TK Trailer Parts, LLC v. Long
4:20-cv-02864
S.D. Tex.Nov 2, 2020Background
- TK Trailer Parts, LLC sued Aaron Johnson (Arizona) and Bill Long (Texas) in Madison County, TX, alleging Johnson copied and sold TK’s trailer parts/designs that TK acquired from Master Plans & Designs, Inc.
- TK sued for misappropriation, injunctive relief, declaratory judgments concerning contracts, and later added unjust enrichment; TK alleged Long was a Texas citizen and Johnson an Arizona citizen.
- Johnson was served January 11, 2019; TK filed suit January 4, 2019. Long was served but did not answer; TK did not pursue default.
- At a July 15, 2020 mediation Johnson learned Long was an employee of TK and that Long had not answered; Johnson claims this showed Long had been improperly joined to defeat diversity.
- Johnson removed the case to federal court on August 14, 2020 (589 days after filing, 582 days after service), asserting diversity (improper joinder of Long) and federal-question jurisdiction (copyright preemption). TK moved to remand on timeliness grounds.
- The magistrate judge recommended remand, finding removal untimely under both the copyright-removal provision (§1454/§1446) and diversity removal rules (one-year bar and no bad-faith showing). The court assumed copyright preemption arguendo but did not reach a final preemption ruling.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness of removal based on federal-question/copyright preemption | Removal untimely because defendant waited >30 days from service to remove | §1454(b)(2) allows extension of §1446 deadlines for copyright removals for cause | Removal under federal-question/preemption untimely; §1454 extension unavailable because notice invoked diversity too and defendant failed to show cause even if §1454 applied |
| Timeliness of removal based on diversity (improper joinder) | Removal untimely under §1446; defendant waited >1 year | Diversity became ascertainable only after mediation (July 15, 2020) due to Long’s employment status | Even assuming diversity ascertainable in July 2020, removal occurred after the §1446(c)(1) one-year bar (589 days); untimely |
| Bad-faith exception to one-year bar (§1446(c)(1)) | TK acted in bad faith by naming Long to defeat diversity and then ‘‘abandoning’’ him | Johnson alleges TK’s conduct prevented discovery of improper joinder until mediation | No clear-and-convincing evidence TK acted in bad faith; alleged conduct not the ‘‘clearly egregious’’ gamesmanship required to overcome the one-year bar |
| Improper joinder merit (whether Long’s citizenship should be disregarded) | TK’s claims reach contracts implicating Long; Long is a real Texas defendant | Johnson contends Long was improperly joined to defeat diversity because Long is TK’s employee and not a proper defendant | Court assumed arguendo improper joinder for timeliness analysis but did not decide the issue on the merits; remand required regardless due to untimeliness |
Key Cases Cited
- Howery v. Allstate Ins. Co., 243 F.3d 912 (5th Cir. 2001) (federal jurisdiction is limited)
- Manguno v. Prudential Prop. & Cas. Ins. Co., 276 F.3d 720 (5th Cir. 2002) (removing party bears burden to establish federal jurisdiction)
- Beneficial Nat’l Bank v. Anderson, 539 U.S. 1 (2003) (complete preemption allows removal when federal law displaces state-law claim)
- Ultraflo Corp. v. Pelican Tank Parts, Inc., 845 F.3d 652 (5th Cir. 2017) (design drawings fall within copyright subject matter)
- Motion Med. Techs., LLC v. Thermotek, Inc., 875 F.3d 765 (5th Cir. 2017) (Texas misappropriation/unfair-competition claims may be preempted by copyright law)
- Hoyt v. Lane Constr. Co., 927 F.3d 287 (5th Cir. 2019) (post-amendment §1446(c)(1) limits equitable tolling; bad-faith standard discussed)
- Tedford v. Warner-Lambert Co., 327 F.3d 423 (5th Cir. 2003) (pre-2011 equitable-tolling approach to removal timing)
- Flagg v. Stryker Corp., 819 F.3d 132 (5th Cir. 2016) (improper joinder is a narrow exception to complete-diversity requirement)
- Douglass v. United Servs. Auto. Ass’n, 79 F.3d 1415 (5th Cir. 1996) (failure to timely object to magistrate findings waives appellate challenges)