United States District Court, D. Arizona
G. Campbell Senior United States District Judge
case was removed from Maricopa County Superior Court on May
31, 2018, by former defendants Hachette Book Group
Incorporated and Little, Brown and Company (collectively, the
“Hachette Defendants”) with the consent of the
remaining defendants Michael and Lauren Breus (collectively,
the “Breus Defendants”). Doc. 1. On August 1,
2018, the Hachette Defendants were dismissed by stipulation.
Doc. 28. Plaintiffs now move to remand this case back to
state court. Doc. 34. The Breus Defendants oppose the motion.
Doc. 36. Because Plaintiffs cite no authority for remand
under these circumstances, the Court will deny the motion.
IOW originally filed suit against only the Breus Defendants
in state court in December 2016. See Doc. 1-2;
IOW, LLC v. Breus, No. CV2016-010236 (Maricopa Cty.
Superior Ct. Dec. 21, 2016). In February 2018, based on facts
uncovered during discovery, IOW sought leave to amend its
complaint to add the Hachette Defendants and Plaintiff When
Enterprises Corporation. Doc. 1-3 at 279-85. The state court
granted the motion, and the amended complaint was filed May
7, 2018. Doc. 1-4 at 72-86.
31, 2018, the Hachette Defendants filed a notice of removal.
Doc. 1. The notice states that removal is based on federal
question jurisdiction, 28 U.S.C. § 1331, because
Plaintiffs' amended complaint asserts a claim under the
Lanham Act, 15 U.S.C. § 1051 et seq. Id. at 3.
The notice further asserts that the Court has jurisdiction
over the state-law unfair competition claim pursuant to 28
U.S.C. §§ 1338(b), 1367(a). Id. The notice
does not specifically address the additional state-law claims
asserted solely against the Breus Defendants, see
Doc. 1-4 at 80-82 (asserting claims for breach of contract,
breach of the implied covenant of good faith and fair
dealing, misappropriation of trade secrets, and unjust
enrichment), but Plaintiffs do not dispute that the Court has
supplemental jurisdiction over these claims.
argue that the Court should remand this case because the
Breus Defendants “waived their right to remove this
case, and thus can no longer avail themselves of the
jurisdiction of this Court now that the removing [Hachette]
Defendants have been dismissed.” Doc. 34 at 2.
Plaintiffs stress that the Breus Defendants could have
removed the case based on diversity or federal question
jurisdiction, but they allowed the 30-day deadline to pass
without removing and instead chose to litigate in state
court. Therefore, Plaintiffs argue, the Breus Defendants
cannot benefit from the Hachette Defendants' removal now
that the Hachette Defendants have been dismissed.
Court does not agree. The Ninth Circuit has held that a party
which waives its right to remove a case, and yet which ends
up in federal court upon removal by a newly added defendant,
may remain in federal court even after the removing defendant
is dismissed. See Brockman v. Merabank, 40 F.3d
1013, 1017 (9th Cir. 1994) (“Although the RTC waived
its right to seek removal, it did not waive its right to a
federal forum.”). The Fifth Circuit has reached the
same conclusion. See Buchner v. FDIC, 981 F.2d 816,
819-21 (5th Cir. 1993).
cite cases discussing the “first-served” rule,
which held that once “the right to removal is waived,
it is generally waived for all time (and for all defendants),
regardless of subsequent changes in the case.” Doc. 34
at 6 (quoting Dunn v. Gaiam, Inc., 166 F.Supp.2d
1273, 1278-79 (CD. Cal. 2001)). As the Breus Defendants
correctly point out, the Ninth Circuit rejected the
first-served rule in 2011, and Congress amended the removal
statute to reject it shortly thereafter. See Doc. 36
at 6-7 (citing 28 U.S.C. § 1446(b)(2)(C) (“If
defendants are served at different times, and a later-served
defendant files a notice of removal, any earlier-served
defendant may consent to the removal even though that
earlier-served defendant did not previously initiate or
consent to removal”); Destfino v. Reiswig, 630
F.3d 952, 956 (9th Cir. 2011) (“There is no reason to
lock an earlier-served defendant out of the federal forum, if
he later chooses to consent.”)).
have identified no defect in removal, and they admit that the
Court has original subject matter jurisdiction over the case.
The Court has no basis for remand.
IS ORDERED that Plaintiffs' motion to remand
(Doc. 34) is denied.
 The Breus Defendants also argue that
Plaintiffs waived the right to seek remand because they
failed to do so within 30 days of removal. Doc. 36 at 4-5.
The Court need not address this argument because ...