Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_05-cv-03533/USCOURTS-cand-5_05-cv-03533-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1441 Petition for Removal- Contract Dispute

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 This disposition is not designated for publication and may not be cited.

Case No. C 05-3533 JF

ORDER DENYING MOTION FOR REMAND AND REQUEST FOR ATTORNEY'S FEES AND COSTS

(JFLC1)

**E-Filed 11/14/05**

NOT FOR CITATION

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

MEDITERRANEANCOINS, GmbH, et al.,

 Plaintiffs,

 v.

EBay INC., et al.,

 Defendants.

Case Number C 05-3533 JF

ORDER1 DENYING MOTION FOR

REMAND AND REQUEST FOR

ATTORNEY’S FEES AND COSTS

[Docket No. 17]

I. BACKGROUND

Plaintiff MediterraneanCoins, GmbH (“MediterraneanCoins”) is a German corporation

that deals in numismatics (collectable coins) and previously conducted a substantial amount of

business on eBay.com. It alleges that on or about October 3, 2004, Defendant eBay Inc. (“eBay”)

cancelled its auctions and suspended its account, explaining via e-mail: (1) “your actions may

cause financial loss or legal liability for you, our users or us,” and (2) “we are unable to verify or

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Case No. C 05-3533 JF

ORDER DENYING MOTION FOR REMAND AND REQUEST FOR ATTORNEY'S FEES AND COSTS

(JFLC1)

authenticate any information you provide to us.” It further alleges that based on its investigation

and information provided to it by a representative of eBay, eBay led it to believe that the

cancellations and suspension were done because of a “formal request” by an unidentified third

party. MediterraneanCoins was thereafter unable to obtain more information from eBay

regarding the matter, and it was notified that further information or documents could be produced

only through a subpoena.

On December 22, 2004, MediterraneanCoins filed a complaint against Does 1 through100

– and no named defendants – in the Santa Clara Superior Court. The complaint alleged three

state law claims: interference with contract and prospective economic advantage, defamation and

trade libel, and unfair business practices pursuant to California Business and Professional Code §

17200. On January 4, 2005, MediterraneanCoins served a subpoena duces tecum on eBay.

MediterraneanCoins alleges that eBay responded to the subpoena by filing objections and did not

produce any records. On February 28, 2005, MediterraneanCoins filed a motion to compel

compliance with the subpoena, which was granted on April 8, 2005. Throughout this period,

eBay was identified in court documents as a “third party” or a “third party witness.”

Britt Anderson (“Anderson”), counsel for eBay, states in his declaration that to date eBay

has produced more than 2,500 pages of documents in response to the subpoena. Anderson also

declares that eBay proposed a protective order with respect to the documents it produced, but that

eBay and MediterraneanCoins could not come to an agreement. MediterraneanCoins alleges

that the documents produced by eBay showed that:

eBay had been monitoring and recording plaintiff’s online activity for over 2

years, and providing sensitive and private information and documents about

plaintiffs’ account to the Italian ‘Cultural Police’ (who, it turns out, are

investigating and arrested [sic] plaintiffs ‘with the support eBay,’ [sic] though no

formal charges have been made under the draconian Italian law).

It alleges further that “eBay essentially acted as a spy for a foreign government against its own

customer.”

On August 11, 2005, MediterraneanCoins and two additional Plaintiffs, Barbara

Francesca Serofilli and Giovanni Grimaldi, filed a first amended complaint, naming eBay, eBay

Italia S.R.L., eBay International AG, Marco Cesare Pancini, Aldo Vignoli, Christian Perella, Ugo

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Case No. C 05-3533 JF

ORDER DENYING MOTION FOR REMAND AND REQUEST FOR ATTORNEY'S FEES AND COSTS

(JFLC1)

Celestino, and Does 8 through 100 as Defendants. The amended complaint was served on eBay

on August 15, 2005. As of the time of the filing of the instant motion, the amended complaint

had not been served on the other named defendants. The amended complaint alleges fifteen

claims: invasion of privacy, defamation and trade libel, breach of fiduciary duty, fraud,

intentional infliction of emotional distress, negligence, interference with contract, interference

with prospective economic advantage, misappropriation of trade secret, breach of contract and

implied covenant of good faith and fair dealing, violation of common law right to fair procedure,

unfair business practices, violations of Electronic Communications Privacy Act, declaratory

relief, and contempt sanctions.

Also on August 11, 2005, eBay filed a motion for entry of protective order and Plaintiffs

brought a motion to compel compliance with the state court’s April 8, 2005 order. On August

23, 2005, eBay filed opposition to this motion to compel. eBay notes that it filed this opposition

at this time because it was required to file it nine days prior to the state court hearing, pursuant to

California Code of Civil Procedure § 1005(b). In this opposition, eBay identified itself as a

named defendant. However its arguments were based expressly on the fact that the discovery

dispute began and continued during a period when eBay was not a named defendant. A state

court hearing on these motions was scheduled for September 2, 2005.

On August 31, 2005, eBay removed the instant case to federal court pursuant to 28 U.S.C.

§ 1441, based on federal question jurisdiction under 28 U.S.C. § 1331. Plaintiffs’ thirteenth

claim is for violations of the federal Electronic Communications Privacy Act (ECPA), 18 U.S.C.

§§ 2510 et seq. In addition, Plaintiffs’ first claim for invasion of privacy invokes the protections

of both the California and the United States Constitutions. On September 8, 2005, eBay filed a

motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) and a motion to strike

Plaintiffs’ first fourteen claims pursuant to pursuant to California Code of Civil Procedure §

425.16 and Federal Rule of Civil Procedure 12(f). These motions are scheduled for hearing on

January 20, 2005.

On September 30, 2005, Plaintiffs filed the instant motion for remand and request for

attorney’s fees and costs. Plaintiffs’ motion to remand is based on five grounds: (1) that eBay

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Case No. C 05-3533 JF

ORDER DENYING MOTION FOR REMAND AND REQUEST FOR ATTORNEY'S FEES AND COSTS

(JFLC1)

waived its right to removal, (2) that abstention is proper under the Younger abstention doctrine,

(3) that abstention is proper under the Pullman abstention doctrine, (4) that abstention is proper

for “other prudential reasons,” and (5) that a stay of the federal claim and abstention of the state

claims is proper under the Colorado River abstention doctrine. Plaintiffs request attorney’s fees

and costs pursuant to 28 U.S.C. § 1447(c) and as sanctions pursuant to Federal Rule of Civil

Procedure 11. Defendant eBay filed opposition to the instant motion. The Court heard oral

argument on November 10, 2005.

II. LEGAL STANDARD

In general, removal is proper when the federal court would have had jurisdiction had the

claim originally been filed in federal court (i.e., federal question or diversity). 28 U.S.C. §

1441(a). Time for removal is thirty days after receipt by defendant of a copy of the initial

pleading setting forth the claim upon which the removal action is based. 28 U.S.C. § 1446(b). If

grounds for removal do not appear from the initial pleading, the time for removal is thirty days

after receipt by defendant of a copy of the amended pleading, motion, order or other paper from

which it appears that removal is proper. 28 U.S.C. § 1446(b). Removal may be improper due to

(1) lack of subject matter jurisdiction in federal court or (2) defects in the removal proceedings. 

The removal statute is strictly construed against removal jurisdiction, and federal jurisdiction

must be rejected if there is any doubt about the right of removal. Gaus v. Miles, Inc., 980 F.2d

564, 566 (9th Cir. 1992).

III. DISCUSSION

EBay properly removed the instant case from state to federal court. The amended

complaint alleges more than one federal claim; the thirteenth claim is for violation of a federal

statute (the ECPA), and the first claim invokes the protections of the United States Constitution. 

28 U.S.C. § 1331; see also Balcorta v. Twentieth Century-Fox Film Corp., 208 F.3d 1102, 1106

(9th Cir. 2000) (“federal jurisdiction exists only when a federal question is presented on the face

of the plaintiff's properly pleaded complaint”). EBay removed the instant case within thirty days

of service of the amended complaint naming it as a party. Prior to the filing and service of the

amended complaint, removal would have been impossible because there were no named

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Case No. C 05-3533 JF

ORDER DENYING MOTION FOR REMAND AND REQUEST FOR ATTORNEY'S FEES AND COSTS

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defendants

The Court has supplemental jurisdiction over Plaintiffs’ state claims pursuant to 28

U.S.C. § 1367(a), under which a federal district court has jurisdiction over state law claims that

are “so related” to claims over which the district court has original jurisdiction that they form

“part of the same case or controversy.” All of Plaintiffs’ claims arise out of the same general

factual allegations: that eBay and the named individual Defendants communicated with the

Italian police about the Defendants. Plaintiffs assert generally that the amended complaint

“encompasses a variety of factual issues, time periods, and separate ‘primary rights’ and

damages,” but they do not specify, nor is it clear to the Court, how the different claims could be

based on factual allegations so distinct as not to be part of the same case or controversy. 

Plaintiffs do specifically suggest that their fifteenth claim, for contempt sanctions for disobeying

a subpoena, arises out of a different nucleus of operative facts. They argue that the claim arises

out of the public policy interest in giving litigants access to records and compensation for seeking

such records. However, regardless of the policy motivating any contempt sanctions, it is clear

that Plaintiffs seek contempt sanctions based on eBay’s alleged non-compliance with a subpoena

that is related to the basic factual allegations upon which all of the other claims are based.

Plaintiffs point out that a district court may decline to exercise supplemental jurisdiction

over a state law claim if: (1) the claim raises a novel or complex issue of state law; (2) the claim

substantially predominates the claims over which the court has original jurisdiction; (3) the court

has dismissed all claims over which it has original jurisdiction; or (4) in exceptional

circumstances, other compelling reasons exist for declining jurisdiction. 28 U.S.C. § 1367(c). A

decision to decline jurisdiction pursuant to one of these factors should take into consideration

judicial efficiency, convenience of the parties, fairness, and comity. ACRI v. Varian Associates,

Inc., 114 F.3d 999, 1001 (9th Cir. 1997). Plaintiffs state generally that their fourteen state law

claims involve novel or complex issues of state law “particularly in the context of online

activity,” that the state law claims substantially predominate, and that judicial efficiency,

convenience, fairness, and comity are “clearly at play in this case.” However, the Court is not

convinced that any of the state law claims asserted by Plaintiffs genuinely involve novel or

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Case No. C 05-3533 JF

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(JFLC1)

complex issues of state law. Moreover, because the Court has original jurisdiction over

Plaintiffs’ federal claim, the interests of judicial efficiency are best served if this Court keeps

jurisdiction over all of Plaintiffs’ asserted claims.

As is explained below, none of the arguments asserted by Plaintiffs in the instant motion

to remand is sufficient to merit a remand of the instant case to state court. It is clear from

Plaintiffs’ moving papers and oral argument that Plaintiffs are concerned that, through removal,

eBay will be able to avoid potentially negative rulings regarding the discovery dispute that had

been ongoing in state court. The Court assures Plaintiffs that the removal of the instant case to

federal court will have no effect upon eBay’s duty to comply with the state court’s subpoena. 

Pursuant to 28 U.S.C. § 1450, “[a]ll injunctions, orders, and other proceedings had in [a state

court] action prior to its removal shall remain in full force and effect until dissolved or modified

by the district court.” Pursuant to this Court’s standing order, the parties’ pending discovery

dispute is hereby referred to the assigned Magistrate Judge, the Honorable Richard Seeborg.

A. eBay’s alleged waiver of removal

Plaintiffs allege that eBay waived its right to remove to federal court through actively

litigating in state court and stipulating to state court jurisdiction. However, prior to the filing of

the amended complaint, eBay participated in the state court proceedings only as a third party. 

None of its actions in state court was sufficient to constitute waiver of its right to removal. 

Plaintiffs’ argument that eBay “explicitly bound all parties to state court jurisdiction” is similarly

without merit. eBay’s proposed protective order states: “I further agree to submit to the

jurisdiction of the Santa Clara Superior Court for the purpose of enforcing the terms of this

Stipulated Protective Order, even if such enforcement proceedings occur after termination of this

action” (emphasis added). The language of this proposed protective order in no way impacts

Defendants’ right of removal to federal court; rather, it merely stipulates to jurisdiction for the

purposes of the proposed protective order.

B. Younger abstention

Plaintiffs next argue that the Court must remand the instant case to state court pursuant

to Younger v. Harris, 401 U.S. 37 (1971), due to the outstanding contempt proceedings.

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Case No. C 05-3533 JF

ORDER DENYING MOTION FOR REMAND AND REQUEST FOR ATTORNEY'S FEES AND COSTS

(JFLC1)

Although there were not in fact any pending contempt proceedings as such at the time of

removal, Plaintiffs had filed a motion to compel compliance with a court order, requesting that

the state court issue an “Order to Show Cause re: contempt and cite the witness into court for a

hearing.” This motion was scheduled for hearing two days after eBay removed the instant case to

federal court. Plaintiffs argue that eBay removed the instant case to evade contempt sanctions

and enforcement of the state court order to compel compliance with the subpoena. As the Court

has already noted, when a case is removed to federal court, the federal court takes the case as it

stood in state court at the time of removal. Thus, removal of the instant case does not allow eBay

to avoid any orders or enforcement that may have been pending in state court.

The Younger doctrine espouses “a strong federal policy against federal-court interference

with pending state judicial proceedings absent extraordinary circumstances.” Middlesex County

Ethics Comm. v. Garden State Bar Ass’n, 457 U.S. 423, 431 (1982). Also underlying the

Younger doctrine is the notion that federal courts should “avoid unwarranted determinations of

federal constitutional law.” Gilbertson v. Albright, 381 F.3d 965, 975 (9th Cir. 2004). Younger

abstention is appropriate when the state proceedings: (1) are ongoing; (2) implicate important

state interests; and (3) provide the plaintiff with an adequate opportunity to litigate his or her

federal claims. See San Remo Hotel v. City and County of San Francisco, 145 F.3d 1095, 1103

(9th Cir. 1998). Younger abstention is not appropriate in the instant case because there are no

ongoing state court proceedings. EBay has removed the instant case from state court to federal

court, thus terminating the proceedings in state court and transferring them to federal court. 

C. Pullman abstention

Plaintiffs also request that the Court remand the entire case to the state court pursuant to

the Pullman abstention doctrine. Plaintiffs suggest that the Defendants could protect their right

to a federal court determination of the federal claims by making an “England reservation.” 

However, Pullman abstention is appropriate only in very specific circumstances, none of which

exists in the instant case. “Traditionally, under Pullman, a federal court stays and remits to state

court cases involving the interpretation of a challenged state statute in order to avoid making an

unnecessary or premature constitutional decision.” United Parcel Service, Inc. v. California

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Public Utilities Comm’n, 77 F.3d 1178, 1183 (9th Cir. 1996). Pullman abstention is appropriate

when: (1) the complaint touches a sensitive area of social policy upon which the federal courts

ought not to enter unless no alternative to its adjudication is open; (2) such constitutional

adjudication plainly can be avoided if a definitive ruling on the state issue would terminate the

controversy; and (3) the possibly determinative issue of state law is doubtful. Sinclair Oil Corp.

v. County of Santa Barbara, 96 F.3d 401, 409 (9th Cir. 1996). 

Plaintiffs’ complaint does not touch on a sensitive area of social policy. Plaintiffs suggest

that the state’s interest in contempt proceedings implicates such an area, but even if there were a

pending order to show cause re contempt in state court, which there was not and is not, Plaintiffs

cite no authority holding that a pending contempt proceeding implicates the type of social issue

subject to Pullman. A contempt hearing is an important legal proceeding, but it is not an area of

social policy. A definitive ruling on the state law issues raised by such a proceeding would not

negate the need to make federal constitutional decisions. Plaintiffs assert federal claims in

addition to, not alternatively to, their state law claims. 

D. Abstention for “other prudential reasons”

Plaintiffs next suggest that a “federal court can remand actions for ‘other prudential

reasons’ not otherwise fitting the ‘absence of jurisdiction’ or ‘removal defects’ categories set

forth in 28 USC § 1447(c).” However, 28 U.S.C. § 1447(c) does not include these words nor

does it stand for this proposition. Instead, § 1447 merely establishes procedures for remanding a

case to state court for an absence of subject matter jurisdiction or for an alternative reason. 

Plaintiffs claim that eBay is attempting to “pre-empt” state court litigation and that “the

combination of eBay’s removal and its Rule 12 Motions to Dismiss and Strike are akin and

effectively amount to a Federal declaratory action.” Plaintiffs cite a number of cases related to

these arguments. However, there is no evidence that eBay is attempting to “pre-empt” state court

litigation. EBay has removed the action to federal court, and there is no longer any state court

proceeding that could be preempted. All of Plaintiffs’ claims, including those related to the

parties’ discovery dispute, stand in the same legal posture in this Court as they did before

remand.

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Case No. C 05-3533 JF

ORDER DENYING MOTION FOR REMAND AND REQUEST FOR ATTORNEY'S FEES AND COSTS

(JFLC1)

E. Colorado River abstention

Finally, Plaintiffs request that the Court remand the state law claims and stay their federal

claims pursuant to the Colorado River abstention doctrine. Under Colorado River, a federal

court may defer to a parallel state court proceeding based upon “considerations of wise judicial

administration, giving regard to conservation of judicial resources and comprehensive disposition

of litigation.” Tovar v. Billmeyer, 609 F.2d 1291, 1293 (9th Cir. 1980) (quoting Colorado River

Water Conservation District v. United States, 424 U.S. 800, 817 (1976)). Colorado River

abstention is appropriate only when there is a parallel state court proceeding, which there is not

in the instant case. 

F. Request for attorney’s fees and costs

Plaintiffs request attorney’s fees and costs pursuant to 28 U.S.C. § 1447(c) and as

sanctions pursuant to Federal Rule of Civil Procedure 11. They argue that eBay’s removal was

improper, improvident, vexatious and in bad faith. However, as is apparent from the foregoing

discussion, eBay’s removal of this action was proper. Accordingly, Plaintiffs’ request for

attorney’s fees and costs will be denied.

IV. ORDER

Good cause therefore appearing, IT IS HEREBY ORDERED that Plaintiffs’ motion to

remand is DENIED.

IT IS FURTHER ORDERED that Plaintiffs’ request for attorney’s fees and costs is

DENIED.

All pending and future discovery proceedings are assigned to Magistrate Judge Richard

Seeborg.

DATED: November 14, 2005

/s/ electronic signature authorized 

JEREMY FOGEL

United States District Judge

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Case No. C 05-3533 JF

ORDER DENYING MOTION FOR REMAND AND REQUEST FOR ATTORNEY'S FEES AND COSTS

(JFLC1)

This Order has been served upon the following persons:

Britt Lee Anderson banderson@cooley.com, cdung@cooley.com

Michael Graham Rhodes rhodesmg@cooley.com,

Dimitry Z. Tsimberg dimitry@goforlaw.com, dimitry.tsimberg@verizon.net 

Case 5:05-cv-03533-JF Document 38 Filed 11/14/05 Page 10 of 10