Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_05-cv-02901/USCOURTS-cand-5_05-cv-02901-4/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question

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ORDER GRANTING PLAINTIFF'SMOTION TO REMAND CASE AND DECLINING TORULEONDEFENDANTS' MOTIONS

TO DISMISS—C-05-2901 RMW

DOH

E-FILED on 10/19/05

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

MIRAGE SYSTEMS, INC.

Plaintiff,

v.

JERRY SPEASL, an individual, MARK K.

ROBERTS, an individual, MATTHEW K.

CHIKOSKY, an individual, ST. CLAIR

INTELLECTUAL PROPERTY

CONSULTANTS, INC., a Michigan corporation,

and DOES 1-50 

Defendants.

No. C-05-2901 RMW

ORDER GRANTING PLAINTIFF'S MOTION

TO REMAND CASE AND DECLINING TO

RULE ON DEFENDANTS' MOTIONS TO

DISMISS

[Re Docket Nos. 5, 9, 13, 16 ]

Mirage Systems, Inc. ("Mirage") has sued Jerry Speasl ("Speasl"), Marc Roberts ("Roberts"),

Matthew Chikosky ("Chikosky"), and St. Clair Intellectual Property Consultants, Inc. ("St. Clair")

(collectively "defendants"). Mirage moves to remand the case to state court. Defendants oppose the

motion. Defendants move to dismiss Mirage's complaint. Mirage opposes the motion. The court has read

the moving and responding papers and considered the arguments of counsel. For the reasons set forth

below, the court grants Mirage's motion to remand and declines to rule on defendants' motions to dismiss.
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1 Although Mirage claims that it served Chikosky and St. Clair "shortly after . . .filing the

[c]omplaint," Mot Remand at 2:21, Mirage cites no evidence to support this claim. However, Chikosky

and St. Clair must have received service before mid-May, because St. Clair filed a demurrer on May 12

and Chikosky moved to quash service on May 16. In addition, Roberts and Speasl substantiate Mirage's

claim in their opposition brief. See Opp. Mot. Remand at 1:12-13 ("[p]laintiff filed its [c]omplaint on April

12, 2005, and all [d]efendants except Roberts were served shortly thereafter"). 

ORDER GRANTING PLAINTIFF'SMOTION TO REMAND CASE AND DECLINING TORULEONDEFENDANTS' MOTIONS

TO DISMISS—C-05-2901 RMW

DOH 2

I. BACKGROUND

Mirage filed a complaint against defendants in California Superior Court on April 12, 2005. The

complaint asserted causes of action for declaratory relief, judgment of ownership, conversion, unfair

competition, and unjust enrichment with respect to six patents ("the '459 patents"). Mirage served Speasl

on April 15, 2005.1 McIntyre Decl. Supp. Mot. Remand ("McIntyre Decl.") Ex. A. Mirage was unable to

serve Roberts. In mid-May, 2005 Speasl and St. Clair filed demurrers, and Chikosky moved to quash

service of the summons. McIntyre Decl. Ex. B. 

On June 15, 2005 Mirage filed an amended complaint. McIntyre Decl. Ex. C. Mirage served

Speasl, Chikosky, and St. Clair with the amended complaint on June 16, 2005. At some point in June,

Mirage filed an ex parte motion to substitute Eastman Kodak ("Kodak") as plaintiff. On June 17, 2005 the

court denied Mirage's motion. Notice of Removal Ex. A at 14.

Mirage served Roberts on June 25, 2005. Notice of Removal ¶ 5. Roberts, who claims to be a

citizen of Nevada, was "at a rental property [he] own[s] in California." Roberts Decl. Opp. Mot. Remand

("Roberts Decl.") ¶ 4. On June 28, 2005 the court denied Chikosky's motion to quash. 

On July 15, 2005 Roberts removed the case to federal court on the basis of diversity and federal

question jurisdiction. The Notice of Removal alleges that (1) Mirage is a California corporation, (2)

Roberts and Speasl are Nevada citizens, (3) Chikosky is a Pennsylvania citizen, and (4) St. Clair is a

Michigan corporation. Notice of Removal ¶ 2. In addition, the Notice of Removal contends that the action

arises under federal patent law. Id. at ¶ 4. 

II. ANALYSIS

A. Motion to Remand

A defendant wishing to remove a case to federal court must to so within "within thirty days after the

receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim

for relief upon which such action or proceeding is based . . . ." 28 U.S.C. § 1446(b). A court must
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ORDER GRANTING PLAINTIFF'SMOTION TO REMAND CASE AND DECLINING TORULEONDEFENDANTS' MOTIONS

TO DISMISS—C-05-2901 RMW

DOH 3

"strictly construe the removal statute against removal jurisdiction" and decline "[f]ederal jurisdiction . . . if

there is any doubt as to the right of removal in the first instance." Gaus v. Miles, Inc., 980 F.2d 564, 566

(9th Cir. 1992). 

It is undisputed that Roberts filed his Notice of Removal on July 15: more than thirty days after

Mirage served Speasl with the original complaint on April 15. It is also undisputed that Roberts filed his

Notice of Removal less than thirty days after he received Mirage's amended complaint. Whether this court

remands the case for untimely removal thus depends on whether it applies (1) the "first-served defendant

rule"—and concludes that the window for removal began when Mirage served Speasl or (2) the "lastserved defendant rule"—and concludes that the removal clock began to run when Mirage served Roberts.

The Ninth Circuit has not addressed the issue. See United Computer Systems, Inc. v. AT & T

Corp., 298 F.3d 756, 763 n.4 (9th Cir. 2002) ("express[ing] no opinion" on whether to apply the "firstserved defendant rule" or the "last-served defendant rule"). However, the vast majority of courts in this

district have applied the "first-served defendant rule." See, e.g., Morgan v. Asbestos Defendants, 2003

WL 945987 *2 (N.D. Cal. 2003) ("[t]his order applies the first-served rule"); Olsen v. Foundation

Health Plan, 1999 WL 390842 *4 (N.D. Cal. 1999) ("the majority rule is appropriate in the present case,

and by that standard, defendants' removal is untimely"); Innovacom, Inc. v. Haynes, 1998 WL 164933

*2 (N.D. Cal. 1998) ("[t]he majority rule, and the rule to be followed here, provides that the 30-day

removal period begins to run for all defendants from the date the first of them receives the original

complaint"); Bewley v. Cigna Financial Advisors, 1997 WL 601426 *2 (N.D. Cal. 1997) ("[t]he [c]ourt

will apply the 'first-served defendant' rule in these circumstances"); Lillard v. Joint Medical Products,

1995 WL 20609 *4 n.2 (N.D. Cal. 1995) (explaining that "[t]he removal period begins when the first

defendant served receives notice that the case has become removable" but denying motion to remand for

other reasons); Varney v. Johns-Manville Corp., 653 F.Supp. 839, 840 (N.D. Cal. 1987) ("[t]his court

holds that the thirty-day period began when [the first] defendant . . . received notice that the case had

become removable"). 

Courts that follow the "first-served" rule generally note several reasons for doing so. First, the

"first-served" rule is consistent with the tenet that courts must construe the removal statute strictly and
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2 The Fifth and Fourth Circuits follow the "first-served" rule, while the Sixth and Eighth

Circuits follow the "last-served" rule. Compare Brown v. Demco, 792 F.2d 478, 482 (5th Cir. 1986)

(adopting the "first-served" rule) and McKinney v. Bd. of Trs. of Maryland Cmty. Coll., 955 F.2d 924,

928 (4th Cir. 1992) (applying modified "first-served" rule that gives later-served defendant thirty days to

remove if served within thirty days of first-served defendant) with Brierly v. Alusuisse Flexible

Packaging, Inc., 184 F.3d 527, 533 (6th Cir. 1999) (applying "last-served" rule) and Maran Enters. of

Kan. v. Z-Teca Rests., L.P., 254 F.3d 753, 755-57 (8th Cir. 2001) (adopting "last-served" rule).

3 This hardly seems conclusive. If Congress intended to toll the thirty day period until the

plaintiff had served all defendants, it also could have so stated.

ORDER GRANTING PLAINTIFF'SMOTION TO REMAND CASE AND DECLINING TORULEONDEFENDANTS' MOTIONS

TO DISMISS—C-05-2901 RMW

DOH 4

resolve doubts against the party seeking removal. See, e.g., Morgan, 2003 WL 945987 at *2. In

addition, the "first-served" rule avoids forum shopping. See, e.g., Cellport Systems, Inc. v. Peiker

Acustic GMBH & Co., 335 F. Supp. 2d 1131, 1133 (D. Colo. 2004) ("[t]he last-served rule also permits

forum shopping by other defendants who, based on the progress of the action in state court, may hope for a

more favorable outcome if they agree to the last-served defendant's removal request"). Finally, some

courts consider the "first-served" rule to accord with the requirement that all defendants must agree to

remove the case. See, e.g., Olsen, 1999 WL 390842 at *2. The logic behind this rationale is that a firstserved defendant who does not remove within thirty days waives his right later to agree to removal, thus

prohibiting unanimity. 

Two courts in this district have applied the "last-served" rule.2 First, in Ford v. New United

Motors Mfg., Inc., 857 F. Supp. 707, 709 (N.D. Cal. 1994), the court reasoned that "[s]ection 1446(b)

refers to removal by 'the defendant,' not 'the first-served defendant' and that "[i]f Congress had intended the

thirty-day removal period to commence in all cases upon service of the first defendant, it could have easily

stated as such." Id.

3

 In addition, the court criticized the unanimity justification for the "first-served" rule. 

The court noted that the purpose of requiring unanimity was to preclude defendants from forcing a plaintiff

to litigate part of a case in state court and part of a case in federal court. Id. (citing Chicago, Rock Island,

& Pac. Ry. Corp. v. Martin, 178 U.S. 245, 248 (1900)). The court questioned how the "first-served"

rule furthered this policy. Id. Finally, the court noted that the "first-served" rule permitted plaintiffs to

"circumvent[ ] the rights afforded to defendants by deliberately manipulating the timing of service in an effort

to secure a state forum." Id. at 710.
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4 Defendants note that the state court only ruled on the motion to quash. Thus, defendants

claim, Mirage cannot plausibly claim that they removed to seek refuge from an unfavorable forum. At the

same time, however, the "first-served" rule does more than avoid forum shopping. The "first-served" rule

also resolves "forum selection . . . as early as possible" and avoids wasting judicial resources. McAnally

Enterprises, Inc. v. McAnally, 107 F. Supp. 2d 1223, 1227, 1229 (C.D. Cal. 2000) (adopting "firstserved" rule). 

ORDER GRANTING PLAINTIFF'SMOTION TO REMAND CASE AND DECLINING TORULEONDEFENDANTS' MOTIONS

TO DISMISS—C-05-2901 RMW

DOH 5

Likewise, Goularte v. ABEX Corp., 1997 WL 294397 (N.D. Cal. 1997), followed the "lastserved" rule. In that case, the plaintiff "sued hundreds of corporations and associations involved in research

manufacture, marketing, distribution, installation, and repair of asbestos and products containing asbestos." 

Id. at *1. Even though a defendant sought removal about a year after the plaintiff served the first defendant,

the court held that removal was timely, reasoning that "the 'first served' rule may encourage plaintiffs to

deliberately manipulate the timing of service to secure a state forum in a form of gamesmanship that does

not befit litigants or courts." Id. at *3. 

The court sees no reason to depart from the majority "first-served" rule here. Ford and Goularte's

strongest rationale for applying the "last-served" rule is prohibiting a plaintiff from "secur[ing] a state forum"

by serving defendants who could seek removal—diverse defendants or defendants with federal

claims—more than thirty days after serving other defendants. Ford, 857 F. Supp. at 710; Goularte, 1997

WL 294397 at *3. That did not happen here. The face of Mirage's complaint—which alleges that Mirage

is a California corporation and Speasl resides in California—did not give rise to diversity jurisdiction. 

Speasl received the complaint on April 15. McIntyre Decl. Ex. A. If, as defendants claim, Speasl is a

Nevada citizen, then he should have been immediately aware that he could remove the case. In addition,

assuming that defendants are correct that Mirage's claims "arise under" federal law, Speasl, Chikosky and

St. Clair should have been immediately aware of their right to remove. Instead, however, they continued to

litigate in state court for three months, filing demurrers, a motion to quash, and resisting Mirage's ex parte

motion to substitute Kodak as plaintiff.4 The fact that Speasl, Chikosky, and St. Clair held the keys to

federal court ameliorates Ford and Goularte's concern about plaintiffs manipulating service to foreclose

removal.

Defendants contend that "Roberts should be afforded the same opportunity as any other defendant

to remove this action to federal court." Opp. Mot. Remand at 3:15-16. In addition, Roberts asserts that
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ORDER GRANTING PLAINTIFF'SMOTION TO REMAND CASE AND DECLINING TORULEONDEFENDANTS' MOTIONS

TO DISMISS—C-05-2901 RMW

DOH 6

Mirage's "[a]mended [c]omplaint was the first written pleading I had seen in relation to this litigation." 

Roberts Decl. ¶ 5. Notably, however, Roberts does not contend that he was unaware of the lawsuit. 

Moreover, the same law firm represents both Speasl and Roberts. Thus, common sense suggests that

defendants could have sought removal earlier if they had so desired. In light of the presumption against

federal jurisdiction, the court holds that defendants' removal was untimely.

III. ORDER

For the foregoing reasons, the court grants Mirage's motion to remand and declines to rule on

defendants' motions to dismiss. 

DATED: 10/19/05 /s/ Ronald M. Whyte

RONALD M. WHYTE

United States District Judge
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ORDER GRANTING PLAINTIFF'SMOTION TO REMAND CASE AND DECLINING TORULEONDEFENDANTS' MOTIONS

TO DISMISS—C-05-2901 RMW

DOH 7

Notice of this document has been electronically sent to:

Counsel for Plaintiff(s):

Daniel S. Mount dmount@mount.com 

Justin T. Beck jbeck@mount.com 

Ronald Craig Finley rfinley@mount.com 

Caroline McIntyre cmcintyre@be-law.com 

Daniel J. Bergeson dbergeson@be-law.com 

Counsel for Defendant(s):

Joshua D. Baker jbaker@omm.com 

Bruce C. Piontkowski bpiontkowski@ropers.com 

Gregory K Storey gstorey@ropers.com 

Richard Steven Swope rswope@thelenreid.com 

Susan G. van Keulen svankeulen@thelenreid.com 

Counsel are responsible for distributing copies of this document to co-counsel that have not registered for

e-filing under the court's CM/ECF program.

Dated: 10/19/05 DOH

Chambers of Judge Whyte