Opinion
CIVIL ACTION NO. 03-1316, SECTION "A"(3).
July 22, 2003.
ORDER AND REASONS
Before the Court is a Motion to Remand and Recover Costs (Rec. Doc. 3) filed by plaintiffs Vincent Brocato, Stephanie Brocato Martinez, and Vincent Brocato Daughter, L.L.C. Defendant, Angelo Brocato Ice Cream Confectionery, Inc., opposes the motion. The motion, set for hearing on July 2, 2003, is before the Court on the briefs without oral argument. For the reasons that follow, the motion is DENIED. I. Background
Plaintiffs Vincent Brocato and his daughter Stephanie Brocato Martinez, are members of plaintiff Vincent Brocato Daughter, L.L.C., which owns and operates a business under that name on Paris Road in St. Bernard Parish. "Vincent Brocato Daughter" is in the business of selling a variety of food items including Italian ice cream and cookies. Vincent Brocato worked in the food business for about forty years with his father James Brocato. They made and sold Italian ice cream and cookies under the name "James Brocato Sons." Their store was located on McShane Place in New Orleans. "James Brocato Sons" closed its doors in 1986, about four years after the death of James Brocato.
Angelo Brocato, Sr., James Brocato's father and plaintiff Vincent Brocato's grandfather, made and sold Italian ice cream and cookies under his name "Angelo Brocato" for many years from his store on Ursuline Street in New Orleans. Upon his death in 1946, his business was continued under the name "Angelo Brocato" by several of his other sons, who were the step-brothers of James Brocato. The "Angelo Brocato" business moved to its current location on N. Carollton Street in New Orleans in 1979.
Vincent Brocato and his daughter Stephanie established Vincent Brocato Daughter, L.L.C. sometime in 2002. In January 2003, while plaintiffs were in the final stages of making arrangements to open their Paris Road store, trademark counsel for Defendant sent a letter to plaintiffs asking them to refrain from using the surname "Brocato" as part of their trade name. (Attachment to Exhibit B, Motion to Remand). The letter informed Plaintiffs that Defendant owns two federal trademark registrations for the mark ANGELO BROCATO and that Plaintiffs' proposed use of "Brocato" would likely cause confusion as to whether their store is associated or affiliated with the service mark ANGELO BROCATO. Id. The letter did not expressly threaten legal action.
On March 31, 2003, Plaintiffs filed a petition for a declaratory judgment, injunctive relief, and damages in St. Bernard Parish. They seek a judgment declaring that they have the right to use the trade name "Vincent Brocato Daughter," as well as an injunction prohibiting Defendant from making any other wrongful claims regarding their use of the Brocato name. Finally, they seek monetary damages from Defendant arising from such wrongful claims. The petition ostensibly seeks relief only under state law. Defendant removed the case to this Court and asserts that Plaintiffs' case arises under federal law. Plaintiffs move for remand and seeks an award of attorney's fees and costs.
II. Discussion
As the party invoking the jurisdiction of a federal court, defendant has the burden of proving that the exercise of such jurisdiction is proper. See In re North American Philips Corp., 1991 WL 40259, at *2 (5th Cir. 1991). Therefore, the Court begins with Defendant's contentions in support of removal.
The Parties' Contentions
Defendant argues that Plaintiffs' petition seeks a declaration that they will not be in violation of the Lanham Act as to Defendant's mark if they use the Brocato name. Therefore, Defendant argues, Plaintiffs' claim is really one based upon federal law. Alternatively, Defendant argues that the Lanham Act completely preempts any state law claims and thereby provides a basis for removal. Although courts have repeatedly held that the Lanham Act does not provide a basis for complete preemption, Defendant argues that various amendments to the Act now militate in favor of complete preemption.
Plaintiffs argue that removal was improper because under the well-pleaded complaint rule, Plaintiffs' petition does not present a federal question on its face. Plaintiffs assert that they, as masters of their complaint, were entitled to rely solely on state law even though an analogous federal cause of action might exist. They assert that La Chemise Lacoste v. Alligator Co., Inc., 506 F.2d 339 (3d Cir. 1974), is squarely applicable to the instant case and demonstrates why remand is appropriate.
Applicable Law
A civil action filed in state court may be removed to federal court if the claim is one "arising under" federal law.Beneficial Nat'l Bank v. Anderson, ___ U.S. ___, 123 S.Ct. 2058, 2062, ___ L.Ed.2d ___ (2003) (citing 28 U.S.C. § 1441(b)). To determine whether the claim arises under federal law, the court examines the "well-pleaded" allegations of the complaint and ignores any potential defenses. Id. A suit arises under federal law only when the plaintiff's statement of his own cause of action shows that it is based upon federal law.Id. Therefore, plaintiff's state law claim does not arise under federal law simply because defendant has a defense to that claim that is based upon federal law, even where plaintiff specifically mentions the anticipated federal defense in his complaint. Id. However, plaintiff cannot defeat removal by "artfully pleading" claims so to omit necessary federal questions from his cause of action. Rivet v. Regions Bank, 522 U.S. 470, 475, 118 S.Ct. 921, 925, 139 L.Ed.2d 912 (1998) (citing Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 14, 103 S.Ct. 2841, 2848, 77 L.Ed.2d 420 (1983)). And even where state law creates the cause of action, federal jurisdiction might be available if a disputed issue of federal law is a substantial and necessary element of plaintiff's well-pleaded state claims. Franchise Tax Bd., 463 U.S. at 13, 103 S.Ct. at 2848. If one claim in the petition arises under federal law then the entire case is removable.Id. (citing 28 U.S.C. § 1441(c)).
Analysis
Pursuant to the foregoing well-established rules, the Court's determination as to whether Plaintiffs' claim arises under federal law begins with the allegations contained in the state court petition. The petition makes no mention whatsoever of federal law and Plaintiffs assert that their petition contains only state law causes of action — namely, a request for a declaratory judgment pursuant to La.C.C.P. article 1871, as well as injunctive relief, and monetary damages for tortious conduct. Thus, at first blush, it would appear that the well-pleaded complaint rule would not permit removal of this action. As noted above, however, the Court must determine whether Plaintiffs have in fact artfully pleaded federal claims as state law claims. A careful examination of Plaintiffs' request for a declaratory judgment reveals that Plaintiffs have done just that.
Louisiana Code of Civil Procedure article 1871 provides that "[c]ourts of record within their respective jurisdictions may declare rights, status, and other legal relations whether or not further relief is or could be claimed." La.C.C.P. art. 1871. The purpose of the article is to settle and afford relief from uncertainty and insecurity with respect to rights and legal relations. Williams v. City of Baton Rouge, 2003 WL 368068, at *5, — So.2d — (La.App. 1st Cir. 2003) (citing La.C.C.P. art. 1881). However, the Louisiana Supreme Court long ago recognized that the declaratory judgment action is a procedural device which allows courts to declare rights without granting executory or coercive relief. West v. Town of Winnsboro, 211 So.2d 665,671 (La. 1968). To put it another way, article 1871 does not create substantive rights and is not a state law cause of action in and of itself. Rather, a declaratory judgment action under state law is the same as any other suit but differs procedurally only in the type of judgment ultimately rendered. La.C.C.P. art. 1871 Rev. Cmts.
Because article 1871 is procedural in nature the Court must therefore look to the nature of the rights to be declared in the declaratory judgment action. The pertinent portion of the petition is paragraph twenty-three which reads:
Pursuant to La.C.C.P. Art. 1871, et seq., and in order to ". . . afford relief from uncertainty and insecurity . . ." (La.C.C.P. Art. 1881) with respect to their rights in this matter, plaintiffs are entitled to a judgment declaring that they have the right to use "Vincent Brocato Daughter" in their trade name and service mark in connection with their store.
Notice of Removal, Rec. Doc. 1.
Plaintiffs do not rely upon any specific substantive provision of state law pursuant to which they can obtain such a declaration. Nor is the Court aware of one. For instance, Plaintiffs have no claim of their own under analogous state trademark law because they own no mark. Nor do they have any claim against Defendant for unfair trade practices or unfair competition. Thus, Plaintiffs are not seeking relief under state law. Rather, the only way Plaintiffs can obtain the certainty they seek is by having a court determine Defendant's rights under its federal trademarks. To do so, the court must apply the Lanham Act. In short, Plaintiffs are attempting to transform Defendant's federal Lanham Act claims into their own preemptive state law cause of action by their use of a state procedural device. However, federal Lanham Act claims do not become causes of action arising under state law merely because a declaratory plaintiff (who also happens to be the would-be Lanham Act defendant) uses a state law declaratory judgment action to get them before a court.
Plaintiffs rely far too heavily on La Chemise Lacoste v. Alligator Co., Inc., supra, which is easily distinguishable. The plaintiff in that case was owner of its own state law trademarks. When defendant, relying upon its ownership of federal trademarks, threatened litigation ("the litigation letter"), plaintiff preemptively filed suit in state court to declare its rights with respect to its own trademarks which were creatures of state law. Thus, even though plaintiff was using the declaratory judgment action, it had its own trademark rights under state law. Defendant's federal trademarks and their preemptive scope were therefore merely a defense to plaintiff's state law-created trademark claims. Naturally, because the federal trademark claims in La Chemise Lacoste were actually being asserted as a defense to a distinct substantive state-created claim, the well-pleaded complaint rule prohibited removal. Moreover, the Third Circuit found error in the district court's reliance upon the litigation letter as a means to convert plaintiff's otherwise legitimate state law claims into federal ones.
The Court also notes that the Supreme Court's decision inFranchise Tax Board possibly undermines some of the reasoning employed in La Chemise Lacoste. The Third Circuit rejected the notion that in a removed declaratory judgment action, the character of the threatened litigation determined whether or not federal jurisdiction exists. La Chemise Lacoste, 506 F.2d at 343. However, in Franchise Tax Board the Supreme Court later applied that very principal to a state removed declaratory judgment action.
In the instant case, Plaintiffs are not relying upon any state created cause of action to vindicate their own rights under state law. Their sole goal, regardless of how they artfully phrased their complaint, is to have a court of law adjudicate Defendant's rights under the Lanham Act. The scope of protection afforded Defendant under the Lanham Act is not a mere defense to a state claim asserted by Plaintiffs. Rather, the Lanham Act comprises this whole case. The Court therefore concludes that Plaintiffs' declaratory judgment action arises under federal law. Because the Court has original jurisdiction over that claim, the entire case was properly removed.
Accordingly;
IT IS ORDERED that the Motion to Remand and Recover Costs (Rec. Doc. 3) filed by plaintiffs Vincent Brocato, Stephanie Brocato Martinez, and Vincent Brocato Daughter, L.L.C. should be and is hereby DENIED.