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Forum Selection Clause Did Not Affect Defendants' 30-Day Removal Window

Defendants waited too long to remove plaintiff’s Lanham Act claim to federal court. Therefore, their removal was improper.

That’s what Western District Judge Ricardo Martinez found on July 1 in the trademark infringement lawsuit Homax Products, Inc., brought against USA Homemax, Inc., and two other defendants.

The court also found it didn’t matter that the plaintiff’s settlement agreement with one of the defendants mandated Whatcom County Superior Court (state court), even though the other defendants believed that fact prevented them from removing the case to federal court until that defendant had been severed from the case. 

“Here, the face of Plaintiff’s complaint clearly alleges claims arising under the Lanham Act, a federal cause of action. As such, this Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331. Defendants were required to file a notice of removal within thirty days of receipt of this initial pleading. [28 U.S.C.] § 1446(b). Here, Defendants were served on April 17, 2010. They were served with the amended complaint in September, 2010. Defendants did not meet the 30-day deadline. Their failure to do so was a complete bar to removal.

“Defendants contend that ‘because of [their] settlement agreement, federal jurisdiction did not exist over the claims against Defendant Homax, Inc. and, accordingly Defendants were unable to remove’ until the claims against HI had been severed. However, a ‘forum selection clause does not deprive a federal court of subject matter jurisdiction.’ Although there was perhaps a likelihood of remand depending on the court’s interpretation of the forum selection clause at issue, a federal district court had subject matter jurisdiction over the action as of the date it was filed by virtue of the Lanham Act claim presented on the face of the complaint. Had Defendants timely removed, the court could have exercised its jurisdiction to interpret the contract and determine whether the forum selection clause was enforceable. Accordingly, the action was removable as of April 17, 2010. Defendants did not meet the 30-day deadline.”

Based on that finding, the Western District granted defendants’ motion to remand the case to Whatcom County Superior Court.

The case cite is Homax Products, Inc. v. USA Homemax, Inc., No. 11-0534 (W.D. Wash. July 1, 2011).

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