Antitrust Law Daily Wrap Up, ANTITRUST—E.D. Mich.: Action for violation of noncompete agreements remanded to Michigan state court, (Oct 21, 2013)

By Tobias J. Gillett, J.D., LL.M.

The federal district court in Detroit has adopted a magistrate’s recommendation to remand an action for violation of noncompete agreements under the Michigan Antitrust Reform Act to state court following the removal by amendment of the complaint of a federal trademark infringement claim (Soulliere v. Berger, October 17, 2013, Borman, P.).

Roger Soulliere and seven corporate entities filed suit in Michigan state court against five corporate entities and eight individuals, asserting a range of state law claims, including claims of unfair competition under the Michigan Uniform Trade Secrets Act and violation of noncompete agreements under the Michigan Antitrust Reform Act, and a claim for violation of a United States trademark. The case was removed to federal court, but Soulliere filed an amended complaint removing the claim for trademark infringement and one of the parties, and a motion to remand. The magistrate issued a report and recommendation to grant the motion, and the defendants filed objections.

The court rejected the defendants’ objections. The plaintiffs were not required to seek leave to amend their complaint because Federal Rule of Civil Procedure 15(a)(1)(b) permits a party to amend its pleading “once as a matter of course” within 21 days of the filing of a responsive pleading, and the plaintiffs filed the amended complaint 17 days after the filing of the defendants’ responsive pleading. Although the defendants contended that the plaintiffs’ amendment should have been analyzed under FRCP 41(a), governing voluntary dismissal of actions, the court observed that the defendants had dismissed a claim, not an action.

Moreover, the court found the defendants’ objection that the court was not divested of subject matter jurisdiction by the removal of the federal claim to be “not germane.” The court observed that the issue was whether the court “in its discretion should decline to exercise supplemental jurisdiction under 28 U.S.C. § 1367(c) and remand the remaining state claims.” The court found that the magistrate had correctly concluded that the court should decline to exercise supplemental jurisdiction because the case was “in its infancy,” the plaintiffs had “acted with dispatch in amending their complaint to remove the federal trademark claim,” “no Rule 16 Scheduling Conference” had occurred, and the plaintiffs had asserted “a whole host of uniquely state law claims.” The court noted that, even if the plaintiffs had amended their complaint in order to obtain a remand to state court, that factor alone did not “weigh in favor of exercising supplemental jurisdiction.”

The case is No. 13-cv-12028.

Attorneys: William K. Cashen (Cashen & Strehl) for Roger Soulliere, Soulliere Decorative Stone, Inc., Michigan Skid Loader, Inc., Stone City, Inc., and Protek Products, Inc. Cindy Rhodes Victor (The Victor Firm, PLLC) for Frank Berger, DSSC Holdings, LLC, Stonescape Design, LLC, Macomb Skid Loader, LLC, and Lyric Technology, L.L.C.

Companies: Soulliere Decorative Stone, Inc.; Michigan Skid Loader, Inc.; Stone City, Inc.; Protek Products, Inc.; DSSC Holdings, LLC; Stonescape Design, LLC; Macomb Skid Loader, LLC; Lyric Technology, LLC

Cases: Antitrust MichiganNews