The basis for removal is diversity jurisdiction.
In its petition for removal (which Pavia Holdings filed its consent to), Bellator provides the basis for removal as follows:
Removal is appropriate pursuant to 28 U.S.C. § 1441(a) because this Court has original jurisdiction over this case based on Diversity of Citizenship pursuant to 28 U.S.C. § 1332. Pursuant to the claims set forth in Plaintiff's Complaint, and irrespective of the fact that Plaintiff has only specified damages in excess of $10,000, Bellator believes that Plaintiff is seeking in excess of $75,000 in damages, exclusive of interests and costs, and diversity of citizenship exists between Plaintiff, a Nevada Limited Liability Company, and Defendant Bellator, a Delaware Limited Liability Company and Pavia Holdings, LLC, a California Limited Liability Company.For those of you who are interested, 28 U.S.C. § 1441 provides, in relevant part, as follows:
(a) . . . any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending. For purposes of removal under this chapter, the citizenship of defendants sued under fictitious names shall be disregarded.28 U.S.C. § 1332 provides that the federal courts have original jurisdiction in diversity cases. Specifically, Section 1332 provides in relevant part as follows:
(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000, exclusive of interest and costs, and is between—
(1) citizens of different States; . . .
(c) For the purposes of this section and section 1441 of this title—
(1) a corporation shall be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business, . . .It appears that the parties are "citizens of different states" so the issue here, as you may have guessed, is the amount in controversy.
Zuffa is seeking "damages in excess of Ten Thousand Dollars ($10,000.00)", which on its face falls short of the $75,000 minimum set forth in Section 1332. However, Zuffa is also seeking an injunction, which, as set forth below, the federal court will likely consider in valuing the amount in controversy for purposes of jurisdiction.
If Zuffa moves to remand the action back to state court (or the Court raises the issue on its own), it will be Bellator's burden to demonstrate by a preponderance of the evidence that the amount actually at stake is higher than the jurisdictional threshold.
As the Ninth Circuit has stated (the Ninth Circuit hears appeals from the District Court in Nevada):
To support removal based on diversity jurisdiction, Petsmart has the burden of proving, by a preponderance of the evidence, that the amount in controversy exceeds $75,000. See Sanchez v. Monumental Life Ins. Co., 102 F.3d 398, 404 (9th Cir.1996); 28 U.S.C. § 1332.
This evidence [a settlement demand] is sufficient to establish the amount in controversy. The heart of Cohn's suit is his request for injunctive and other equitable relief. "In actions seeking declaratory or injunctive relief, it is well established that the amount in controversy is measured by the value of the object of the litigation." Hunt v. Wash. State Apple Adver. Comm'n, 432 U.S. 333, 347, 97 S.Ct. 2434, 53 L.Ed.2d 383 (1977). The undisputed evidence shows that Cohn values his trademark rights — the object of the litigation — as worth more than $100,000. As the amount in controversy exceeded $75,000, the case was properly removed to federal court.Thus, here, although Zuffa only asked for (at least) $10,000, if necessary, Bellator will attempt to come forward with evidence that the value of the injunctive relief requested in Zuffa's complaint in conjunction with the monetary demand satisfies the threshold.
The good news for us is that we can more easily monitor the case electronically if it is in federal court.
Fight Lawyer
