United States District Court, N.D. Texas, Dallas Division
MEMORANDUM OPINION AND ORDER
BARBARA M. G. LYNN, CHIEF JUDGE.
the Court is the Motion to Remand (ECF No. 10), filed by
Plaintiff MCR Oil Tools, LLC (“MCR”). After
consideration, the Motion is GRANTED IN PART
and DENIED IN PART.
action concerns a dispute involving an alleged breach of
contract and misuse of MCR's intellectual property. MCR
invents, develops, manufactures, and sells oilfield tools,
products, and equipment. (Original Petition, ECF No. 1-1, at
¶ 1). These tools include thermite-based tools,
including a pipe cutter and a torch fueled by a solid
combustible charge. (Id.). MCR's tools are
protected through patents, trade secrets, confidential and
proprietary information, and license agreements
(collectively, the “Licensed Technology.”).
in 2009, Defendant SPEX Offshore, Ltd. (“SPEX”)
entered into multiple technology licenses with MCR.
(Id. at ¶ 2). MCR alleges that SPEX recently
breached numerous provisions of the 2014 License Agreement
(including a 2015 Extension), misappropriated MCR's
Licensed Technology, and used MCR's stolen technology to
obtain numerous patents in SPEX's own name. (Id.
at ¶ 4).
December 27, 2017, MCR filed this lawsuit in the 95th
Judicial District Court of Dallas County, Texas, and asserted
causes of action against Defendants for breach of contract,
declaratory judgment, violations of the Texas Uniform Trade
Secrets Act, common law misappropriation, unfair competition
under Texas law, common law fraud, fraudulent inducement, and
conspiracy. (Id. at ¶¶ 38-67). MCR also
requested a temporary restraining order, temporary
injunction, and permanent injunction to enjoin SPEX's
further use of the Licensed Technology. (Id. at
¶¶ 68-74). To clarify that none of the claims seeks
relief under federal patent law, the Original Petition
states: “Nothing herein is presented to the Court which
seeks a determination of the validity of a patent or calls
for the application of U.S. Federal Law. . . .”
(Id. at ¶ 76).
December 28, 2017, Defendants removed the state court action
to this Court, arguing that “[t]his case concerns a
federal question involving patents.” (Notice of
Removal, ECF No. 1, at 2 ¶3). On January 4, 2018, SPEX
Group U.S. LLC (“SPEX Group”)-but not the other
two Defendants-filed an answer and asserted affirmative
defenses. (ECF No. 4). SPEX Group also alleged two
counterclaims under the Federal Declaratory Judgment Act, 28
U.S.C. § 2201, et seq., for a declaration of
non-violation of the Defend Trade Secrets Act, 18 U.S.C.
§ 1836, et seq., and a declaration of
non-infringement of MCR's patents. (ECF No. 4 at
January 5, 2018, the Court, on its own accord, set a hearing
on whether federal question jurisdiction exists in this case.
(ECF No. 5). MCR and SPEX Group submitted briefing and
appeared for an oral argument on February 13, 2018.
defendant may remove a state court action to federal court if
the case originally could have been filed in federal court.
28 U.S.C. § 1441(a). The removing party bears the burden
of establishing the federal court's jurisdiction.
Howery v. Allstate Ins. Co., 243 F.3d 912, 916 (5th
federal district court has subject matter jurisdiction over a
civil action that “arises under the Constitution, law,
or treaties of the United States.” 28 U.S.C. §
1331. To evaluate whether a federal question exists, the
court examines the well-pleaded complaint as it existed at
the time of removal. Merrell Dow Pharms. v.
Thompson, 478 U.S. 804, 808 (1986); Allen v. Bank of
Am., N.A., 5 F.Supp.3d 819, 829 (N.D. Tex. 2014). The
basis for jurisdiction must be found in the allegations
supporting the plaintiff's claim. Carpenter v.
Wichita Falls Indep. Sch. Dist., 44 F.3d 362, 366 (5th
Cir. 1995). Federal jurisdiction cannot rest on the
defendant's answer or petition for removal. See Stump
v. Potts, 322 F. App'x 379, 380 (5th Cir. 2009)
(citing MSOF Corp. v. Exxon Corp., 295 F.3d 485, 490
(5th Cir. 2002)). Nor does it suffice if the defendant's
counterclaim raises the federal question. Vaden v.
Discover Bank, 556 U.S. 49, 60 (2009).
question jurisdiction does not exist merely because federal
law may be tangentially involved. Merrell Dow, 478
U.S. at 813. The federal law must create the plaintiff's
cause of action, or the plaintiff's claim must
necessarily depend on a substantial federal law question.
Borden v. Allstate Ins. Co., 589 F.3d 168, 172 (5th
Cir. 2009); see Am. Tel. & Tel. Co. v. Integrated
Network Corp., 972 F.2d 1321, 1324 (Fed. Cir. 1992)
(“[E]very theory of a claim as pled must depend on
patent law if there is to be federal jurisdiction.”).