Intellectual Property Law

Later Evidence Can Satisfy Amount-in-Controversy Requirement for Removal

By Michael Atkins

General Dentistry for Kids, LLC, sued Kool Smiles, P.C. in Arizona superior court for trademark infringement and unfair competition under state law. Kool Smiles removed to federal court. The District of Arizona denied General Dentistry’s motion to remand, and ultimately granted Kool Smiles’ motion for summary judgment.

General Dentistry appealed to the Ninth Circuit, arguing that the district court lacked jurisdiction because Kool Smiles’ notice of removal failed to establish the $75,000 amount-in-controversy requirement.

Kool Smiles argued that it later provided a third-party affidavit stating that the cost of complying with General Dentistry’s requested injunction relief would exceed $135,000. In doing so, it relied on Gaus v. Miles, 980 F.2d 564 (9th Cir. 1992), which provided that a defendant must set forth “in the removal petition itself, underlying facts supporting its assertion that the amount in controversy exceeds” the jurisdictional amount.

Trouble is, the Ninth Circuit found that Gaus had been distinguished by later authority holding that a district court may consider later-provided evidence as amending a defendant’s notice of removal. The Ninth Circuit found the District of Arizona properly applied that later authority and upheld the district court’s denial of General Dentistry’s motion to remand.

The case cite is General Dentistry for Kids, LLC v. Kool Smiles, P.C., 2010 WL 1986187, No. 09-16017 (9th Cir. May 18, 2010).

Full post as published by Seattle Trademark Lawyer on June 01, 2010 (boomark / email).