Swipe & Bite, Inc. v. Chow

147 F. Supp. 3d 924, 117 U.S.P.Q. 2d (BNA) 1504, 2015 U.S. Dist. LEXIS 158144, 2015 WL 7423244
CourtDistrict Court, N.D. California
DecidedNovember 23, 2015
DocketCase No. 15-cv-03997-JST
StatusPublished
Cited by4 cases

This text of 147 F. Supp. 3d 924 (Swipe & Bite, Inc. v. Chow) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Swipe & Bite, Inc. v. Chow, 147 F. Supp. 3d 924, 117 U.S.P.Q. 2d (BNA) 1504, 2015 U.S. Dist. LEXIS 158144, 2015 WL 7423244 (N.D. Cal. 2015).

Opinion

ORDER DENYING PLAINTIFF’S MOTION TO REMAND; GRANTING IN PART AND DENYING IN PART DEFENDANT TRINH’S MOTION TO DISMISS

JON S. TIGAR, United States District Judge

Before the Court is Plaintiff Swipe & Bite, Inc.’s motion to remand and Defendant Christopher: Trinh’s motion to dismiss. For the reasons set forth below, the motion to remand is denied and the motion to dismiss is granted in- part and denied in part.

I. PLAINTIFF’S MOTION TO REMAND

A. Background1

This is a business tort dispute between Plaintiff Swipe & Bite, Inc. and Defendants William Chow (“Mr.-Chow?), Christopher Trinh (“Mr. Trinh”), Shuk Chow, and Alice Chow that Mr;: Chow removed to this Court on September 1, 2015. ECF No. 1. Swipe & Bite alleges nine causes of action: breach of fiduciary duty, aiding and abetting breach of fiduciary duty, intentional and tortious interference with contract, intentional and tortious interference with prospective advantage, conspiracy, violation of court order, and declaratory relief. See ECF No. 1-2, Ex. B, First Amended Complaint (“FAC”). Swipe & Bite specifically disclaims an allegation of copyright infringement. Id. ¶ 12.

Swipe & Bite, Inc. is a California corporation' that is developing an online and mobile payment application for ordering food. Id. ¶ 14. Chris and Gilda Hutchinson founded Swipe & Bite in 2014. Id. Mr. Hutchinson knew Mr. Chow from prior intellectual property work Mr. Chow had done for Mr. Hutchinson. Id. ¶ 17. In mid-2014, Mr. Hutchinson contacted Mr. Chow to discuss his ideas, and they agreed that Mr. Chow would complete some programming, coding, and legal work for Swipe & Bite in exchange for equity in the company. Id. ¶¶ 18-22. Swipe & Bite alleges that Mr. Chow agreed to “help code the [company] website” for a “potential total stake [928]*928in the Company.. .of up to-25% based on „sweat equity’ vesting over four years.” Id, ¶22.'This agreement was made verbally and confirmed in writing. Id.

In February of 2015, Mr. Chow introduced Mr. Hutchinson to Mr. Trinh. Id. ¶ 23. Mr; Trinh wrote code for Swipe & Bite as a software engineer in exchange for equity in the company. Id. Mr. Trinh was to receive “an option for up to 1% stake in the Company, vesting over four years.” Id. This agreement was partially oral and partially written'.' Id. Swipe & Bite alleges that IP rights transferred from Mr. Chow and Mr. Trinh to Swipe & Bite “under the operation of California law governing; partnerships, promoters, agents, fiduciaries and cofounders, not-as a question of employment, not work for hire.. .and not joint work.” Id. ¶ 12.

Swipe & Bite established- several business relationships with customers throughout early 2015, resulting in product delivery dates in the summer of 2015, and Mr. Chow and Mr. Trinh were aware of- these customers and product delivery dates. Id. ¶ 24. Swipe & Bite also cultivated relationships with prospective customers who expressed interest in the product, and Mr. Chow and Mr. Trinh were aware of these relationships as well. Id.

Swipe & Bite accuses Mr. Chow and Mr. Trinh of taking source code and cutting off Swipe & Bite’s access to company property, such as its server and other computer resources, in June of 2015. Id. ¶¶ 25-28. Mr. Chow and Mr. Trinh prevented another software engineer for Swipe & Bite, Brian Campisi, from completing his deadlines and obligations. Id. ¶ 26-27. Further, Mr. Chow and Mr. Trinh refused to restore the computer files to Swipe & Bite. See e.g., id. ¶¶ 39, 48, 59. As a’ result, Swipe & Bite lost significant business because it .was unable to meet its product delivery dates. Id. ¶ 32. Swipe & Bite alleges that this “shut down” was part of a plan by Mr, Chow and Mr. Trinh to “cripple” Swipe & Bite by interfering with the company’s contracts. Id. ¶¶ 25,. 30.

Dn July 8, 2015, Swipe & Bite filed an action in the Superior Court of the State of California, County of Santa Clara. ECF No, 1-1, Ex. A. On July 10, 2015, the court issued a Temporary Restraining Order (“TRO”) against Mr. Trinh.- See ECF No. 1-2, Ex. B, Ex. 4. The TRO expired and no preliminary injunction was issued. ECF No. 14 at 4. Defendants removed the case to federal court on July 30,2015. ECF No. 18 at 5-6. Swipe & Bite voluntarily dismissed the complaint and filed a new state court case the next day. Id. On August 24, 2015, Swipe & Bite filed the FAC. ECF No. 1-2, Ex. B. On September 1, 2015, Mr. Chow again removed the case to federal court. ECF No. 1. The Notice of Removal argues that this Court has jurisdiction because allegations in the FAC present a federal question under the Copyright Act. Id. at 2.

On October. 1, 2015, Swipe & Bite filed the present motion to remand the case to the Superior Court of the State of California, County of Santa Clara. ECF No. 16. Swipe & Bite.argues that because it asserts only state law claims for relief, the Court should remand the case. Mr. Chow and Mr. Trinh oppose the ¡motion to remand. ECF Nos. 18,19.

B. Legal Standard

Federal courts are courts of limited jurisdiction and are - presumptively without jurisdiction unless authorized by the Constitution and by statute. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994). Federal courts have original jurisdiction over “all civil actions arising under the Constitution, laws, or treaties of the United States,” 28 U.S.C. § 1331, and over “all civil actions where the matter in con[929]*929troversy exceeds the sum or value of $75,-000... and is between citizens of different states,” 28 U.S.C. § 1332(a). The removal statute permits a state court action be removed to federal court if the case presents a federal question under section 1331 or if the case is diverse under section 1332(a). 28 U.S.C. § 1441. The defendant has the burden of establishing that removal is proper. Parking Concepts, Inc. v. RSUI Group, Inc., 2009 WL 2973118, at *2 (C.D.Cal. Sept. 11, 2009). A federal court “may remand a matter for lack of subject matter jurisdiction or for a defect in the removal procedure.” Calicraft Distribs., LLC v. Castro, No. CV 15-01041 BRO (AJW), 2015 WL 1789014, at *3 (C.D.Cal. Apr. 17, 2015).

C. Discussion

Swipe & Bite argues that the Court should remand this case because the Coujt does not have subject matter jurisdiction.2 ECF No. 16. Swipe.& Bite’s FAC does not bring, a claim for copyright infringement or otherwise seek relief under the Copyright Act. Defendants nevertheless assert that this case arises under the Copyright Act because Swipe & Bite’s state law claims require it to show an ownership interest in the copyright for the source code, a showing which Defendants believe requires the application of the work-for-hire doctrine. See ECF Nos. 18,19

1. Subject Matter Jurisdiction

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
147 F. Supp. 3d 924, 117 U.S.P.Q. 2d (BNA) 1504, 2015 U.S. Dist. LEXIS 158144, 2015 WL 7423244, Counsel Stack Legal Research, https://law.counselstack.com/opinion/swipe-bite-inc-v-chow-cand-2015.