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O'Brien & Gere Limited v. Business Software Alliance

January 30, 2008


The opinion of the court was delivered by: Neal P. McCURN, Senior District Court Judge


This is an action arising from a complaint filed on August 8, 2007 by the plaintiff O'Brien & Gere Limited ("OBG") in the Supreme Court of the State of New York. OBG was seeking a declaratory judgment from that court holding that OBG need not respond to the demands of the defendant Business Software Alliance ("BSA"). BSA's alleged demands entailed a requirement that OBG conduct an audit of all of the software published by BSA's member organizations on all of OBG's computers, and for OBG to review the software licenses and proofs of purchase for those licenses. BSA removed the action to this court on November 5, 2007 pursuant to 28 U.S.C. § 1331. Currently before the court is BSA's motion to dismiss OBG's complaint (Doc. No. 6) and OBG's cross motion to remand this action to the state court (Doc. No. 13). For the reasons set for the below, OBG's motion to remand will be granted and BSA's motion to dismiss will be denied as moot.


The following facts are presumed true for the purpose of the motion to remand. O'Brien & Gere Limited is a corporation organized and existing pursuant to the laws of the State of New York with a principal place for the transaction of business located in Onondaga County. BSA is a business entity organized and existing in a foreign state but transacting business within the State of New York.*fn1 (Doc. No. 1 (Complaint at 1)). OBG is an engineering firm employing approximately eight hundred professionals and much of its work is computer program based. In 2004 and 2005, OBG incurred costs in the tens of thousands of dollars to demonstrate to Microsoft that OBG's software usage was in conformance with Microsoft's licensing requirements. (Doc. No. 1-3 at 2).

This case is based entirely on a series of letters between the parties, and initiated by BSA. On June 13, 2007, attorneys for BSA sent a letter to OBG stating that "[w]e have recently been advised that O'Brien & Gere has installed on its computers more copies of Microsoft Excel, Microsoft Outlook, Microsoft PowerPoint and Microsoft Word software than it is licensed to use." Id., (citing the June 13, 2007 letter from Pepper Hamilton LLP Law Firm to OBG). (Doc. No. 6-4). In that letter, BSA purports to represent the interests of fourteen*fn2 software companies. "Through BSA, these companies work to ensure that organizations are using those computer software products in compliance with federal copyright laws."*fn3

In its strongly worded letter of June 13, 2007, BSA gave OBG an "opportunity" to avoid litigation for its alleged use of unlicensed software by "providing O'Brien & Gere with an opportunity to conduct its own company-wide investigation," and "[t]o take advantage of this opportunity, O'Brien & Gere's investigation must include an audit of all the software published by BSA members ... on all of its computers and a review of the software licenses and proofs of purchases for those licenses." (emphasis added). The letter further stated that "[i]f formal action is to be avoided, we must insist that you contact us by June 26, 2007. At that time we will provide you with specific guidance on how to conduct your audit." (Doc. No. 6-4).

Subsequent letters between the parties offered no resolution, and OBG filed this declaratory action in state court on August 8, 2007. On August 16, 2007, BSA's counsel sent a letter to counsel for OBG stating, inter alia, that Pepper Hamilton LLP "will not accept service of process for the Business Software Alliance," and that "if you wished to cease all professional correspondence with us in this matter, all you had to do was say so." BSA counsel stated that "[w]e have never contended, nor would we, that your client or you are under any present legal obligation to respond to our inquiries." (Doc. No. 6-16). On August 22, 2007, counsel for BSA gave OBG "one last chance to dismiss [the action] ... If we have not received notice that it has been dismissed within five (5) days ... we shall have no choice but to move to dismiss and seek sanctions." BSA counsel estimated that preparing and filing said motions would cost approximately $7,500, and that they would seek further sums for sanctions pursuant to BSA having to defend "this frivolous Complaint." (Doc. No. 6-17).

In a letter dated August 24, 2007, in response to BSA's request for dismissal of the complaint, counsel for OBG stated that "[i]f you do not disagree with the relief sought in the Complaint, then a Stipulation and Order would be appropriate rather than a dismissal of the Complaint. We do not wish to discontinue the action and then later have an action or a claim brought against my client asserting that it did not provide information to your firm based upon your firm's demand and that my client is liable in some manner as a result." (Doc. No. 6-18). BSA would not agree to stipulation of dismissal. (Doc. No. 6-19).

A hearing was held on October 11, 2007 in the Supreme Court of the State of New York, County of Onondaga, before Justice James P. Murphy on BSA's motion to dismiss. (Doc. No. 1-5). The motion was denied on the basis that BSA neglected to annex a copy of the complaint to its moving papers in violation of state court procedure. Id.


Pursuant to 28 U.S.C. § 1441(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 defendants, to the district court of the United States for the district and division embracing the place where such action is pending." 28 U.S.C. § 1441(a) (West 2008). "Absent diversity of citizenship, federal question jurisdiction is required. The presence or absence of federal-question jurisdiction is governed by the 'well-pleaded complaint rule,' which provides that federal jurisdiction exists only when a federal question is presented on the face of the properly pleaded complaint." Caterpillar Inc. v. Williams, 482 U.S. 386, 392, 107 S.Ct. 2425, 2429 (1987). "Federal district courts have original jurisdiction over "all civil actions arising under the Constitution, laws, or treaties of the United States." Id., n.4 (citing 28 U.S.C. § 1331).

It is well-settled law that unless the balance of law is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed. Gulf Oil v. Gilbert, 330 U.S. 501, 508, 67 S.Ct. 839 (1947). On a motion to remand, the court construes all factual allegations in favor of the party seeking the remand. Connecticut Resources Recovery Act v. Lay, 292 B.R. 464, 469-70 (D. Conn. 2003). Consequently, "[i]n determining whether remand is appropriate, [a] court must evaluate all of the factual allegations in the light most favorable to the plaintiff, resolving all contested issues of substantive fact in favor of the plaintiff." Laughlin v. Prudential Insurance Co., 882 F.2d 187, 190 (5th Cir. 1989). The removing party bears the burden of showing that the removal was proper. This burden extends to demonstrating the jurisdictional basis for removal. California Public Employees' Retirement System v. Worldcom, Inc., 368 F.3d 86, 100 (2d Cir. 2004).

A. Timely Removal

As a threshold matter, this court looks to the removal date of November 5, 2007 to determine if removal was proper, and whether the court has jurisdiction over this matter. The time for removal is set forth in 28 U.S.C.A. 1446 which states that b) The notice of removal of a civil action or proceeding shall be filed within thirty days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon ...

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