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Quadrille Wallpapers and Fabric, Inc v. Maria Pucci

August 24, 2011

QUADRILLE WALLPAPERS AND FABRIC, INC., PLAINTIFF,
v.
MARIA PUCCI, A/K/A MARIA PUCCIARIELLO, AND ROBERT PUCCIARIELLO, DEFENDANTS.



MEMORANDUM-DECISION and ORDER

I. INTRODUCTION

Plaintiff Quadrille Wallpapers and Fabrics, Inc. ("Plaintiff" or "Quadrille") commenced this action on October 22, 2010, in the Supreme Court of the State of New York in Columbia County. Compl. (Dkt. No. 1-1) ("Complaint"). Plaintiff, a company that designs and markets custom fabric, wallpaper, and women's clothing, seeks monetary and injunctive relief against former employee Defendant Maria Pucci ("Defendant Pucci" or "Pucci") and her husband, Defendant Robert Pucciariello ("Defendant Pucciariello" or "Pucciariello"), both of whom Plaintiff alleges are unlawfully marketing Plaintiff's patterns and soliciting Plaintiff's clients. See id.

Defendants filed a Notice of Removal (Dkt. No. 1) to the United States District Court in the Northern District of New York on November 17, 2010. On December 6, 2010, Defendants filed the present Motion requesting the Court to either transfer the present action to the United States Court in the Southern District of New York, or dismiss Plaintiff's Complaint for failure to state a cause of action. Defs. Mot. to Transfer or Dismiss ("TOD Motion") (Dkt. No. 6). Also presently before the Court are Plaintiff's Cross-Motion, filed on January 31, 2011, opposing the TOD Motion and requesting the Court to remand the case ("Cross-Motion") (Dkt. No. 15); Defendants' Response to Plaintiff's Cross-Motion ("Defendants' Response") (Dkt. No. 17); and Plaintiff's Reply to Defendants' Response ("Plaintiff's Reply") (Dkt. No. 22). For the reasons that follow, the Court denies Defendants' Motion and grants Plaintiff's Cross-Motion to remand this case to the state court.

II. BACKGROUND

Quadrille is a corporation engaged in the business of designing and selling custom fabric, wallpaper, and women's clothing. Compl. ¶ 1. Quadrille is incorporated in the state of New York, has outlet facilities in the town of Kinderhook in Columbia County, New York, and has showrooms in New York City, New York; Los Angeles, California; Dallas, Texas; and Dania Beach, Florida.

Id. John Knott ("Knott"), who owns the company in addition to being its chief executive officer and president, resides in the town of Valatie in Columbia County, New York.*fn1 Id. ¶ 2.

Though incorporated in 1969, Quadrille did not begin designing and marketing women's clothing until 1998. Id. ¶ 7. Prior to this, Knott cultivated client relationships with friends, their acquaintances, and prior clients. Id. ¶ 9. Quadrille has continued to establish client relationships through retail sales at its showrooms around the country, as well as through its trunk shows and select vendors, but its client base has mostly been established by word of mouth and mostly consists of private individuals who have ongoing relationships with Knott and the company. Id. ¶¶ 10-11. Quadrille possesses lists of and details about its clients, all of which, the company states, are treated as confidential and not readily discoverable through public sources. Id. ¶ 14.

The Defendants in this action are a married couple who reside in New York City and who are both partners in Crystal Nation LLC ("Crystal Nation"), which is engaged in the business of designing clothing for both men and women.*fn2 Defendant Pucci worked as a sales director for Quadrille from February 8, 2008, until April 30, 2010. Compl. ¶ 12; Pucci Aff. ¶ 4. In the course of her employment Pucci had access to confidential information, including Quadrille's client lists, client details, and the identities of the manufacturers of Quadrille's clothing.*fn3 Compl. ¶ 13. Pucci was in charge of Plaintiff's clothing line accounts, but had access to the company's entire client data base, including clients for Quadrille's wallpapers and fabrics design line. Id. ¶ 15. On April 19, 2010,*fn4 Pucci submitted a letter of resignation stating that she was returning to Bulgaria, her country of origin, to care for her ailing father for an indefinite amount of time. Id. ¶ 20; Pucci Letter.

In June 2010, Pucci's replacement, Edward Guski ("Guski"), visited the office of one of Quadrille's manufacturers, specifically where Quadrille's women's clothing was being manufactured ("the workroom"). Compl. ¶ 22. There, Guski allegedly noticed between eight and ten jackets with Quadrille's patterns labeled "Pucci," and the workroom's owner confirmed that those jackets were part of Pucci's new fashion line. Id. ¶¶ 23-24. In that same month, on June 14, 2010, Pucci was interviewed in Time Out New York and stated to her interviewer, "I make clothes for high-end, very conservative ladies. Custom clothes out of upholstery fabrics." Compl. ¶ 26; This Week in New York: Maria Pucci, 31, TIME OUT NEW YORK (June 14, 2010), http://newyork.timeout.com/things-to-do/this-week-in-new-york/73677/maria-pucci-31. According to its Complaint, Quadrille eventually learned that Pucci had set up Crystal Nation with Defendant Pucciariello while she was still working for Quadrille, and that they were using Quadrille's manufacturer to manufacture their clothing line using Quadrille's patterns. Compl. ¶ 28; Knott Aff. (Dkt. No. 15) ¶ 8. The Complaint also alleges that Defendants are attempting to poach Quadrille's clients using the lists and details of Quadrille's clients known to Pucci by virtue of her previous employment with Quadrille. Compl. ¶¶ 29-30; Knott Aff. ¶ 8. Additionally, Plaintiff claims that Defendants have held trunk shows using Quadrille's hostesses -- also known only to them through Pucci's employment with Quadrille -- and inviting Quadrille's private clients to attend these shows. Compl. ¶ 31; Knott Aff. ¶¶ 8-9. Plaintiff filed the present action in state court on October 22, 2010.

III. DISCUSSION

Defendants contend that removal is required in this case because Plaintiff's claims, all of which allege violations of New York state law, are preempted by federal law, namely, the United States Copyright Act. TOD Mot. at 1, 6, 9-17; Defs.' Response at 2, 16. Plaintiff argues that the Court should remand the action because its Complaint presents no questions of federal law and the Copyright Act does not preempt its state law claims. Cross-Mot. at 6-9; Pl.'s Reply at 2-7. For the following reasons, the Court finds that none of Plaintiff's claims are preempted by the Copyright Act and therefore remands this case to state court for lack of subject matter jurisdiction.

A. Standard of Review

A party may remove a case to federal court from state court if the case originally could have been brought in federal court. 28 U.S.C. § 1441(a). Either complete diversity of citizenship between the parties where the amount in controversy is $75,000 or greater, or a question arising under federal law, is required to establish federal jurisdiction. Id. § 1331, 1332(a). "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded." Id. § 1447(c).

On a motion to remand, "the defendant has the burden of establishing that removal is proper." United Food & Commercial Workers Union, Local 919, AFL-CIO V. CenterMark Properties Meriden Square, Inc., 30 F.3d 298, 301 (2d Cir. 1994). The Court "construes all factual allegations in favor of the party seeking remand." O'Brien & Gere Ltd. v. Bus. Software Alliance, No. 5:07-CV-1174, 2008 WL 268430, at *3 (N.D.N.Y. Jan. 30, 2008). Additionally, "[a]ny doubts regarding the propriety of removal are resolved in favor of remand, and 'federal courts construe the removal statute narrowly.'" ...


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