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Equity Staffing Group Inc. v. Rtl Networks, Inc.

United States District Court, D. Colorado

June 6, 2014

EQUITY STAFFING GROUP INCORPORATED, Plaintiff,
v.
RTL NETWORKS, INC., Defendant.

ORDER DENYING PLAINTIFF'S MOTION FOR REMAND AND DENYING DEFENDANT'S MOTION TO DISMISS

WILLIAM J. MARTÍNEZ, Judge.

Plaintiff Equity Staffing Group Incorporated ("Plaintiff") brings this action alleging breach of contract and related claims against RTL Networks, Inc. ("Defendant"). Before the Court is Plaintiff's Motion to Remand ("Motion to Remand") (ECF No. 14), and Defendant's Motion to Dismiss Pursuant to Federal Rule of Civil Procedure 12(b)(6) ("Motion to Dismiss") (ECF No. 9). For the reasons set forth below, Plaintiff's Motion to Remand and Defendant's Motion to Dismiss are both denied.

I. BACKGROUND

On March 14, 2013, Defendant entered into a Contract with the United States Department of Energy - Western Area Power Administration (the "DOE") to provide information technology support services (the "DOE Contract"). (DOE Contract (ECF No. 17-1).) The parties entered into a subcontract agreement, effective April 1, 2013 (the "Subcontract"), by which Plaintiff would assist Defendant in performing the DOE Contract. (Subcontract (ECF No. 14-1).)

The DOE soon began raising concerns with Defendant regarding Plaintiff's performance under the DOE Contract. (ECF No. 17-2 ¶¶ 5-6.) By July 1, 2013, the DOE instructed Defendant to resolve Plaintiff's performance issues or risk termination of the DOE Contract. ( Id. ¶¶ 8-9; ECF No. 17-3 ¶¶ 8-11.)

In August of 2013, the parties met to discuss certain amendments to the Subcontract. (ECF No. 5 ¶ 7.) The parties then sent e-mail messages back and forth to discuss the amendments. ( Id. )

On November 18, 2013, Plaintiff sent Defendant a Notice of Default and Demand for Cure, requesting payment of past amounts owed and timely payment of present and future amounts owed. ( Id. ¶ 10.) On November 19, 2013, Defendant attempted to terminate the Subcontract, and to backdate the termination to be effective July 1, 2013. ( Id. ¶ 12.)

On these facts, Plaintiff filed this action against Defendant in Denver County Defendant removed the action to this Court, contending that the case was removable pursuant to 28 U.S.C. § 1442(a)(1) (the "Federal Officer Removal Statute"). (ECF No. 1.) On January 27, 2014, Plaintiff filed a Motion to Remand. (ECF No. 14.) Defendant filed a Response to the Motion to Remand on February 20, 2014 (ECF No. 17), and Plaintiff filed a Reply on March 7, 2014 (ECF No. 21). On April 17, 2014, this Court denied Defendant's Motion for Leave to File Supplemental Brief in Support of Opposition to the Motion to Remand. (ECF No. 27.)

On January 6, 2014, Defendant filed a Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(6). (ECF No. 9.) Plaintiff filed a Response to the Motion to Dismiss on January 29, 2014 (ECF No. 15), and Defendant filed a Reply on February 18, 2014 (ECF No. 16). Both motions are now ripe for decision.

II. MOTION FOR REMAND

A. Legal Standard

Defendant bears the burden of establishing that the Court has jurisdiction over this action. See Figueroa v. Am. Bankers Ins. Co. of Fla., 517 F.Supp.2d 1266, 1268 (D. Colo. 2006); Ryan v. Dow Chem. Co., 781 F.Supp. 934, 939 (E.D.N.Y. 1992) ("In removal cases, defendant bears the burden of showing that removal is clearly appropriate[.]").

Under 28 U.S.C. § 1442(a)(1), a private corporation may remove a case to federal court upon a showing that: (1) it was acting under the direction of a federal officer when engaging in the challenged conduct; (2) there is a causal nexus between the plaintiff's claims and the acts the private corporation performed under the federal officer's direction; and (3) there is a colorable federal defense to the plaintiff's claims. See Greene v. Citigroup, Inc., 215 F.3d 1336, at *2 (10th Cir. 2000).

One of the primary purposes of the Federal Officer Removal Statute is to permit federal defenses to be litigated in the federal courts. Willingham v. Morgan, 395 U.S. 402, 407 (1969). Therefore, federal subject-matter jurisdiction under the Federal Officer Removal Statute is liberally construed. See id. at 406-07 (construing this statute as "not narrow' or limited'" but rather "broad enough to cover all cases where federal officers can raise a colorable defense arising out of their duty to enforce federal law."); Arizona v. Manypenny, 451 U.S. 232, 242 (1981) ("the policy favoring removal should not be frustrated by a narrow, grudging interpretation of § 1442(a)(1).") (quoting Willingham, 395 U.S. at 407); Watson v. Phillip Morris Co., Inc., 551 U.S. 142, 147 (2007) ("The words acting under' are broad, and this Court has made clear that [the Federal Officer Removal Statute] must be liberally construed.'").

B. Analysis

Plaintiff moves to remand this action on the basis that: (1) Defendant was not "acting under" the direction of any federal officer when it terminated the Subcontract; (2) Defendant has failed to assert a federal defense, meaning no removal jurisdiction exists under 28 U.S.C. § 1442; and (3) Defendant waived its right to ...


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