Case 7:19-cv-00061-KMK Document 1 Filed 01/03/19 Page 1 of 7

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK
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WEROK, LLC,
Plaintiff, Case No.:

v.

LEAF BRANDS, LLC, NOTICE OF REMOVAL

Defendant.
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PLEASE TAKE NOTICE that Defendant Leaf Brands, LLC (“Defendant”), by and

through its undersigned counsel, hereby removes this action pursuant to 28 U.S.C. §§ 1331,

1332(a), 1441 and 1446, from the Supreme Court of the State of New York, County of

Rockland, to the United States District Court for the Southern District of New York. In support

of this Notice, the Defendant states the following:

1. On November 28, 2019, plaintiff Werock, LLC (“Plaintiff”) filed an action in the

Supreme Court of the State of New York, County of Rockland, entitled Werock, LLC v. Leaf

Brands, LLC, index number 037005/2018. Pursuant to 28 U.S.C. § 1446(a), a true and correct

copy of the Summons and Complaint is attached hereto as Exhibit 1, which constitutes all

pleadings and process in this action.

2. The state court complaint (“Complaint”) purports to assert one common law cause

of action against the Defendant for alleged “Defamation and Libel Per Se”. The claim

purportedly arises out of a grievance which the Defendant submitted to Amazon accusing the

Plaintiff of selling via Amazon goods that infringe one or more of the Defendant’s trademark.

Compl. ¶ 10.

3. On December 5, 2018, Defendant received a copy of the Complaint and

Summons. The Defendant has not made any filings in the state court action.

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4. This Notice of Removal is being filed within thirty days from the date on which

service of the Complaint was complete, as required by 28 U.S.C. § 1446(b).

5. Removal to this judicial district is proper under 28 U.S.C. § 1441(a) because this

district embraces Rockland County, New York, in which the state action was originally filed.

6. In accordance with 28 U.S.C. § 1446(3), Defendant will promptly provide notice

of this Notice of Removal to Plaintiff and will promptly file this Notice of Removal with the

Clerk of the Supreme Court of the State of New York, County of Rockland.

FEDERAL QUESTION JURISDICTION

7. This action is removable to this Court under 28 U.S.C. § 1331 on the basis of a

federal issue arising under the Lanham Act, 15 §§ U.S.C. 1151 et seq.

8. “Federal-question jurisdiction is usually invoked by plaintiffs pleading a cause of

action created by federal law, but this Court has also long recognized that such jurisdiction will

lie over some state-law claims that implicate significant federal issues, see, e.g., Smith v. Kansas

City Title & Trust Co., 255 U.S. 180, 41 S.Ct. 243, 65 L.Ed. 577.” Grable & Sons Metal Prod.,

Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 308, 125 S. Ct. 2363, 2364, 162 L. Ed. 2d 257 (2005)

(emphasis added).

9. The factual allegation central to Plaintiff’s state court Complaint is that the

Defendant submitted to Amazon a grievance which falsely asserts that Plaintiff sold goods that

infringe one or more trademarks belonging to the Defendant. Compl. ¶ 22 (“Specifically, these

defamatory statements include a false assertion that Plaintiff committed trademark

infringement.”). Because a successful defamation claim must involve a false statement, to

succeed on its claim the Plaintiff must prove that it did not infringe Defendant’s trademark under

the Lanham Act. In other words, the Plaintiff’s claim necessarily includes within it a request for

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the Court to issue a finding of non-infringement in Plaintiff‘s favor, which will require the Court

to interpret provisions of the Lanham Act that address trademark infringement, including 15

U.S.C. § 1052(d). Plaintiff’s state law claim thus necessarily implicates a disputed and

substantial federal issue relating to trademark infringement arising under the Lanham Act, which

could have been brought in federal court as an action for declaratory judgment of non-

infringement (with supplemental jurisdiction over the state law defamation claim), and therefore

confers onto this Court federal question jurisdiction over this controversy. Grable & Sons Metal

Prod., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 125 S. Ct. 2363, 162 L. Ed. 2d 257 (2005)

(Federal court has federal question jurisdiction over state law claim if it necessarily states federal

issue, actually disputed and substantial, which federal forum may entertain without disturbing

congressionally approved balance of federal and state judicial responsibilities). Removal in this

instance is appropriate and does not disturb congressionally approved balance of federal and

state judicial responsibilities.

DIVERSITY JURISDICTION

10. This action is removable to this Court because it has original jurisdiction under 28

U.S.C. § 1332(a)(1) on the basis of diversity of citizenship and an amount in controversy which

exceeds $75,000, exclusive of interest and costs.

Citizenship of the Parties

11. “A corporation shall be deemed to be a citizen of every State and foreign state by

which it has been incorporated and of the State or foreign state where it has its principal place of

business.” 28 U.S.C. § 1332(c)(1).

12. The Complaint alleges that Plaintiff is a limited liability company organized in

New York, with its principal place of business in Rockland County, New York.

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13. Defendant is a California limited liability company, with its principal place of

business in Orange County, California, and all members of the Defendant are residents of the

State of California.

14. There is complete diversity of citizenship between the parties because Plaintiff is

a citizen of New York and Defendant is a citizen of California.

Amount in Controversy

15. Although the Complaint fails to specify a damages sum, the preponderance of the

evidence here indicates that the amount in controversy in this case easily exceeds $75,000.

McLoughlin v. People's United Bank, Inc., 586 F. Supp. 2d 70, 72 (D. Conn. 2008) (Where “the

complaint fails to allege a specific amount of damages, the removing defendant must prove by a

preponderance of the evidence that the amount in controversy” exceeds the jurisdictional

amount”) citing Royal Ins. Co. v. Jones, 76 F.Supp.2d 202, 204 (D.Conn.1999).

16. “The Second Circuit adheres to a rule which ascertains the amount in controversy

from the perspective of the plaintiff alone, and applies that approach to removed actions as well.”

Concorde Fin. Corp. v. Value Line, Inc., No. 03 CIV.8020 NRB, 2004 WL 287658, at *2

(S.D.N.Y. Feb. 11, 2004) citing Kheel v. Port of New York Authority, 457 F.2d 46 (2d Cir.1972);

Bernard v. Gerber Food Products Co., 938 F.Supp. 218 (S.D.N.Y.1996). In the Complaint,

Plaintiff states that it “generates revenues well in excess of $10 million dollars per year on

Amazon”, Compl. ¶ 16 (emphasis added), and alleges that the statements made to Amazon by

the Defendant have caused significant damages to Plaintiff’s business and that Plaintiff has

experienced “extreme reputational distress.” Compl. ¶ 40 (emphasis added). Plaintiff further

alleges that the “false and defamatory statements have caused Plaintiff embarrassment, loss of

business, and reputational injury” and “as a result of said defamation, Plaintiff continues to suffer

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from loss of business, loss of standing in the online community and online disgrace.” Compl. ¶¶

26, 28.

17. Under the rules of pleading in New York, complaints filed in tort cases in the

State of New York shall not seek a specific dollar amount, but have an ad damnum clause stating

that damages are “in an amount that exceeds the jurisdictional limits of all lower courts that

would otherwise have jurisdiction.” The Complaint includes such a statement. Compl. ¶ 17.

18. Plaintiff is seeking punitive damages, Compl. ¶ 18, which further increases the

amount-in-controversy in this case. See Bracken v. MH Pillars Inc., 290 F. Supp. 3d 258, 262

(S.D.N.Y. 2017) (“The amount in controversy requirement may be met by a combination of

economic and non-economic losses and punitive damages, so long as the punitive damages are

permitted under the controlling law.”) citing A.F.A. Tours, Inc. v. Whitchurch, 937 F.2d 82, 87

(2d Cir. 1991) (“if punitive damages are permitted under the controlling law, the demand for

such damages may be included in determining whether the jurisdictional amount is satisfied.”).

New York law permits punitive damages in defamation case. See Prozeralik v. Capital Cities

Communications, Inc., 82 N.Y.2d 466, 479–80, 605 N.Y.S.2d 218, 626 N.E.2d 34 (1993). See

also DiBella v. Hopkins, 403 F.3d 102, 122 (2d Cir. 2005).

19. Plaintiff is also seeking attorneys’ fees, Compl. at 6, which further increases the

amount-in-controversy in this case. See Concorde Fin. Corp. v. Value Line, Inc., No. 03

CIV.8020 NRB, 2004 WL 287658, at *3 (S.D.N.Y. Feb. 11, 2004) (“Last, attorney's fees may be

included in the amount in controversy determination if [‘]recoverable as a matter of right[‘]”)

quoting Givens v. W.T. Grant Co., 457 F.2d 612, 614 (2d Cir.1972).

20. Plaintiff is also seeking equitable relief, Compl. at 6, which further increases the

amount-in-controversy in this case. Mohammad G. M. Khan v. CXA-16 Corp., No. 16-CV-6672

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(RA), 2017 WL 1906885, at *3 (S.D.N.Y. May 5, 2017) (“In actions seeking declaratory or

injunctive relief, it is well established that the amount in controversy is measured by the value of

the object of the litigation.”) quoting Correspondent Servs. Corp. v. First Equities Corp., 442

F.3d 767, 769 (2d Cir. 2006).

21. For the foregoing reasons, the preponderance of the evidence here suggests that

the amount-in-controversy in this case exceeds $75,000.

CONCLUSION

22. Because this Court has federal question jurisdiction and diversity jurisdiction over

this action, this case is, upon Defendant’s request, removable to this Court under 28 U.S.C. §§

1332 and 1441.

WHEREFORE, Defendant Leaf Brands, LLC requests that this action be removed from

the Supreme Court of the State of New York, County of Rockland, to the United States District

Court for the Southern District of New York, and respectfully requests that this Court assume

jurisdiction over the action.

Dated: New York, New York

January 3, 2019

Respectfully submitted,

/s
_____________________________
Wedeen & Kavanagh
Attorneys for defendant Leaf Brands, LLC
By: Timothy Wedeen
137 5th Avenue, 10th Floor
New York, New York 10010
(646) 963-6808

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TO:

[PLTF’S COUNSEL NAME]

[PLTF’S COUNSEL ADDRESS]
[PLTF’S COUNSEL PH.]
Attorneys for Plaintiff

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