Repco, Inc. v. Flexan, LLC

Background

Repco, Inc., doing business as Peterson Enterprises, sued Flexan, LLC, over claims involving unfair competition and interference with Repco’s business relationship with Qure. Repco alleged that Flexan terminated Repco as its regional sales representative and interfered with that relationship. The opinion states that Flexan is an Illinois company and Repco is a Minnesota corporation.

Repco served Flexan with the complaint on July 23, 2018. The complaint sought more than $50,000 in damages but did not expressly seek more than $75,000. Repco sent Flexan a demand letter on August 15, 2018, stating that Repco had suffered more than $3 million in damages. Repco later filed the complaint in Hennepin County District Court on November 16, 2018. After receiving Repco’s initial disclosures on December 28, 2018, Flexan removed the case to federal court on January 7, 2019.

Motion to Remand

Repco moved to remand, meaning to return the case to state court, arguing that Flexan’s removal was untimely. The parties agreed that they were citizens of different states and that more than $75,000 was at stake. The issue was whether Flexan should have known that federal diversity jurisdiction was available earlier, based on the August demand letter.

Under 28 U.S.C. § 1446(b)(3), when a case is not removable based on the initial pleading, a defendant generally has 30 days after receiving another qualifying document showing that the case has become removable. The court held that the demand letter qualified as such a document because it stated that Repco’s damages exceeded $3 million. The court therefore concluded that Flexan was on notice by August 15, 2018, that the amount-in-controversy requirement was satisfied. Because Flexan did not remove the case until January 7, 2019, the court held that removal was too late and that the case had to be remanded to Hennepin County District Court.

Fees and Motion to Dismiss

Repco also requested costs and actual expenses incurred in seeking remand. The court denied that request, finding that Flexan’s position about when the removal period began was not objectively unreasonable, even though the court rejected it.

Because the case was being remanded, the court denied Flexan’s motion to dismiss as moot. The court’s order granted Repco’s motion to remand, remanded the case to Hennepin County District Court, and denied Flexan’s motion to dismiss as moot.