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Pennsy Supply, Inc. v. Mumma

April 19, 2010

PENNSY SUPPLY, INC., PLAINTIFF,
v.
ROBERT M. MUMMA, II AND CACO, THREE, INC., DEFENDANTS



The opinion of the court was delivered by: Judge Caputo

MAGISTRATE JUDGE SMYSER

MEMORANDUM

Presently before the Court is Magistrate Judge Smyser's Report and Recommendation ("R&R") of March 17, 2010 (Doc. 30), Defendant CACO Three, Inc.'s ("CACO") Objections to the R&R (Doc. 32), and Defendant Robert M. Mumma's Objections to the R&R (Doc. 35). Magistrate Judge Smyser recommended that Plaintiff's Motion to Remand (Doc. 4) be granted. For the reasons discussed more fully below, this Court will adopt Magistrate Judge Smyser's R&R and remand this case to the Court of Common Pleas of Dauphin County.

BACKGROUND

Plaintiff Pennsy Supply, Inc. ("Pennsy") filed its Complaint in the Court of Common Pleas of Dauphin County on February 25, 2010 against Defendants Mumma and CACO. (Doc 1., Ex. A.) Plaintiff's Complaint set forth three causes of action: trademark dilution pursuant to the Pennsylvania Trademark Act, 54 PA. CONST. STAT. § 1101-1126 (Count I), unfair competition (Count II), and preliminary and permanent injunction (Count III).

The facts alleged in Plaintiff's Complaint are as follows. Pennsy is a Pennsylvania corporation, Mumma is a resident of Pennsylvania, and CACO is a Pennsylvania Corporation. (Compl. ¶¶ 1-3.) Pennsy was founded in 1921 by Mumma's grandfather and has been competing in the construction industry in south central Pennsylvania by selling and delivering ready-mix concrete, crushed stone, asphalt and other aggregate. (Compl. ¶¶ 4-6.) Mumma owns and controls businesses that directly compete with Pennsy, including CACO, which has been doing business as McDermitt Concrete, Inc. ("McDermitt"). (Compl. ¶ 7.) On January 19, 2010, Mumma filed with Pennsylvania Department of State to have the fictitious name "McDermitt Concrete, Inc." withdrawn; however, McDermitt has not stopped operating. (Compl. ¶ 15). On Febraury 1, 2010, Mumma filed the fictitious name "Pennsy Concrete" with the Pennsylvania Department of State. (Compl. ¶ 14.) Pennsy alleges that it has used the name "Pennsy Supply" or "Pennsy" for over fifty (50) years, including in advertising media, and that the general public associates the word "Pennsy" with Plaintiff. (Compl. ¶¶ 10-12.)

In early February 2010, the outgoing voice message for the number associated with McDermitt stated "Thank you for calling Pennsy Concrete, formerly known as McDermitt Concrete." (Compl. ¶ 16.) On February 5, 2010, Plaintiff's corporate parent sent Mumma a cease-and-desist letter instructing Mumma to stop using the name "Pennsy Concrete" and demanded Mumma to confirm his compliance with the letter in writing by February 9, 2010. (Compl. ¶ 17.) Mumma failed to indicate his compliance, and Plaintiff filed the instant Complaint.

On March 1, 2010, Mumma filed a notice of removal, which was consented to by CACO. (Doc. 1.) On March 2, 2010, Plaintiff filed a Motion to Remand (Doc. 4.) Magistrate Judge Smyer issued an R&R on March 17, 2010, recommending that this case be remanded to state court because due to lack of subject matter jurisdiction. (Doc. 30.) Both Defendants filed Objections to the R&R (Docs. 32, 35). Defendants also filed briefs in support with accompanying affidavits and other documents. Plaintiff filed briefs in opposition to the Objections (Doc. 37, 38.) As such, this matter is fully briefed and ripe for disposition.

STANDARD OF REVIEW

Where objections to the magistrate judge's report are filed, the Court must conduct a de novo review of the contested portions of the report, Sample v. Diecks, 885 F.2d 1099, 1106 n.3 (3d Cir. 1989) (citing 28 U.S.C. § 636(b)(1)(c)), provided the objections are both timely and specific, Goney v. Clark, 749 F.2d 5, 6-7 (3d Cir. 1984). In making its de novo review, the Court may accept, reject, or modify, in whole or in part, the factual findings or legal conclusions of the magistrate judge. See 28 U.S.C. § 636(b)(1); Owens v. Beard, 829 F. Supp. 736, 738 (M.D. Pa. 1993). Although the review is de novo, the statute permits the Court to rely on the recommendations of the magistrate judge to the extent it deems proper. See United States v. Raddatz, 447 U.S. 667, 675-76 (1980); Goney, 749 F.2d at 7; Ball v. United States Parole Comm'n, 849 F. Supp. 328, 330 (M.D. Pa. 1994). Uncontested portions of the report may be reviewed at a standard determined by the district court. See Thomas v. Arn, 474 U.S. 140, 154 (1985); Goney, 749 F.2d at 7. At the very least, the Court should review uncontested portions for clear error or manifest injustice. See, e.g., Cruz v. Chater, 990 F. Supp. 375, 376-77 (M.D. Pa. 1998).

DISCUSSION

Pursuant to 28 U.S.C. § 1447(c), this Court must remand any action if "it appears that the district court lacks subject matter jurisdiction." Defendants removed this case to federal court pursuant to Federal Question Jurisdiction and Diversity of Citizenship Jurisdiction. Each basis will be discussed below.

I. Federal Question Jurisdiction

28 U.S.C. § 1331 provides that "district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." In order to remove a case based on federal question jurisdiction, a federal question must be "presented on the face of the plaintiff's properly pleaded complaint." Trans Penn Wax Corp. v. McCandless, 50 F.3d 217, 228 (3d Cir. 1995). Thus, this rule "makes the plaintiff the master of the claim; he or she ...


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