Commercial Litigation and Arbitration

Grable & Guns

Most opinions published over the past six months have rejected attempts to remove based on Grable & Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308 (2005), but there are some colorful exceptions. Adventure Outdoors, Inc. v. Bloomberg, 2007 U.S. Dist. LEXIS 69631 (S.D. Ga. Sept. 20, 2007), is a defamation action filed in Georgia state court again the mayor and other New York City officials. In 2006, the City of New York filed suit in the Eastern District of New York against gun brokers from around the country, alleging that they knowingly permitted straw transactions to take place involving gun purchases, in violation of federal law. The City had hired private investigators to pose as gun purchasers and engage in behavior designed to simulate straw purchases to determine whether particular gun brokers would sell under circumstances which mimicking a straw purchase. Adventure Outdoors allegedly did. After being sued, it filed a state court defamation action in Cobb County, Georgia, against New York City’s mayor, corporation counsel, police commissioner and a host of others for, among other things, remarks at a press conference announcing the filing of the New York action.

The decisive practical issue for any district judge considering a Grable-based removal is whether the presented circumstances more resemble Grable (which permitted removal, but with caution) or Merrell Dow Pharm. Inc. v. Thompson, 478 U.S. 804, 808 (1986) (which rejected federal jurisdiction, with vigor). District Judge J. Owen Forrester found the former. He recognized that ‛the federal firearms scheme does not allow for a private right of action,“ which is ‛a factor to consider in the ‘arising under’ analysis“ but ‛not dispositive.“ The Court concluded that ‛the law surrounding straw purchases under these circumstances ... is an ‘important issue of federal law that sensibly belongs in a federal court.’“

The plaintiff did not lose everything, however. The Court also refused to dismiss the case in its entirety or to transfer it to the E.D.N.Y. Same jury pool, but a federal district judge and the Eleventh Circuit to contend with. Remember the Texas livestock association lawsuit against Oprah?

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