EC’s remand motion #notchilled

This litigation is getting complicated enough that I’m going to start separating it out into threads and giving each separate thread a letter. Some of these threads will close out relatively swiftly; some may be around for a very, very long time.

A. The claim by EC against DA alleging defamation.
B. The motion for a temporary restraining order by EC (discussed here).
C. The removal of the case to federal court.
D. The counterclaim by DA against EC alleging abuse of process.

I’m going to be referring to these separate threads for a while. I’m separating them out like this because you can (mostly) treat them as independent. You don’t have to know what is happening in A to understand what is happening in C or D.

Today, Ellora’s Cave filed two motions: a motion to remand to state court (this has to do with thread C) and a motion to continue the hearing for the TRO (this has to do with thread B).

Thread B: the motion for the temporary restraining order.

Where we are: EC filed a motion for a TRO when it filed its suit. The state court decided it needed a longer hearing to decide the matter. That longer hearing was originally scheduled to be heard in state court on October 27th; when the defendants removed to federal court, a hearing before the federal judge was scheduled for October 29th. 

The easy one to discuss is the motion to continue. That motion basically says, in plain English: “We have a hearing scheduled for October 29th at 1:30 PM. I have another hearing scheduled at the same time and so cannot attend. Also, I think we need to schedule a discussion of my remand motion before we talk about the TRO. Let’s reschedule.”

This is fairly routine. The TRO hearing will almost certainly get bumped. Not a big deal.

What to expect next: The court will probably recalendar the TRO hearing.

Thread C: The removal to federal court.

Where we are: EC originally filed the law suit in state court. The defendants removed the lawsuit to federal court under what is known as “diversity jurisdiction”–meaning that the defendants are from a different state than the plaintiffs, and the amount is large enough to be serious. There are a lot of reasons to prefer federal courts: judges know federal law (including first amendment law), harsh penalties for dilatory discovery, uniform procedural rules so that the out-of-state counsel isn’t at a disadvantage.

Ellora’s Cave has now moved to remand the case to state court. They claim:

Defendants waived their right to removal based upon diversity jurisdiction because of their clear and unequivocal intent to proceed with this case in the State court. Because these actions were clearly inconsistent with the Defendants’ right of removal, remand to the State court is appropriate.

(Motion to continue)

Here is EC’s full memorandum in support. Notice what they are not arguing: they are not disputing any of the jurisdictional requirements–that is, they don’t dispute that the parties are from different states or that the amount in controversy is greater than $75,000. They are claiming instead that DA availed itself of the proceedings in state court and so waived the right to remove.

Here’s the general rule on waiving the right to remand:

The law is clear that a defendant may, by making affirmative use of the processes of the state court, waive the right to remove the action to federal court. California Republican Party v. Mercier, 652 F.Supp. 928, 931 (C.D.Cal.1986). The basis for this rule of law is that it is unfair to permit a defendant to experiment with his case in state court, and, upon adverse decision, remove the case for another try in federal court. Bolivar Sand Co., Inc. v. Allied Equipment, Inc., 631 F.Supp. 171, 172 (W.D.Tenn.1986). Any intent to waive the right to remove, however, must be evidenced by “clear and unequivocal” action. Bedell v. H.R.C. Ltd., 522 F.Supp. 732, 738 (E.D.Ky.1981) (footnote omitted).

Rose v. Giamatti, 721 F. Supp. 906, 922 (S.D. Ohio 1989).

Translation for the lay person: You get the side-eye if you start in state court, you start adjudicating the merits, you start losing, and then you try to go to federal court as a do-over.

This motion gets the “you gave it the old college try” pat on the back, but I doubt it’s likely to succeed.

Let’s talk law. Rose, one of the cases cited by EC, is not very helpful for the plaintiffs. In Rose, the defendants participated in a two-day evidentiary hearing regarding a temporary restraining order. That went badly for them; they then tried to appeal that order in state court, and got smacked down. Only then did they try to remove to federal court. The court in Rose explained that “a fairly bright line exist[s] between submitting a case for decision on its merits, and engaging in preliminary proceedings relating to temporary restraining orders or preliminary injunctive relief… The latter [is] not a conscious choice to submit the merits of a controversy to a state court for determination.” Id. at 923. Translation: showing up to talk about a TRO does not waive your right to remove to federal court.

That doesn’t look good for EC.

(As a sidenote for those reading this without legal training: if I say Rose, italicized, I refer to the case. If I say Rose, not-italicized, I’m referring to the plaintiff in that case, who was Pete Rose, the baseball player. Thank you, baseball–now let’s get back to Ellora’s Cave.)

EC’s lawyer valiantly tries to save the day with this argument:

Unlike Rose, here the Defendants expressly, and unequivocally, requested in a motion and agreed order a “full airing of the issues at a preliminary injunction” before the State court. This was no simple request for a continuance; Defendants explicitly requested to take full advantage of the State court proceedings for an adjudication on the merits before seeking removal to this Court.

(Memo at 6.)

The problem EC has is that in Rose, the court found that the defendants had not waived their right of removal. There, the plaintiffs actually had a full airing of the issues at a preliminary injunction hearing–which surely is about ten times farther along the path of availing themselves of the state court than merely agreeing to such a hearing. It’s utterly absurd to imagine that DA agreed to schedule a preliminary injunction and so bound themselves to the state court’s decision on the merits, but in Rose, the defendants showed up to a hearing on the preliminary injunction but never agreed to that hearing.

While counsel tries to point out that DA has made discovery attempts in state court (this affidavit by the lawyer; these emails back and forth between counsel for the parties, as well as a subpoena issued to Google in state court), the emails cited clearly state that the transcripts are “for the hearing” on the preliminary injunction, and we already know that “discovery . . . conducted . . . for purposes of the preliminary injunction hearing,” Rose at 923, will not bar removal to federal court.

I could say a lot more about this, but it wouldn’t really change what I think. I don’t even think this one is remotely close, and I say that without having the benefit of hearing from defendants in response.

My conclusion: EC isn’t going to try to contest the jurisdictional amount, this motion to remand will almost certainly be denied, and we are in federal court from here on out.

Huzzah, federal court!

What to expect next: DA/Jane will almost certainly file a memorandum opposing a remand. The court will decide if it wants to hold a hearing on this or simply decide on its own, and we should get a decision from the court. That decision will almost certainly seal off this thread once and for all, and we can move on to the many, many other issues.

I have not talked about threads A or D recently, even though we have an answer from Dear Author (in thread A) and a counterclaim from Dear Author (which is the start of thread D). The reason I have not done this yet is that the answer is from Dear Author alone, and not from Jane in her personal capacity. Some things Jane will say in her answer will be duplicative. Some things she says will, I suspect, not be (which is why they didn’t file together). I’m waiting to have all things in hand before saying what I think. But if you want to come to your own conclusions, the answer from Dear Author is here, and the counter claim is here.

One last thing: I said in this post that Ellora’s Cave could not win this without spending at least $75,000. If you can’t tell from the litigation thus far, I’m going to up that amount to at least $150,000. Notice that of the things I listed that EC would have to do to win in my prior post we’ve now added at least 10 items–include fighting removal to federal court, joinder motions, motions to dismiss based on the CDA… So the irrationality of Ellora’s Cave runs, at this point, to 300 BookBub ads. And it’s been less than 30 days. Just keep that in mind.

EC won’t get to trial–the most they can hope for is a blaze of glory at summary judgment–but that’s what is on the line at this point. So my question from before stands: Why is Tina Engler economically irrational?

35 thoughts on “EC’s remand motion #notchilled

  1. Courtney, I would be very interested to know what the implications would be if EC were to withdraw the charges at this stage. Can they do that? Would they be liable for Jane/DA’s legal fees? What other implications might there be for them?

  2. Also, thank you for your ongoing explanations of the details of the case. It’s a huge service to the rest of the community.

  3. There’s a typo in your summary intro to describe EC’s motion to remand to STATE COURT. You said EC wanted to remand to Fed. You can delete this comment. I just wanted to send you a note :) Also thanks for writing about all of this :)

  4. @Ros: They could withdraw their suit at this point without having to pay attorneys fees.

    They can’t withdraw Dear Author’s countersuit. That survives no matter what they do.

    They could easily talk to Dear Author about settlement at this point, though.

  5. Just as a note, one of my personal things that I always get wrong–and the reason I need someone besides me to read court stuff because I CONTINUALLY FUCK IT UP–is that I will switch plaintiffs and defendants. Don’t know why; I just naturally do, and I will never in a million years ever catch it on a reread.

    I had to make myself cheat sheets to make sure I didn’t screw it up all through my career, starting in law school, and always needed a second set of eyes on anything important. My brain just doesn’t see when I mess things up.

    In this case, you guys have to act as my second set of eyes so assume that anything I say will initially need someone to make sure I’m not screwing up in my usual ways.

  6. Love your summary! Completely ignorant of US law! :) But it still sounds as if EC is going to lose badly :)

    Thank you!

  7. I don’t think there was ever any doubt that EC was going down in a fiery ball of stupid. What I am waiting to see is if Jane Litte is pissed enough to continue with her counterclaim after the Cave whimpers “Uncle”. Now that is when the popcorn popper is going to get a workout.

  8. Thanks you so much for the great updates, and especially for putting it into laymans terms for people like me.

    I read their motion before reading your summary, and even by my layman POV I couldn’t see how Jane’s few actions to date could lock her into the Ohio state jurisdiction. Technically, isn’t the case still in a pre-litigation stage? And if Tina E is brought into the case, with her being a California resident wouldn’t that help strengthen the case to move the jurisdiction to the Federal level? I don’t blame EC for trying, (hey, if you don’t ask you don’t get, right?!) but even I can’t see how their latest motion would be granted.

  9. EC and their management don’t seem to me to have the sort of personalities that would consider a settlement, at least at this point.

  10. @Karlyn, I think in one of the prior filings, Randazza pointed out that Engler is not actually involved in the suit, Ellora’s Cave is, and CEO Patty Marks is. I read that to mean that TE is just an author and a founder, who happens to own a % of EC, so technically she isn’t actually involved in the case unless she wants to be. She hasn’t offered a deposition thus far (as far as I know) but oddly enough; she posted on Facebook and Twitter yesterday that she’d been busy compiling upwards of 3000 pieces of “evidence” for her lawyer. I guess she’s still trying to scare someone. I don’t really know who she thinks she’s going to scare, but apparently she thinks there is someone out there who will digest her bullshit. As for these 3000 pieces of evidence; she sure is wasting her attorney’s time, but I’m sure that firm is used to it by now. You put up with what you have to in order to pay the bills, after all. LOL
    @Courtney, with the speed at which you’re posting commentary for us peanuts with no law experience, I’m surprised it took this long to catch a minor typo. If you makes you feel any better; your copy has fewer errors than either attorney. We’re all writers here; we know how it is :)

  11. I don’t normally pay that much attention to publishing news that closely but having followed the breadcrumbs about this case to your site I have to say that you make it both understandable and interesting at the same time. Thanks so much for that.

  12. Question: If for some reason the motion to remand to state court is approved and mucks up the suit for DA, is that acceptable grounds for filing appeal?

    (I’m a legal-idiot… I only understand MOST of what you translate into English for us, so BLESS YOU.)

  13. The “3K pieces of evidence” meme is a good example of who TE is NOT playing to. It’s not the attys or business gallery. From afar it looks as if she’s reassuring supporters that she’s got a handle on all this, it’s completely under control.

    I hope that someone is keeping notes, because surely there’s a book in here somewhere.

  14. @Amalie Berlin:

    I’m always on shaky ground with Civ Pro, which is not my area, but 28 U.S.C. 1447(d) says: An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise, except that an order remanding a case to the State court from which it was removed pursuant to section 1442 or 1443 of this title shall be reviewable by appeal or otherwise.

    So the answer appears to be no, you can’t appeal a remand order.

    That being said, I’m not worried that the court will screw this up. This is pretty basic stuff.

  15. @Mzcue: There’s a meme? I haven’t seen it, but I’d like to because this thing is like a car accident I can’t look away from. My guess is that the evidence is in the form of screenshots, as in one of today’s motions, EC’s attorney’s references “re-sharing” whatever they think is libel. I wonder if that means they are going to go after DA for every re-tweet about the case. I can’t wait to see the dance Randazza choreographs to counter that kind of bullshit argument. It will probably go down in history.

  16. @Emily: And then there’s the “favorite-ing.” Don’t let’s forget to add those in, too.

    I may have misused the word meme—what I meant to convey was that the reference to “3000 pieces of evidence” is something we can expect to hear over and over, like a slogan or mantra. It seems meant to convey more than the explicit meaning of the four words.

  17. Your write-ups on this case are awesome — thanks for putting everything in language we can understand!

  18. It also occurs to me that in assembling “3000 pieces of evidence,” what TE is really doing is boosting the legal bill. An atty couldn’t afford the risk of offering stupid stuff to the court, so it will all have to be examined and vetted, piece by piece, at someone’s hourly rate before it has any value at all.

    It’s yet another indication that burning scarce resources is of no concern to EC at all.

  19. @Mzcue: I’ll quote the post since I can’t figure out how to post a screenshot here in the comments 17 hours ago: TE (as Jaid Black) posted on facebook: “I have literally worked from dawn til dusk (and beyond) today, most of which was spent organizing upwards of 3000 pieces of evidence for my lawyer. Worth it? Yeah, it saves cash, but… Fatigue, thy name is Jaid.” I guess she thinks she’s saving her attorney time and money, but you’re right, he’ll have to go through every piece at his hourly, so I don’t know where she was going with that. More proof that EC money is of no consequence. Also a good reason to depose her, but I doubt that post will be the clincher.

  20. But who is going to depose a 90-percent owner? To whom is TE really answerable. Warmly expressed sentiments of loyalty and devotion aside, it seems that TE can tank her company if she feels like it. There’s no apparent board of directors to stop her. Perhaps EC’s creditors have some sort of standing? Before this case, I never thought about the ramifications of intentionally or ambivalently allowing the destruction of one’s own company before. The only thing that comes to mind is when Howard Roark blew up his building in The Fountainhead, and that was pretty misbegotten too.

  21. @Mzcue: You know, it never occurred to me, until just now that she could be tanking the company on purpose. It makes an odd sort of sense.

  22. @Emily:

    So let me get this straight, EC is blaming the entire Barbara Streisand Effect (re-sharing, favorite-ing) on DA?

    LOL!!!!! LOL!!!!!!

    I think most of us had heard chatter about EC’s money troubles well before DA posted their article (heck, it was trending on my Twitter feed, hard to miss the conversations), but things didn’t get interesting until EC filed suit.

  23. I can’t imagine that there’s purposeful tanking going on. It’d be profitable to sell off assets and close if you really wanted out. And who doesn’t like money? :)

  24. @Karlyn: I know, right? As I see it; EC created this shitstorm with the filing against DA.

    @ Mzcue: PS: When I wrote depose; I meant in the legal sense :) I don’t think they managed to get Engler on the case yet. You’re a genius for the Fountainhead comparison, though. I think you’re really on to something there :)

  25. @Emily: Oh—THAT kind of depose…Of course that’s what you meant. Duh.

    In my imagination this thing is taking on overtones of an epic tragedy. Who puts her own mother in that kind of position?

  26. Thx so much for these posts Courtney.

    As for the rest, to paraphrase Jay-Z, it seems to me EC/Engler has 3000 problems and the truth IS one.

  27. EC is taking such a huge gamble I can’t even begin to understand what motivates them. Thanks to Jane’s article about EC I’ll never buy anything from EC again. I didn’t know any of the things EC has been doing until I read Jane’s article, and now I’m glad I did read it.

  28. @Emily:

    And here I thought: “Only 3000? That’s like 3-4 for each author. At most.”

    Seriously, though, Tina *is* a princpal of a party even if she’s not (currently?) a party in her own right. It’s part of a plaintiff’s job, especially in a defamation case, to sort through all that.

    On Courtney’s statement on the TRO post:

    “On the basis of the exhibits currently available to the court, someone has to be lying.”

    I’ve seen a lot of damage done, including lawsuit threats and lawsuits, by overreliance on underqualified employees and managers. I still think it’s possible that’s the case here—where there is significant internal misinformation.

    Until all that digging gets done, the magnitude may not be known by anyone.

  29. Thank you very much for your summaries. I’m learning a lot about US legal procedures. In a sense I’m a layperson, b/c I know law, but that of my country. I’m trying to translate your words into concepts of my own legal system, so I can understand what’s going on.

    Another comment has pointed out that TE as an individual, is not actually involved in the suit. I find that very interesting. Having re-read the original Dear Author post, that makes a difference, at least for me.

  30. Thanks for taking time to explain this to non-lawyers.

    I’m puzzled about the difference between the courts. Why is EC trying to remand back to State court ? And why does DA want to continue in Federal ?

  31. Just adding my thanks to all the others. You make legalese and formalities of the US legal process so much clearer! More than that, you do a wonderful job of showing what matters and why.

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