In the… [crucial] section of his order, Judge Houck sets out the law that is applicable to these various claims and assertions (“Standard of Review”). Citing another 4th Circuit case which is binding upon him, Judge Houck writes: “Thus, ‘(i)f a plaintiff can establish, without the resolution of an issue of federal law, all of the essential elements of his state law claim, then the claim does not necessarily depend on a question of federal law.” To determine this question, the U.S. Supreme Court requires a federal court to which a state-law case has been removed to analyze whether or not the federal claim involved is “substantial”, or is merely an incident to the dispute:
Under the substantial federal question doctrine, “federal jurisdiction over a state law claim will lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress.” … If the defendant fails to demonstrate all four of these elements, removal is improper under this doctrine.
Now Judge Houck turns to a detailed analysis of the defendants’ arguments to see how they fare under each of the four prongs of this test. He preliminarily disposes of the defendants’ claims concerning the Lanham (federal trademark) Act, and observes that the plaintiffs had the absolute right to base their complaint upon State trademark law only. Thus the fact that there may be federal-law claims assertable in addition to the state-law ones pled in the complaint is irrelevant to the analysis.
And in a few thoroughly researched and well-written pages, Judge Houck now demonstrates how insubstantial are the defendants’ federal-law arguments. He takes each of the four prongs one by one, and shows how the defendants’ arguments fail to satisfy any of them. ((That is why Judge Houck’s order would almost certainly be upheld if defendants were able to appeal from it (see below). Failing four out of four grounds of the test does not even make this a close case….)
Read it all and please note that there is a link provded to the full document from the Judge for those of you interested in such things–KSH.