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BGC Partners, Inc. v. Avison Young (Canada) Inc.

United States District Court, D. Columbia.

July 22, 2015

BGC PARTNERS, INC., et al., Plaintiffs,
v.
AVISON YOUNG (CANADA) INC., et al., Defendants

Page 120

For BGC PARTNERS, INC., G& E ACQUISITION COMPANY, LLC, G & E REAL ESTATE, INC., doing business as, NEWMARK GRUBB KNIGHT FRANK, Plaintiffs: Robert Courtney Gill, Saad Gul, LEAD ATTORNEY, SAUL EWING LLP, Washington, DC.

For AVISON YOUNG - WASHINGTON, D.C., LLC, AVISON YOUNG (CANADA) INC., AVISON YOUNG (USA) INC., MARK ROSE, Defendants: Bryan M. Stephany, LEAD ATTORNEY, Beth A. Williams, KIRKLAND & ELLIS LLP, Washington, DC.

Page 121

MEMORANDUM OPINION

CHRISTOPHER R. COOPER, United States District Judge.

The pugilists in this case are competing heavyweights in the commercial real estate brokerage industry. On one side of the ring are New York-based BGC Partners, Inc., and two of its subsidiaries. On the other are Toronto-based Avison Young, two its U.S.-based subsidiaries, and its Chief Operating Officer. BGC sued in the District of Columbia Superior Court alleging that Avison Young poached brokers and customers from a third firm, Grubb & Ellis, whose assets BGC purchased out of bankruptcy in 2012. Avison Young removed the case to this Court, asserting both federal bankruptcy jurisdiction based on the case's connection to the Grubb & Ellis bankruptcy and diversity jurisdiction. BGC moves to remand. Finding that the case does not " arise in" the bankruptcy proceeding, that abstention is required even if the case is " related to" the bankruptcy, and that diversity is lacking, the Court will award this round of the bout to BGC and remand the case to D.C. Superior Court.

A. Background[1]

In 2008, the president of Grubb & Ellis, Mark Rose, left his position to become Avison Young's Chief Executive Officer. Compl. ¶ 27. With Rose at the helm, Avison Young aggressively expanded into the United States market, opening new offices in New York, Boston, Los Angeles, Washington, D.C., and other large cities across the country. Id. Avison Young's expansion, according to BGC, was fueled by a conspiracy to steal clients and brokers from Grubb & Ellis. Id. ¶ ¶ 28, 30. BGC specifically alleges that Avison Young paid individual brokers around the country to terminate their contracts with Grubb & Ellis and to supply Avison Young with information on existing and potential clients. Id. ¶ ¶ 33-37.

Grubb & Ellis struggled in the wake of Avison Young's expansion, resulting in the firm's February 2012 bankruptcy. Id. ¶ ¶ 22, 28. BGC purchased Grubb & Ellis's assets shortly thereafter, id., and contends that Avison Young continued to steal Grubb & Ellis's brokers and commissions during the bankruptcy proceedings. Id. ¶ 29. Later in 2012, BGC sued Avison Young in New York state court for tortious interference with contractual

Page 122

relationships, tortious interference with prospective business relationships, unjust enrichment, and other claims. BGC Partners, Inc. v. Avison Young (Can.), Inc., 919 F.Supp.2d 310, 313 (S.D.N.Y. 2013). After Avison Young removed that case to the United States District Court for the Southern District of New York, BGC sought remand, which the court granted. The court found that the parties as named were not completely diverse; that the case was not significantly related to the prior bankruptcy proceeding; and that the mandatory abstention doctrine prevented the court from exercising bankruptcy jurisdiction. Id. at 317-19. On remand, the state court dismissed the case for lack of personal jurisdiction. Pls.' Mem. in Supp. of Mot. to Remand or Abstain at 5.

BGC--along with its affiliates G& E Acquisition Company, LLC and G& E Real Estate, Inc.--then brought suit in District of Columbia Superior Court against Avison Young, its affiliates Avison Young-Washington, D.C., LLC, and Avison Young (USA) Inc., and Mark Rose, again raising claims of tortious interference and unjust enrichment in addition to new claims for conspiracy, theft of trade secrets, and conversion. Avison Young removed the case to this Court, and BGC has again moved to remand. As in the New York case, Avison Young asserts two grounds for federal jurisdiction. It argues that bankruptcy jurisdiction exists because the case is connected to the Grubb & Ellis bankruptcy proceedings. Notice of Removal at 3. And it contends the Court has diversity jurisdiction because the parties are citizens of different states. Id. at 5. BGC disputes both grounds for jurisdiction.

II. Standard of Review

When faced with a motion to remand, the removing party has the burden to prove that there is federal jurisdiction. See Hood v. F. Hoffman-La Roche, Ltd.,639 F.Supp.2d 25, 28 (D.D.C. 2009). Courts construe removal jurisdiction narrowly to avoid state court encroachment, Shamrock Oil & Gas Corp. v. Sheets,313 U.S. 100, 109, 61 S.Ct. 868, 85 L.Ed. 1214 (1941), and any factual ambiguities are resolved in ...


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