Court Watch

Franchisors, more often than not, prefer to litigate in federal court when they are sued by franchisees. Since franchisors do not have the ability to control where the case is to be filed when they are on the receiving end, they sometimes have to resort to creative means to effect removal of state court cases to federal courts. The basis for removal is either diversity of citizenship (as long as the diverse defendant is not a citizen of the state where suit has been filed) or that the litigation is a federal question. Plaintiffs will usually anticipate the possibility of removal by either naming defendants who are non-diverse or crafting their claims as based on state, not federal, law. Federal courts require that removal notices lay out the basis for removal, since in some instances a federal court, sua sponte, without any motion to remand, will remand a case based on its reading of the removal notice; this reflects the importance of anticipating such possible action in drafting the removal notice. This happened recently in a case brought by Quiznos franchisees against a number of Quiznos-related parties in Colorado state court. PT Sak, LLC v. QFA Royalties, LLC, Bus. Fran. Guide (CCH ' 14,996 (D.CO Feb. 11, 2013).