Tuesday, January 3, 2012

Covenant Not to Sue Limited to Recipient's Current Ownership Is Sufficient to Divest the Court of Subject Matter Jurisdiction

Over Declaratory Judgment Claim

The court granted plaintiff's motion to dismiss defendant's declaratory judgment counterclaims following the execution of a unilateral covenant not to sue that applied only to defendant under its current ownership. "[Defendant] argues that the Covenant’s limitation to [it] under its present ownership does not significantly remove an actual case or controversy because it prevents [defendant] from conducting its business. . . . [Defendant] has shown how the Covenant might limit its future business opportunities. But it has not shown that an actual controversy continues to exist between the parties of sufficient immediacy and reality to warrant the issuance of a declaratory judgment."

Frontline Placement Technologies, Inc. v. CRS, Inc., 2-07-cv-02457 (PAED December 23, 2011, Order) (Robreno, J.)

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