Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_04-cv-00238/USCOURTS-azd-4_04-cv-00238-0/pdf.json

Nature of Suit Code: 365
Nature of Suit: Personal Injury - Product Liability
Cause of Action: 28:1441 Petition for Removal- Product Liability

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WO

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Martin Sanchez and Maria Sanchez,

husband and wife, 

Plaintiffs, 

vs.

Yokohama Tire Corporation, a foreign

corporation; G.I. Gonzalez, Inc., d.b.a.,

Llantera el Rincon, an Arizona

corporation; A to Z Tire & Battery, Inc., a

foreign corporation,

Defendants. _________________________________

Evangelina Ocejo Saldana, the surviving

wife of Santiago Saldana on her own

behalf and on behalf of Daisy Saldana and

James Andrew Saldana, the surviving

children of Santiago Saldana, 

Plaintiffs,

vs.

The Yokohama Tire Corporation, a foreign

corporation; G.I. Gonzales Inc., an

Arizona corporation; A to Z Tire and

Battery, Inc., a foreign corporation;

Armando Arellano et ux.; Julian B.

Noriega et ux.; Salvadore Valdivia et ux.

d.b.a. Shuttle Transporte Superior/

Superior Shuttle & Transportation; Martin

Sanchez et ux, 

Defendants. 

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No. CIV 04-238-TUC FRZ (GEE)

REPORT AND RECOMMENDATION

(Motion for Attorney’s Fees)

Case 4:04-cv-00238-FRZ-GEE Document 79 Filed 12/29/05 Page 1 of 6
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28 1

 Clerk’s record number.

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Pending before the court is a motion for attorney’s fees filed by the Sanchez plaintiffs

(collectively, Sanchez) on June 21, 2005. [#66]1

 The defendant, Yokohama Tire

Corporation (Yokohama), filed a response, and Sanchez filed a reply.

The motion was referred to Magistrate Judge Edmonds for a report and

recommendation pursuant to LRCiv. 72.1 and 72.2. Rules of Practice of the U.S. District

Court for the District of Arizona. The court finds the motion suitable for decision without

oral argument. 

This is a products liability and negligence case that arose out of a one-car accident.

The driver of the vehicle, Martin Sanchez, was injured and the front-seat passenger, Santiago

Saldana, was killed when the vehicle in which they were riding overturned when one of its

tires suddenly failed. 

The case originated in state court. On May 6, 2004, the defendant, Yokohama, filed

a notice of removal in this court alleging federal question jurisdiction. Yokohama argued the

recently added claim for punitive damages provided the necessary federal question

jurisdiction under the “artful pleading rule.” On June 4th and 7th of 2004, the plaintiffs filed

motions to remand which were granted by the district court. 

Sanchez moves for attorney’s fees pursuant to 28 U.S.C. § 1447(c). The motion for

attorney’s fees should be denied. Yokohama had an objectively reasonable basis for seeking

removal.

Factual and Procedural Background

On June 6, 2000, a 1997 Ford E-350 15 passenger van was heading north on Interstate

19 when one of its tires suffered a sudden tread belt separation. (Notice of removal.);

(Motion to remand by Saldana plaintiffs, p. 3.) The driver, Martin Sanchez, lost control, and

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the van overturned. Id. Sanchez was badly injured, and Santiago Saldana, the right front seat

passenger, was killed. Id.

The van was equipped with National XT Commando tires manufactured by

Yokohama and distributed by A to Z tires and Llantera El Rincon. (Notice of removal.)

The van was operated by Transporte Superior, Martin Sanchez’s employer. Id.

The Sanchez plaintiffs (collectively, Sanchez) filed an action in state court claiming

product liability and negligence. Id., Exhibit 1. His action was consolidated with a similar

action filed later by the Saldana plaintiffs. Id., p. 2.

On January 15, 2004, Sanchez filed a motion to amend his complaint to add a claim

for punitive damages. (Notice of removal, Exhibit 3.) He argued in his motion he was

entitled to punitive damages because Yokohama “failed to report pertinent information

concerning tread/belt edge separation problems to the National Highway Traffic Safety

Administration (NHTSA) [as they are required to do under the Motor Vehicle Safety Act

(MVSA), 49 U.S.C. § 30101 et seq.] and did so to avoid an investigation which would result

in negative publicity and economic repercussions.” Id. This failure to report, Sanchez

argued, is evidence Yokohama acted with an “evil mind.” Id. 

On May 6, 2004, Yokohama filed a notice of removal arguing the punitive damages

claim provided federal question jurisdiction under the artful pleading rule. The plaintiffs

moved to remand. 

 Under the artful pleading rule, “[a] state-created cause of action can be deemed to

arise under federal law (1) where federal law completely preempts state law; (2) where the

claim is necessarily federal in character; or (3) where the right to relief depends on the

resolution of a substantial, disputed federal question.” Arco Environmental Remediation v.

Department of Health and Environmental Quality of the State of Montana, 213 F.3d 1108,

1113 (9th Cir.2000). (citations omitted). The artful pleading rule, however, is a “narrow

exception” that should be invoked only in “exceptional circumstances.” Clinton v. Acequia,

Inc., 94 F.3d 568, 571 (9th Cir.1996).

Case 4:04-cv-00238-FRZ-GEE Document 79 Filed 12/29/05 Page 3 of 6
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2

 The Motor Vehicle Safety Act (MVSA) was created to “reduce traffic accidents and deaths

and injuries resulting from traffic accidents.” 49 U.S.C. § 30101. The Secretary of Transportation

delegated the administrative implementation of the MVSA to the National Highway Traffic and

Safety Administration (NHTSA). Public Citizen Inc. v. Mineta, 343 F.3d 1159 (9th Cir.2003).

Under the MVSA, tire manufacturers are required to report to NHTSA pertinent information

concerning tread belt separation problems. See 49 U.S.C. § 30166(m). Failure to comply with the

terms of the MVSA may result in civil penalties. See 49 U.S.C. § 30165. 

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Yokohama argued the punitive damages claim was in reality a federal common law

action designed to punish Yokohama for its alleged failure to comply with the reporting

requirements of the Motor Vehicle Safety Act (MVSA),2

 49 U.S.C. § 30101 et seq. and 49

C.F.R. § 573, et seq. In the alternative, Yokohama argued removal was proper because “it

appears that some substantial, disputed question of federal law is a necessary element of one

of the well-pleaded state claims.” (Defendant’s response, June 21, 2004, p. 10.) This court,

however, rejected Yokohama’s arguments and remanded the case to state court.

On June 21, 2005, Sanchez filed the instant motion for attorney’s fees. [#66]

Yokohama filed a response and Sanchez filed a reply.

Discussion

When a case is remanded to state court, the court may award attorney’s fees to the

party opposing removal. The pertinent statute reads as follows: “An order remanding the

case may require payment of just costs and any actual expenses, including attorney fees,

incurred as a result of the removal.” 28 U.S.C.A. § 1447 (c).

“Absent unusual circumstances, courts may award attorney’s fees under § 1447(c)

only where the removing party lacked an objectively reasonable basis for seeking removal.”

Martin v. Franklin Capital Corp., __ U.S. __ , __ , 126 S.Ct. 704, 712 (2005). “Conversely,

when an objectively reasonable basis exists, fees should be denied.” Id.

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 In this case, Yokohama had an objectively reasonable basis for seeking removal.

When Sanchez moved to amend his complaint, he announced his intention to prove

Yokohama failed to comply with its federal duty to report tread belt separation problems.

Under certain circumstances, introducing a federal issue into a state law action may create

federal jurisdiction. See Arco Environmental Remediation, 213 F.3d at 1113. Yokohama

argued the introduction of this federal issue triggered the artful pleading rule and removal

was therefore proper. Yokohama’s argument was a fair extension of existing case law. Id.

Sanchez argues Yokohama did not support its motion with case law from a controlling

jurisdiction. There is some truth to this criticism, but this area of the law is relatively

complex, and there is little controlling case law to look to for guidance. See Littel v.

Bridgestone/Firestone, Inc., 259 F.Supp.2d 1016, 1026 (C.D.Cal.2003); See also 28

U.S.C.A. § 1447 (d) (“An order remanding a case to the State court from which it was

removed is not reviewable on appeal or otherwise . . . .”). As Yokohama correctly observes,

neither party was able to find controlling case law “on all fours” with the instant action. This

is a reflection of the state of the case law, not an indication that Yokohama’s removal was

not well taken. Yokohama had an objectively reasonable basis for its notice of removal. See,

e.g., Vetro, Inc. v. Active Plumbing and Heating, Inc., __ F.Supp. 2d __ , 2005 WL 3462794,

*6 (D.Colo. 2005) (Where the defendant based federal question jurisdiction on the fact that

the anticipated subcontract would have been governed by federal regulations, removal was

improper, but the defendant had an objectively reasonable basis for removal.). 

Recommendation

 The Magistrate Judge recommends the district court, after its independent review of

the record, enter an order 

DENYING the motion for attorney’s fees filed by the Sanchez plaintiffs on June 21,

2005. [#66]

Pursuant to 28 U.S.C. §636 (b), any party may serve and file written objections within

10 days of being served with a copy of this report and recommendation. If objections are

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not timely filed, the party’s right to de novo review may be waived. See United States v.

Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir.2003) (en banc). If objections are filed, the

parties should direct them to the district court by using the following case number: CIV 04-

238 TUC-FRZ

The Clerk is directed to send a copy of this report and recommendation to all parties.

DATED this 28th day of December, 2005.

Case 4:04-cv-00238-FRZ-GEE Document 79 Filed 12/29/05 Page 6 of 6