Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-06-35148/USCOURTS-ca9-06-35148-0/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 

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FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JOHN LUSSIER; MARY HAWKS, 

individually, and on behalf of all

other similarly situated, No. 06-35148

Plaintiffs-Appellants, D.C. No.  v. CV-05-00768-AJB

DOLLAR TREE STORES, INC., a OPINION

Foreign Corporation,

Defendant-Appellee. 

Appeal from the United States District Court

for the District of Oregon

Anna J. Brown, District Judge, Presiding

Argued and Submitted

February 6, 2008—Portland, Oregon

Filed March 7, 2008

Before: Pamela Ann Rymer and Richard A. Paez,

Circuit Judges, and Cormac J. Carney,* District Judge.

Opinion by Judge Rymer

*The Honorable Cormac J. Carney, United States District Judge for the

Central District of California, sitting by designation. 

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COUNSEL

J. Dana Pinney, Bailey, Pinney & Associates LLC, Vancouver, Washington, Jacqueline L. Koch, Vancouver, Washington (argued), for the plaintiffs-appellants. 

Kevin H. Kono, Davis Wright Tremaine LLP, Portland, Oregon, for the defendant-appellee. 

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OPINION

RYMER, Circuit Judge: 

John Lussier and Mary Hawks, putative class representatives in litigation against Dollar Tree Stores, Inc., appeal the

district court’s denial of their request for attorney’s fees following their successful motion to remand the underlying

action after it had been removed by Dollar Tree pursuant to

the recently enacted Class Action Fairness Act of 2005

(CAFA). 28 U.S.C. § 1332(d)(2) (2005). We conclude that the

district court did not abuse its discretion in finding that, given

the lack of clarity in the law at the time, Dollar Tree’s

removal arguments were not unreasonable. Accordingly, we

affirm. 

I

In the underlying action, Lussier and Hawks sought to

recover unpaid wages, overtime wages, minimum wages and

penalty wages for Dollar Tree employees for a six year

period. The complaint was originally filed in the Circuit Court

of Oregon for the County of Multnomah on February 14,

2005. Dollar Tree was served on April 29, 2005. 

Meanwhile, CAFA became effective on February 18, 2005.

Pub. L. No. 109-2, 119 Stat. 4 (2005). CAFA amended 28

U.S.C. § 1332, which provides for diversity jurisdiction, by

conferring original federal court jurisdiction over class actions

when there is minimal diversity and the amount in controversy exceeds $5,000,000. 28 U.S.C. § 1332(d). Section 9 of

the Act provides that “[t]he amendments made by this Act

shall apply to any civil action commenced on or after the date

of enactment of this Act.” Pub. L. 109-2, § 9. 

Dollar Tree removed the action to the federal District Court

for the District of Oregon on May 27, 2005. The Notice of

Removal asserted jurisdiction under § 1332(d) based on the

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case being a civil class action between minimally diverse parties in which the matter in controversy exceeds $5,000,000.

The Notice averred that removal was proper pursuant to 28

U.S.C. § 1441(a)-(b), and was timely under 28 U.S.C.

§ 1446(b) in that fewer than 30 days had elapsed since a copy

of the summons and complaint was first provided. 

Lussier and Hawks moved to remand for lack of federal

jurisdiction, arguing that the suit was filed, and therefore

commenced, prior to CAFA’s effective date. Dollar Tree

argued in response that when an action is “commenced” for

purposes of CAFA is ambiguous, and that the term should be

interpreted broadly in accordance with the congressional

intent to expand federal court jurisdiction over class actions.

It agreed with Lussier and Hawks that the law of the state of

filing governs when an action is deemed “commenced” for

removal,1 but maintained that this action was not commenced

under Oregon law until the summons was served on April 29,

2005, after enactment of CAFA. For this it relied on Or. Rev.

Stat. § 12.020,2 and our opinion in Torre v. Brickey, where we

stated that “[u]nder Oregon law, summons must be served

1As Dollar Tree’s papers acknowledged, the Tenth Circuit Court of

Appeals had so held in Pritchett v. Office Depot, Inc., 404 F.3d 1232,

1238 (10th Cir. 2005) amended by 420 F.3d 1090 (concluding that

removal to federal court does not “commence” (or recommence) an action

for purposes of CAFA). 

2Or. Rev. Stat. § 12.020 provides in pertinent part: 

(1) Except as provided in subsection (2) of this section, for the

purpose of determining whether an action has been commenced

within the time limited, an action shall be deemed commenced as

to each defendant, when the complaint is filed, and the summons

served on the defendant . . . . 

(2) If the first publication of summons or other service of summons in an action occurs before the expiration of 60 days after

the date on which the complaint in the action was filed, the action

against each person of whom the court by such service has

acquired jurisdiction shall be deemed to have been commenced

upon the date on which the complaint in the action was filed. 

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within 60 days of filing the complaint in order for the action

to commence as of the date the complaint is filed.” 278 F.3d

917, 918 (9th Cir. 2002). Based on Torre, Dollar Tree’s theory was that Or. Rev. Stat. § 12.020 allows a grace period for

rolling back the date of commencement to the date of filing

when the statute of limitations is at issue. It further contended

that Or. R. Civ. P. 3, which provides that for purposes other

than statutes of limitations, an action is commenced by filing

a complaint,3 does not control because CAFA § 9 creates an

inverse type of statute of limitations for when an action may

be deemed timely commenced. 

The district court granted the motion to remand. The court

observed that CAFA does not define the term “commenced,”

but assumed — as we subsequently held in Bush v. Cheaptickets, Inc., 425 F.3d 683, 686-88 (9th Cir. 2005) — that a

removed case is “commenced” for purposes of CAFA on the

date it is initially commenced in state court rather than the

date of removal. Turning to the procedural rules of Oregon,

the court held that Or. R. Civ. P. 3 determines when an action

in “commenced,” not Or. Rev. Stat. § 12.020, because Rule 3

sets forth when an action commences in Oregon for all purposes other than the statute of limitations, whereas Or. Rev.

Stat. § 12.020 applies only when determining whether an

action has been commenced within a statute-of-limitations

period. It found that CAFA did not create a statute of limitations for class actions, but merely expanded the scope of federal jurisdiction by relaxing diversity requirements and

allowing aggregation for the amount in controversy requirement. Thus, it concluded, Rule 3 is the applicable provision

for determining when a CAFA action commences in Oregon.

Finally, the district court declined Dollar Tree’s invitation to

construe the jurisdictional provisions broadly to include

3Or. R. Civ. P. 3 states: “ Other than for purposes of statutes of limitations, an action shall be commenced by filing a complaint with the clerk

of the court.” 

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actions filed but not served at the time of CAFA’s enactment,

as Congress could have said so had that been its intent. 

Following remand, Lussier and Hawks sought attorney’s

fees under 28 U.S.C. § 1447(c).4 Observing that its task was

to assess the reasonableness of the attempted removal, the district court found that Dollar Tree raised novel issues regarding

removal under CAFA. The court noted that the issue of when

an action is “commenced” under CAFA was one of first

impression, and that district courts were divided on the meaning of “commenced” in other jurisdictional contexts.5

 The

court concluded that Dollar Tree’s position was reasonable

and, in its discretion, denied the request for fees and costs

resulting from removal. 

Lussier and Hawks timely appealed. 

II

[1] The Supreme Court settled the standard for awarding

attorney’s fees when remanding a case to state court in Martin

v. Franklin Capital Corp., 546 U.S. 132 (2005).6 The Court

held that “the standard for awarding fees should turn on the

reasonableness of the removal.” Id. at 141. As the Court put

4Section 1447(c) provides in pertinent part: “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.” 

5The court’s order referred to Kieffer v. Travelers Fire Ins. Co., 167

F.Supp. 398, 401 (D. Md. 1958), and Lorraine Motors, Inc. v. Aetna Cas.

& Sur. Co., 166 F.Supp. 319, 323-24 (E.D.N.Y. 1958), where the courts

reached opposite conclusions on whether “commenced” referred to the filing date of the complaint or to the date of removal for purposes of an

amendment to the diversity statute that raised the amount-in-controversy

requirement. 

6The district court’s decision was filed just after the decision in Martin

was rendered. The district court did not mention Martin in its order, but,

as we shall explain, its approach was not inconsistent with Martin’s analysis. 

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it, “[a]bsent unusual circumstances, courts may award attorney’s fees under § 1447(c) only where the removing party

lacked an objectively reasonable basis for seeking removal.

Conversely, when an objectively reasonable basis exists, fees

should be denied.” Id. 

We review the award of fees and costs for abuse of discretion, and will overturn the district court’s decision if it is

based on an erroneous determination of law. Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1250 (9th Cir. 2006);

Patel v. Del Taco, Inc., 446 F.3d 996, 999 (9th Cir. 2006).

Lussier and Hawks press for de novo review on the footing

that the district court made a legal error by applying an incorrect standard, but we disagree. The court recognized that its

decision turned on the reasonableness of the attempted

removal, which is the correct legal standard. Beyond this,

Lussier and Hawks suggest that Dollar Tree’s arguments in

support of removal were without legal merit, hence the court

erred when it found that the removal was reasonable. There

is no question that Dollar Tree’s arguments were losers. But

removal is not objectively unreasonable solely because the

removing party’s arguments lack merit, or else attorney’s fees

would always be awarded whenever remand is granted.

Resolving a circuit split on the issue, Martin explicitly

rejected the view that attorney’s fees should presumptively, or

automatically, be awarded on remand. 546 U.S. at 136-37.

The district court implicitly accepted this position as well; it

assessed the merits of Dollar Tree’s attempted removal for

reasonableness, even though it had remanded. Finally, Lussier

and Hawks fault as legally erroneous the district court’s reference to Kieffer and Lorraine Motors, both of which involved

the question whether a non-CAFA action was “commenced”

on the date of removal or on the date of filing. While we agree

that neither opinion is particularly useful, we do not read the

court as having relied on Kieffer or Lorraine Motors for any

reason other than to support its point that the meaning of

“commenced” under CAFA was novel, and existing law on its

meaning in other jurisdictional statutes was inconclusive.

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Accordingly, we have no occasion to depart from the normal

standard of review for attorney’s fees on remand, informed by

the framework set out in Martin. 

We have considered an award of attorney’s fees in three

cases since Martin. In Durham, we considered whether a

defendant who failed to remove within thirty days on diversity or federal question grounds, could later remove once it

discovered the case was also removable on federal officer

grounds. Expressing no opinion on the merits of the removal

petition, we held that it was timely and so Lockheed had an

objectively reasonable basis for filing it. 445 F.3d at 1254. In

Patel, the plaintiffs had filed a complaint in federal district

court against Del Taco alleging various civil rights violations.

The complaint also sought to remove Del Taco’s pending

state court petition to confirm an arbitration award. The plaintiffs contended that the arbitration petition was removable

because the federal district court had supplemental jurisdiction over the petition when it was joined with the civil rights

claims. This contention was frivolous, as the supplemental

jurisdiction statute is not a basis for removal and no other

ground for removal existed. Accordingly, we held that the district court did not abuse its discretion in awarding attorney’s

fees. 446 F.3d at 999-1000. Finally, in Gardner v. UICI, 508

F.3d 559, 562 (9th Cir. 2007), we held that it was objectively

reasonable for an insurer to remove on the basis of fraudulent

joinder of an agent as a reasonable litigant in its position

could have concluded that the complaint failed to state a claim

against the only resident defendant. 

[2] Dollar Tree argues that this case is more like Durham

than Patel. However, the situation here is different from both;

Dollar Tree sought removal under a new statute whose meaning had not yet been fleshed out. Although Martin itself did

not explicate “objectively reasonable” because the reasonableness of the removal arguments was not disputed, the Court of

Appeals for the Seventh Circuit discussed the question in a

somewhat similar context. In Lott v. Pfizer, Inc., Pfizer

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removed an action under CAFA, arguing among other things

that the case “commenced” on the date that it was removed

to federal court, not the date on which it had been filed in

state court. 492 F.3d 789 (7th Cir. 2007). The district court

remanded the action, and awarded attorney’s fees under

§ 1447(c) without assessing the reasonableness of Pfizer’s

attempt to remove under CAFA. The court of appeals

reversed, holding that the test is whether the relevant case law

clearly foreclosed the defendant’s basis of removal. It reasoned that the Supreme Court in Martin had cited with

approval Valdes v. Wal-Mart Stores, Inc., 199 F.3d 290, 293

(5th Cir. 2000), which applied an objectively reasonable standard by looking to the clarity of the law at the time of

removal. Martin, 546 U.S. at 141. The court also pointed out

that courts are familiar with determining whether conduct is

objectively reasonable in contexts such as qualified immunity,

and that Martin’s objectively reasonable standard balances

competing interests in much the same way as the doctrine of

qualified immunity does. Applying this test, the court held

that Pfizer’s attempt to remove under CAFA was objectively

reasonable given that, at the time the notice of removal was

filed, no circuit court of appeals had rejected Pfizer’s argument that the word “commenced” means the date on which a

case is removed to federal court. Lott, 492 F.3d at 793. 

[3] The situation here is analogous. When Dollar Tree

removed, the Tenth Circuit’s opinion in Pritchett was the only

circuit authority on the meaning of “commenced” in CAFA.

Dollar Tree’s removal arguments proceeded on the understanding that the action was commenced when it was brought

in state court instead of upon removal, in accord with Pritchett’s holding. Beyond this, as the district court stated, the

issue of when an action is “commenced” under CAFA was

one of first impression. While the court rejected Dollar Tree’s

novel arguments about the relationship among Or. Rev. Stat.

§ 12.020, Or. R. Civ. P. 3, and CAFA in light of CAFA’s

broadening of federal jurisdiction over class actions, it also

found that Dollar Tree’s position was reasonable. We cannot

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say that the district court abused its discretion in this. Lussier

and Hawks point out that Dollar Tree offered no authority for

its “bar to actions in the inverse” theory, and submit that it

was wrong in distinguishing Pritchett because this case (like

Pritchett’s) commenced with the filing in state court. However, Pritchett said nothing about what any particular state’s

law provides in relation to CAFA. Dollar Tree’s arguments

were not otherwise clearly foreclosed. Consequently, we

affirm the district court’s denial of attorney’s fees and costs.

AFFIRMED. 

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