Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca3-14-04282/USCOURTS-ca3-14-04282-0/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 

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NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

_____________

Nos. 14-4282; 15-3152

_____________

SOUTH ANNVILLE TOWNSHIP, LEBANON COUNTY AUTHORITY

v.

JAROMIR KOVARIK; DARIA KOVARIKOVA,

Appellants

_____________

Appeal from the United States District Court

for the Middle District of Pennsylvania

(D.C. Civ. No. 1-13-cv-01780)

District Judge: Hon. Yvette Kane

______________

Submitted Under Third Circuit L.A.R. 34.1(a)

March 24, 2016

______________

Before: GREENAWAY, JR., VANASKIE, and SHWARTZ, Circuit Judges.

(Opinion Filed: June 3, 2016)

______________

OPINION*

______________

VANASKIE, Circuit Judge.

 

* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 

does not constitute binding precedent.

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Appellants Jaromir Kovarik and Daria Kovarikova (the “Kovariks”) appeal both 

the District Court’s grant of attorneys’ fees and costs in favor of Appellee South Annville 

Township, Lebanon County Authority (the “Authority”), as well as the District Court’s 

denial of relief sought by the Kovariks pursuant to Rule 60(b) of the Federal Rules of 

Civil Procedure. Because we find that the District Court both appropriately exercised its 

discretion in awarding attorneys’ fees and costs in favor of the Authority based upon the 

Kovariks’ baseless removal of the underlying municipal lien action to federal court and 

acted well within its ample discretion in denying the Kovariks’ Rule 60(b) motion, we 

will affirm.

I.

We write primarily for the parties, who are familiar with the facts and procedural 

history of this case. Accordingly, we set forth only those matters essential to our 

analysis.

The Authority filed a municipal lien against the Kovariks in the Lebanon County 

Court of Common Pleas asserting that they failed to pay sewer tapping and rental fees 

amounting to $8,014.90. The Kovariks removed the case to the United States District 

Court for the Middle District of Pennsylvania, claiming that the Authority filed the lien

action in retaliation for their exercise of First Amendment rights.1 The Authority filed a 

 

1 At the time the Kovariks removed the case to federal court, this was the only 

asserted basis for federal jurisdiction. They no longer contend that any First Amendment 

claim provides a basis for federal jurisdiction.

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motion to remand the case to state court on the ground that defenses and counterclaims 

based on federal law are insufficient to confer federal subject matter jurisdiction.

The Kovariks filed a motion for an extension of time to respond to the Authority’s 

motion to remand, which the District Court granted. The Kovariks then filed another 

motion for extension, asking for an additional sixty days to respond and stating that they 

needed to obtain documents from the Pennsylvania Infrastructure Investment Authority 

(“Pennvest”) pursuant to Pennsylvania’s Right to Know Law, 65 Pa. Stat. Ann. §§ 

67.101–67.3104, to support their contention that there was federal subject matter 

jurisdiction. Upon receiving the documents, however, the Kovariks were unable to 

provide any evidence of the existence of a federal question. Instead, they filed an 

affidavit stating that the documents Pennvest had provided included over 600 pages of 

irrelevant information and claimed that Pennvest was unwilling or unable to provide the 

information they needed. The Kovariks requested that the owners or creators of the 

documents be deposed so that they could obtain the information they needed. 

The District Court declined to extend discovery and denied the Kovariks’ third 

motion to extend the time to respond to the Authority’s motion to remand. The District 

Court further required the Kovariks to file a reply to the motion to remand within 

fourteen days. Instead of filing a reply to the motion to remand, the Kovariks stipulated 

to a remand to state court, asking for leave to remove the case to federal court if they 

discovered evidence of federal subject matter jurisdiction. 

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Before the District Court could act on the stipulation, the Kovariks filed a motion 

to withdraw their stipulation or, in the alternative, for the District Court to reconsider 

jurisdictional discovery. The District Court denied the motion, granted the Authority’s 

motion for remand, and requested supplemental briefing on whether the Kovariks should 

be required to pay the Authority’s attorneys’ fees, costs, and expenses pursuant to 28 

U.S.C. § 1447(c) for removing the case to federal court without an objectively reasonable 

basis for doing so. 

The District Court ultimately granted attorneys’ fees and costs in favor of the 

Authority, finding that the underlying action, a municipal lien, failed to raise a federal 

question and that the Kovariks’ “asserted grounds for removal were insubstantial.” J.A. 8

(citation and internal quotations marks omitted).

2

 The District Court rejected the 

Kovariks’ argument that Grable & Sons Metal Products, Inc. v. Darue Engineering &

Manufacturing, 545 U.S. 308 (2005), authorized removal, observing that Grable involved 

a substantial question of federal law in the complaint and the municipal lien action here 

contains no issue of federal law. See J.A. 7. The Kovariks insisted that there was a 

federal question because the Authority’s purported purpose in pursuing the lien was to 

repay a loan to the United States Treasury under the American Recovery and 

Reinvestment Act of 2009 (“ARRA”), Pub. L. No. 111-5. The District Court rejected 

this argument and found that the Kovariks’ “attempt to invoke the ARRA and raise 

 

2

“J.A.” shall refer to the appendix in case 14-4282.

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questions pertaining to its limiting provisions and interpretations does not connect to [the 

Authority’s] original lien.” J.A. 7 (citations omitted).

Ultimately, the District Court awarded the Authority $17,310.66 in fees and costs. 

Specifically, the District Court found that: (1) the attorneys’ rates were reasonable for the 

market and, regardless, the Kovariks failed to challenge them; and (2) the hours incurred 

by the attorneys were reasonable in light of the Kovariks’ requests and motions. The 

District Court also rejected the Kovariks’ motion for sanctions under Federal Rule of 

Civil Procedure 37, finding that the Authority had adequately complied with its orders for 

disclosure. The Kovariks appealed the fee award to this Court.

While this appeal was pending, the Authority withdrew the underlying municipal 

lien. In response, the Kovariks moved pursuant to Federal Rule of Civil Procedure 60(b) 

to set aside the judgment awarding fees, requesting the District Court to take judicial

notice of a state court docket revision relating to a judgment that had previously been 

entered against the Kovariks. Both parties also filed motions for sanctions against each 

other.

The District Court denied all motions and dismissed as moot the request to take 

judicial notice of the state court docket revision. The Kovariks appeal the denial of their

Rule 60(b) motion as well as the District Court’s decision not to take judicial notice of 

the docket revision. 

II.

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The Kovariks make three main arguments in support of their direct appeal of the 

fee award: (1) there was an objectively reasonable basis for removing the case to federal 

court and/or for seeking jurisdictional discovery; (2) the District Court abused its 

discretion in failing to reduce the amount of fees awarded given the circumstances of the 

case; and (3) the District Court abused its discretion in calculating the amount of fees 

awarded. In their appeal from the denial of post-judgment relief, the Kovariks make two 

arguments: (1) the District Court erred in denying their motion to vacate under Rule 

60(b); and (2) the District Court erred by failing to take judicial notice of adjudicative 

facts pursuant to Federal Rule of Evidence 201 before denying their motion to vacate. 

We will address each appeal in turn. 3

A.

In general, a court may award fees under 28 U.S.C. § 1447(c) “only where the 

removing party lacked an objectively reasonable basis for seeking removal.” Martin v. 

Franklin Capital Corp., 546 U.S. 132, 141 (2005). We review a district court’s award of 

fees under § 1447(c) for abuse of discretion. See Mints v. Educ. Testing Serv., 99 F.3d 

1253, 1260 (3d Cir. 1996). A district court does not abuse its discretion in awarding 

attorneys’ fees and costs when the basis for removal was “frivolous” or “insubstantial.” 

Id. at 1261. 

1.

 

3 We have appellate jurisdiction under 28 U.S.C. § 1291 to review final orders of 

the District Court. 

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When the Kovariks initially removed the case to federal court, their basis for 

removal was that the lien was the Authority’s attempt to retaliate against them for 

exercising their First Amendment rights. The Kovariks later changed the jurisdictional 

foundation for removal, alleging that the Authority was pursuing the lien to repay a 

federal government loan received and governed by ARRA. The Kovariks argue that 

because Congress may impose conditions on ARRA fund recipients, this case presents a 

substantial federal question, analogizing it to Grable. 

Like the District Court, we find that the Kovariks’ reliance on Grable is 

misplaced. In Grable, the Court found jurisdiction because the question of whether the 

Internal Revenue Service, a federal agency, properly seized property under federal law 

necessarily had to be decided to resolve the case. See Grable, 545 U.S. at 314–15. Here, 

the Kovariks’ alleged federal question does not need to be decided to determine if the

Authority’s lien was proper. Even if the Authority had used ARRA funds to construct the 

sewer project, the Kovariks are unable to point to any relevant conditions that Congress 

placed on using such funds or any impact this may have on the propriety of the 

Authority’s lien. 

Ultimately, the Authority’s municipal lien against the Kovariks is nothing more 

than a state law claim brought by a municipality. The Kovariks’ attempts to transform 

the Authority’s lien into a federal claim are insubstantial and provide no “objectively 

reasonable basis” for removal. For these reasons, we find that the District Court did not 

abuse its discretion in awarding attorneys’ fees and costs in favor of the Authority.

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2.

We address together the Kovariks’ second and third arguments relating to their 

direct appeal of the fee award. The Kovariks argue that the amount awarded here was 

unreasonable and that it is unfair for them to pay over $17,000 in attorneys’ fees in regard 

to the removal issue when the entire amount in controversy for the case was barely 

$8,000. The Kovariks also argue that the District Court incorrectly calculated the award 

of attorneys’ fees. According to the Kovariks, the fees awarded included compensation 

for “persistently grossly inflated hours” and for meetings and communications that 

should not have been included. Appellant Br. at 26. The District Court found, however,

that the supporting information was satisfactory and engaged in a detailed explanation of 

why it found the fees to be appropriate. The District Court did not abuse its considerable 

discretion in determining the amount of fees and costs to award.

B.

We review a District Court’s denial of post-judgment relief under Rule 60(b) for

abuse of discretion. See Reform Party of Allegheny Cty. v. Allegheny Cty. Dep’t. of 

Elections, 174 F.3d 305, 311 (3d Cir. 1990) (en banc). We may find that there has been 

an abuse of discretion when “the district court’s decision rests upon a clearly erroneous 

finding of fact, an errant conclusion of law or an improper application of law to fact.” Id.

(quoting Int’l Union, UAW v. Mack Trucks, Inc., 820 F.2d 91, 95 (3d Cir. 1987)). 

Because our standard of review with respect to Rule 60(b) is quite deferential, “we will 

not interfere with the [D]istrict [C]ourt’s exercise of discretion unless there is a definite 

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and firm conviction that the court . . . committed a clear error of judgment.” In re 

Cendant Corp., 235 F.3d 176, 181 (3d Cir. 2000) (citation and internal quotation marks 

omitted).

The Kovariks argue that the District Court erred by not considering the fact that 

the Authority withdrew its underlying municipal lien claim after the case was remanded 

to state court. This argument is meritless, however, because what happens on the merits

of the case in state court does not impact the propriety of the fee award for the improper 

removal and associated proceedings. The Kovariks argue that the Authority could have 

withdrawn its claim while it was in federal court, thereby avoiding the federal jurisdiction 

litigation altogether. The Kovariks, however, assume that the Authority was planning to 

withdraw its claim the whole time, but did not present any evidence to support such a 

contention. Their argument also does not take into account the fact that the federal 

jurisdiction litigation was in response to their own improper removal and that they also 

could have avoided the jurisdiction litigation by not undertaking an improper removal.

We agree with the District Court’s reasonable explanations for rejecting each of 

the Kovariks’ theories of relief under Rule 60(b). To the extent that the Kovariks 

challenge the Authority’s standing to obtain an award of attorneys’ fees and costs, that 

argument is inappropriate for a Rule 60(b) motion and should have been brought on 

direct appeal. The Kovariks provide no reason for us to find that the District Court 

abused its discretion in rejecting their request for relief under Rule 60(b).

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We review a District Court’s decision to take judicial notice of facts for abuse of 

discretion. In re NAHC, Inc. Sec. Litig., 306 F.3d 1314, 1323 (3d Cir. 2002). The 

Kovariks argue that the District Court abused its discretion in failing to take judicial 

notice pursuant to Federal Rule of Evidence 201(c)(2) of a docket entry revision in the 

state court case relating to a judgment that had previously been entered against them. We 

disagree because, as the District Court explained, the subsequent state proceedings were 

immaterial to the question of whether the award of attorneys’ fees was appropriate for 

litigating the subject matter jurisdiction question. The District Court correctly found that 

a docket revision relating to the merits of the underlying suit did not need to be 

considered to decide the Kovariks’ Rule 60(b) motion.

IV.

For the reasons set forth herein, we hold that the District Court did not abuse its 

discretion in either awarding attorneys’ fees and costs in favor of the Authority or

determining the amount of fees to award, denying the Kovariks’ request for Rule 60(b) 

relief, and declining to take judicial notice of the state court docket revision. 

Accordingly, we will affirm the District Court’s orders entered September 25, 2014 and 

August 4, 2015.

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