1

United States Court of Appeals,

Fifth Circuit.

No. 95-40574.

W.H. AVITTS, et al., Plaintiffs-Appellees,

v.

AMOCO PRODUCTION CO., et al., Defendants-Appellants.

April 28, 1997.

Appeals from the United States District Court for the Southern

District of Texas.

Before DAVIS, SMITH and DUHÉ, Circuit Judges.

W. EUGENE DAVIS, Circuit Judge:

Defendants-appellants appeal an order imposing costs and

attorney's fees against them for improper removal under 28 U.S.C.

§ 1447(c). We reverse the order and remand this case to the

district court for the limited purpose of taxing costs under

Fed.R.Civ.P. 54.

I.

Appellees are landowners who contend that their property was

harmed by Amoco's operations in the West Hastings Field. Appellees

initiated this litigation by filing separate suits in Texas state

district court.

In their state court complaints, appellees alleged that their

damages caused by Amoco were in violation of "not only State law

but also Federal law." Based on federal question jurisdiction,

Amoco removed the case to federal court in October 1990. The

district court then consolidated appellees' suits.

Along with its notice of removal, Amoco filed a Fed.R.Civ.P.
 

1Appellees cited "18 U.S.C. § 1962 ("RICO'), 42 U.S.C. § 300,

et. seq., ("Family Planning and Population Act'), 33 U.S.C. § 1251

("Clean Water Act 1977'), 42 U.S.C. § 7401, et. seq. ("Clean Air

Act'), as "applicable' to this suit." 

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12(e) motion for a more definite statement, to determine what

federal law Appellees claimed Amoco had violated. The magistrate

judge summarily denied Amoco's motion, directing Amoco to seek this

clarification through interrogatories. Consistent with the

magistrate's direction, Amoco served appellees with interrogatories

asking appellees to specify their federal causes of action. In

response, appellees stated that they "believed" they had a claim

against Amoco under at least four, and maybe more, federal laws.1

Appellees filed the first of several amendments in July 1991.

The first amendment removed the reference to federal law contained

in the original complaint; nonetheless, appellees continued to

allege in their pleadings that the district court had jurisdiction

over these actions pursuant to 28 U.S.C. § 1331. Appellees' third

amendment, filed October 17, 1991, named for the first time Apache

Corporation ("Apache") and MW Petroleum Corporation ("MW") as

co-defendants.

After the pre-trial conference, all the defendants moved to

dismiss the action on grounds that the district court had no

federal question or diversity jurisdiction over any part of the

action. Appellees opposed the motion, arguing that the district

court had authority to entertain the action under its pendent

jurisdiction. Appellees persuaded the district court to deny the

motion to dismiss and retain the case in federal court. In fact,
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the district court embraced the appellees' position and

characterized the defendants' jurisdictional arguments as

"meritless."

Four days after the trial began, the district court, on its

own motion, issued a mandatory injunction requiring Amoco, Apache,

and MW to conduct an environmental study of the relevant property.

The district court also awarded $644,141.99 in interim attorney's

fees and expenses to appellees under the authority of the Federal

Oil Pollution Act of 1990, 33 U.S.C. § 2701-2761. Amoco, Apache,

and MW appealed these orders. In Avitts v. Amoco Production Co.,

53 F.3d 690, 692 (5th Cir.1995), this court held that appellees had

never asserted a federal cause of action and as a result the

district court did not have subject matter jurisdiction. The

district court's orders were thus vacated and the case was remanded

to the district court with instructions to remand the case to state

court.

Upon remand to the district court, appellees moved for "just

costs and actual expenses, including attorney fees" under 28 U.S.C.

§ 1447(c). The district court overruled the defendants' objection,

granted the motion, and held Amoco, Apache, and MW jointly and

severally liable under § 1447(c) for $641,509.46, representing

appellees' costs and attorney's fees. The district court then

remanded the action to state court. Amoco, Apache, and MW timely

appealed the district court's § 1447(c) order.

II.

The question we face is whether the district court erred in
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holding Amoco, Apache, and MW liable for attorney's fees and costs

under § 1447(c). We look first, of course, to the statute itself.

Section 1447(c) provides:

A motion to remand the case on the basis of any defect in

removal procedure must be made within 30 days after the filing

of the notice of removal under section 1446(a). If at any

time before final judgment it appears that the district court

lacks subject matter jurisdiction, the case shall be remanded.

An order remanding the case may require payment of just costs

and any actual expenses, including attorney fees, incurred as

a result of removal.

28 U.S.C.A. § 1447(c) (West 1994)(emphasis added).

Plaintiffs added Apache and MW as defendants after Amoco

removed this action to federal court. In Miranti v. Lee, 3 F.3d

925, 929 (5th Cir.1993), we held that a court's discretion to award

attorney's fees under § 1447(c) is triggered only if the court

first finds that the defendant's decision to remove was legally

improper. Id. at 929. As Miranti makes clear, the propriety of

the defendant's action in removing the case is central to the

determination of whether fees are awarded. Id. at 928. In

undertaking this analysis, we look only to "the complaint at the

time the petition for removal was filed." Id. Because neither

Apache nor MW played a role in the decision to remove, they are not

subject to an award under § 1447(c).

The determination of whether Amoco's removal of this case was

legally improper was decided in the earlier appeal and is not

before us. See Avitts, 53 F.3d at 693 (holding that "[n]o federal

cause of action has ever been asserted [by appellees], and it is

plain that removal jurisdiction under 28 U.S.C. § 1441 simply did

not exist"). But the determination that the removal was improper
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does not end our inquiry. We still must determine whether under

the circumstances of this case the district court abused its

discretion by ordering Amoco to pay $641,509.46 in costs and fees.

 Once a court determines that the removal was improper, thus

satisfying the Miranti threshold requirement, § 1447(c) gives a

court discretion to determine what amount of costs and fees, if

any, to award the plaintiff. Congress has plainly limited such an

award to those costs and fees "incurred as a result of removal."

See 28 U.S.C.A. § 1447(c)(West 1994). We interpret this language

to limit the litigation expenses that may be awarded under this

section to fees and costs incurred in federal court that would not

have been incurred had the case remained in state court. This

interpretation of the plain language of § 1447(c) is buttressed by

its legislative history. For example, the House Report states that

§ 1447(c) "will ensure that a substantive basis exists for

requiring payment of actual expenses incurred in resisting an

improper removal; civil rule 11 can be used to impose more severe

sanction when appropriate." H.R.Rep. No. 100-889, reprinted in

1988 U.S.C.A.N. 6033.

We conclude therefore that a party's costs of opposing

removal, seeking remand, and other expenses incurred because of the

improper removal may be awarded. By contrast, ordinary litigation

expenses that would have been incurred had the action remained in

state court are not recoverable because such expenses are not

incurred "as a result of the removal."

If the opinion ended here, we would remand this case to permit
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the district court to reduce the award to compensate Appellees for

expenses incurred "as a result of the removal." But for reasons

that follow, we need not remand this case for that purpose.

If a plaintiff bears a substantial share of the responsibility

for the case remaining in federal court, a court abuses its

discretion by awarding the plaintiff any sums under § 1447(c). In

other words, a plaintiff may in certain cases be estopped from

recovering costs and attorney's fees under § 1447(c) when his

conduct after removal plays a substantial role in causing the case

to remain in federal court.

In Bankston v. Burch, 27 F.3d 164, 169 (5th Cir.1994), the

plaintiff, a limited partner in a limited partnership, sued the

general partner alleging fraud or negligent misrepresentation,

breach of fiduciary duty, mismanagement and waste of partnership

assets, and breach of contract. The plaintiff asserted all of his

claims as personal claims in his original petition. The general

partner, a citizen of California, removed the case based on the

diversity between himself and the plaintiff, a citizen of Texas.

Plaintiff did not seek remand. Shortly before trial, the defendant

filed a motion to dismiss on grounds that subject matter

jurisdiction was lacking. He argued, among other things, that the

plaintiff had failed to join the limited partnership and the

individual limited partners as indispensable parties. The district

court referred the motion to the merits and proceeded to trial. A

jury verdict was rendered primarily in favor of the plaintiff. In

a post-trial motion, the plaintiff admitted for the first time that
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some of his claims were derivative in nature. Following entry of

judgment, the defendant appealed, and argued that the district

court had no jurisdiction over the plaintiff's derivative claims.

On appeal, this court concluded that the limited partnership,

a citizen of Texas and California, was an indispensable party to

the plaintiff's derivative suit, and therefore once its citizenship

was considered complete diversity was lacking. We then vacated the

district court's judgment and remanded the case with instructions

to remand to state court. The plaintiff in his brief asked this

court to award him costs and fees under § 1447(c) if the court

concluded that a remand was appropriate. We declined to make the

requested award on grounds that the plaintiff "himself bears a

substantial share of the responsibility for this case's lengthy but

futile sojourn in the federal courts." Id. at 169. We observed

that "[h]ad [the plaintiff] pleaded his derivative claims as

derivative claims, rather than attempting to cast them as personal

to himself, the indispensability of the partnership as a party

would have been immediately apparent." Id.

The same reasoning applies to this case. Given the active

role appellees took in persuading the district court to retain

jurisdiction of the case, fees are not appropriate. Appellees

alleged violations of both state and federal law in their original

state court complaint; did not move to remand; alleged that the

district court had federal question jurisdiction in each amended

complaint; opposed the defendants' motion to dismiss for lack of

jurisdiction, and persuaded the court it had jurisdiction to hear
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the case. Because appellees bear a substantial share of the

responsibility for the case remaining in federal court, we conclude

that the district court abused its discretion in awarding fees and

costs to appellees under § 1447(c).

III.

For the reasons stated above, we reverse the § 1447(c) award

of fees and costs and remand this case to the district court to tax

costs under Fed.R.Civ.P. 54.

REVERSED and REMANDED.