Court Opinion

ID: 9001976
Source: CourtListenerOpinion
Date Created: 2022-11-27 13:14:38.247318+00
Date Added: 2024-06-11T17:11:13.056094
License: Public Domain

JOHN M. WALKER, Jr., Circuit Judge,
dissenting:
The majority holds that the district court did not apply § 1447(c) retroactively and properly awarded $136,000 in attorney’s fees. While I am not wholly convinced by the majority’s retroactivity analysis, my principal disagreement is with the majority’s conclusion that the fee award did not constitute an abuse of discretion. Because Palau has consistently acted in good faith, because Palau’s supposed change of position came about only at the request of this court, and because the district court’s award of fees is unprecedented both in size and context, I think the district court abused its discretion. Accordingly, I respectfully dissent.
I agree with the majority that fees may be awarded even absent bad faith. I do not agree that “the award was fair, and equitable under the circumstances.” The panel identifies three reasons why the fee award was appropriate: (1) “the factors that eventually clearly established the lack of federal jurisdiction were attributable to Palau”, supra at 924; (2) “Palau did not make the district court fully aware of the substantive meaning” of the Palau Supreme Court decision and the subsequent plebiscites, id.; and (3) Palau “essentially changed its position and all but expressly admitted it was not a foreign state”, supra at 924. None of these claims survives serious scrutiny.
First, to suggest that “the factors that eventually clearly established the lack of federal jurisdiction were attributable to Palau” is to confuse the government of Palau with the people of Palau (who voted in the plebiscites) and the Supreme Court of Palau (who invalidated an early plebiscite). Only the government of Palau is a party in this case. Presumably,, the government of Palau supported the sovereignty plebiscites and opposed the Palau court’s decision. That the people and the court took actions that ultimately thwarted the jurisdictional claim cannot be attributed to the government of Palau and thus are irrelevant to assessing Palau’s conduct in this litigation.
The panel also notes that although Palau informed the district court of intervening events, Palau did not explain to the district court that these events undermined the court’s jurisdiction. To my mind, this is to Palau’s credit. Palau faced a 46 million dollar judgment in the district court. Had it occurred to Palau at any time between the entry of judgment in August of 1988 and the moment we inquired into the sovereignty issue at oral argument in August of 1990 that it was not a de facto sovereign and thus that the award was void because the court lacked jurisdiction, it is inconceivable that Palau would have paused for a second before bringing the issue to the district court’s attention. The only inference that can be drawn from Palau’s silence for nearly two years is that it never occurred to Palau that jurisdiction was still an issue. The inference of concealment that the majority draws is implausible.
Finally, the panel observes that Palau “essentially” changed its position by “all but expressly” admitting that it was not a foreign state. Palau simply responded to a request of this court and made an honest factual report of post-removal circumstances that cast doubt on the district court’s jurisdiction. Palau had no choice but to report these facts truthfully. Had Palau done otherwise, Rule 11 sanctions would have been appropriate.
In short, the majority has not pointed to a single act by Palau that would warrant awarding fees. Instead, we have here a $136,000 fee award predicated solely on the fact that events subsequent to removal and beyond the control of the Palau government defeated jurisdiction. The majority responds that jurisdiction was lacking from the start. While I give due deference to *926the author of the majority opinion’s analysis of his prior opinion in Palau I, it seems to me that events subsequent to removal were critical to the decision in Palau I. See Palau I, 924 F.2d at 1246-47. I think this fee award under these circumstances constituted an abuse of discretion.
First, section 1447(c) is principally designed to compensate plaintiffs for the costs of opposing removal in the district court. Here, however, the district court allowed the plaintiffs to recover for fees associated with defending the removal in the court of appeals. This is a rather strange use of section 1447(c).
Second, the award here is unprecedented both in size and circumstance. The majority has not identified a single case where attorney’s fees (or even costs, under the old rule) were awarded where the district court approved the removal and the court of appeals subsequently disagreed.
Third, awarding fees where the initial removal is proper opens the door for far greater fee shifting than occurs in the normal removal case. In the normal removal case, the defendant merely has to pay the plaintiff’s costs in filing the motion that leads to remand. Where remand comes only after a trial and full appeal, the statute appears to open the defendant to liabili-. ty for all of plaintiff’s fees. While Congress may have intended that result where the removal was improper, I do not believe that Congress intended to turn removal into a game of chance, where factual developments subsequent to removal could suddenly expose one party to liability for the full litigation costs of the other. Accordingly, I would find that the district court abused its discretion in awarding plaintiffs $136,000 in fees.
I respectfully dissent.