Court Opinion

ID: 4176535
Source: CourtListenerOpinion
Date Created: 2017-06-09 20:05:23.54951+00
Date Added: 2024-06-11T14:38:47.575741
License: Public Domain

NOT FOR PUBLICATION                           FILED
                    UNITED STATES COURT OF APPEALS                        JUN 9 2017
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

KEEHAN TENNESSEE INVESTMENTS,                   No.    15-16303
LLC; DAVID KEEHAN; DONALD J.
KEEHAN, Sr.; DURHAM RIDGE                       D.C. No.
INVESTMENTS, LLC; WESTLAKE                      3:14-cv-00500-RCJ-WGC
BRIAR, LLC; KEEHAN TRUST
FUNDING, LLC; DONALD J. KEEHAN,
Jr.; 951 REALTY LTD.,                           MEMORANDUM*

                Plaintiffs-Appellants,

 v.

GUARDIAN CAPITAL ADVISORS, INC.;
PRAETORIUM SECURED FUND, I, L.P.;
GEORGE V. CRESSON, Individually and
doing business as Development Finance, LP;
KENNETH A. MILLER,

                Defendants-Appellees.

                   Appeal from the United States District Court
                            for the District of Nevada
                   Robert Clive Jones, District Judge, Presiding

                       Argued and Submitted April 17, 2017
                            San Francisco, California

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: REINHARDT and BERZON, Circuit Judges, and MONTGOMERY,
District Judge. **

      Plaintiff-Appellants (“Plaintiffs”) appeal the district court’s order awarding

Defendant-Appellees (“Defendants”) Praetorium Secured Fund, I, L.P.

(“Praetorium”) and George Cresson (“Cresson”) $23,365.50 in attorney’s fees and

costs under 28 U.S.C. § 1447(c) for the improper removal of this case from Ohio

state court.1 We have jurisdiction under 28 U.S.C. § 1291, and we reverse.

      The underlying dispute in this case concerns financing for a golf course

development project. Plaintiffs initiated the lawsuit by filing a complaint in Ohio

state court, and Defendants later removed the action to the United States District

Court for the District of Ohio, citing diversity jurisdiction under 28 U.S.C. § 1332.

      In federal court, Plaintiffs filed an amended complaint that added two

additional defendants. The case was then transferred to the United States District

Court for the District of Nevada, where the district court, sua sponte, ordered the

parties to conduct jurisdictional discovery after perceiving that federal jurisdiction

       **
              The Honorable Ann D. Montgomery, United States District Judge for
the District of Minnesota, sitting by designation.
1
 The district court also awarded attorney’s fees and costs to Defendants Guardian
Capital Advisors, Inc. (“Guardian”) and Kenneth Miller. Plaintiffs appealed that
award, but Guardian and Miller failed to appear before this court. In light of our
conclusion with respect to defendants Praetorium and Cresson, we vacate the
district court judgment awarding attorney’s fees and costs to Guardian and Miller.
See Fed. R. App. P. 31(c); see also Carvalho v. Equifax Info. Servs., LLC, 629 F.3d
876, 887 n.7 (9th Cir. 2010).

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might be lacking. During the course of that discovery, the parties ascertained

jurisdictional facts destroying diversity, and the case was remanded back to Ohio

state court.

       The parties both moved for an award of attorney’s fees and costs under 28

U.S.C. § 1447(c). The district court concluded that Plaintiffs were responsible for

the improper removal and awarded fees to Defendants. In this appeal, Plaintiffs

argue that the district court erred by awarding fees to Defendants because the

removal statute permits an award of attorney’s fees and costs only to the non-

removing party. Plaintiffs also argue that, if § 1447(c) permits awarding fees to

the removing party, the district court erred in finding Plaintiffs responsible for the

improper removal and ordering them to pay Defendants’ attorney’s fees and costs.

       Even if fees are available to a removing party under the removal statute, a

question we leave for another day, the district court abused its discretion in

awarding fees to Praetorium and Cresson for the improper removal. See Patel v.

Del Taco, Inc., 446 F.3d 996, 999 (9th Cir. 2006) (noting that the decision to award

fees is reviewed for an abuse of discretion).

       “The burden of establishing removal jurisdiction . . . lies with the defendant

seeking removal.” Washington v. Chimei Innolux Corp., 659 F.3d 842, 847 (9th

Cir. 2011). For purposes of diversity jurisdiction, limited liability companies

(“LLCs”) and limited partnerships are citizens of every state where their owners,

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members, or partners are citizens. See Johnson v. Columbia Props. Anchorage,

LP, 437 F.3d 894, 899 (9th Cir. 2006) (“[L]ike a partnership, an LLC is a citizen of

every state of which its owners/members are citizens.”). Plaintiffs’ state-court

complaint did not allege facts sufficient to determine whether federal diversity

jurisdiction existed. Although in their notice of removal Defendants made general

allegations about Plaintiffs’ citizenships and recited facts from Plaintiffs’ state-

court complaint, nowhere in the notice of removal did Defendants allege facts

regarding the citizenships of the members of Plaintiff LLCs, even on information

and belief, nor did they request jurisdictional discovery after removal to determine

the relevant additional facts. The district court abused its discretion in awarding

fees to Praetorium and Cresson under these circumstances. Both parties share the

blame and therefore the responsibility for paying their own costs of litigating a

jurisdictionally deficient case in federal court for almost a year.

      For the foregoing reasons, the judgment of the district court is reversed. The

case is remanded with directions to vacate the judgment awarding attorney’s fees

and costs to Defendants.

      REVERSED.

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