Court Opinion

ID: 3000768
Source: CourtListenerOpinion
Date Created: 2015-09-24 20:08:54.556105+00
Date Added: 2024-06-11T11:45:42.613148
License: Public Domain

In the
 United States Court of Appeals
                For the Seventh Circuit
                        ____________

No. 06-3372
RICKY LOTT, GERALD SUMNER,
SANDY BECKER, AND MIKE BALDWIN,
                                          Plaintiffs-Appellees,
                              v.

PFIZER, INC.,
                                        Defendant-Appellant.
                        ____________
          Appeal from the United States District Court
               for the Southern District of Illinois.
          No. 05 CV 230—Michael J. Reagan, Judge.
                        ____________
     ARGUED MARCH 29, 2007—DECIDED JUNE 25, 2007
                    ____________

  Before FLAUM, EVANS, and WILLIAMS, Circuit Judges.
  FLAUM, Circuit Judge. On February 17, 2005, the
plaintiffs filed a purported class action lawsuit against
Pfizer in Illinois state court. Pfizer removed the case
under the Class Action Fairness Act (CAFA), 28 U.S.C.
§ 1332(d), but the district court remanded it after con-
cluding that CAFA only applies to lawsuits filed on or after
February 18, 2005. The court then awarded the plaintiffs
$23,664.83 in attorneys’ fees and costs under 28 U.S.C.
§ 1447(c). Pfizer appeals the award of fees and costs. For
the following reasons, we reverse.
2                                              No. 06-3372

                     I. Background
   Hoping to avoid removal to federal court, the plaintiffs
filed a purported class action lawsuit in Madison County
Circuit Court on February 17, 2005—the day before
President Bush enacted CAFA, a law that gives federal
courts jurisdiction to hear class action lawsuits involv-
ing minimally diverse parties and more than five-million
dollars in controversy. 28 U.S.C. § 1332(d). The plaintiffs’
complaint alleged that Pfizer misrepresented the health
hazards associated with two drugs, Celebrex and Bextra,
and charged more for the drugs than their fair market
value. They sought compensatory damages and attorneys’
fees under the Illinois Consumer Fraud and Deceptive
Business Practices Act, 815 ILCS 505/10a.
  Although CAFA, by its terms, applies only to “civil
action[s] commenced on or after the date of enactment of
th[e] Act,” Pub. L. No. 109-2, § 9, 119 Stat. 4, 13 (2005),
Pfizer filed a notice of removal in federal district court
on April 1, 2005. In response to the plaintiffs’ motion for
remand, Pfizer argued that the case “commenced” on the
date that it was removed to federal court, not the date on
which the plaintiffs filed their complaint. Pfizer also
asserted, under two different theories, that removal was
appropriate because the case satisfied the requirements
for traditional diversity jurisdiction under 28 U.S.C.
§ 1332(a). For their part, the plaintiffs contended that
the case commenced on the day it was filed in state
court and that the district court lacked diversity juris-
diction because the plaintiffs had disclaimed damages
in excess of $75,000.
  On May 26, 2005, the district court ruled that it
lacked subject matter jurisdiction and remanded the case
to state court. It found that the suit commenced on
February 17, 2005 and that the case did not satisfy the
requirements for diversity jurisdiction. It also awarded
No. 06-3372                                               3

the plaintiffs their attorneys’ fees and costs under 28
U.S.C. § 1447(c). It cited Seventh Circuit case law hold-
ing that fees and costs should be awarded as “normal
incidents of remands for lack of jurisdiction.” Citizens for
a Better Env’t v. Steel Co., 230 F.3d 923, 927 (7th Cir.
2000). The district court then referred the case to a
magistrate judge to determine the precise amount of
fees and costs.
  On August 4, 2005, this Court affirmed the district
court’s ruling that it lacked subject matter jurisdiction.
Pfizer, Inc. v. Lott, 417 F.3d 725, 727 (7th Cir. 2005). We
held, citing Knudsen v. Liberty Mutual Insurance Co., 411
F.3d 805 (7th Cir. 2005), that “commenced” means “filed”
and not “removed.” Id. We also held that Pfizer offered
no evidence that someone in the class satisfied the diver-
sity jurisdiction statute’s amount in controversy require-
ment. Id. at 726 (noting that to invoke the district court’s
diversity jurisdiction, Pfizer had to show that one class
member suffered damages in excess of $75,000). The Court
did not consider the propriety of the district court’s
award of fees and costs, however, because the magistrate
judge was still resolving the award’s precise amount.
  On December 7, 2005, the Supreme Court issued Martin
v. Franklin Capital Corporation, 546 U.S. 132, ___, 126
S. Ct. 704, 711 (2005), and held that a district court may
award attorneys’ fees under § 1447(c) only where the
removing party lacked an objectively reasonable basis
for seeking removal. On December 21, 2005, Pfizer filed
a motion to reconsider the fee award in light of Martin, but
the district court denied the motion. The court held that
Martin did not apply retroactively and, therefore, did not
affect the outcome of the previous decision. Alternatively,
the district court held that Pfizer’s attempt to remove
the case based on diversity jurisdiction was objectively
unreasonable. Lott v. Pfizer, Inc., No. 05-CV-230, 2006 WL
4                                                No. 06-3372

2224155, *3 (S.D. Ill. Aug. 2, 2005). Notably, the district
court did not assess the reasonableness of Pfizer’s at-
tempt to remove the case under CAFA. Pfizer appeals the
district court’s denial of its motion to reconsider.

                        II. Analysis
   A defendant may remove a civil action from state court
if it is one over which a district court has original jurisdic-
tion. 28 U.S.C. § 1441(a). Removal must occur within
thirty days of the defendant’s receipt of the complaint or
within thirty days of the date that removal becomes
possible. Id. § 1446(b). “An order remanding the case may
require payment of just costs and any actual expenses,
including attorney fees, incurred as a result of the re-
moval.” Id. § 1447(c). We review a district court’s award of
fees and costs under § 1447(c) for an abuse of discretion.
Bauknight v. Monroe County, Fla., 446 F.3d 1327, 1329
(11th Cir. 2006); Hart v. Wal-Mart Stores, Inc. Associates’
Health and Welfare Plan, 360 F.3d 674, 678 (7th Cir. 2004)
(pre-Martin case).
  In Martin, the Supreme Court resolved a circuit split
over the correct standard for awarding attorneys’ fees
under § 1447(c). Compare, e.g., Hornbuckle v. State Farm
Lloyds, 385 F.3d 538, 541 (5th Cir. 2004) (“Fees should
only be awarded if the removing defendant lacked objec-
tively reasonable grounds to believe the removal was
legally proper.”) (internal quotation omitted), with Sirotzky
v. N.Y. Stock Exch., 347 F.3d 985, 987 (7th Cir. 2003)
(“[P]rovided removal was improper, the plaintiff is pre-
sumptively entitled to an award of fees.”) (emphasis in
original). The Court adopted the Fifth Circuit’s approach
and held that plaintiffs are entitled to attorneys’ fees
under § 1447(c) only if the defendant “lacked an objec-
tively reasonable basis for seeking removal.” Martin, 126
S. Ct. at 711. As a policy matter, it pointed out that “[i]f
No. 06-3372                                                5

fee shifting were automatic, defendants might choose to
exercise this right only in cases where the right to remove
was obvious.” Id. The Court noted that Congress would
not have conferred a right to remove and then discouraged
its exercise in all but the obvious cases. Id.
  The parties agree that the district court erred by con-
cluding that Martin does not govern this dispute. Supreme
Court decisions announcing a rule of federal law always
govern civil cases pending in the district courts. See Raines
v. Shalala, 44 F.3d 1355, 1363 (7th Cir. 1995). The only
question, therefore, is whether either of Pfizer’s two
bases for removal was objectively reasonable.
  In Martin, the Supreme Court did not have occasion to
define “objectively reasonable” because the parties agreed
that the defendant’s basis for removal was reasonable. Id.
at 712. It approved, however, a Fifth Circuit decision that
applied the objectively reasonable standard by examin-
ing the clarity of the law at the time the notice of removal
was filed. See Valdes v. Wal-Mart Stores, Inc., 199 F.3d
290, 293 (5th Cir. 2000). In Valdes, Wal-Mart attempted
to remove a case based on the plaintiff ’s fraudulent
joinder. The court noted that it had upheld removal in
analogous circumstances and that applicable state law
suggested that the plaintiff ’s cause of action against the
non-diverse defendant lacked merit. As a result, the
court held that Wal-Mart could have concluded from the
case law that its position was reasonable.
  Of course, there are other contexts in which courts
determine whether an act is objectively reasonable by
examining the clarity of the case law. The qualified
immunity doctrine assumes that state officials are aware
of existing case law and holds officials liable only if
they violate clearly established and particularized rights.
See Brosseau v. Haugen, 543 U.S. 194, 199 (2004). The
doctrine balances society’s desire to punish those who
6                                              No. 06-3372

knowingly violate the law with a need for zealous law
enforcement, and, as such, allows state officials to make
reasonable errors without worrying about being sued. See
Hunter v. Bryant, 502 U.S. 224, 229 (1991).
  As discussed above, Martin’s objectively reasonable
standard—like the qualified immunity doctrine’s objec-
tively reasonable standard—also balances competing
interests. Congress, in passing the removal statute, en-
couraged defendants to remove certain cases to federal
court, while at the same time discouraged defendants
from delaying the resolution of claims by removing cases
without legal justification. Martin, 126 S. Ct. at 711.
Indeed, just as the qualified immunity doctrine attempts
to protect zealous law enforcement, the removal statute
encourages litigants to make liberal use of federal courts,
so long as the right to remove is not abused. Id.
   For this reason, our qualified immunity jurisprudence
provides appropriate guidance for determining whether
a defendant had an objectively reasonable basis for
removal. As a general rule, if, at the time the defendant
filed his notice in federal court, clearly established law
demonstrated that he had no basis for removal, then a
district court should award a plaintiff his attorneys’ fees.
By contrast, if clearly established law did not foreclose
a defendant’s basis for removal, then a district court
should not award attorneys’ fees.
   Here, the district court erred by awarding the plain-
tiffs’ attorneys’ fees because Pfizer’s attempt to remove
the case under CAFA was objectively reasonable. When
Pfizer filed its notice of removal, no circuit court had
rejected Pfizer’s argument that the word “commenced”
means the date on which a case is removed to federal
court. A few district courts had rejected the argument, see
Hankins v. Pfizer, Inc., No. CV-1797-ABC-RZ, 2005 U.S.
Dist. LEXIS 17191, *3 (C.D. Cal. Mar. 25, 2005); Smith v.
No. 06-3372                                                  7

Pfizer, Inc., No. 05-CV-0112, 2005 WL 3618319, *5 (S.D.
Ill. Mar. 24, 2005); Pritchett v. Office Depot, Inc., 360
F. Supp. 2d 1176, 1180 (D. Colo. 2005), but a number of
other district courts had held, in cases decided shortly
after Congress raised the amount in controversy require-
ment for diversity cases, that “commenced” means the
date on which a case is removed to federal court. See
Cedillo v. Valcar Enters. & Darling Del. Co., 773 F. Supp.
932, 939 (N.D. Tex. 1991); Hunt v. Transport Indem. Ins.
Co., No. Civ. 90-00041 ACK, 1990 WL 192483, *5 (D. Haw.
July 30, 1990); Lorraine Motors, Inc. v. Aetna Cas. & Sur.
Co., 166 F. Supp. 319, 323 (E.D.N.Y. 1958). District court
decisions, let alone conflicting district court decisions, do
not render the law clearly established. See Anderson v.
Romero, 72 F.3d 518, 525 (7th Cir. 1995). Accordingly,
Pfizer acted reasonably when it attempted to remove
this case under CAFA.
  The plaintiffs argue that Pfizer should have known
that its construction of CAFA was wrong for two other
reasons: because the legislative history indicates that
“commenced” means the date on which a case was filed
and because Pfizer lobbied Congress about CAFA. We
reject both arguments. First, the legislative history that
the plaintiffs cite is unpersuasive. They quote two con-
gressmen and three senators who said that CAFA was
not retroactive and would not affect matters currently
pending in state court. Two of the legislators voted against
the bill, so their views on the law’s meaning do not bear
on the legislature’s intent. See Selective Serv. Sys. v. Minn.
Pub. Interest Research Group, 468 U.S. 841, 855 n.15
(1984) (stating that statements of legislators who oppose
a bill are entitled to “little, if any, weight”). Additionally,
individual legislators’ statements are of minimal value
when it comes to interpreting statutes. See Chrysler Corp.
v. Brown, 441 U.S. 281, 311 (1979) (“The remarks of a
single legislator, even the sponsor, are not controlling in
8                                               No. 06-3372

analyzing legislative history.”). Pfizer’s basis for removal
was not unreasonable simply because it conflicted with
three legislators’ understanding of the statute.
  The plaintiffs also argue that Pfizer’s basis for re-
moval was objectively unreasonable because Pfizer had an
inside track on what the word “commenced” means, given
that it lobbied Congress for CAFA’s passage. As Pfizer
points out, however, our review is for objective, as opposed
to subjective, reasonableness. The test is whether the
relevant case law clearly foreclosed the defendant’s
basis of removal, not whether the defendant had some
special insight into the legislative process.
  Because Pfizer had an objectively reasonable basis for
seeking removal, the district court erred by awarding the
plaintiffs their attorneys’ fees under § 1447(c). See Martin,
126 S. Ct. at 711. As a result, we need not consider
whether Pfizer’s attempt to invoke the district court’s
diversity jurisdiction was also reasonable.

                     III. Conclusion
  The Court REVERSES the district court’s award of attor-
neys’ fees and costs.

A true Copy:
      Teste:

                        ________________________________
                        Clerk of the United States Court of
                          Appeals for the Seventh Circuit

                   USCA-02-C-0072—6-25-07