Court Opinion

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Date Created: 2015-10-13 22:29:11.959853+00
Date Added: 2024-06-11T18:18:41.787030
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Opinions of the United
2006 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit

2-7-2006

Siebert v. Norwest Bank MN
Precedential or Non-Precedential: Non-Precedential

Docket No. 04-4422

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                                                                 NOT PRECEDENTIAL

                        UNITED STATES COURT OF APPEALS
                             FOR THE THIRD CIRCUIT

                                       No. 04-4422

                         ERIC J. SIEBERT; RUTH A. SIEBERT,

                                                                   Appellants

                                             v.

        NORWEST BANK MINNESOTA, AS TRUSTEE FOR THE AMRESCO
          RESIDENTIAL SECURITIES MORTGAGE LOAN TRUST 1998-2;
         FIDELITY NATIONAL FORCLOSURE SOLUTIONS; WENDOVER
                  FINANCIAL SERVICES; RALPH CASALE;
                      CASALE & PELLEGRINO, L.L.C.

       On Appeal from the United States District Court for the District of New Jersey
                              (D.C. Civil No. 02-cv-4356)
                    District Court Judge: Honorable Jose L. Linares

                    Submitted pursuant to Third Circuit L.A.R. 34.1(a)
                                    January 30, 2006

           Before: McKEE, VAN ANTWERPEN, and SILER,* Circuit Judges.

                                 (Filed: February 7, 2006)

                               OPINION OF THE COURT

VAN ANTWERPEN, Circuit Judge.

   *
   The Honorable Eugene E. Siler, Jr., Senior United States Circuit Judge, United States
Court of Appeals for the Sixth Circuit, sitting by designation.
       Appellants Eric and Ruth Siebert, plaintiffs below, challenge the Order of the District

Court denying their request for attorney fees and costs under 28 U.S.C. § 1447(c) following

remand of their case to state court. The Sieberts successfully challenged on procedural

grounds the defendants’ petition to remove the case to federal court. Following remand, they

sought fees and costs. The District Court referred the matter to a Magistrate Judge, who

denied the request; on appeal, the District Court affirmed. Because the District Court was

within its discretion to deny the fee request, we will affirm.

                                              I

       On July 29, 2002, the Sieberts filed a Complaint in the Superior Court of New Jersey,

Bergen County, naming as defendants Norwest Bank Minnesota as Trustee of a Mortgage

Trust, Fidelity National Foreclosure Solutions, Wendover Financial Services, Ralph Casale,

Esq., Casale & Pellegrino, LLC, and a John Doe. The lawsuit involved alleged misconduct

by the defendants in foreclosure proceedings against the Sieberts. In the Complaint, the

Sieberts included two New Jersey statutory consumer protection claims, and a federal claim

under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692. On September 6, 2002,

Wendover Financial Services filed a notice of removal indicating (1) that the District Court

had federal question jurisdiction under 28 U.S.C. § 1331, and removal was available under

28 U.S.C. § 1441; (2) that only Ralph Casale and Casale & Pellegrino had been served; and

(3) that they had “both indicated their consent to this removal.” Wendover alleged oral

consent only. After the time for filing for removal had passed, the defendants filed untimely

written consents to removal.

       The Sieberts moved for remand on November 20, 2002. A Magistrate Judge issued

                                             -2-
a report on July 16, 2003 recommending remand based on the failure to obtain written

consent to removal from Casale individually and the firm of Casale & Pellegrino. The

Sieberts had included a request for fees and costs in their motion, but the report and

recommendation was silent on it; accordingly, they filed a limited objection renewing their

request for expenses. On October 6, 2003, the District Court, Judge Jose L. Linares,

reviewed the report and recommendation de novo, adopted it, and ordered remand. However,

he referred the Sieberts’ request for fees and costs to the Magistrate Judge.

       The Sieberts argued below that they were entitled to attorney fees and costs under 28

U.S.C. § 1447(c), which provides that the court “may” order “payment of just costs and any

actual expenses, including attorney fees, incurred as a result of the removal.” They claimed

that because Wendover’s removal was procedurally improper, the Court should exercise its

discretion to award fees and costs for obtaining a remand to the Sieberts. In an August 12,

2004 Order, the Magistrate Judge denied the request, noting (1) that there was a sound legal

basis for removal – namely, federal question jurisdiction; and (2) that the law in the District

of New Jersey, the Third Circuit, and elsewhere was unsettled as to whether defendants could

orally consent to removal. The Sieberts appealed to the District Court. Reasoning that the

fee award determination was non-dispositive, it reviewed the Magistrate Judge’s Order

under the “clearly erroneous or contrary to law” standard set forth in the Magistrate Act, 28

U.S.C. § 636(b)(1)(A). Because § 1447(c) leaves the award of costs and fees in the

discretion of the court, the District Court also noted that it would only reverse for abuse of

discretion. The Sieberts argued that because the District Court had initially treated their

motion to remand as dispositive, and because that motion had included a fee request, the

                                             -3-
District Court should review the fee issue de novo. The District Court properly observed,

however, that the dispositive aspect of the case was the remand motion itself; not the fee

request. It went on to agree with the Magistrate Judge, and affirmed the denial of fees and

costs. It also noted that it would have affirmed even if review were de novo. The Sieberts

timely appealed.

                                             II

       Our jurisdiction lies pursuant to 28 U.S.C. § 1291. The substance of a remand to state

court under 28 U.S.C. § 1447(c) following a removal attempt is unreviewable. 28 U.S.C. §

1447(d); Mints v. Educ. Testing Serv., 99 F.3d 1253, 1258 (3d Cir. 1996). In contrast, fee

awards under that section are collateral issues over which federal courts retain jurisdiction

after remand. Id. The Sieberts incorrectly contend that our standard of review over the

award determination is de novo. Their argument is addressed infra, section III; for present

purposes, it suffices to note that the proper standard is abuse of discretion. Id. at 1260. “A

district court abuses its discretion by basing its decision on a clearly erroneous finding of

fact, an erroneous legal conclusion, or an improper application of law to fact.” Roxbury

Condominium Ass’n, Inc. v. Anthony S. Cupo Agency, 316 F.3d 224, 226 (3d Cir. 2003)

(citations and quotations omitted).

                                             III

       The Sieberts argue that this Court should review the District Court’s decision

affirming the denial of fees and costs by the Magistrate de novo. We disagree. There is no

authority for this Court to review decisions on the award of fees under § 1447(c) for anything

other than abuse of discretion. This is so because award of fees under § 1447(c) is

                                             -4-
discretionary: the statutory language, which states that remand orders “may require” payment

of fees is plain in this respect. 28 U.S.C. § 1447(c). This Court has held as much. Mints,

99 F.3d at 1260 (holding that court of appeals reviews counsel fees following remand for

abuse of discretion); see Anjelino v. New York Times Co., 200 F.3d 73, 88 (3d Cir. 1999)

(reviewing district court’s affirmance of magistrate’s ruling on non-dispositive discovery

motions for abuse of discretion).

       The Sieberts also argue that de novo review is called for because the Magistrate Judge

and the District Court adjudicated the fee issue on the basis of a strictly legal question –

namely, whether or not it is settled law that defendants must consent to removal in writing.

This confuses entitlement to fees under § 1447(c) in the first instance with the subsequent

– and discretionary – decision whether to award them. As discussed below, the clarity of

procedural law governing removal is a factor a court may consider when determining

whether to grant fees upon remand; not a question of law regarding entitlement to fees in the

first instance. See Mints, 99 F.3d at 1260 (district courts have broad discretion in fee awards

under § 1447(c)).

                                              IV

       Predicated on their belief that our review is de novo, the Sieberts argue that the

District Court erred in denying their request for fees. As discussed, our review is for abuse

of discretion, and the record reveals no such abuse. As we have noted, § 1447(c) grants

district courts broad discretion in determining whether to award fees following a remand.

Mints, 99 F.3d 1260. Bad faith on the part of the removing party is not a prerequisite to an

award of attorneys fees, but it is a consideration. Id. Similarly, where the substantive basis

                                             -5-
for the removal petition was “frivolous” or “insubstantial,” a district court may exercise its

discretion to award fees. See id. at 1261 (where basis for removal “was, if not frivolous, at

best insubstantial,” district court did not abuse its discretion by awarding fees). We have not

had occasion to examine in a precedential opinion the significance of fatal procedural flaws

like those here when determining post-remand fee awards,1 but the answer is nonetheless

plain.

         The Sieberts argue that it was an abuse of discretion to deny their fee request in light

of defendants’ collective failure to provide timely written consents that gave rise to the

remand. To the contrary, however, it is not necessarily an abuse of discretion to deny a fee

request where a removal attempt failed for procedural reasons; rather the issue is within the

discretion of the district court, which must weigh the circumstances of the case before it.

Mints, 99 F.3d 1260. The Sieberts also argue that the law is settled in the District of New

Jersey that removal petitions on behalf of multiple defendants must include timely written

consent by all,2 and that defendants’ failure to comply necessitates an award of fees. Again,

that plaintiffs may be able to obtain fees and costs because defendants have procedurally

bungled removal does not mean that such fee awards are automatic. Rather, district courts

must exercise their discretion in view of the circumstances of the case. We find no reason

   1
     We did, however, hold in a recent unpublished opinion with similar facts that a
district court was within its discretion to deny fees where several defendants failed to
provide written consent to removal, even though the substantive basis for removal was
sound. Hammer v. Scott, 137 Fed. Appx. 472, 475 (3d Cir. 2005).
   2
    At least two District of New Jersey cases do hold that timely written consents are
required. E.g., Michaels v. New Jersey, 955 F. Supp. 315 (D.N.J. 1996). However, the
Third Circuit has not visited the issue, and it is the subject of some disagreement among
federal courts nationwide.

                                               -6-
to disturb the judgment of the District Court, where it determined that even if Wendover

should have obtained written consents to removal, the law on that procedural issue was

debatable.

       Furthermore, because the Sieberts included a federal claim in their Complaint, the

removal petition was substantively sound, and neither frivolous nor insubstantial. They

allege neither clearly erroneous fact finding, nor misapplication of law to fact. Nor do they

assert an actual legal error. They do claim that the District Court erred in determining the

legal standard for awarding fees, but the argument is specious. The District Court’s

enunciation of the standard accords with the Third Circuit’s precedent in Mints, set forth

above. Accordingly, the District Court was within its discretion to deny the fee request.

                                             V

       The Sieberts also argue that the District Court should have reviewed the Magistrate

Judge’s denial of their fee request de novo, rather than determining whether it was “clearly

erroneous or contrary to law” and applying abuse of discretion review. This claim is

unavailing. Any error would be harmless because the District Court’s decision would have

been the same under either standard of review. In reviewing the denial for abuse of

discretion, the District Court stated that it “would not reach a different outcome were it to

treat this matter as dispositive under [the Magistrate Act], allowing de novo review of a

magistrate’s proposed findings and recommendations.” It went on to make a full review of

the issue, and affirmed. We therefore need not, and do not, reach the issue of the correct

standard of review: doing so would not change the result. See Forrest v. Beloit Corp., 424

F.3d 344, 349 (3d Cir. 2005) (error harmless where highly probable that it did not affect

                                            -7-
outcome of the case).

                                            VI

       For the foregoing reasons, we will affirm the Order of the District Court. We have

considered all other arguments advanced by the parties, and conclude that further discussion

is not warranted.

                                            -8-