Court Opinion

ID: 47965
Source: CourtListenerOpinion
Date Created: 2010-04-25 23:32:56+00
Date Added: 2024-06-11T17:18:11.017543
License: Public Domain

United States Court of Appeals
                                                                                              Fifth Circuit
                                                                                             F I L E D
                       IN THE UNITED STATES COURT OF APPEALS
                                                                                            January 18, 2007
                                FOR THE FIFTH CIRCUIT
                                                                                        Charles R. Fulbruge III
                                   __________________________                                   Clerk
                                          No. 05-11498
                                   __________________________

BLASTMYRESUME.COM LP,
                                                                                                 Plaintiff,

JOHN NICKELSON,
                                                                                               Appellant,

versus

HOBOKEN WEB SERVICES LLC, doing business as Datapipe.com,
                                                                                              Defendant.

                  ___________________________________________________

                          Appeal from the United States District Court
                              for the Northern District of Texas
                                      (No. 4:05-CV-504)
                  ___________________________________________________

Before KING, BENAVIDES, and CLEMENT, Circuit Judges.

PER CURIAM:*

         Appellant, an associate at a Dallas law firm, was sanctioned after the following events

transpired. Appellant and his co-counsel, a partner at the Dallas firm, filed suit in state court on behalf

of Blastmyresume.com against Hoboken Web Services LLC (“Hoboken”). Prior to requesting

discovery and before it had obtained adequate information to determine diversity jurisdiction,

         *
        Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be
published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

                                                    1
Hoboken removed to federal court. The district court entered an order finding that Hoboken had

failed to disclose the identity and citizenship of Blastmyresume.com’s general and limited partners

and directing Hoboken to supplement its notice of removal.

        After Hoboken informally requested the citizenship information from Appellant, who did not

disclose it, Hoboken moved for leave to serve expedited discovery, despite the fact that no Rule 26

conference had occurred. In response, the district court ordered Appellant and his co-counsel to show

cause why disciplinary action should not be imposed. At a subsequent hearing, the district court

ordered Appellant and his co-counsel to produce the citizenship information; they immediately did

so. As to the sanctions, Appellant stated that his actions were based on his good-faith argument that

Hoboken had no right to obtain the citizenship information after removal.

        This court reviews sanctions imposed by a district court for abuse of discretion and reviews

underlying conclusions of law de novo. United States v. City of Jackson, 359 F.3d 727, 731 (5th Cir.

2004) (reviewing sanction imposed pursuant to the court’s inherent powers). The sanctions imposed

were based upon the district court’s view that Appellant had not cooperated with or been courteous

to opposing counsel who requested the citizenship information. See Dondi Properties Corp. v.

Commerce Sav. & Loan Ass’n, 121 F.R.D. 284 (N.D. Tex. 1988) (en banc) (adopting standards for

attorney conduct including courtesy and cooperation). In keeping with the spirit and purpose of

Dondi, perhaps Appellant was required to provide the information when first requested. Nonetheless,

under the unique circumstances presented here and even if in error, Appellant’s actions were

defensible and the sanctions were unwarranted. Less than a year before removal, the district court

judge who imposed the sanction had remanded a claim to state court because the removing party’s

notice of removal did not “set forth with specificity the citizenship of each of the parties.” Fields v.

                                                   2
Black & Decker (U.S.), Inc., No. 4:04-CV-941, 2005 WL 477988, at *1 (N.D. Tex. Feb. 28, 2005).

Appellant’s actions were based on his good-faith legal argument that parties that remove a state court

action to federal court may remove only when they become aware of the facts that support

jurisdiction. See Bosky v. Kroger Texas, LP, 288 F.3d 208, 211 (5th Cir. 2002); see also Posen v.

Malkerson Gilliland Martin, LLP, No. 05-CV-1819, 2006 WL 27214, at *1 (D. Colo. Jan. 5, 2006)

(stating that it is “improper for a party to first remove and only then seek to develop facts showing

that federal subject matter jurisdiction exists”); Portside Investors, L.P. v. N. Ins. Co. of New York,

253 F. Supp. 2d 835, 838 (E.D. Pa. 2003) (stating that the defendant “could have and should have

availed itself of the opportunity to conduct limited discovery”).1 We VACATE the district court’s

order insofar as it imposed sanctions on Appellant.

       1
        It should also be noted that Hoboken was the subject of the district court’s order to produce
the information that would establish diversity jurisdiction. Hoboken’s counsel, who was not
sanctioned, improperly removed without the citizenship information.

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