Court Opinion

ID: 19120
Source: CourtListenerOpinion
Date Created: 2010-04-25 07:21:39+00
Date Added: 2024-06-11T09:38:27.603161
License: Public Domain

UNITED STATES COURT OF APPEALS
                          FOR THE FIFTH CIRCUIT

                                No. 98-31340

                MARY ANNA RIVET; MINNA REE WINER;
         EDMOND G. MIRANNE; and EDMOND G. MIRANNE, JR.,

                                                    Plaintiffs-Appellees,

                                    VERSUS

           REGIONS BANK OF LOUISIANA, F.S.B.; ET AL.,

                                                                 Defendants,

    REGIONS BANK OF LOUISIANA, F.S.B.; WALTER L. BROWN, JR.;
                PERRY S. BROWN; and FSA, L.L.C.,

                                                   Defendants-Appellants.

          Appeal from the United States District Court
              for the Eastern District of Louisiana
                               (95-CV-426-K)

                              November 4, 1999
Before POLITZ, DeMOSS, BENAVIDES, Circuit Judges.

DeMOSS, Circuit Judge:*

     Defendants Regions Bank of Louisiana, Walter L. Brown, Jr.,

Perry S. Brown, and Fountainbleau Storage Associates (collectively,

the Regions   Bank    group    or   the   defendants)   appeal   from   final

judgment awarding plaintiffs Mary Anna Rivet, Minna Ree Winer,

Edmond G. Miranne, and Edmond G. Miranne, Jr. (collectively, the

Mirannes) costs and expenses, including attorney’s fees, in the

     *
          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that this opinion should not be published and is not precedent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.
amount of $105,448.30 after a determination of improper removal

pursuant to 28 U.S.C. § 1447(c).         We affirm.

                                    I.

     The Mirannes, as holders of a second collateral mortgage note

attached to a leasehold interest on certain Louisiana property,

sued the defendants comprising the Regions Bank group in Louisiana

state court.    The Mirannes claimed that the defendants engaged in

certain property transactions that prejudiced the Mirannes’ rights

under   the   second   collateral   mortgage   note.      The   defendants

answered, claiming that the Mirannes’ interest in the property was

extinguished by a prior federal judgment ordering the sale of the

subject property free and clear of the Mirannes’ second mortgage.

     The defendants removed the case to federal court, alleging

federal question jurisdiction based upon the preclusive effect of

the prior federal judgment.    The Mirannes moved to remand, arguing

that the prior federal judgment, which constituted an affirmative

defense, was insufficient to support the exercise of federal

question jurisdiction over their state law claims.

     The district court erroneously denied the motion to remand on

the basis of dicta in Carpenter v. Wichita Falls Indep. Sch. Dist.,

44 F.3d 362 (5th Cir. 1995), which was not decided until two weeks

after the defendants’ removal of this case.            Carpenter included

dicta to the effect that the preclusive effect of a prior federal

judgment might support federal question jurisdiction, but only when

the claims at issue are sufficiently “federal in character.”           See

                                    2
Carpenter, 44 F.3d at 368-69.    Having denied the Mirannes’ motion

to remand, the district court then relied upon the preclusive

effect of the prior federal judgment, which extinguished the

Mirannes’ state law claims, to grant summary judgment in favor of

the Regions Bank group.   See Rivet v. Regions Bank, No. 95-0426,

1995 WL 237019, at *2-4 (E.D. La. 1995), aff’d, 108 F.3d 576 (5th

Cir. 1997), rev’d, 118 S. Ct. 31 (1997).

     This Court affirmed, likewise relying upon Carpenter.        See

Rivet v. Regions Bank, 108 F.3d 576 (5th Cir.), rev’d, 118 S. Ct.

31 (1997).   Judge Jones entered a vigorous dissent, arguing that

the Carpenter dicta was wrong because it was fatally inconsistent

with the well-pleaded complaint limit upon removal jurisdiction,

and further, that even if the Carpenter dicta was not wrong, it

would not in any event extend to support the exercise of federal

jurisdiction in this case, where the Mirannes’ claims were premised

upon state, rather than federal, law.    Id. at 593-96.

     The Supreme Court granted certiorari and reversed, holding

that “claim preclusion by reason of a prior federal judgment is a

defensive plea that provides no basis for jurisdiction.”     Rivet v.

Regions Bank, 118 S. Ct. 921, 926 (1998).   Applying that principle

to this case, the Supreme Court concluded that the potentially

preclusive effect of the prior federal court judgment extinguishing

the Mirannes’ state law claims did not provide an adequate basis

for the exercise of removal jurisdiction.          Id.    Removal was

therefore held to be improper, and the matter was remanded to this

Court for further proceedings.    Id. at 925-26.

                                  3
       On remand, the Mirannes moved this Court to bypass the federal

district court by first making an appellate determination that the

Mirannes were entitled under 28 U.S.C. § 1447(c) to recover the

costs and expenses, including attorney’s fees, incident to the

defendants’ improper removal, and then remanding directly to the

appropriate state court. That motion was denied, and the cause was

remanded to the district court for further proceedings consistent

with the Supreme Court’s opinion.          See Rivet v. Regions Bank, 139

F.3d 512 (5th Cir. 1998).

       On remand, the district court entered an order remanding the

improperly removed case for lack of subject matter jurisdiction,

but sua sponte enjoining “any further proceedings in the state

court regarding the captioned cause, save its outright dismissal.”

       The Mirannes responded by filing a writ of mandamus, arguing

that    the   district   court    lacked    jurisdiction       to   issue   the

injunction.      This Court agreed, and issued an order granting the

writ of mandamus and vacating the injunction on further proceedings

in the state court.      The Court’s brief mandamus order pointed out

that the district court did not have jurisdiction over the case,

and    ordered   the   district   court    to   remand   the    case   to   the

appropriate state court without attempting to rule on the merits in

the process.      The balance of the order clarified the district

court’s remaining jurisdiction on remand, by providing that the

district court should “determine and require payment of the costs

and any actual expense, including attorney’s fees,” incurred as a

consequence of removal, but that the district court should not

                                     4
otherwise “comment upon, rule on, or issue any directives or orders

as to” any other issue or controversy in the case.                     Regions Bank

group moved for a rehearing of the Court’s mandamus order, which

was denied.

      On remand for the second time, the district court entered an

order remanding the case, but ordering the parties to either

resolve, or to submit evidence relating to, the remaining issue to

be   decided    by   the     district   court;     that     is,   the     Mirannes’

entitlement to costs and expenses, including fees, under § 1447(c).

      The Mirannes thereafter filed a petition for costs and fees.

The Regions     Bank   group    opposed     the   motion,     arguing     that   the

district   court     should    exercise     its   discretion      to    refuse   the

Mirannes’ petition for fees.            The Regions Bank group also filed

specific objections to certain sums requested by the Mirannes.                    In

a carefully detailed twenty-three page order, the district court

considered each of the defendants’ objections, making certain

reductions in time, eliminating some requests, and ultimately

entering an order that reduced the Mirannes’ request for fees by

more than $60,000.         The Regions Bank group appealed.

      On appeal, the defendants contend that the district court’s

award of fees is improper for two reasons.              First, the defendants

maintain that the district court’s decision is improper because

this is not an appropriate case for the award of fees.                  Second, the

defendants maintain that the district court’s award of fees is

improper because it was based upon this Court’s mandamus order,

rather   than   an   independent    exercise       of   the   district      court’s

                                        5
discretion.    We disagree on both counts.

                                 II.

     The district court’s award of fees and costs in this case was

made pursuant to 28 U.S.C. § 1447(c).    Congress made substantial

changes to § 1447 in 1988.       Prior to that time, the relevant

portion of § 1447(c) provided:

          If at any time before final judgment it appears
          that the case was removed improvidently and without
          jurisdiction, the district court shall remand the
          case, and may order the payment of just costs.

Thus, prior to 1988, § 1447(c) provided only for an award of “just

costs,” and even then only when the suit was “removed improvidently

and without jurisdiction.”    See Hensgens v. Deere & Co., 833 F.2d

1179, 1181 (5th Cir. 1987).      Under this older version of the

statute, bad faith was sometimes relied upon to support a finding

of improvident removal, and thus, an award of “just costs” under

the statute.   See News-Texan v. City of Garland, 814 F.2d 216, 220

(5th Cir. 1987).      Likewise, prior to 1988, the plaintiff was

required to demonstrate either bad faith, or some other exception

to the American Rule relating to attorney’s fees, before attorney’s

fees could be awarded on the basis of improper removal.   See Davis

v. Veslan Enters., 765 F.2d 494, 498 n.6 (5th Cir. 1985); see also

Miranti v. Lee, 3 F.3d 925, 927 n.2 (5th Cir. 1993) (“fees were not

allowed under the former statute unless counsel proceeded in bad

faith or some other exception to the American rule applied”).

     In contrast, the relevant portion of the current and here

applicable version of § 1447(c) provides:

                                  6
          If at any time before final judgment it appears
          that the district court lacks subject matter
          jurisdiction, the case shall be remanded. An order
          remanding the case may require payment of just
          costs and any actual expenses, including attorney
          fees, incurred as a result of the removal.

Rather than being limited to an award of “just costs,” the current

version of § 1447(c) permits recovery of both “just costs” and

“actual expenses,” which is now expressly defined to include

“attorney fees.”   Id.   Moreover, the current version of § 1447(c)

no longer requires that removal be improvident or in bad faith.

Indeed, aside from requiring that removal be improper in the sense

that the district court lacked subject matter jurisdiction, the

statute does not expressly limit the availability of “just costs”

or “actual expenses, including attorney fees,” in any manner.   See

Miranti, 3 F.3d at 928 (noting that an award of just costs or

actual expenses under the amended version of § 1447(c) depends

primarily upon whether removal was proper or improper).

     Our cases analyzing the propriety of an award of costs or

attorney’s fees under the current version of § 1447(c), likewise,

confirm that nothing more is absolutely required to support an

award of attorney’s fees under § 1447(c) than a showing that

removal was in fact improper because subject matter was lacking at

the time that the case was removed.   See Avitts v. Amoco Prod. Co.,

111 F.3d 30, 32 (5th Cir.), cert. denied, 118 S. Ct. 435 (1997);

Miranti, 3 F.3d at 928-29.     Once the determination of improper

removal is made, the only issue remaining for determination by the

relevant court is the quantum of costs and fees, if any, that are

justified by the record in the case.    See Avitts, 111 F.3d at 32

                                  7
(“Once a court determines that the removal was improper, thus

satisfying the Miranti threshold requirement, § 1447(c) gives a

court discretion to determine what amount of costs and fees, if

any, to award the plaintiff.”).   This make sense because Congress,

by expressly recognizing attorney’s fees as a recoverable expense,

by eliminating any reference to improvident removal, and by failing

to impose textual restrictions upon the availability of costs and

expenses, clearly intended to create a statutory scheme in which,

at least as a general rule, the burden of an improper removal falls

upon the removing defendant.2

     The Supreme Court’s opinion in this matter dispositively

settles the fact that removal was improper because the district

court lacked subject matter jurisdiction.   See Rivet, 118 S. Ct. at

925-26.   Thus, the conditions for application of § 1447(c) are

satisfied, and there is no indication that the fee award was in

error.

     The defendants attempt to avoid this conclusion, by contending

that the district court must, in the first instance, apply some

    2
          The only qualification that has developed with regard to
the general rule that a defendant’s improper removal supports an
award of fees is that we have declined to permit an award of fees
relating to improper removal when the plaintiff seeking those fees
“bears a substantial share of the responsibility for the case
remaining in federal court.” Maguire Oil Co. v. City of Houston,
143 F.3d 205, 209 (5th Cir. 1998); Avitts, 111 F.3d at 32; see also
Bankston v. Burch, 27 F.3d 164, 169 (5th Cir. 1994).           That
qualification has no application in this case because there is no
indication, either in the arguments of the parties or the record
itself, that the Mirannes, who promptly moved for remand and have
vociferously fought continuing federal jurisdiction over their
state law claims, have contributed in any manner to the extended
delay in getting this case back to state court.

                                  8
multi-factoral analysis to determine whether fees are appropriate

at all.   Specifically, in the defendants’ rendition of a proposed

test, the district court should consider whether the law governing

the removal was complex or relatively straightforward, whether the

law governing removal was unsettled or fairly well-established, and

finally, whether there is record evidence tending to establish that

the defendants removed the case in good faith or, at least, in the

absence of bad faith.      According to the defendants, a § 1447(c)

award of costs and expenses, including fees, is “disfavored when

the law governing removal in a particular case is complex, when the

law governing the jurisdictional issue is unsettled, or when the

removing defendants have acted in good faith.”

     There are several problems with remanding for failure to apply

the defendants’ proposed test. First, there is no support for such

an analysis in the plain text of the statute.       Indeed, to embrace

such a test would arguably render the 1988 amendments to § 1447(c)

nugatory by reinjecting the concept that costs and expenses cannot

be awarded when the defendant has removed the case on the basis of

an erroneous but good faith belief that removal is proper.

     Second, there is no support for such a test in the applicable

precedent.    To   the   contrary,   the   defendants   have   pieced   the

proposed test together from snippets appearing in a variety of

district court cases from around the country.       We do not think it

wise to remand this ancient case for failure to apply some newly-

minted and unprecedented multi-factoral test which is not obviously

drawn from the plain language of the statute or our own precedent.

                                     9
To do so both creates new law and comes perilously close to

replacing the relatively broad discretion permitted by the plain

language of § 1447(c) with a mechanistic and potentially under-

inclusive, multi-factoral analysis.            See Mints v. Educational

Testing Serv., 99 F.3d 1253, 1260 (3d Cir. 1996) (eschewing any

mechanistic    analysis    of   when   costs   and   attorney’s    fees   are

appropriate under § 1447(c)); see also Morris v. Bridgestone/

Firestone, Inc., 985 F.2d 238, 240 (6th Cir. 1993); Morgan Guar.

Trust Co. v. Republic of Palau, 971 F.2d 917, 924 (2d Cir. 1992)

(both    stating   that   the   wide   discretion    afforded     in   revised

§   1447(c)   requires    affirmance    when   the   award   is   “fair   and

equitable” under the circumstances).

        Finally, there is no indication that the defendants would be

entitled to relief even if the multi-factoral test they propose

were applied.      The defendants argue that an award of costs and

expenses under § 1447(c) was inappropriate in this case because the

law governing the removal of this case was unsettled at the time it

was removed.    We disagree.     The defendants seek to capitalize upon

ambiguity arising from an “enigmatic” footnote in Federated Dep’t

Stores, Inc. v. Moitie, 101 S. Ct. 2424 (1981).3         See Carpenter, 44

    3
          Moitie addressed the Ninth Circuit’s failure to apply the
res judicata doctrine in the context of federal antitrust claims
that were first dismissed in federal court, then refiled in state
court and removed to another federal court. Thus, Moitie was a res
judicata case, rather than a case directly involving removal
jurisdiction.    See Carpenter, 44 F.3d at 369.       Nonetheless,
footnote two of that opinion suggested that some of the claims
pleaded as state law claims might be sufficiently “federal in
nature” to support removal jurisdiction. Moitie, 101 S. Ct. at
2427 n.2.

                                       10
F.3d at 369.   To be sure, Moitie was the source of some confusion

concerning whether the potentially preclusive effect of a prior

federal judgment on a matter of federal law might permit removal of

artfully pleaded state law claims that were, in essence, the same

as the previously adjudicated federal claims.    See Carpenter, 44

F.3d at 368-71; Doe v. Allied-Signal, Inc., 985 F.2d 908, 911-13

(7th Cir. 1993); Ultramar American Ltd. v. Dwelle, 900 F.2d 1412,

1415-17 (9th Cir. 1990); Sullivan v. First Affiliated Sec., Inc.,

813 F.2d 1368, 1370-76 (9th Cir. 1987).   But none of these cases

cited by the defendants tortured the Moitie footnote to the extent

that removal jurisdiction might be premised upon the potentially

preclusive effect of a prior federal judgment disposing, as in this

case, of claims premised upon rights arising under state law.    To

the contrary, the cited cases expressly decline to go that far.

Carpenter, 44 F.3d at 368-70; Allied-Signal, 985 F.2d at 911-13;

Ultramar, 900 F.2d at 1415-17; see also Rivet, 108 F.3d at 593-96

(Jones, J., dissenting). Thus, we agree with the Mirannes that the

defendants may not rely upon the unsettled meaning of the Moitie

footnote to defeat the Mirannes’ fee petition in this case.   Stated

simply, the defendants have not cited any authority, either in this

Circuit or any other, supporting their removal of a state law claim

on the basis that Moite, prior to the Supreme Court’s disposition

in Rivet, permitted removal of an artfully pleaded state law claim

on the basis that it was precluded by a prior federal judgment on

an issue of state law.    The defendants also maintain that this

case should be remanded for a factual determination of their

                                11
relative good or bad faith.                 As with the defendants’ argument that

§   1447(c)     requires     a    separate          layer    of    analysis        as    to   the

appropriateness of fees, and their argument that some confusing

Supreme Court precedent created confusion in their case, the

defendants’ argument that factual determinations are better made in

the district court once again has us tilting at windmills.                               Stated

simply, there is no genuine issue relating to the defendants’ bad

faith, or lack of good faith, that requires remand.                                     Leaving

litigation rhetoric to one side, the Mirannes have not offered any

significant evidence that would support a finding that the Regions

Bank    group    proceeded        in    bad    faith        when   removing        the    case.

Likewise, the Regions Bank group has not responded with any factual

evidence that would unambiguously establish that they were acting

in good faith.        In such a case, there simply are no factual issues

that the district court would be better suited to resolve.

       To be clear, we do not say that the factors identified by the

defendants      may    not       appropriately         inform       a   federal         court’s

discretion      when    passing        on    the     issue    of    a   fee    award      under

§ 1447(c).      But we will not hold, in the absence of any binding

authority, and on the face of a record which does not suggest that

the award of fees was infected by any unfairness or other legal

error, that such an analysis is a necessary prerequisite that must

appear for formality’s sake in every court decision awarding fees

for improper removal.            We conclude that there can be no reversible

error   based    upon    the      district          court’s    failure        to   apply      the

defendants’ proposed three-factor test in this case.                                    Section

                                               12
1447(c) requires no more in the ordinary case than that removal be

improper.   The Supreme Court’s decision conclusively settles that

removal was improper.     Moreover, even if we were to accept the

defendants’   novel   argument    in    favor   of   an    extra-textual   and

unprecedented threshold test for determining whether fees are

appropriate, the defendants have not demonstrated any error that

may be predicated thereon.

     For the foregoing reasons, the defendants’ argument that this

is an inherently inappropriate case in which to award costs and

expenses under § 1447(c) is without merit.

                                   III.

     The defendants’ second argument is in fact related to their

first.   The defendants maintain that the district court’s order

granting the Mirannes’ request for costs and expenses should be

reversed, and the matter remanded for redetermination by the

district court, because the district court erroneously believed

that this Court’s mandamus order directed the district court to

award costs and expenses, leaving only the quantum to be awarded in

the district court’s discretion.        Thus, the defendants reason, the

district court did not exercise its discretion with respect to the

mandatory   and   independent    determination       of   whether   fees   were

appropriate under the three-factor test, in the first instance,

before proceeding to the independent analysis of the quantum of

costs and fees, if any, that were justified by the Mirannes’

petition for fees, in the second instance.                The defendants rely

                                       13
upon language in this Court’s mandamus order, as well as the

district court’s order awarding costs and expenses, for their

position.

       We are not persuaded by the parties’ reading of this Court’s

mandamus order. The Court’s mandamus order was intended to address

only the issues presented to the Court in that proceeding; that is,

whether the district court possessed the power to remand for lack

of subject matter jurisdiction, while simultaneously trying to rule

from beyond the borders of Article III on the merits.               The Court’s

holding was that the district court’s lack of subject matter

jurisdiction placed any attempt to rule upon the merits of the case

beyond the district court’s power.              The Court added a brief

statement    clarifying     that     the     district     court’s    remaining

jurisdiction on remand would be limited to consideration of the

costs and expenses that might be awarded under § 1447(c).

       We note that there was no live pleading requesting costs and

expenses under § 1447(c) before this Court on the writ of mandamus.

Indeed, the mandamus order was entered less than two months after

the Court expressly declined to bypass the district court by making

an appellate determination concerning the Mirannes’ entitlement to

costs and expenses.        See Rivet, 139 F.3d at 513. (denying the

Mirannes’ motion to make an award of costs and expenses under

§ 1447(c) on appeal).       There is nothing in the mandamus order,

which addressed only the issues raised in that separate appeal,

that    demonstrates   a   retreat    from     that     position.     Although

defendants point to the Court’s use of the directive that the

                                      14
district court “shall determine” fees, that directive was broad

enough, when viewed in the appropriate procedural and textual

context, to permit the district court’s determination on remand, if

appropriate, that no such fees should be allowed.

     The defendants also point to language in the district court’s

order awarding costs and expenses, which indicates the district

court’s view that this Court had already exercised the statutory

discretion granted in § 1447(c) by requiring that the district

court award any costs and expenses justified by the Mirannes’ fee

petition.     Assuming, for the sake of argument, that there is any

reasonable support for the proposition that the district court’s

lengthy     and   detailed   order    does   not   reflect   that   court’s

independent discretion about the appropriateness of fees in this

case, the fact that the district court felt so constrained does not

independently give rise to reversible error in this case.

     First of all, it bears repeating that there is no textual or

precedential support for the proposition that every § 1447(c) fee

award must necessarily reflect some separate, independent decision

regarding whether fees are appropriate at all.        Such a decision may

be implicit in the particulars of or the mere fact of the awarding

court’s decision      itself.    We   are,   therefore,   loathe    to   find

reversible error on the basis that the district court erroneously

believed it was constrained from making a dispensable, threshold

analysis, particularly where, as here, the defendants’ arguments

fail to call the fundamental fairness or propriety of the district

court’s decision into question.

                                      15
     Second, the current version of § 1447(c) simply provides that

a remand order may include an award of costs and fees.                      The statute

does not provide, as did the pre-1988 version, that a “district

court” may order such an award.                   While we have expressed a

preference for permitting the district court to rule upon the

propriety of fees and costs in the first instance, this is a

prudential rule typically resting upon the inherently factual

nature of the determination as to the quantum of fees to be

awarded.      There   is   nothing       in   §     1447(c)    that        precludes   a

determination that fees are appropriate by an appellate court,

particularly where, as here, the propriety of the award itself does

not depend upon any genuine issues of disputed fact that are more

appropriately resolved, at least as an initial matter, in the

district   court.        See     Bankston,     27    F.3d     at     169    (declining

plaintiffs’    request     for    fees   pursuant       to    §    1447(c)     without

requiring consideration of that request as an initial matter by the

district court).

     For the foregoing reasons, we conclude that, without regard to

what this Court intended when it entered the mandamus order and

without regard to what the district court felt or intended when it

entered the order granting (in part) the Mirannes’ fee petition,

there is no reversible error presented in the record of this case.

                                   CONCLUSION

     The   district   court’s       order     awarding       costs    and    expenses,

including attorney’s fees, pursuant to 28 U.S.C. § 1447(c) is

                                         16
AFFIRMED.

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