Court Opinion

ID: 9907141
Source: CourtListenerOpinion
Date Created: 2023-12-05 19:00:54.224011+00
Date Added: 2024-06-11T09:56:26.818652
License: Public Domain

Case: 23-10311         Document: 00516990005             Page: 1      Date Filed: 12/05/2023

              United States Court of Appeals
                   for the Fifth Circuit                                   United States Court of Appeals
                                                                                    Fifth Circuit
                                      ____________                                FILED
                                                                           December 5, 2023
                                        No. 23-10311
                                                                             Lyle W. Cayce
                                      ____________                                Clerk

   Jesse Casas,

                                                                       Plaintiff—Appellee,

                                             versus

   Lickity Split Expediting, L.L.C.,

                                               Defendant—Appellant.
                      ______________________________

                      Appeal from the United States District Court
                          for the Northern District of Texas
                                USDC No. 5:22-CV-37
                      ______________________________

   Before Higginbotham, Higginson, and Duncan, Circuit Judges.
   Per Curiam:*
          The district court has remanded this case twice to the state court, and
   as part of its second order remanding the case, it awarded attorney’s fees
   against Appellant Lickity Split Expediting, L.L.C., in the amount of
   $35,980.00. Because we find that the district court did not abuse its
   discretion in calculating or awarding these fees, we AFFIRM the lower
   court’s grant of attorney’s fees.

          _____________________
          *
              This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 23-10311       Document: 00516990005            Page: 2     Date Filed: 12/05/2023

                                       No. 23-10311

                                                I.
          This appeal arises out of a tort suit initiated by Jesse Casas in state
   court for an injury sustained when an industrial air conditioner was dropped
   from a crane onto his legs on April 30, 2021. On May 28, 2021, Casas sued
   Temtrol, Inc. (“Temtrol”), Anthony Mechanical Services, Inc. (“AMS”),
   and Lickity Split in the 99th Judicial District of Lubbock County for
   negligence and gross negligence.
                                                A.
   The First Remand
          In August 2021, Nortek Air Solutions, LLC (“Nortek”) appeared in
   state court and removed the case to federal court. Nortek contended that it
   had merged with Temtrol, Temtrol no longer existed, and that Casas
   intended to sue Nortek instead of Temtrol.1 Nortek also alleged that Casas
   fraudulently joined AMS to defeat diversity. However, Nortek was not a
   named defendant and had never sought to become one in state court. Casas
   filed a motion to remand, arguing that Nortek lacked the requisite authority
   to initiate removal proceedings and that federal precedent required a remand.
          On February 23, 2022, Judge James Hendrix agreed with Casas and
   remanded the case to state court after finding that Nortek “has no voice in
   these proceedings” and that a “nonparty may not remove a case from state
   to federal court, regardless of whether it believes it should be a party.”

          _____________________
          1
             Although Temtrol was created on August 12, 1955, it ceased to exist in 2010
   pursuant to Oklahoma’s General Corporation Act when it was converted into Temtrol,
   LLC. After a merger with another company called CES Group, LLC in 2014, the surviving
   entity eventually became Nortek.

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                                        No. 23-10311

   The Second Remand
           About two weeks after Judge Hendrix remanded the case, Lickity Split
   removed the case to federal court, arguing (on the same grounds as Nortek)
   that AMS was improperly joined. The district court again remanded the case
   to state court, finding that the removal was procedurally deficient under 28
   U.S.C. § 1446(b)(2)(A) because no other defendant consented to Lickity
   Split’s motion.2
           After remanding, the district court ordered Casas to file a motion for
   fees pursuant to 28 U.S.C. § 1447(c) which authorizes a district court to
   award attorney’s fees incurred as a result of removal. Casas was ordered to
   focus on the availability of fees where a defendant failed to comply with the
   procedural requirements of removal. Casas filed the application for
   attorney’s fees, requesting a “lodestar” calculation of $122,350 in fees.
   Lickity Split responded that no fees were warranted because they believed
   the consent requirement did not apply to Temtrol, which had merged with
   Nortek. The district court disagreed, however, and granted Casas’s
   application for attorney’s fees in part, awarding $35,980.00 to Casas.
           First, the district court found that Lickity Split’s removal attempt was
   “objectively unreasonable because it failed to comply with the fundamental
   statutory requirement that all properly joined defendants consent to
   removal.” The district court, having found that Temtrol was already a party
   to the suit, “put [Lickity Split] on notice that Temtrol was a proper
   defendant and, as such, any removal required its consent.”

           _____________________
           2
             See 28 U.S.C. § 1446(b)(2)(A) (“When a civil action is removed solely under
   section 1441(a), all defendants who have been properly joined and served must join in or
   consent to the removal of the action.”) (emphasis added).

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                                     No. 23-10311

          Second, the district court quantified the amount owed by Lickity Split
   using the lodestar method. After reviewing the time entries submitted, the
   district court concluded that Casas’s attorneys expended a total of 198.2
   hours in connection with both removals, 70.4 of which responded to the
   Nortek removal.
          Lickity Split argued that Casas should not recover for hours spent
   responding to Nortek’s removal action, because they were not related to
   Lickity Split’s removal. However, the district court found that Lickity Split
   “duplicated Nortek’s improper-joinder argument” and that Casas
   “reasserted—essentially verbatim—the counterarguments he presented in
   his first motion to remand.” Therefore, now faced with a second
   procedurally defective removal, the district court found that it could not
   “ignore the time Casas’s attorneys wasted litigating the improper-joinder
   issue” in the first removal action. “Irrespective of when the issue was first
   raised, [Lickity Split] made a strategic choice to raise it again.” As such, the
   district court included the time spent in the Nortek removal and the hours
   spent otherwise responding to Lickity Split’s procedurally defective attempt
   to remove.
          Third, the district court found that certain reductions were necessary
   to account for the lack of evidence of billing judgment in the record. As to the
   time entries before Lickity Split’s removal, the district court found that Casas
   failed to produce evidence showing that the entries related only to the
   improper joinder argument. With respect to the time entries after Lickity
   Split’s removal, the district court found that it lacked the requisite
   information to confirm that Casas has not “double billed” for the same work
   in the context of both removals. Given the lack of specificity, the district
   court found that (1) “a reduction by 20% of the total hours billed before
   [Lickity Split’s] removal reasonably adjusts the relatively minor number of
   hours billed with respect to the first removal;” and (2) “that a larger 40%

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                                          No. 23-10311

   reduction of the total hours billed after [Lickity Split’s] removal is reasonable
   to correct for the substantial overlap between each motion to remand.”
           After imposing the percentage reductions and removing a senior
   paralegal’s hours, the district court found that Casas’s team reasonably
   expended 127.04 hours of labor in response to Lickity Split’s defective
   removal.
           Fourth, the district court determined that “exorbitantly high rates
   charged by the Buzbee Law Firm” were not supported by Casa’s evidence.
   As such, the district court reduced the hourly rates charged by Casas’s
   lawyers.3 Altogether, “when multiplying the reasonable number of hours
   worked by each attorney by his or her reasonable hourly rate, [the district

           _____________________
           3
             The district court found that: “Buzbee has failed to consider three factors in
   particular: (1) the relevant market; (2) the type of work performed by his firm; and (3) the
   size and breadth of his firm. See Jiwani [v. United Cellular, Inc.], No. 3:13-CV-4243-M-BK,
   2014 WL 4805781, at *5 (finding that a court may take judicial notice of a report prepared
   by the Texas State Bar); see also Fed. R. Evid. 201(b)(2) (permitting a court to take
   judicial notice of facts that ‘can be accurately and readily determined from sources whose
   accuracy cannot reasonably be questioned’).”
            The district court also noted that “Buzbee points to Houston rather than
   Lubbock—where this Court sits—as the relevant market, which improperly drives up his
   rates.” Moreover, “[h]ourly rates recently approved in this district—though not
   dispositive—further undercut the rates proposed by Buzbee.”

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                                            No. 23-10311

   court found] the lodestar is $35,980.00.” Lastly, the district court found that,
   under the Johnson factors,4 no further adjustments were necessary.5
                                                 B.
           Lickity Split appeals the district court’s grant of attorney’s fees. First,
   Lickity Split argues that the district court abused its discretion in awarding
   the fees because its removal was “objectively reasonable” because: (1)
   Temtrol ceased to exist over a decade before Lickity Split’s removal; and (2)
   the district court had previously issued an order stating that Temtrol’s
   successor entity, Nortek, “had no voice in these proceedings” after Nortek
   had attempted to remove the case. Lickity Split further argues that the
   district court abused its discretion by improperly awarding attorney’s fees to
   Casas for work unrelated to Lickity Split’s removal, i.e., the fees Casas’s
   attorneys billed for work relating to Nortek’s removal attempt. Lastly, Lickity
   Split contends that the district court abused its discretion by improperly
   awarding attorney’s fees for hours expended by Casas’s attorneys on the

           _____________________
           4
             Johnson v. Ga. Highway Exp., Inc., 488 F.2d 714, 717–19 (5th Cir. 1974). “[A] court
   may, if necessary, adjust the lodestar based on the weight of twelve factors: (1) the time and
   labor required; (2) the novelty and difficulty of the issues in the case; (3) the skill required
   to perform the legal services properly; (4) the preclusion of other employment by the
   attorney due to acceptance of the case; (5) the customary fee charged for those services in
   the relevant community; (6) whether the fee is fixed or contingent; (7) time limitations
   imposed by the client or the circumstances; (8) the amount involved and the results
   obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability
   of the case; (11) the nature and length of the professional relationship with the client; and
   (12) awards in similar cases.”
           5
             Specifically, the district court found: “Casas does not identify any business that
   his attorneys refused due to their handling of these proceedings. Nor does he point to any
   reason that has made his case undesirable to undertake. And Casas does not have a pre-
   existing relationship with the Buzbee Law Firm that would justify an atypical rate. Finally,
   other fee awards granted by courts in this district under Section 1447(c)—though at times
   smaller than the lodestar here—do not justify any further adjustment because those cases
   dealt with less involved, less time-consuming motions to remand.”

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                                             No. 23-10311

   issue of improper joinder, the merits of which the district court never
   addressed.
                                                  II.
            This Court reviews a district court’s award of attorney’s fees award
   for an abuse of discretion and the factual findings supporting the fee award
   for clear error.6
            “When the district court remands a case to state court, it has
   discretion to award the non-removing party its attorney’s fees incurred as a
   result of the removal, see 28 U.S.C. § 1447(c), but ‘[a]bsent unusual
   circumstances, attorney’s fees should not be awarded when the removing
   party has an objectively reasonable basis for removal.’”7 The Court focuses
   on an “objective view of the legal and factual elements in each particular
   case.”8 This Court must “evaluate the objective merits of removal at the
   time of removal” and ask “whether the defendant had objectively reasonable
   grounds to believe the removal was legally proper.” 9 The party challenging
   the award must point to “authority showing that the district court erred in
   its assessment of the relevant facts or in its legal conclusion” and cannot
   simply plead that the “the district court abused its discretion.”10

            _____________________
            6
             See Omega Hosp., L.L.C. v. Louisiana Health Serv. & Indem. Co., 592 F. App’x
   268, 270 (5th Cir. 2014); Hornbuckle v. State Farm Lloyds, 385 F.3d 538, 541 (5th Cir. 2004).
            7
             Omega Hosp., 592 F. App’x at 270 (quoting Martin v. Franklin Cap. Corp., 546
   U.S. 132, 136 (2005)).
            8
                Valdes v. Wal-Mart Stores, Inc., 199 F.3d 290, 293 (5th Cir. 2000).
            9
                Id.
            10
                 MidCap Media Fin., L.L.C. v. Pathway Data, Inc., 857 F. App’x 786, 793 (5th Cir.
   2021).

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           Lastly, “[f]ailure to raise an argument before the district court waives
   that argument” on appeal.11 This Court does not “consider a waived
   argument ‘absent extraordinary circumstances.’”12
                                                      III.
                                                      A.
           We find that the district court did not abuse its discretion in awarding
   the attorney’s fees. The district court’s determination was reasonable, as it
   relied on the plain terms of 28 U.S.C. § 1446(b)(2)(A) and binding Fifth
   Circuit law.
           28 U.S.C. § 1446(b)(2)(A) requires that “all defendants who have
   been properly joined and served must join in or consent to the removal of the
   action.”13 As the district court explained, “the plain text of the removal
   statute defies the reasonableness of [Lickity Split’s] removal.” In this case,
   Lickity Split failed to obtain Temtrol’s consent before removing the case to
   federal court, thereby failing to comply with the procedural requirements of
   removal. The district court also explained that “Fifth Circuit precedent
   further highlights the unreasonableness of [Lickity Split’s] argument . . . . [as]
   [t]he Fifth Circuit has repeatedly affirmed that ‘[t]he law is clear that under
   28 U.S.C. § 1446(a), removal procedure requires that all defendants join in
   the removal petition.’”14

           _____________________
           11
             Rossco Holdings, Inc. v. McConnell, 613 F. App’x 302, 307 (5th Cir. 2015) (quoting
   Fruge v. Amerisure Mut. Ins. Co., 663 F.3d 743, 747 (5th Cir. 2011)).
           12
            McConnell, 613 F. App’x at 307 (quoting N. Alamo Water Supply Corp. v. City of
   San Juan, 90 F.3d 910, 916 (5th Cir. 1996)).
           13
                28 U.S.C. § 1446(b)(2)(A) (emphasis added).
           14
                Doe v. Kerwood, 969 F.2d 165, 167 (5th Cir. 1992).

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                                     No. 23-10311

          Lickity Split counters that the district court created an inescapable
   “Catch-22” because, at the time of its removal, Temtrol no longer existed as
   a corporate entity and the district court had found that Temtrol’s successor,
   Nortrek, had no say in the proceedings. The district court, however, directly
   addressed this “procedural paradox” and explained that it had already
   recognized Temtrol as a party to the suit. We find no clear error in the district
   court’s factual finding with respect to Temtrol’s status as a party in the
   underlying case—Temtrol maintained a registered agent on the Texas
   Secretary of State’s website, Casas served the registered agent, and it was
   undisputed that Temtrol was being represented by counsel in the state court
   proceedings. The district court thus “put [Lickity Split] on notice that
   Temtrol was a proper defendant and, as such, any removal required its
   consent.”
          Furthermore, “although the [district court] previously rejected
   Nortek’s status as a party to this suit, it never discredited Nortek’s legal
   existence or its authority to act on behalf of Temtrol.” We then agree with
   the district court that there was no reason why Nortek could not have simply
   signed the removal petition on Temtrol’s behalf.
          Having carefully considered Tremtol’s status as a party to the
   underlying suit, the plain terms of 28 U.S.C. § 1446(b)(2)(A), and binding
   Fifth Circuit law, we hold that the district court did not abuse its discretion
   in awarding attorney’s fees against Lickity Split.
                                          B.
          We also find that the district court did not abuse its discretion in
   awarding fees for time spent on Nortek’s attempted removal.
          The district court found that it could not “ignore the time that Casas’s
   attorneys wasted litigating the improper-joinder issue” in the Nortek
   removal, an issue that Lickity Split strategically chose to raise again. The

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   district court, however, awarded only a fraction of the fees Casas requested
   relating to the time incurred responding to Lickity Split’s joinder argument,
   as it reduced (1) the number of recoverable hours by twenty percent to
   account for a “lack of evidence of billing judgment” and potential for
   “double-billing;” (2) the number of recoverable hours by another forty
   percent to account for overlap between each motion to remand; and (3) the
   requested hourly rates for Casas’s counsel. Under these facts, we find that
   the district court did not abuse its discretion in awarding fees for work
   relating to the first removal action, as Lickity Split made the strategic
   decision to revive the argument in its own removal action.
                                                     C.
          Lastly, as to Lickity Split’s argument that the district court abused its
   discretion by improperly awarding attorney’s fees to Casas for hours
   expended by his attorneys on the issue of improper joinder (instead of the
   “winning” procedural defect argument), we find that Lickity Split failed to
   preserve this argument for appeal as it was not raised before the district court.
   Seeing as there are no “extraordinary circumstances” warranting a different
   finding, we cannot find that the district court abused its discretion.15
                                            *****
          “[B]earing in mind [the district] court’s superior understanding of the
   litigation and of the costs and fees reasonably incurred in that litigation,” we
   find that the district court did not abuse its discretion by awarding attorney’s
   fees or by including fees associated with the fist removal action.16 Lickity Split
   also failed to preserve its last argument that the district court abused its

          _____________________
          15
               See McConnell, 613 F. App’x at 307.
          16
               Pathway Data, 857 F. App’x at 793.

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                                  No. 23-10311

   discretion in awarding fees pertaining to the issue of joinder. For these
   reasons, we AFFIRM the district court’s order granting attorney’s fees.

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