Court Opinion

ID: 6335107
Source: CourtListenerOpinion
Date Created: 2022-04-26 19:02:16.901665+00
Date Added: 2024-06-11T09:23:48.427145
License: Public Domain

USCA11 Case: 21-11888      Date Filed: 04/26/2022   Page: 1 of 6

                                           [DO NOT PUBLISH]
                            In the
         United States Court of Appeals
                 For the Eleventh Circuit

                    ____________________

                         No. 21-11888
                    Non-Argument Calendar
                    ____________________

24E FITNESS, LLC,
                                              Plaintiff-Appellant,
versus
INTERNAL CREDIT SYSTEMS INC.,

                                            Defendant-Appellee.

                    ____________________

          Appeal from the United States District Court
             for the Northern District of Alabama
             D.C. Docket No. 2:20-cv-01937-GMB
                   ____________________
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2                      Opinion of the Court                21-11888

Before WILSON, LUCK, and ANDERSON, Circuit Judges.
PER CURIAM:
       24e Fitness LLC appeals the district court’s order denying its
attorney’s fees motion after the district court remanded 24e Fit-
ness’s case back to state court. Because the district court did not
abuse its discretion, we affirm.
       In March 2016, 24e Fitness hired Internal Credit Systems,
Inc. to collect on 24e Fitness’s accounts receivable in exchange for
forty percent of the amount collected. In September 2020, 24e Fit-
ness ended the contract because it discovered that Internal Credit
Systems was not licensed to conduct business in Alabama and be-
cause 24e Fitness’s members had complained about Internal Credit
Systems’s conduct in collecting the accounts receivable.
       In October 2020, 24e Fitness sued Internal Credit Systems in
Alabama state court, asserting state law claims for breach of con-
tract, negligence, and malice/wantonness. The company also
sought a declaratory judgment that (1) “the Service Agreement
[was] void”; or in the alternative (2) “the Defendant breached the
Service Agreement”; (3) “the Defendant’s actions were outside the
scope of Federal, State, and City laws and regulations”; and (4) “the
Defendant’s actions were unprofessional and unethical.”
       Internal Credit Systems filed a notice of removal to federal
court, alleging that the reference in 24e Fitness’s complaint to vio-
lations of “federal” laws and regulations invoked federal question
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21-11888                Opinion of the Court                         3

jurisdiction. 24e Fitness moved to remand, arguing that its com-
plaint did not actually name a federal statute or allege facts support-
ing the violation of federal law. Internal Credit Systems responded
that 24e Fitness’s complaint moved beyond breach of contract into
making allegations, “albeit generalized allegations[,] that [it] ha[d]
violated federal laws and regulations[.]”
        24e Fitness also moved for attorney’s fees under 28 U.S.C.
section 1447(c), which provides that a district court “may” award
payment of “just costs and any actual expenses, including attorney
fees, incurred as a result of the removal.” 28 U.S.C. § 1447(c). The
company argued that it should be awarded fees under section
1447(c) because Internal Credit Systems lacked “an objectively rea-
sonable basis for seeking removal.” And, 24e Fitness continued,
Internal Credit Systems had countersued in North Carolina state
court for $74,800 which was both frivolous—24e Fitness said it was
not subject to personal jurisdiction in North Carolina—and re-
vealed an intent to prolong and delay the litigation.
       Internal Credit Systems responded that the North Carolina
state court had found jurisdiction over 24e Fitness—thus eliminat-
ing the basis for 24e Fitness’s claim of delay. And, the reference to
“federal” laws and regulations in 24e Fitness’s complaint gave it an
objectively reasonable basis to believe that 24e Fitness was at least
attempting to raise federal claims.
       The district court granted 24e Fitness’s motion to remand
the case to Alabama state court. As to its subject matter jurisdic-
tion, the district court concluded that “[a] few stray references to
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4                       Opinion of the Court                   21-11888

federal law do not transform claims for breach of contract and re-
lated state-law torts into federal causes of action.” The district
court also rejected Internal Credit Systems’s argument that 24e Fit-
ness’s state law claims raised a substantial federal issue.
      But the district court denied 24e Fitness’s section 1447(c) at-
torney’s fees motion because, despite the remand, Internal Credit
Systems “had an objectively reasonable, albeit incorrect, basis for
seeking removal.” 24e Fitness appeals the part of the district court’s
order denying its attorney’s fees motion.
        We review the denial of costs and fees under section 1447(c)
for an abuse of discretion. Legg v. Wyeth, 428 F.3d 1317, 1320
(11th Cir. 2005). “We will find an abuse of discretion only when a
decision is in clear error, the district court applied an incorrect legal
standard or followed improper procedures, or when neither the
district court’s decision nor the record provide sufficient explana-
tion to enable meaningful appellate review.” Friends of the Ever-
glades v. S. Fla. Water Mgmt. Dist., 678 F.3d 1199, 1201 (11th Cir.
2012). “[T]he abuse of discretion standard allows for a range of
choice for the district court, so long as that choice does not consti-
tute a clear error of judgment.” In re Rasbury, 24 F.3d 159, 168
(11th Cir. 1994) (internal citations omitted).
       24e Fitness argues that the district court abused its discretion
because Internal Credit Systems’s failure to cite a federal statute in
its removal notice showed that it “knew or should have known”
that 24e Fitness’s complaint did not invoke federal question juris-
diction. And it contends that the removal was frivolous and an
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21-11888               Opinion of the Court                         5

attempt to delay litigation and to thwart Alabama state court juris-
diction.
      Section 1447(c) provides that fees and costs “may” be
awarded in an order remanding a case to state court. 28 U.S.C.
§ 1447(c). The Supreme Court has explained that “[a]bsent unusual
circumstances, courts may award attorney’s fees under [section]
1447(c) only where the removing party lacked an objectively rea-
sonable basis for seeking removal.” Martin v. Franklin Capital
Corp., 546 U.S. 132, 141 (2005).
        Here, the district court did not abuse its discretion in deny-
ing fees. 24e Fitness’s complaint alleged that Internal Credit Sys-
tems’s conduct violated federal laws and federal regulations and
sought a declaration saying so. The district court’s conclusion—
that it was objectively reasonable for Internal Credit Systems to be-
lieve that seeking such a declaration was attempting to raise a fed-
eral claim—is well within the “range of choice[s]” it could have rea-
sonably made. See Rasbury, 24 F.3d at 168.
        24e Fitness’s counterarguments boil down to a disagree-
ment with the district court’s call on whether the removal, albeit
incorrect, was objectively reasonable. But under the abuse of dis-
cretion standard, we may not “substitute[] [our] judgment for that
of the [district court].” Piper Aircraft Co. v. Reyno, 454 U.S. 235,
257 (1981). 24e Fitness has not identified any way in which the dis-
trict court followed an improper procedure or relied on an incor-
rect legal standard. Friends of the Everglades, 678 F.3d at 1201. Nor
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6                      Opinion of the Court                21-11888

has 24e Fitness cited any case revealing clear error in the decision.
Id. Absent those things, we cannot find an abuse of discretion.
      AFFIRMED.