Arnhoelter v. Kaus

District Court, D. Arizona·Decided August 12, 2020·No. 2:20-cv-00403·Unknown

Opinion

WO

Frank Arnhoelter, No. CV-20-00403-PHX-JAT

Plaintiff, ORDER

v.

Armin Kaus, et al.,

Defendants. Pending before the Court are Plaintiff Frank Arnhoelter’s Motion for Attorney’s Fees (Doc. 27) and Motion to Strike (Doc. 38). The Court now rules.1 Defendants removed this action to this Court pursuant to 28 U.S.C. § 1441(a), asserting diversity jurisdiction under 28 U.S.C. § 1332(a)(2) as their basis for removal. (Doc. 1). Shortly afterward, Defendants moved to consolidate this case with another case, Med-Fibers Europe GmbH v. Med Fibers Inc., No. CV-19-04962-DJH (D. Ariz. filed Aug. 15, 2019). (Doc. 11). Plaintiff then filed a motion seeking remand and for an award of attorney fees, requesting specifically that he “be granted his legal fees in bringing” the Motion to Remand. (Doc. 12 at 1, 8). The Court granted the Motion to Remand (Doc. 12) because there are foreign citizens on both sides in this case, or alternatively, because two defendants are citizens of Arizona. (Doc. 24 at 3–6).

1 Although Defendants’ Motion to Strike (Doc. 36) is also pending, Plaintiff withdrew the document Defendants sought to strike, (Doc. 37 (withdrawing Doc. 35)). The Court will therefore deny Defendants’ Motion to Strike (Doc. 36) as moot. -1- The Court also found that Defendants “had no objectively reasonable basis for removal” and that Plaintiff therefore demonstrated entitlement to attorney fees under 28 U.S.C. § 1447(c). (Doc. 24 at 8 (citation omitted)). Consistent with Plaintiff’s explicit request, the Court limited its grant of attorney fees to those “reasonable fees [Plaintiff] incurred in seeking remand.” (Doc. 24 at 8). The Court then held that, before the Court would award fees, Plaintiff was required to file a motion for attorney fees that complied with District of Arizona Local Rule of Civil Procedure 54.2. (Doc. 24 at 8–9). Plaintiff then timely filed the instant attorney fees motion (Doc. 27). In remanding a case, courts may grant “just costs and any actual expenses, including attorney fees, incurred as a result of the removal.” 28 U.S.C. § 1447(c). A district court may award attorney fees “where the removing party lacked an objectively reasonable basis for seeking removal.” Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005). The Supreme Court has recognized that “[t]he process of removing a case to federal court and then having it remanded back to state court delays resolution of the case, imposes additional costs on both parties, and wastes judicial resources.” Id. at 140. Accordingly, “the standard for awarding fees should turn on the reasonableness of the removal.” Id. at 141. And while district courts retain discretion in granting awards under § 1447(c), their “reasons for departing from the general rule should be ‘faithful to the purposes’ of awarding fees under § 1447(c).” Id. (citation omitted). Once a court has found that a party is entitled to attorney fees, it must then determine whether the fees requested are reasonable using the lodestar method. Sankary v. Ringgold, 601 F. App’x 529, 530 (9th Cir. 2015); Staton v. Boeing Co., 327 F.3d 938, 965 (9th Cir. 2003). A fee award based on the lodestar method—which requires multiplying the reasonable hourly rate by the number of hours reasonably expended—is presumptively reasonable. See Intel Corp. v. Terabyte Int’l Inc., 6 F.3d 614, 622 (9th Cir. 1993). Local Rule 54.2 provides the procedural vehicle for seeking an award of reasonable attorney fees. See LRCiv 54.2. The rule requires, among other things, that a party seeking attorney fees file: (1) a memorandum in support of the motion for attorney fees, which must include a discussion of the reasonableness of the requested award, (2) any necessary supporting documentation, and (3) a task-based itemized statement of fees and expenses. LRCiv 54.2(c)–(e). A party must show that it is eligible for a fee award, that it is entitled to a fee award, and that the requested fee award is reasonable. LRCiv 54.2(c). The party seeking fees has the burden of showing that the amount requested is reasonable. See Moon v. Am. Family Mut. Ins., No. CV-18-00524-PHX-JAT, 2018 WL 3729762, at *1 (D. Ariz. Aug. 6, 2018). The task-based itemized statement required under Local Rule 54.2(e) must therefore “adequately describe the services rendered so that the reasonableness of the charge can be evaluated.” See LRCiv 54.2(e)(2). Once the party establishes that the requested fee amount is reasonable, the burden shifts to the party opposing the motion to show that the amount is not reasonable. Moon, 2018 WL 3729762, at *1. The opposing party does this by separately identifying each time entry or expense item it disputes. See LRCiv 54.2(f). As noted, a party must establish eligibility to an award of fees, entitlement to an award, and the reasonableness of the request awarded. Here, the Court already found eligibility. (Doc. 24 at 7–9). The Court now discusses the other two requirements. a. Entitlement The Court found in its May 8, 2020 order that Plaintiff is generally entitled to attorney fees under § 1447(c). (Doc. 24 at 7–9). Although Defendants state that they concede the propriety of the attorney fees award, (Doc. 30 at 2 n.2), they yet appear to contest Plaintiff’s entitlement to said fees through two distinct arguments, (id. at 2, 8). The Court addresses each argument in turn before determining the reasonableness of Plaintiff’s fee request. 1. Defendants’ Argument from Equity Defendants first argue that because Plaintiff and his counsel allegedly committed ethical violations, Plaintiff’s hands “are not fully clean,” and thus any fee award should be equitably reduced as a result. (Doc. 30 at 2–8). It is far from clear that equitable doctrines like unclean hands apply to fee awards under § 1447(c). CarMax Auto Superstores, Inc. v. Sibley, No. 3:16cv611, 2018 WL 6795838, at *2 (E.D. Va. Nov. 21, 2018) (rejecting defendant’s argument that considerations under the unclean hands doctrine are relevant to an award of attorney fees under § 1447(c)). Indeed, while the plain text of § 1447(c) does refer to “just costs,” there is no indication in the statute’s text that matters related to equity are relevant to the ultimate decision to award attorney fees. TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820, 833 n.9 (9th Cir. 2011) (questioning whether the unclean hands doctrine applies to a statutory fee-shifting provision that does not “use the word ‘equity’” (citations omitted)). In any event, Defendants have not demonstrated that any of the alleged inequitable conduct has any bearing on the issues related to removal here. Defendants’ allegations of professional misconduct are simply not responsive to whether Plaintiff is entitled to fees “incurred as a result of the removal” or whether the fees requested are reasonable. See § 1447(c); LRCiv 54.2(c)(3). Nor are they relevant to the purpose of § 1447(c), which is to deter objectively unreasonable removals. See Martin, 546 U.S. at 140–41. The Court is mindful that a decision to “depart[] from the general rule should be ‘faithful to the purposes’ of awarding fees under § 1447(c).” Id. at 141 (citation omitted); see also id. (“[W]hen

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