Brady v. UBS FINANCIAL SERVICES, INC.

696 F. Supp. 2d 1263, 2010 U.S. Dist. LEXIS 24567, 2010 WL 944176
CourtDistrict Court, N.D. Oklahoma
DecidedMarch 12, 2010
DocketCase 06-CV-282-SPF-PJC
StatusPublished
Cited by1 cases

This text of 696 F. Supp. 2d 1263 (Brady v. UBS FINANCIAL SERVICES, INC.) is published on Counsel Stack Legal Research, covering District Court, N.D. Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brady v. UBS FINANCIAL SERVICES, INC., 696 F. Supp. 2d 1263, 2010 U.S. Dist. LEXIS 24567, 2010 WL 944176 (N.D. Okla. 2010).

Opinion

ORDER

STEPHEN P. FRIOT, District Judge.

On June 16, 2009, the court entered an order denying Defendants’ Motion to Dismiss the Complaint for Lack of Subject Matter Jurisdiction. The court concluded that it has subject matter jurisdiction over this action under 28 U.S.C. § 1332 because the parties are diverse in citizenship and the amount in controversy exceeds $75,000.00. Specifically, in regard to the amount in controversy, the court found that the “potential award of reasonable attorney fees [under 12 O.S. 2001 § 936] should be included in determining whether the jurisdictional amount is satisfied ... [and] any potential award in this case would clearly exceed $2001.00 1 , the amount required for the amount in controversy in this case to exceed $75,000.00.” See, Order, doc. no. 72, pp. 4-5.

I.

Presently before the court is Defendants’ Motion for Reconsideration. In their motion, defendants contend that the court’s June 16 order violates United States Supreme Court and Tenth Circuit precedents. Citing Missouri State Life Ins. Co. v. Jones, 290 U.S. 199, 54 S.Ct. 133, 78 L.Ed. 267 (1933) and Evitt v. Durland, 2000 WL 1750512 (10th Cir. Nov. 28, 2000), defendants assert that attorney fees may only count in determining the amount in controversy when a plaintiff has (1) requested attorney fees in the complaint, (2) cited the specific statute or contract authorizing the award and (3) made sufficiently particular factual allegations supporting a reasonable estimate of the attorney fees. Defendants contend that plaintiff, in his complaint, has failed to comply with these requirements. Defendants suggest that the omission of these requirements was intentional.

According to defendants, plaintiff is not seeking to recover attorney fees under § 936, as assumed by the court, because the statute authorizes attorney fees for “the prevailing party,” and if defendants prevail, plaintiff will be required to pay their attorney fees. Additionally, defendants point out that plaintiff would not be able to collect a premium to counsel’s lodestar fee under § 936. Defendants assert that plaintiff is seeking to recover attorney fees under the class action common-fund exception to the American Rule. However, defendants maintain that attorney fees awarded under this exception cannot count toward the amount-in-controversy requirement. Furthermore, defendants argue that even if plaintiff were seeking attorney fees under § 936, those fees, under Tenth Circuit precedent, specifically, Martin v. Franklin Capital Corp., 251 F.3d 1284, 1293 (10th Cir.2001), could not be aggregated to satisfy the amount-in-controversy requirement. Defendants assert that the attorney fees must be pro rated across the class, and in order to generate a $2,000.01 attorney fee recovery for plaintiff, the total attorney fee award for the class would have to exceed $5,000,000. Defendants contend that such award is purely speculative and therefore any attorney fee award may not be used to augment the amount-in-controversy calculation. Hence, defendants request the court to reconsider its *1266 June 16 order and dismiss this action for lack of subject matter jurisdiction.

Plaintiff, in response, contends that in a class action lawsuit filed originally in federal court, such as this, there is no requirement for a plaintiff to request attorney fees in the complaint; to cite to a contract or statute authorizing the award or to make particular factual allegations in the complaint as to a reasonable estimate of the attorney fees. According to plaintiff, the cases cited by defendants are distinguishable in that they involved removal jurisdiction and none were class action lawsuits originally filed in federal court. Plaintiff asserts that the “legal certainty” test for the jurisdictional amount may be met by amending the pleadings or submitting affidavits which sufficiently substantiate the amount in controversy. Plaintiff contends that he has clearly pled a class action under Rule 23, Fed.R.Civ.P., and that Rule 23(h) provides that the court may award reasonable attorney fees authorized by law or by the parties’ agreement. Plaintiff asserts that his counsel’s affidavit establishes that a contingent fee agreement exists between plaintiff and his attorney for fees in an amount which, when allocated pro rata to the putative class, will exceed the amount needed to establish subject matter jurisdiction. Moreover, plaintiff contends that despite defendants’ argument to the contrary, the complaint alleges a specific amount of damages in the complaint from which an attorney fee can be reasonably estimated.

In addition, plaintiff argues that Oklahoma common law allows the recovery of attorney fees under the common-fund theory or doctrine. Plaintiff asserts that courts have held that attorney fees may be included in calculating the jurisdictional amount if authorized by statute, contract or other legal authority. Plaintiff maintains that the common-fund doctrine is “other legal authority.” Moreover, according to plaintiff, the Oklahoma Supreme Court has concluded that under the common-fund doctrine, attorney fees may be awarded from the fund itself or may be paid directly by a defendant to plaintiffs attorney based on equitable principles and the exigencies of the case. Because the court may, in its discretion, direct defendant to pay the fees to plaintiffs counsel, plaintiff contends that the attorney fees under the common-fund doctrine may be included in the amount in controversy. Further, plaintiff asserts that under the common-fund doctrine, attorney fees are evaluated as a percentage of the total benefits obtained for the class, and that 25-30 percent of the total benefits is a benchmark for consideration. The amount of attorney fees, plaintiff asserts, may also be influenced by the contingent fee agreement between counsel and the named plaintiff and that a fee in the range of 30-40 percent would be the market rate for class actions in Oklahoma. Plaintiff contends that a reasonable estimate of plaintiffs pro rata share of potential attorney fees, as established by his counsel’s affidavit, is sufficient to satisfy the amount in controversy.

Plaintiff also seeks (in the event that the court believes that it must reconsider its order) to offer additional evidence to prove that at the time the complaint was filed, plaintiff held additional Series B Serial Zero Coupon Bonds (“Series B Bonds”) of a face value at maturity of $82,000, which, plaintiff argues, satisfies beyond doubt that the jurisdictional amount is met. Plaintiff requests leave from the court to amend his complaint to add his additional Series B Bonds to satisfy the jurisdictional amount. Plaintiff also maintains that, as previously argued in response to defendants’ motion to dismiss, the court may include the post-maturity interest on the Series B Bonds alleged in the complaint to satisfy the jurisdictional amount. Plaintiff *1267 asserts that, at the time the complaint was filed, the post-maturity interest due on those Series B Bonds, which were to pay $73,000.00 at maturity, was $5,475.00.

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Bluebook (online)
696 F. Supp. 2d 1263, 2010 U.S. Dist. LEXIS 24567, 2010 WL 944176, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brady-v-ubs-financial-services-inc-oknd-2010.