1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Ecoshield Pest Solutions North DC LLC, et No. CV-21-01726-PHX-MTL al., 10 ORDER Plaintiffs, 11 v. 12 Parker Dixon, 13 Defendant. 14 15 Plaintiffs Ecoshield Pest Solutions North DC LLC, The Shield Co Marketing LLC, 16 The Shield Companies LLC, The Shield Co Management LLC (collectively, “Ecoshield”) 17 filed a Motion for Attorneys’ Fees and Costs pursuant to LRCiv 54.2 and 28 U.S.C. 18 § 1447(c). (Doc. 29.) For the following reasons, the Court grants the motion.* 19 I. BACKGROUND 20 Ecoshield sells pest control services and hires contractors to sell those services door- 21 to-door. (Doc. 1 at 8–9.) The contractors’ Independent Contractor Agreements (“ICAs”) 22 contain certain restrictive covenants, including a prohibition on drawing Ecoshield’s 23 contractors away from its business. (Id. at 9–10.) For the 2021 selling season, Defendant 24 Parker Dixon signed an ICA with Ecoshield to sell its products door-to-door. (Id. at 9.) 25 Dixon acknowledged, by signing the ICA, that he had read and understood all provisions 26 of the employment agreement. (Id. at 10.) Ecoshield alleges that he persuaded at least five 27 Ecoshield contractors to work with him at a competitor’s business. (Id. at 10–11.)
28 * Will Clark, a second-year law student at Notre Dame Law School, assisted in drafting this Order. 1 Ecoshield then sent Dixon a cease and desist letter, requesting that he cease any 2 interference or competition with Ecoshield’s business. (Id. at 11.) Despite the letter, 3 Ecoshield alleges that Dixon continued his active recruitment of its contractors. (Id.) 4 In September 2021, Ecoshield commenced this action in Maricopa County Superior 5 Court. (Id. at 6.) Ecoshield asserts three claims against Dixon: Breach of Contract, Breach 6 of the Duty of Good Faith and Fair Dealing, and Tortious Interference with 7 Contracts/Business Expectancies. (Id. at 12–14.) Ecoshield also requested injunctive relief 8 to stop Dixon’s alleged continued business interference. (Id. at 11–12.) 9 In the signed 2021 ICA, the parties agreed to submit all claims arising out of the 10 contract to an Arizona State Court in Maricopa County. (Id. at 8.) Nonetheless, Dixon 11 timely removed the action to this Court pursuant to 28 U.S.C. § 1441(b) by invoking 12 diversity of citizenship and alleging an amount in controversy higher than $75,000. (Id. at 13 1–3.) In January 2022, the parties filed a Joint Motion to Remand to the Superior Court of 14 Arizona, Maricopa County, with Ecoshield reserving the right to seek attorneys’ fees 15 related to the improper removal and Dixon reserving the right to challenge personal 16 jurisdiction. (Doc. 22.) Ecoshield then filed the pending Motion requesting $27,108.50 in 17 attorneys’ fees. (Doc. 29 at 1.) 18 II. LEGAL STANDARD 19 Upon remand to a state court, the “order remanding the case may require payment 20 of just costs and any actual expenses, including attorney fees, incurred as a result of the 21 removal.” 28 U.S.C. § 1447(c). The Court has significant discretion in awarding reasonable 22 attorneys’ fees, yet there is no “presumption” in favor of awarding fees simply because one 23 party improperly removed the case to federal court. Martin v. Franklin Cap. Corp., 546 24 U.S. 132, 137 (2005). The award of attorneys’ fees should not deter otherwise reasonable 25 removals and should award them “only where the removing party lacked an objectively 26 reasonable basis for seeking removal.” Id. at 141. Bad faith need not be demonstrated as a 27 motive behind the original removal in order for the requesting party to recover attorneys’ 28 fees. Moore v. Permanente Med. Grp., Inc., 981 F.2d 443, 448 (9th Cir. 1992). Attempted 1 removals are “not objectively unreasonable solely because the removing party’s arguments 2 lack merit.” Lussier v. Dollar Tree Stores Inc., 518 F.3d 1062, 1065 (9th Cir. 2008). 3 Additionally, simply because the removing party later agrees to remand the case to state 4 court does not imply that the initial removal was objectively unreasonable. Assocs. Nat. 5 Bank v. Erum, 206 F. App’x. 666, 668 (9th Cir. 2006). 6 If the Court determines that fees are appropriate, then it has significant discretion in 7 calculating the reasonable fee award. Moore, 981 F.2d at 447. The method frequently used 8 to calculate the reasonable fees in a remand case is the lodestar method. See Env’t Rsch. 9 Ctr., Inc. v. Hotze Health Wellness Ctr. Int’l One, LLC, 850 F. App’x. 572, 573 (9th Cir. 10 2021). The fees are calculated by “multiplying the number of hours the prevailing party 11 reasonably expended on the litigation by a reasonably hourly rate.” Morales v. City of San 12 Rafael, 96 F.3d 359, 363 (9th Cir. 1996). 13 III. DISCUSSION 14 A. Award of Attorneys’ Fees 15 Ecoshield contends that it was not objectively reasonable for Dixon to remove the 16 case to this Court, given that there was a forum selection clause which governed all matters 17 arising out of the employment contract. (Doc. 33 at 2.) Dixon argues that under Ninth 18 Circuit case law, there is at least a non-frivolous claim that the forum selection clause 19 should not be enforced. (Doc. 32 at 7.) Accordingly, this Court considers only whether the 20 removal was objectively reasonable. 21 As a general rule, a “forum-selection clause ‘should control except in unusual 22 cases.’” Yei A. Sun v. Advanced China Healthcare, Inc., 901 F.3d 1081, 1088 (9th Cir. 23 2018) (quoting Atl. Marine Const. Co. v. U.S. Dist. Ct. for W. Dist. Of Tex., 571 U.S. 49, 24 64 (2013)). This protects the parties’ bargained-for expectations. Id. Ultimately, “[o]nly 25 under extraordinary circumstances unrelated to the convenience of the parties should a 26 motion to enforce a forum-selection clause be denied.” Id. (quoting Atl. Marine, 571 U.S. 27 at 62) (internal quotations omitted). In order to qualify as an “unusual” circumstance, the 28 party arguing for the inapplicability of the forum-selection clause must make a 1 strong showing that: (1) the clause is invalid due to “fraud or overreaching,” (2) “enforcement would contravene a strong 2 public policy of the forum in which suit is brought, whether declared by statute or by judicial decision,” or (3) “trial in the 3 contractual forum will be so gravely difficult and inconvenient that [the litigant] will for all practical purposes by deprived of 4 his day in court.” 5 Id. (quoting M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15, 18 (1972)). Differences 6 in “power or education on a non-negotiated contract will not vitiate a forum selection 7 clause.” Murphy v. Schneider Nat’l, Inc., 362 F.3d 1133, 1141 (9th Cir. 2004). 8 Here, there is no colorable argument that any of the three factors in Bremen were 9 met, so there is no reason to treat the forum-selection clause as unenforceable. Thus, 10 Dixon’s removal to this Court was unreasonable. First, the record does not show “fraud or 11 overreaching” by Ecoshield. Dixon contends that Ecoshield pressured him into signing the 12 contract, and that he lacked the education and business expertise to adequately protect his 13 own interests. (Doc.
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1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA
9 Ecoshield Pest Solutions North DC LLC, et No. CV-21-01726-PHX-MTL al., 10 ORDER Plaintiffs, 11 v. 12 Parker Dixon, 13 Defendant. 14 15 Plaintiffs Ecoshield Pest Solutions North DC LLC, The Shield Co Marketing LLC, 16 The Shield Companies LLC, The Shield Co Management LLC (collectively, “Ecoshield”) 17 filed a Motion for Attorneys’ Fees and Costs pursuant to LRCiv 54.2 and 28 U.S.C. 18 § 1447(c). (Doc. 29.) For the following reasons, the Court grants the motion.* 19 I. BACKGROUND 20 Ecoshield sells pest control services and hires contractors to sell those services door- 21 to-door. (Doc. 1 at 8–9.) The contractors’ Independent Contractor Agreements (“ICAs”) 22 contain certain restrictive covenants, including a prohibition on drawing Ecoshield’s 23 contractors away from its business. (Id. at 9–10.) For the 2021 selling season, Defendant 24 Parker Dixon signed an ICA with Ecoshield to sell its products door-to-door. (Id. at 9.) 25 Dixon acknowledged, by signing the ICA, that he had read and understood all provisions 26 of the employment agreement. (Id. at 10.) Ecoshield alleges that he persuaded at least five 27 Ecoshield contractors to work with him at a competitor’s business. (Id. at 10–11.)
28 * Will Clark, a second-year law student at Notre Dame Law School, assisted in drafting this Order. 1 Ecoshield then sent Dixon a cease and desist letter, requesting that he cease any 2 interference or competition with Ecoshield’s business. (Id. at 11.) Despite the letter, 3 Ecoshield alleges that Dixon continued his active recruitment of its contractors. (Id.) 4 In September 2021, Ecoshield commenced this action in Maricopa County Superior 5 Court. (Id. at 6.) Ecoshield asserts three claims against Dixon: Breach of Contract, Breach 6 of the Duty of Good Faith and Fair Dealing, and Tortious Interference with 7 Contracts/Business Expectancies. (Id. at 12–14.) Ecoshield also requested injunctive relief 8 to stop Dixon’s alleged continued business interference. (Id. at 11–12.) 9 In the signed 2021 ICA, the parties agreed to submit all claims arising out of the 10 contract to an Arizona State Court in Maricopa County. (Id. at 8.) Nonetheless, Dixon 11 timely removed the action to this Court pursuant to 28 U.S.C. § 1441(b) by invoking 12 diversity of citizenship and alleging an amount in controversy higher than $75,000. (Id. at 13 1–3.) In January 2022, the parties filed a Joint Motion to Remand to the Superior Court of 14 Arizona, Maricopa County, with Ecoshield reserving the right to seek attorneys’ fees 15 related to the improper removal and Dixon reserving the right to challenge personal 16 jurisdiction. (Doc. 22.) Ecoshield then filed the pending Motion requesting $27,108.50 in 17 attorneys’ fees. (Doc. 29 at 1.) 18 II. LEGAL STANDARD 19 Upon remand to a state court, the “order remanding the case may require payment 20 of just costs and any actual expenses, including attorney fees, incurred as a result of the 21 removal.” 28 U.S.C. § 1447(c). The Court has significant discretion in awarding reasonable 22 attorneys’ fees, yet there is no “presumption” in favor of awarding fees simply because one 23 party improperly removed the case to federal court. Martin v. Franklin Cap. Corp., 546 24 U.S. 132, 137 (2005). The award of attorneys’ fees should not deter otherwise reasonable 25 removals and should award them “only where the removing party lacked an objectively 26 reasonable basis for seeking removal.” Id. at 141. Bad faith need not be demonstrated as a 27 motive behind the original removal in order for the requesting party to recover attorneys’ 28 fees. Moore v. Permanente Med. Grp., Inc., 981 F.2d 443, 448 (9th Cir. 1992). Attempted 1 removals are “not objectively unreasonable solely because the removing party’s arguments 2 lack merit.” Lussier v. Dollar Tree Stores Inc., 518 F.3d 1062, 1065 (9th Cir. 2008). 3 Additionally, simply because the removing party later agrees to remand the case to state 4 court does not imply that the initial removal was objectively unreasonable. Assocs. Nat. 5 Bank v. Erum, 206 F. App’x. 666, 668 (9th Cir. 2006). 6 If the Court determines that fees are appropriate, then it has significant discretion in 7 calculating the reasonable fee award. Moore, 981 F.2d at 447. The method frequently used 8 to calculate the reasonable fees in a remand case is the lodestar method. See Env’t Rsch. 9 Ctr., Inc. v. Hotze Health Wellness Ctr. Int’l One, LLC, 850 F. App’x. 572, 573 (9th Cir. 10 2021). The fees are calculated by “multiplying the number of hours the prevailing party 11 reasonably expended on the litigation by a reasonably hourly rate.” Morales v. City of San 12 Rafael, 96 F.3d 359, 363 (9th Cir. 1996). 13 III. DISCUSSION 14 A. Award of Attorneys’ Fees 15 Ecoshield contends that it was not objectively reasonable for Dixon to remove the 16 case to this Court, given that there was a forum selection clause which governed all matters 17 arising out of the employment contract. (Doc. 33 at 2.) Dixon argues that under Ninth 18 Circuit case law, there is at least a non-frivolous claim that the forum selection clause 19 should not be enforced. (Doc. 32 at 7.) Accordingly, this Court considers only whether the 20 removal was objectively reasonable. 21 As a general rule, a “forum-selection clause ‘should control except in unusual 22 cases.’” Yei A. Sun v. Advanced China Healthcare, Inc., 901 F.3d 1081, 1088 (9th Cir. 23 2018) (quoting Atl. Marine Const. Co. v. U.S. Dist. Ct. for W. Dist. Of Tex., 571 U.S. 49, 24 64 (2013)). This protects the parties’ bargained-for expectations. Id. Ultimately, “[o]nly 25 under extraordinary circumstances unrelated to the convenience of the parties should a 26 motion to enforce a forum-selection clause be denied.” Id. (quoting Atl. Marine, 571 U.S. 27 at 62) (internal quotations omitted). In order to qualify as an “unusual” circumstance, the 28 party arguing for the inapplicability of the forum-selection clause must make a 1 strong showing that: (1) the clause is invalid due to “fraud or overreaching,” (2) “enforcement would contravene a strong 2 public policy of the forum in which suit is brought, whether declared by statute or by judicial decision,” or (3) “trial in the 3 contractual forum will be so gravely difficult and inconvenient that [the litigant] will for all practical purposes by deprived of 4 his day in court.” 5 Id. (quoting M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 15, 18 (1972)). Differences 6 in “power or education on a non-negotiated contract will not vitiate a forum selection 7 clause.” Murphy v. Schneider Nat’l, Inc., 362 F.3d 1133, 1141 (9th Cir. 2004). 8 Here, there is no colorable argument that any of the three factors in Bremen were 9 met, so there is no reason to treat the forum-selection clause as unenforceable. Thus, 10 Dixon’s removal to this Court was unreasonable. First, the record does not show “fraud or 11 overreaching” by Ecoshield. Dixon contends that Ecoshield pressured him into signing the 12 contract, and that he lacked the education and business expertise to adequately protect his 13 own interests. (Doc. 4 at 10.) But this case is similar to Murphy, where the Ninth Circuit 14 found that the District Court did not err in enforcing the forum selection clause, despite the 15 fact that the plaintiff only had a tenth-grade education. 362 F.3d at 1141. Dixon has some 16 college-level education from the University of Arkansas and had signed two contracts with 17 Ecoshield before the one at issue. (Doc. 4 at 10; Doc. 33 at 7.) Consequently, there is no 18 reason to believe that Dixon’s level of education or business acumen would be below those 19 of the plaintiff’s in Murphy. Additionally, while Dixon argued in his Motion to Dismiss 20 that he lacked ability to negotiate the contract’s terms (Doc. 4 at 10), the Ninth Circuit has 21 made clear that non-negotiable terms are not enough to overcome the presumption in favor 22 of enforcing the forum selection. Murphy, 362 F.3d at 1141. 23 Second, public policy supports the enforcement of forum selection clauses such as 24 this one, and Dixon presents no compelling argument otherwise. See Stewart Org., Inc. v. 25 Ricoh Corp., 487 U.S. 22, 33 (1988) (“[E]nforcement of valid forum-selection clauses, 26 bargained for by the parties, protects their legitimate expectations and furthers vital 27 interests of the justice system.”) (Kennedy, J., concurring). 28 Lastly, insufficient evidence has been presented to show that by enforcing the forum 1 selection clause, Dixon would effectively be deprived of his day in court. See Yei A. Sun, 2 901 F.3d at 1088. Dixon contends that since witnesses in Arkansas are outside of the 3 Arizona courts’ subpoena power, he would need to reimburse them for all travel expenses, 4 as well as his own, which would bar him from being able to effectively defend himself. 5 (Doc. 4 at 11.) A conclusory statement that a party does not have the resources to litigate 6 in a certain forum is not sufficient to overcome the high burden imposed by the Bremen 7 factors, however. Spradlin v. Lear Siegler Mgmt. Servs. Co., 926 F.2d 865, 869 (9th Cir. 8 1991) (denying party’s request to avoid forum selection clause, as he “not only failed to 9 produce evidence of inconvenience he would suffer by being forced to litigate in [the 10 forum], he has failed even to offer any specific allegations as to travel costs . . . or his 11 financial ability to bear such costs and inconvenience.”). Moreover, even travelling to a 12 foreign country to abide by a forum selection clause does not deprive the movant of his 13 day in court if there is only “scant and conclusory information presented.” Id. Here, Dixon 14 has not presented sufficient evidence to show how having witnesses travel to Arizona to 15 litigate would be prohibitively burdensome for him. Thus, there is no basis to conclude that 16 the forum selection clause would truly deprive Dixon of his day in court. 17 B. Reasonableness of the Attorneys’ Fees 18 Having determined an award of attorneys’ fees appropriate, the Court will now 19 determine the reasonable hourly rate and number of hours reasonably expended to 20 determine the fee award. Dixon argues that Ecoshield’s requested fees of $27,108.50 are 21 unreasonable, as “there appears to be considerable duplication of effort” in the billed work. 22 (Doc. 32 at 11.) Ecoshield responds that the billing does not have any duplication of work, 23 the hourly rates charged are reasonable, and Dixon is unable to elucidate concrete examples 24 of where work may be duplicated. (Doc. 33 at 8–9.) 25 When a statute provides for a fee-shifting arrangement, as 28 U.S.C. § 1447(c) does, 26 the Court must utilize the lodestar method to calculate the fees to be awarded. Staton v. 27 Boeing Co., 327 F.3d 938, 965 (9th Cir. 2003). The District Court is required to “provide 28 a concise but clear explanation of its reasons for the fee award.” Hensley v. Eckerhart, 461 1 U.S. 424, 437 (1983). The lodestar calculation is made by multiplying the number of hours 2 reasonably expended by a reasonable hourly rate. Camacho v. Bridgeport Fin., Inc, 523 3 F.3d 973, 978 (9th Cir. 2008). In a motion for attorneys’ fees, the party petitioning for 4 attorneys’ fees bears the burden of establishing entitlement to an award by submitting 5 detailed time records justifying the hours expended. Hensley, 461 U.S. at 437. 6 1. Related Claims 7 First, Ecoshield is only entitled to attorneys’ fees “incurred as a result of the 8 removal.” 28 U.S.C. § 1447(c). Dixon does not contend that any of the billed time is 9 unrelated to the issue of improper removal. Additionally, in its review of Ecoshield’s time 10 sheets, the Court does not find any time entries unrelated to contesting the removal. (Doc. 11 29-2.) 12 2. Reasonable Hourly Rate 13 In determining the appropriate hourly rate for the fees, the Court should not base its 14 determination on the rates actually charged by the party, but rather it “should be guided by 15 the rate prevailing in the community for similar work performed by attorneys of 16 comparable skill, experience, and reputation.” Chalmers v. Los Angeles, 796 F.2d 1205, 17 1210–11 (9th Cir. 1986). In determining a reasonable rate, “the relevant community is the 18 forum in which the district court sits.” Barjon v. Dalton, 132 F.3d 496, 500 (9th Cir. 1997). 19 Additionally, the Court must use the prevailing rates in the market that were in effect within 20 two years of the services being performed. Bell v. Clackamas Cnty., 341 F.3d 858, 869 (9th 21 Cir. 2003). 22 The six attorneys for Ecoshield charged between $300 and $400 per hour, which 23 they contend is their “standard hourly rate for this type of litigation.” (Doc. 29 at 5–6.) 24 Dixon does not contest the reasonableness of the rates. (Doc. 32.) Moreover, attorney of 25 record for Ecoshield, Alexander R. LaCroix, submitted an affidavit discussing the 26 qualifications and rates of each attorney that worked on the case, and further asserted that 27 these rates are “at or below the hourly rate” for similarly qualified attorneys. (Doc. 29-1, 28 at 3, 4, 5.) 1 Other cases in this District have held that similar rates are reasonable for the purpose 2 of calculating fee awards. Casavelli v. Johanson, No. CV-20-00497-PHX-JAT, 2021 WL 3 3400608, at *7–8 (D. Ariz. July 20, 2021) (holding that fees of $350 to $400 per hour are 4 reasonable); Strojnik v. Driftwood Hosp. Mgmt. LLC, No. CV-20-01532, 2021 WL 5 5961645 at *4 (D. Ariz. Dec. 16, 2021) (holding that fees of $460 per hour are reasonable). 6 Based on the above, the Court finds the hourly rates charged by Ecoshield’s counsel to be 7 reasonable. 8 3. Number of Hours Reasonably Expended 9 Having confirmed the reasonableness of the hourly rates, the Court must now 10 determine the reasonable number of compensable hours. See Gonzalez v. City of Maywood, 11 729 F.3d 1196, 1202 (9th Cir. 2013). The Court should exclude any time that is “excessive, 12 redundant, or otherwise unnecessary.” McCown v. City of Fontana, 565 F.3d 1097, 1102 13 (9th Cir. 2009). 14 After reviewing the time entries in detail, there are two time entries which are non- 15 recoverable by Ecoshield’s counsel. Counsel claimed 1.9 hours to “[r]eview and analyze 16 fees incurred since removal in order to identify which fees are related to each 17 pleading/order to prepare affidavit.” (Doc. 29-2 at 10.) Additionally, Counsel claimed 0.2 18 hours to review a spreadsheet from the Director of Accounting regarding the hours spent 19 on the remand issue. (Doc. 29-2 at 9.) Tasks that are clerical in nature are not recoverable 20 as part of a reasonable fee award. Nadarajah v. Holder, 569 F.3d 906, 921 (9th Cir. 2009) 21 (concluding that clerical tasks, such as document organization, should be “subsumed in 22 firm overhead”). These two entries constitute clerical tasks and organization of time 23 entries, rather than substantive legal arguments of the removal. As such, the Court will 24 reduce the total allowable time to be recovered by 2.1 hours. 25 4. Lodestar Figures 26 In total, the hourly billing rates charged by Ecoshield’s counsel and counsel’s staff 27 are reasonable. After the Court’s deduction of hours not reasonably expended, Dixon will 28 be charged for 81.10 hours of Ecoshield’s counsel’s time. Under the lodestar method, the 1 || Court multiplies the number of hours expended by the timekeeper’s reasonable hourly rate: 2 ; ‘
11 12 Accordingly, Ecoshield is entitled to $26,485.00 in attorneys’ fees. The Court has 13 || itemized its reductions to Ecoshield’s fee award in the spreadsheet attached as an appendix to this Order. IV. CONCLUSION 16 Accordingly, 17 IT IS ORDERED that Ecoshield’s Application for Attorneys’ Fees (Doc. 29) is 18] granted. 19 IT IS FURTHER ORDERED Dixon shall pay $26,485.00 in attorneys’ fees to || Ecoshield within 30 days from the date of this order. 21 IT IS FINALLY ORDERED Ecoshield shall file a notice of satisfaction within 7 || days of receipt of the full amount of attorneys’ fees as outlined in this Order. 23 Dated this 13th day of June, 2022. 24 WMichadl T. dibunde Michael T. Liburdi 27 United States District Judge 28
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