Fire House Block Associates, LP v. Weston Associates Management Co., Inc., et al.

2021 DNH 010

• Court: District Court, D. New Hampshire
• Decided: January 25, 2021
• Docket: 20-cv-1117-JD
• Status: Published

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE

Fire House Block Associates, LP

v. Civil No. 20-cv-1117-JD Opinion No. 2021 DNH 010 Weston Associates Management Co., Inc., et al.

O R D E R

Fire House Block Associates, LP brought suit in state

court, challenging actions taken by the defendants to gain

control over the plaintiff. The defendants removed the case to

this court based on diversity jurisdiction under 28 U.S.C.

§ 1332. The plaintiff now moves to remand the action to state

court for lack of subject matter jurisdiction and seeks an award

of costs and attorneys’ fees. The defendants do not object to

remand but do object to an award of costs and fees.

Discussion

The plaintiff contends, and the defendants do not dispute,

that because the plaintiff has partners who are citizens of

states where the defendants are also citizens, diversity of

citizenship does not exist to support subject matter

jurisdiction. The plaintiff seeks an award of costs and

attorneys’ fees under 28 U.S.C. § 1447(c), which provides for an award of costs and fees incurred in removal, when appropriate.

The defendants contend that an award of costs and fees under

§ 1447(c) is not appropriate because they misunderstood the

rules of citizenship for a limited partnership and the plaintiff

did not give them sufficient time to respond before filing the

motion to remand.

The purpose of an award of costs and fees under § 1447(c)

is to deter defendants from using the removal process to prolong

litigation and to cause the plaintiff to incur additional and

unnecessary expense. Martin v. Franklin Capital Corp., 546 U.S.

132, 138 (2005). “Absent unusual circumstances, courts may

award attorney’s fees under § 1447(c) only where the removing

party lacked an objectively reasonable basis for seeking

removal.” Id. at 141. An objectively reasonable basis for

seeking removal may be based on caselaw or facts that existed at

the time of removal. Id. at 135 & 141; Lott v. Pfizer, Inc.,

492 F.3d 789, 793 (7th Cir. 2007) (“As a general rule, if, at

the time the defendant filed his notice in federal court,

clearly established law demonstrated that he had no basis for

removal, then a district court should award a plaintiff his

attorneys’ fees. By contrast, if clearly established law did

not foreclose a defendant’s basis for removal, then a district

court should not award attorneys’ fees.”).

2 The defendants state that, although they are represented by

counsel, they “reasonably believed that limited partnerships

behaved differently for diversity purposes than traditional

partnerships and that the citizenship of limited passive

partners was not considered under a diversity analysis.”

Objection, doc. no. 12, ¶ 1. They do not cite a case or

authority of any kind to support that theory. Any research on

the issue quickly would have provided the controlling rule that

the citizenship of limited partnerships is determined based on

the citizenship of its members. See, e.g., Americold Realty Tr.

V. Conagra Foods, Inc., 136 S. Ct. 1012, 1015 (2016); Carden v.

Arkama Assocs., 494 U.S. 185, 192-95 (1990); D.B. Zwirn Special

Opp. Fund, L.P. v. Mehrotra, 661 F.3d 124, 127 (1st Cir. 2011);

Stinson v. SimplexGrinnell LP, 152 F. App’x 8, 9 n.1 (1st Cir.

2005); Am. Fiber & Finishing, Inc. v. Tyco Healthcare Gr., LP,

362 F. 3d 136, 138 (1st Cir. 2004).

The defendants state that when they filed the notice of

removal “they were moving at full haste” to act before the

plaintiff served other defendants. Doc. no. 12, at *2. The

defendants apparently believe that the limited time available

excuses them from determining whether subject matter

jurisdiction existed before filing the notice of removal.

Regardless of the hurry, the court expects counsel for the

defendants to research legal issues when necessary.

3 In addition, the defendants argue that the plaintiff did

not give them sufficient time to respond after notifying counsel

that the plaintiff would file a motion to remand. They

represent that the plaintiff’s counsel sent notice of the motion

by email the night before the motion was filed, assuming that

the defendants would not assent to remand. Counsel for the

plaintiff contends that because a motion to remand is

dispositive, he was not required to provide notice before filing

the motion. The defendants have not shown that the courtesy

notice provided weighs against an award of costs and fees.

Conclusion

For the foregoing reasons, the plaintiff’s motion to remand

(document no. 11) is granted.

The plaintiff shall file a motion for an award of fees and

costs supported by legal authority as may be necessary for

specific requests and appropriate billing records on or before

January 25, 2021. The defendants shall file their response

within fourteen days after the motion is filed.

SO ORDERED.

______________________________ Joseph A. DiClerico, Jr. United States District Judge January 14, 2021

cc: Counsel of record.