MB Financial, N.A. v. Stevens

678 F.3d 497, 2012 WL 1404280, 2012 U.S. App. LEXIS 8181
CourtCourt of Appeals for the Seventh Circuit
DecidedApril 24, 2012
Docket11-2603
StatusPublished
Cited by26 cases

This text of 678 F.3d 497 (MB Financial, N.A. v. Stevens) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
MB Financial, N.A. v. Stevens, 678 F.3d 497, 2012 WL 1404280, 2012 U.S. App. LEXIS 8181 (7th Cir. 2012).

Opinion

EASTERBROOK, Chief Judge.

Attorney David Novoselsky, purporting to represent MB Financial as guardian of Cristina Zvunca’s financial interests, filed suit in a state court against six defendants. This suit alleged, among other things, that several of the defendants had abused Zvunea. It had multiple problems, including the fact that Tiberiu Klein, Zvunca’s general guardian (she is a minor), had discharged Novoselsky as Zvunca’s lawyer. When defendants pointed out the suit’s shortcomings, Novoselsky dismissed the complaint — but the defendants, who had been defamed and put to the expense of procuring dismissal, sought an award of sanctions against Novoselsky under Illinois Supreme Court Rule 137. Before the state court ruled on this motion, Klein filed a motion to intervene for the purpose of requesting sanctions on Zvunca’s behalf. And before the state court could rule on Klein’s motion, Novoselsky filed a notice of removal to federal court under 28 U.S.C. § 1441. (Our references throughout this opinion are to the laws in force in spring 2011, when the suit was removed. The Federal Courts Jurisdiction and Venue Clarification Act of 2011, Pub.L. 112-63, 125 Stat. 758 (2011), amended 28 U.S.C. §§ 1332,1441,1446, and several other statutes. The President signed the 2011 Act on December 7, 2011. It went into force on January 6, 2012, and the jurisdictional changes apply only to suits begun on or after that date. See § 105 of the 2011 Act, 28 U.S.C. § 1332 note.)

Within a month, and notwithstanding what the district judge called a “deluge of motions” from Novoselsky, the federal court remanded the proceeding to state court. The put-upon litigants asked for an award of attorneys’ fees for wrongful removal. See 28 U.S.C. § 1447(c). The district judge concluded that such an award is appropriate and that Novoselsky also had vexatiously multiplied the proceedings, allowing an award under 28 U.S.C. § 1927. See 2011 WL 5514059, 2011 U.S. Dist. Lexis 71803 (N.D.Ill. July 5, 2011). The court ordered Novoselsky to pay $10,155 to one of the defendants and $2,432 to another. Novoselsky has appealed. The order must be affirmed if either § 1447(c) or § 1927 supports it; we discuss only § 1447(c).

Section 1447(c) authorizes an award of attorneys’ fees when the removal was unreasonable. Martin v. Franklin Capital Corp., 546 U.S. 132, 126 S.Ct. 704, 163 L.Ed.2d 547 (2005). Novoselsky’s removal was worse than unreasonable; it was preposterous. Here is a partial list of the problems:

• Only a party can remove a suit to federal court. 28 U.S.C. § 1441(a), (b). A request for sanctions does not convert a lawyer into a party. (Nor, as a matter of Illinois law, does a motion under Rule 137 create a new suit with the lawyer as defendant. See Cook County v. Triangle Sign Co., 40 Ill.App.2d 202, 216 [189 N.E.2d 25] (1963). That’s why Novoselsky removed MB Financial v. Stevens, the suit he originally filed, rather than attempting to remove “Klein v. Novoselsky ” as a separate juridical unit.)
• Among parties, only a defendant can remove the suit. 28 U.S.C. § 1441(a), (b). Novoselsky is not a defendant; he was counsel on the plaintiffs side. *499 Like Klein, Novoselsky might have moved to intervene, but he didn’t.
• Removal requires the consent of all defendants. See Chicago, Rock Island & Pacific Ry. v. Martin, 178 U.S. 245 [20 S.Ct. 854, 44 L.Ed. 1055] (1900). (This requirement has been codified by § 103(b) of the 2011 Act, amending 28 U.S.C. § 1446(a)(2)(B).) The state suit has six defendants, none of whom consented to removal. So even if Novoselsky were treated as a seventh defendant, removal would be impossible.
• When federal jurisdiction depends on diversity of citizenship, the suit “shall be removable only if none of the parties in interest properly joined and served as defendants is a citizen of the State in which such action is brought.” 28 U.S.C. § 1441(b). Section 103(a) of the 2011 Act makes this language even stronger. All six defendants in the state suit are citizens of Illinois, the state in which the action was brought — so again treating Novoselsky as a party would not have allowed removal, even had all of the original six defendants consented (which they didn’t).
• A notice of removal must be filed within 30 days of a suit’s commencement. 28 U.S.C. § 1446(b). Novoselsky’s notice was filed long after that.

Novoselsky has slighted all of these problems except the last — the 30-day rule. He invokes the proviso in § 1446(b) that a new 30-day window opens, “[i]f the case stated by the initial pleading is not removable”, on “receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable”. According to Novoselsky, Klein’s motion for leave to intervene brought the suit within the diversity jurisdiction because Zvunca is a citizen of Romania, while Novoselsky is a citizen of Wisconsin. There are multiple problems with this theme.

First, a motion to intervene does not create diversity of citizenship. Perhaps a grant of that motion could have done so, had it produced a Romanian plaintiff and a Wisconsin defendant. But a motion proposing to become a party did not make Klein a party. Novoselsky needed to wait for the state court’s decision on Klein’s motion. That decision would have been an “order” starting the 30-day period (had the other conditions of removal been met).

Second, and apart from the fact that Novoselsky would not have been a party even if Klein had become one, is the statutory rule that a new 30-day period for removal begins only “[i]f the case stated by the initial pleading is not removable”. The case stated by Novoselsky’s initial pleading may have been removable (if, like Novoselsky, we were to disregard the rule that the suits with forum-state defendants cannot be removed). It had a Romanian citizen as the plaintiff and six Illinois citizens as defendants.

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Cite This Page — Counsel Stack

Bluebook (online)
678 F.3d 497, 2012 WL 1404280, 2012 U.S. App. LEXIS 8181, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mb-financial-na-v-stevens-ca7-2012.