Rutledge v. Seyfarth, Shaw, Fairweather & Geraldson

201 F.3d 1212, 2000 Cal. Daily Op. Serv. 310, 24 Employee Benefits Cas. (BNA) 1149, 2000 Daily Journal DAR 437, 2000 U.S. App. LEXIS 307, 2000 WL 16550
CourtCourt of Appeals for the Ninth Circuit
DecidedJanuary 12, 2000
DocketNo. 98-15298
StatusPublished
Cited by42 cases

This text of 201 F.3d 1212 (Rutledge v. Seyfarth, Shaw, Fairweather & Geraldson) is published on Counsel Stack Legal Research, covering Court of Appeals for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rutledge v. Seyfarth, Shaw, Fairweather & Geraldson, 201 F.3d 1212, 2000 Cal. Daily Op. Serv. 310, 24 Employee Benefits Cas. (BNA) 1149, 2000 Daily Journal DAR 437, 2000 U.S. App. LEXIS 307, 2000 WL 16550 (9th Cir. 2000).

Opinion

WARDLAW, Circuit Judge:

Seyfarth, Shaw, Fairweather, & Gerald-son, a law firm, and Mitchell Whitehead, one of its attorneys (collectively, “Sey-farth”), appeal from the district court’s order awarding' attorneys’ fees and costs under 28 U.S.C. § 1447(c) to Anthony Rutledge and the AFL Hotel and Restaurant Workers’ Health and Welfare Fund (collectively, “Rutledge”). The court made the award on the strength of its prior decision remanding the underlying action to state court for lack of federal subject-matter jurisdiction, despite Seyfarth’s claim of preemption under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (“ERISA”). Sey-farth’s appeal presents the question whether the district court abused its discretion in awarding the fees and costs. We conclude that removal was proper, and, accordingly, we reverse.

I

The Hotel Union and Hotel Industry of Hawaii Pension Trust and the AFL Hotel & Restaurant Workers’ Health and Welfare Fund (collectively, the “Plans”) are two multi-employer- employee benefit plans. The Plans are governed by ERISA. Rutledge is a labor trustee for and participant in the Plans. Seyfarth has provided legal services to the Plans since 1984.

Rutledge brought suit in the Superior Court of California on behalf of himself and all other participants and beneficiaries of the Plans. Rutledge claimed that Sey-farth overcharged the Plans for legal services rendered between 1986 and 1998 by charging them for Whitehead’s time at his then-current hourly rate, which exceeded an allegedly agreed-upon rate of $155 per hour.2 Rutledge raised various state law claims: breach of contract, breach of the covenant of good faith, breach of fiduciary duty, fraud, constructive fraud, and negligent misrepresentation. He prayed for relief in the form of damages according to proof, punitive damages, costs and attorneys’ fees, and other relief as deemed appropriate by the court. The complaint did not expressly allege any causes of action under ERISA.

Seyfarth removed the complaint to the United States District Court for the Northern District of California on October 3, 1997, pursuant to 28 U.S.C. § 1441. Seyfarth sought to invoke the district court’s federal question jurisdiction under 28 U.S.C. § 1331, on the grounds that ERISA preempted the state law claims such that there was federal jurisdiction despite the absence of any federal cause of action on the face of the complaint. Sey-farth then moved for judgment on the pleadings. Rutledge contested the removal and moved to remand.

On December 19, 1997, the district court conducted a hearing on the motion to remand. Relying on our decision in Yeseta v. Baima, 837 F.2d 380 (9th Cir.1988), the district court stated that, “[i]t seems plain that the services to be performed by the Seyfarth firm ... were traditional attorney services, and thus these professional functions will not support a determination that ERISA applies to their performance. And, accordingly, the basis for removal under ERISA is absent.” Implicitly, the court concluded that the only basis for preemption would be a claim against Sey-farth in its fiduciary capacity and that Yeseta precluded it from finding that a fiduciary relationship existed. Because the district court determined that ERISA did not preempt Rutledge’s state law claims and therefore did not confer federal subject-matter jurisdiction over the action, the court granted Rutledge’s motion to [1215]*1215remand and dismissed Seyfarth’s motion for judgment on the pleadings as moot.

After issuing its remand order, the district court ruled that Rutledge was entitled to attorneys’ fees and costs, pursuant to 28 U.S.C. § 1447(c),3 under the rule of Moore v. Permanente Medical Group, Inc., 981 F.2d 443, 445 (9th Cir.1992), that a district court retains jurisdiction to award costs and fees pursuant to 28 U.S.C. § 1447(c) even after issuing a remand order. The court ordered briefing as to the proper amount of attorneys’ fees and costs, and on January 26, 1998, entered an order awarding $23,052.22, the full amount requested by Rutledge.4

Seyfarth timely appealed, invoking our jurisdiction under 28 U.S.C. § 1291.

II

On appeal, Seyfarth challenges the award of attorneys’ fees, in part on the ground that the action should not have been ordered remanded.

A

Although the district court’s remand order is not reviewable in this Court, see 28 U.S.C. § 1447(d), we do review the district court’s award of attorneys’ fees for abuse of discretion, see K.V. Mart Co. v. United Food and Commercial Workers Int’l Union, Local 321, 173 F.3d 1221, 1223 (9th Cir.) (citing Moore, 981 F.2d at 447), cert. denied, — U.S.-, 120 S.Ct. 176, 145 L.Ed.2d 148 (1999), and one component of this review is “some consideration of the underlying remand order,” Moore, 981 F.2d at 447. Although the district court has “wide discretion” in assessing fees under § 1447(c), id., we must reverse an award of attorneys’ fees if the district court’s exercise of discretion was grounded in a determination of law that we reject. See id. (citing Cooler & Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 S.Ct. 2447, 110 L.Ed.2d 359 (1990)). We review the district court’s legal determination as to the propriety of removal, like all questions of subject-matter jurisdiction, de novo. See Toumajian v. Frailey, 135 F.3d 648, 652 (9th Cir.1998) (citing Kruse v. State of Hawaii 68 F.3d 331, 333 (9th Cir.1995)).

With these principles in hand, we turn to the question of whether Seyfarth properly removed the action to federal court.

B

Rutledge’s complaint did not allege a federal cause of action on its face. Seyfarth therefore could have established federal subject-matter jurisdiction supporting removal if, but only if, ERISA “completely preempts” the state law claims. See Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63, 107 S.Ct. 1542, 95 L.Ed.2d 55 (1987); Toumajian v. Frailey, 135 F.3d 648, 653-54 (9th Cir.1998).

“Federal pre-emption is ordinarily a federal defense to the plaintiffs suit. As a defense, it does not appear on the face of a well-pleaded complaint, and, therefore, does not authorize removal to federal court.” Metropolitan Life Ins. Co., 481 U.S. at 63, 107 S.Ct. 1542. However, “[a]n independent corollary to the well-pleaded complaint rule is the ‘complete preemption’ doctrine.” Id. at 1358; see Harris v. Provident Life and Accident Ins. Co.,

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201 F.3d 1212, 2000 Cal. Daily Op. Serv. 310, 24 Employee Benefits Cas. (BNA) 1149, 2000 Daily Journal DAR 437, 2000 U.S. App. LEXIS 307, 2000 WL 16550, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rutledge-v-seyfarth-shaw-fairweather-geraldson-ca9-2000.