Huffman v. Saul Holdings Limited Partnership

• Decision Date: 22 August 2001
• Docket Number: No. 99-5239,99-5239
• Citation: 262 F.3d 1128
• Parties: (10th Cir. 2001) MARSHALL HUFFMAN; VIRGINIA NEWTON, Plaintiffs-Appellees, v. SAUL HOLDINGS LIMITED PARTNERSHIP, a Maryland limited partnership, Defendant-Appellant
• Court: U.S. Court of Appeals — Tenth Circuit

Page 1128

262 F.3d 1128 (10th Cir. 2001)

MARSHALL HUFFMAN; VIRGINIA NEWTON, Plaintiffs-Appellees, v. SAUL HOLDINGS LIMITED PARTNERSHIP, a Maryland limited partnership, Defendant-Appellant.

No. 99-5239

UNITED STATES COURT OF APPEALS TENTH CIRCUIT

August 22, 2001

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OKLAHOMA. (D.C. No. 97-CV-602-H)

[Copyrighted Material Omitted] Submitted on the briefs: Bill V. Wilkinson and Andrew P. DeCann of Wilkinson Law Firm, Tulsa, Oklahoma, for Plaintiffs-Appellees.

Terry M. Thomas of Crowe & Dunlevy, Tulsa, Oklahoma, for Defendant-Appellant.

Before SEYMOUR and McKAY, Circuit Judges, and BRORBY, Senior Circuit Judge.

SEYMOUR, Circuit Judge.

This case involves an award of attorneys' fees following what should have been the conclusion, at least with respect to proceedings in the federal courts, of a case already marred by a lengthy procedural history. We hold that the district court lacked authority to grant plaintiffs Marshall Huffman and Virginia Newton appeal-related fees and, in addition, erroneously failed to conduct an inquiry into the reasonableness of their fee application. Accordingly, we reverse the decision of the district court with directions to vacate its award of appellate fees and to conduct a hearing on the reasonableness of the remaining portions of Huffman and Newton's fee application.¹

I. Factual Background

The roots of this dispute lie in a leaky roof. Huffman and Newton leased space from defendant Saul Holdings Limited Partnership to operate a retail furniture store in a shopping center near Tulsa, Oklahoma. Saul disclosed the leaks during the lease negotiations and agreed to repair the roof once the lease was signed. Despite Saul's repeated attempts to make the necessary repairs, the leaks persisted. Ultimately Huffman and Newton moved to another location. Seeking damages for what they said were lost sales, they brought suit in state court against Saul, alleging breach of contract, rescission, and fraud.

After filing an answer and counterclaim, and after engaging in several rounds of discovery, Saul removed the action to federal court. The district court denied Huffman and Newton's motion for remand, and later granted summary judgment in favor of Saul. This court reversed the district court with respect to both rulings. See Huffman v. Saul Holdings Ltd. P'ship, 194 F.3d 1072 (10th Cir. 1999). We concluded not only that Saul's notice of removal was untimely, but, in addition, that the existence of disputed, material facts precluded the entry of summary judgment. The panel instructed the district court to return the case to the state court. Id. at 1084.²

Having secured a remand to state court, Huffman and Newton asked the federal district court to award them attorneys' fees pursuant to 28 U.S.C. 1447(c), which authorizes costs and fees to a plaintiff who successfully resists a defendant's removal effort, that is, obtains an order remanding the case to state court. Initially, the district court denied Huffman and Newton's fee petition. Their petition, said the court, went beyond the allowable scope of 1447(c), since it sought fees not just for efforts at opposing removal but for other matters as well. In response to the court's ruling, Huffman and Newton filed an amended petition, seeking fees only for services related to remand. The amended petition requested slightly more than $1300 for fees incurred in the district court, approximately $4000 in appellate fees, and just over $1800 for preparing the fee application itself. The total amounted to $7099. The district court granted the petition in full. Saul appeals that ruling.³

II. Standard of Review

At the outset, we reject Huffman and Newton's insistence that we review the ruling of the district court under an abuse of discretion standard. Granted, as Huffman and Newton note, we generally review a district court's decision to award fees for abuse of discretion. "[B]ut we review de novo the district court's application of the legal principles underlying that decision." Nat'l Ass'n of Prof'l Baseball Leagues, Inc. v. Very Minor Leagues, Inc., 223 F.3d 1143, 1146 (10th Cir. 2000). In particular, we extend de novo review to any statutory interpretation that provides the basis for the award of attorneys' fees. Hoyt v. Robson Cos., 11 F.3d 983, 984 (10th Cir. 1993).

III. Appellate Fees

Saul argues first that the district court lacked jurisdiction to award Huffman and Newton appeal-related fees. We agree that the district court erred, but not for lack of jurisdiction.

In the previous appeal, Huffman and Newton filed in this court the same request for attorneys' fees, including appellate fees, that they originally filed in the district court.⁴ In our decision reversing the district court, we expressly refused to award appellate fees to Huffman and Newton, despite their success on appeal. We could not have been more clear. "Plaintiffs' motion for attorneys' fees and costs," we said, "is DENIED." Huffman, 194 F.3d at 1084 (emphasis in the original). "The parties must bear their own costs and fees," we added. Id.

Nevertheless, on remand the district court granted Huffman and Newton the very fee request we earlier had rejected. It did so mindful of our injunction. "[T]he Tenth Circuit's denial of Plaintiffs' motion for attorney fees," said the court, "does not bind the discretion of this court to award fees pursuant to 28 U.S.C. 1447(c)." Aplt.'s App. at 327. Noting that its discretion rested on an interpretation of the controlling statutory language, the district court explained that 1447(c) "specifically contemplates the award of such fees by the district court that remands the case to state court." Id.⁵

The district court, of course, is correct. It does have discretion to award fees and costs under 1447(c), provided this court or some higher court has not limited the exercise of that discretion. Our earlier decision did just that. Indeed, our denial of Huffman and Newton's request for appellate fees was dispositive; it became law of the case and could not be reconsidered by the district court.

The law of the case "doctrine posits that when a court decides upon a rule of law, that decision should continue to govern the same issues in subsequent stages in the same case." Arizona v. California, 460 U.S. 605, 618 (1983). The doctrine has particular relevance following a remand order issued by an appellate court. "[W]hen a case is appealed and remanded, the decision of the appellate court establishes the law of the case and ordinarily will be followed by both the trial court on remand and the appellate court in any subsequent appeal." Rohrbaugh v. Celotex Corp., 53 F.3d 1181, 1183 (10th Cir. 1995). The law of the case doctrine is intended to prevent "continued re-argument of issues already decided," Gage v. Gen. Motors Corp., 796 F.2d 345, 349 (10th Cir. 1986), and to preserve scarce court resourcesto avoid "in short, Dickens's Jarndyce v. Jarndyce syndrome." McIlravy v. Kerr-McGee Coal Corp., 204 F.3d 1031, 1035 (10th Cir. 2000).

An "important corollary" to the law of the case doctrine, "known as the 'mandate rule,' provides that a district court must comply strictly with the mandate rendered by the reviewing court." Ute Indian Tribe v. Utah, 114 F.3d 1513, 1520-21 (10th Cir. 1997) (internal quotation omitted); see also Mason v. Texaco, Inc., 948 F.2d 1546, 1553 (10th Cir. 1991) ("Under the 'law of the case' doctrine, the district court may not deviate from the appellate court's mandate."). Here the mandate rule prohibited the district court from departing from our earlier decision denying appeal-related fees to Huffman and Newton. In general, we repeat, few restraints cabin a district court's ability to award statutory attorneys' fees. This does not hold, however, where an appellate court has issued a mandate that specifically limits the district court's discretion.

Thus, the district court lacked authority, not jurisdiction, to award appellate fees. Its jurisdiction flowed from both 1447(c) itself, which allows courts in certain cases to consider an award of attorneys' fees, and our remand order, which returned the mandate in this diversity case to the district court. The district court's authority, however, was circumscribed by the terms of the mandate and the law of the case doctrine, neither of which is jurisdictional. United States v. Gama-Bastidas, 222 F.3d 779, 784 (10th Cir. 2000) ("Neither the law of the case doctrine nor the mandate rule is jurisdictional.").

In contrast to a jurisdictional defect, exceptions to both rules exist. For instance, a district court may deviate from the mandate "under exceptional circumstances, including (1) a dramatic change in controlling legal authority; (2) significant new evidence that was not earlier obtainable through due diligence but has since come to light; or (3) if blatant error from the prior . . . decision would result in serious injustice if uncorrected." United States v. Webb, 98 F.3d 585, 587 (10th Cir. 1996) (quotation omitted). None of these exceptions is present here. Similarly, three "exceptionally narrow" grounds justify departing from the law of the case doctrine: "(1) when the evidence in a subsequent trial is substantially different; (2) when controlling authority has subsequently made a contrary decision of the law applicable to such issues; or (3) when the decision was clearly erroneous and would work a manifest injustice." McIlravy, 204 F.3d at 1035. Again, the district court faced none of these exceptions, nor do we.

Our conclusion rejecting Huffman and Newton's claims for appellate fees mirrors the Third Circuit's opinion in Yaron v. Township of Northampton, 963 F.2d 33 (3d Cir. 1992). The court held there that once the court of appeals "has entertained an application for appellate attorneys' fees, a district court may not." Id. at 37. Jaron rested its ruling exclusively on the mandate rule. We...