Horvath v. JP Morgan Chase & Co.
| Decision Date | 13 October 2022 |
| Docket Number | 3:21-cv-01665-BTM-AGS |
| Parties | HELEN L. HORVATH, Plaintiff, v. JP MORGAN CHASE & COMPANY, Defendant. |
| Court | U.S. District Court — Southern District of California |
ORDER DENYING MOTION FOR COSTS, EXPENSES, AND ATTORNEY'S FEES. [ECF NO. 74, 75, AND 77]
Dr Helen Horvath (“Plaintiff”), in Propria Persona, has filed motions for costs and fees pursuant to Fed.R.Civ.P. 54(d)(1) and 28 U.S.C. § 1927. (ECF Nos 74, 75, 77.) JP Morgan Chase (“Defendant”) filed an opposition. Plaintiff filed a response and a separate “Statement of Facts/Legal Issues”. (ECF Nos. 79 and 80.) Although this case is remanded, the Court retains jurisdiction over the collateral issue of costs and attorney's fees under § 1447(c). The motions have been extensively briefed and oral argument would not add anything or aid the Court in deciding the motions. Therefore under Civ. L.R. 7.1 (d)(1), the Court has exercised its discretion to decide the motions on the papers without oral argument. For the reasons discussed below, Plaintiff's motions are DENIED.
On August 16, 2021, Plaintiff filed a complaint against JP Morgan Chase in the small claims court of the Superior Court of California, County of San Diego. (ECF No. 3 at 3.) The complaint requested damages for (1) violation of the Cares Act reporting requirements when granting deferrals; (2) inaccurate reporting; (3) failure to provide access to the balance liquidation programs in 2020; (4) failure to grant COVID-19 deferrals; (5) denial of credit by Pentagon Federal Credit Union and Geneva Financial; (6) not granting the balance liquidation; (7) violations of the Fair Credit Reporting Act; (8) loss of time; and (9) punitive damages. (ECF No. 12 at 4 (“Compl.”).) On September 22, 2021, Defendant removed to federal court on the basis of federal question jurisdiction. (ECF No. 1.) Defendant then submitted a motion to dismiss for failure to plea sufficient facts under Rule 8(a)(2) and failure to state a claim under Rule 12(b)(6). (ECF No. 3.)
After removal, Plaintiff submitted a response and justification to reject removal of the case, among other reasons, on the basis Defendants did not timely file the notice of removal. (ECF No. 5 at 2.) Plaintiff contested that “[t]he notice of removal [was] dated September 22, 2021, more than 30 days after receipt of the small claims action as stated by defendant's attorney.” (Id.) Plaintiff then submitted additional motions to remand, also alleging improper removal. (ECF Nos. 8 and 9.) On January 7, 2022, the Court issued an Order denying remand, and granting Defendant's motion to dismiss with leave to amend. (ECF No. 28.)
In January and February of 2022, Plaintiff submitted motions for reconsideration. (ECF Nos. 34, 36, 38.) Plaintiff additionally filed a motion to reassign the case to a different judge. (ECF No. 35.) Defendant responded in opposition to these motions (ECF No. 37.) and on April 6, 2022, this Court issued an order granting in part and denying in part Plaintiff's motion for reconsideration. (ECF No. 40.) This set a subsequent evidentiary hearing to determine the merits of Plaintiff's jurisdictional claim. (Id. at 24.) During this evidentiary hearing on May 19, 2022, the Court took judicial notice of Plaintiff's “Exhibit 8,” which provided circumstantial evidence that Plaintiff's complaint was delivered on August 20, 2021, making Defendant's removal untimely. (ECF No. 66.) The Court granted JP Morgan Chase 45 days in which to depose a representative of the U.S. Postal Service (“USPS”) and resolve the discrepancy of fact, or alternatively agree to a remand. (Id. 4-5.) During this period, Plaintiff filed four additional motions to remand. (ECF. Nos. 67, 69, 70, and 72.) On July 25th, 2022, JP Morgan Chase declined to depose a representative of the USPS and agreed to jointly remand, stating it agreed “solely to avoid incurring further fees and costs.” (ECF No. 71.) On July 29, 2022, the case was remanded to state court. (ECF No. 73.)
On August 11, 2022, Plaintiff filed a motion for entry of judgement under Rule 54(b) and 28 U.S.C. § 1927. (ECF No. 74.) Plaintiff filed subsequent motions, memorandums, and addendums between August 12 and September 22, 2022. (ECF Nos. 75, 77, 79, and 80.) Plaintiff contends that JP Morgan Chase's failure to agree to remand earlier entitles her to costs, expenses, and attorneys fees under the law. Plaintiff requests a total amount of $89,528.10, including but not limited to mileage and human costs, mailing costs, administrative costs, attorney's fees, and, if the court finds fit, additional costs for medical issues resulting from the case. (ECF No. 77 at 10-14.) The Court now considers the motion for costs, expenses, and fees under 28 U.S.C. § 1927 and costs under Fed.R.Civ.P. 54(d) in turn.
The "American Rule" provides that each party bear the cost of its attorney's fees regardless of the outcome of the litigation. Alyeska Pipeline Co. v. Wilderness Soc'y, 421 U.S. 240, 247 (1975). As a general matter, prevailing litigants are only entitled to collect attorney's fees where there is explicit statutory authorization or a binding contractual provision providing for such awards. Key Tronic Corp. v. United States, 511 U.S. 809, 814-15 (1994).
28 U.S.C. § 1441 authorizes the removal of state cases to federal court where the district court would have original jurisdiction, including over federal question claims. 28 U.S.C. § 1447(c) provides for remand based on lack of jurisdiction "[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction...". Further, "an order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." 28 U.S.C. § 1447(c). The Court has discretion to grant fees when the removing party lacked an objectively reasonable basis for seeking removal. Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005). Here, Defendant removed to federal court on the basis of federal question jurisdiction, allowed under 28 U.S.C. § 1441. Subsequent remanding of the case was agreed to by the Defendant to avoid deposition costs associated with Plaintiff's untimely removal claim. As discussed in more detail below, the Court finds JP Morgan Chase's initial removal reasonable. Therefore, the Court exercises its discretion under § 1447(c), and DENIES Plaintiff's request for fees and costs associated with the removal.
Plaintiff seeks an award of costs, expenses, and attorney's fees under 28 U.S.C. § 1927. Section 1927 dictates that:
“[a]ny attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct."
District courts have substantial discretion to decide whether to award sanctions under § 1927 or their inherent power, and in what amount. Haynes v. City and County of San Francisco, 688 F.3d 984, 987-88 (9th Cir. 2012). The purpose of a sanctions award "may be to deter attorney misconduct, or to compensate the victims of an attorney's malfeasance, or to both compensate and deter." Id. The award is intended only to cover excess costs incurred due to unreasonable conduct; it is not meant to reimburse a party for ordinary trial costs. See United States v. Associated Convalescent Enters., Inc., 766 F.2d 1342, 134748 (9th Cir. 1985). However, assessment of § 1927 sanctions requires a court to make a finding of bad faith. West Theatre Corp. v. City of Portland, 897 F.2d 1519, 1528 (9th Cir. 1990); In re Keegan Mgmt. Co., 78 F.3d 431, 436 (9th Cir. 1996) (); United States v. Blodgett, 709 F.2d 608, 610 (9th Cir.1983); Barnd v. City of Tacoma, 664 F.2d 1339, 1343 (9th Cir.1982). Bad faith is present whenever an attorney or pro se party "knowingly or recklessly raises a frivolous argument, or argues a meritorious claim for the purpose of harassing an opponent." Estate of Blas Through Chargualaf v. Winkler, 792 F.2d 858, 860 (9th Cir. 1986); West Coast Theater Corp. v. City of Portland, 897 F.2d at 1528; U.S. v. Associated Convalescent Enterprises, Inc., 766 F.2d 1342 (9th Cir., 1985) (“The imposition of liability under this statute requires a finding that an attorney has acted “recklessly or in bad faith.”). “[W]hile it is true that reckless filings may be sanctioned, and nonfrivolous filings may also be sanctioned, reckless nonfrivolous filings, without more, may not be sanctioned.” In re Keegan Mgmt. Co., 78 F.3d at 436. Before a party can recover excess costs under 28 U.S.C. § 1927, the court must find that the "attorney or other person admitted to conduct cases" created "needless proceedings" or "prolonged litigation,” and that the conduct was vexatious as well as unreasonable.
28 U.S.C. § 1927 is "a penal statute designed to discourage unnecessary delay in litigation," and limit "multiplicity of suits or processes, where a single suit or process might suffice.” Roadway Express, Inc. v Piper, 447 U.S. 752, 759 (1980) (quoting 26 ANNALs OF CONG. 29 (1813)). Sanctions under § 1927 are warranted when an attorney or pro se plaintiff intentionally or recklessly raises a frivolous argument which results in the multiplication of proceedings. In re Girardi, 611 F.3d 1027, 1061 (9th Cir. 2010); see also Zambrano v. City of Tustin, 885 F.2d 1473, 1485 (9th Cir. 1989) ...
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