Ramotnik v. Fisher

• Decision Date: 25 July 2008
• Docket Number: Civil Case No. RWT 08-0369.
• Citation: 568 F.Supp.2d 598
• Parties: Andrew W. RAMOTNIK, Plaintiff, v. Henry FISHER, et al., Defendants.
• Court: U.S. District Court — District of Maryland

568 F.Supp.2d 598

Andrew W. RAMOTNIK, Plaintiff, v. Henry FISHER, et al., Defendants.

Civil Case No. RWT 08-0369.

United States District Court, D. Maryland.

July 25, 2008.

Brynee K. Baylor, Baylor and Jackson PLLC, Washington, DC, for Plaintiff.

Amy S. Owen, Kimberly L. Cole, Cochran and Owen LLC, Vienna, VA, Sue Lawless, Samek McMillan and Metro PC, Rockville, MD, for Defendants.

MEMORANDUM OPINION

ROGER W. TITUS, District Judge.

On February 11, 2008, Defendant Wells Fargo Bank, N.A. ("Wells Fargo") filed a Notice of Removal of this case from the Circuit Court of Prince George's County, Maryland, based on this Court's alleged federal question jurisdiction over one of Plaintiff's claims. The issue now is whether to remand the case back to State court after Plaintiff amended his Original Complaint to excise the apparent federal claim that was the basis of Wells Fargo's removal. Of more concern to the parties, it seems, is whether to award Wells Fargo costs and attorney's fees expended in the removal process. For the reasons stated herein, the Court will remand the case to the Circuit Court for Prince George's County and declines to award costs and fees to Wells Fargo.

I.

In its Notice of Removal, Wells Fargo asserted that the Court has jurisdiction over Plaintiff's Original Complaint, pursuant to 28 U.S.C. § 1331, based on the title of Count VI: "Civil Conspiracy to Commit Fraud and Violate State and Federal Statutes."¹ (Emphasis added.) Wells Fargo explained in its notice that from this title it "appears" Plaintiff was asserting a violation of the federal Real Estate Settlement Procedures Act, 12 U.S.C. §§ 2601 et seq. Ten days after the removal, Plaintiff filed both (1) an Amended Complaint that deleted the words "and Federal" from the heading of Count VI² and (2) a motion to remand the action to the Circuit Court for Prince George's County.³ Plaintiff stated in his motion to remand that the Original Complaint "erroneously contained a Federal Claim of Federal Conspiracy when it was Plaintiff's intent to only assert a state conspiracy claim against the parties." (Paper No. 10 ¶ 1). Plaintiff argues that, because there is no longer a federal question in controversy, this Court no longer has jurisdiction pursuant to 28 U.S.C. § 1446.

Wells Fargo responded by requesting, pursuant to 28 U.S.C. § 1447, that the Court order Plaintiff to pay to Wells Fargo $1,500 for all costs and expenses, including attorney's fees, associated with its removal of this action and its response to the motion to remand.⁴ Wells Fargo argues that Plaintiff has conceded that he had no "good faith basis" for including the federal claim in his Original Complaint and that it "should not be made to bear the financial burden of Plaintiff's errors or inadvertencies." (Paper No. 11 at 2). Well's Fargo does not otherwise oppose an order remanding this case to state court.⁵

II.

Subsection 1447(c) provides in relevant part: "If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded. 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." Even where an award of costs and expenses is permissible, however, such a decision is ultimately discretionary within established standards. See Martin v. Franklin Capital Corp., 546 U.S. 132, 136, 141, 126 S.Ct. 704, 163 L.Ed.2d 547 (2005)(holding that "courts may award attorney's fees [against a removing party] under § 1447(c) only where the removing party lacked an objectively reasonable basis for seeking removal").

A. Whether 28 U.S.C. § 1447(c) Authorizes an Award of Costs and Expenses Against the Non-Removing Party

Here, Wells Fargo has requested an award of two categories of costs and expenses: (1) those associated with its removal of this action and (2) those associated with its response to the motion to remand. The Court concludes that an award of neither category of costs and expenses is permissible, at least under subsection 1447(c). Although section 1447(c) permits an award of costs and expenses to a party seeking remand of a case improperly removed, it does not permit such an award in a case where the initial removal was proper.⁶ See Baddie v. Berkeley Farms, Inc., 64 F.3d 487, 490 (9th Cir.1995). Such a conclusion is unavoidable because, giving the text of the statute its most natural reading, and keeping in mind the purpose of permitting such an award, neither category of costs and expenses was "incurred as a result of the removal." (Emphasis added.)

As to the first category requested by Wells Fargo, the Court cannot conclude that costs and expenses incurred by the removing party in effecting the removal itself are available under the statute. See Fleet Nat'l Bank v. Weightman Group, No. 02Civ.9556(KMW)(DF), 2003 WL 21781967, *3, 5 (S.D.N.Y. June 19, 2003)(denying defendants' request for sanctions against plaintiffs seeking remand because "28 U.S.C. § 1447(c) does not appear to cover the situation presented by this case, where the removal itself was proper"). Such costs and expenses would be more aptly described as simply the "costs and expenses of removal" or even the "costs and expenses incurred in the removal," and not the "costs and expenses incurred as a result of the removal." The action by which such costs and expenses are incurred was not taken as a "result of the removal," but rather was part and parcel thereof.⁷

As to the second category of expenses requested by Wells Fargo, the Ninth Circuit Court of Appeals has set forth persuasive reasoning as to why costs and expenses associated with opposing remand of a properly removed case are not "incurred as a result of the removal":

Where the removal was proper but plaintiffs take action subsequent to removal to precipitate remand, the expense of opposing remand would not have been incurred absent the removal. That expense, however, is proximately caused by the plaintiffs subsequent action rather than by the removal itself. Such an expense, therefore, is not `a result of removal,' and therefore is not authorized under section 1447(c).

Baddie, 64 F.3d at 490; see also Property Clerk v. Fyfe, 197 F.Supp.2d 39, 42 (S.D.N.Y.2002)(holding that "§ 1447(c) does not provide for an award of costs and fees to the party opposing remand").

This reading of the statute is strongly supported by its legislative history. The commentary accompanying the 1988 revision to the statute explains that the purpose of the costs-and-expenses provision, like the former requirement of a removal bond in section 1446 that it replaced, is to deter improper removal:

Congress says that this added power under subdivision (c) of § 1447 is to "replace" the bond requirement now eliminated from removal procedure with the repeal of subdivision (d) of the old § 1446....

The money sanction is as potent a threat as the bond was, and possibly even greater, but it lacks the "good and sufficient" surety that would have guaranteed payment of whatever the bond secured.

28 U.S.C. 1447, David D. Siegel, Commentary on 1988 Revision of Section 1447. The Second Circuit has aptly explained the need for such deterrence of improper removals:

Removal is done ex parte and without need of a court order. A defendant removes a case from state court to federal court simply by filing a signed notice of removal in the United States district court. While the simplicity of this procedure facilitates removal, it also exposes a plaintiff to the possibility of abuse, unnecessary expense and harassment if a defendant removes improperly, thereby requiring plaintiff to appear in federal court, prepare motion papers and litigate, merely to get the action returned to the court where the plaintiff initiated it. Providing for attorneys' fees when granting a motion to remand serves the purpose of deterring improper removal....

Circle Indus. USA, Inc. v. Parke Constr. Group, Inc., 183 F.3d 105, 109 (2d Cir.1999)(internal citation omitted). In sum, the purpose of the costs-and-expenses provision is to serve as a counterweight to the otherwise unfettered power of a defendant to unilaterally, and potentially improperly, remove an action to federal court. The same counterweight is not needed for a Plaintiff seeking to dismiss federal claims and obtain a remand of a case to State court.

B. Whether Plaintiff's Conduct Was Proper

An examination of Plaintiffs conduct here both reinforces the interpretation of section 1447(c) discussed above and reveals that, even if such an award were within the Court's discretion, Plaintiffs conduct was proper. Rule 15(a) of the Federal Rules of Civil Procedure provides: "A party may amend [his] pleading once as a matter of course ... before being served with a responsive pleading." Here, Wells Fargo had filed a motion to dismiss at the time Plaintiff moved to remand, but such a motion to dismiss is not considered a responsive pleading for purposes of Rule 15. See Domino Sugar Corp. v. Sugar Workers Local Union 392, 10 F.3d 1064, 1068 n. 1 (4th Cir.1993)("A motion to dismiss is not a responsive pleading for the purposes of Rule 15(a)."). As such, Plaintiff here was fully within his rights to amend his Complaint without leave of this Court.

The propriety of Plaintiff's behavior in this case is illustrated by comparison with the plaintiff in Shilling v. Northwestern Mutual Life Insurance Co., 423 F.Supp.2d 513 (D.Md.2006). Much like the. Court is doing here, the Shilling case had previously been remanded after the plaintiff filed an amended complaint in federal court that deleted a claim over which this Court allegedly had exclusive jurisdiction. Id. at 516. While this first amendment and remand alone would be enough to support the propriety of Plaintiffs actions here, Shilling goes further. After the State court on remand disposed of the defendants' motions to dismiss, the plaintiff substituted a claim...