Warthman v. Genoa Township Bd. of Trustees

• Decision Date: 15 December 2008
• Docket Number: No. 07-4528.,07-4528.
• Citation: 549 F.3d 1055
• Parties: Leslie WARTHMAN, Plaintif-Appellant, v. GENOA TOWNSHIP BOARD OF TRUSTEES, Defendant-Appellee.
• Court: U.S. Court of Appeals — Sixth Circuit

549 F.3d 1055

Leslie WARTHMAN, Plaintif-Appellant, v. GENOA TOWNSHIP BOARD OF TRUSTEES, Defendant-Appellee.

No. 07-4528.

United States Court of Appeals, Sixth Circuit.

Argued: October 29, 2008.

Decided and Filed: December 15, 2008.

ARGUED: James E. Melle, Buckley King, Columbus, Ohio, for Appellant. David A. Riepenhoff, Downes, Hurst & Fishel, Columbus, Ohio, for Appellee. ON BRIEF: James E. Melle, Buckley King, Columbus, Ohio, for Appellant. David A. Riepenhoff, Cheri B. Hass, Downes, Hurst & Fishel, Columbus, Ohio, for Appellee.

Before: MARTIN and GILMAN, Circuit Judges; DOWD, District Judge.^*

OPINION

RONALD LEE GILMAN, Circuit Judge.

Leslie Warthman filed a complaint in the Court of Common Pleas for Delaware County, Ohio, arguing that the Genoa Township Board of Trustees violated the Ohio Open Meetings Law when it terminated her employment without allowing her to respond to the allegations against her at a public hearing. The Township removed the case to the federal district court on the basis that a reference in the complaint to the Due Process Clause of the Fourteenth Amendment to the United States Constitution created federal question jurisdiction. Holding that the complaint did not state a federal cause of action, the district court remanded Warthman's lawsuit to the state court. The district court declined, however, to award Warthman the costs and attorney fees associated with the removal and subsequent remand. For the reasons set forth below, we VACATE the portion of the district court's judgment that denied Warthman her request for costs and attorney fees and REMAND the case for reconsideration of that issue.

I. BACKGROUND

Warthman worked as a Zoning Inspector for the Genoa Township Board of Trustees in Westerville, Ohio. The Genoa Township Zoning Commission (a separate entity) held a meeting on March 12, 2007 in which sharp differences of opinion were expressed regarding a thirty-acre parcel of property in the Township. Warthman sent an email to the Board of Trustees the following day. According to her complaint in this case, the email contained "harsh and unflattering" criticism of some Zoning Commission members.

At a Board of Trustees meeting on March 14, 2007, a Zoning Commission member requested an executive session between the Zoning Commission and the Board of Trustees. The Board adopted a motion to hold such an executive session to consider taking action against Warthman, unless she requested a public hearing. Warthman responded to the Board's action by requesting a public hearing, but no such hearing on the matter was held. The Board of Trustees instead met in four separate executive sessions and subsequently terminated Warthman's employment on the ground that she had "admitted to having violated Township policies."

After Warthman was terminated, she filed a complaint in the Court of Common Pleas for Delaware County, Ohio. Her complaint alleged in Count One that the Township had violated the Ohio Open Meetings Law by adopting the resolution to fire her in a meeting not open to the public. In Count Two, the complaint asserted that "Defendant is estopped to deny Plaintiff's right to a public name clearing hearing." This estoppel claim arose from Warthman's contention that members of the Board of Trustees and the Zoning Commission "agreed that Plaintiff was entitled to a public hearing but at a later date," and that they had made that representation to her. Paragraph 25 of Warthman's complaint contained the sole reference to federal law, stating that, "[p]ursuant to the Due Process Clause of the Fourteenth Amendment to the United States Constitution and Article I Section 16 of the Ohio Constitution, [she] was entitled to a name clearing hearing."

The Township removed the case to the United States District Court for the Southern District of Ohio. In its Notice of Removal, the Township cited paragraph 25 of the complaint and Count Two, the estoppel claim, asserting that these portions of the complaint "state[d] a Federal Question pursuant to 28 U.S.C. [§] 1331." Warthman moved to remand the case back to state court and requested an award of "costs and any actual expenses, including attorney fees, incurred as a result of the removal." See 28 U.S.C. § 1447(c). The motion to remand explained that paragraph 25 of the complaint referenced the Due Process Clause of the Fourteenth Amendment simply to satisfy the Ohio Supreme Court's interpretation of the Ohio Open Meetings Law. See Matheny v. Frontier Local Bd. of Educ., 62 Ohio St.2d 362, 405 N.E.2d 1041, 1046 (1980) (explaining that the law guarantees the right to a public hearing only if that right is "elsewhere provided by law").

Ruling on the motion to remand the case to state court, the district court "conclude[d] that the complaint, fairly read, invoke[d] only claims under state law." The district court noted that the complaint made no reference to 42 U.S.C. § 1983 or any other federal statute, that the first count expressly invoked only Ohio law, and that the second count asserted only a common law estoppel claim. As a result, the district court granted the motion to remand the case to the state court. Regarding Warthman's request for an award of costs and attorney fees, however, the district court said: "Because removal of the action was based upon plaintiff's reference in the Complaint to federal law, the Court concludes that an award of fees or costs to plaintiff would be unjust and is unwarranted."

The district court's decision to grant the motion to remand the case to state court is not subject to review by this court. See 28 U.S.C. § 1447(d); Powerex Corp. v. Reliant Energy Servs., Inc., 551 U.S. 224, 127 S.Ct. 2411, 2415-16, 168 L.Ed.2d 112 (2007) (noting that remands based on a lack of subject matter jurisdiction are shielded from appellate review by § 1447(d)). This leaves only the denial of costs and attorney fees to Warthman as an issue on appeal. See Stallworth v. Greater Cleveland Reg'l Transit Auth., 105 F.3d 252, 255 (6th Cir.1997) (holding that this court has jurisdiction to review the award or denial of attorney fees under § 1447(c)).

II. ANALYSIS

A. Standard of review

District courts have considerable discretion to award or deny costs and attorney fees under 28 U.S.C. § 1447(c), and we will overrule whatever decision is reached only where such discretion has been abused. Bartholomew v. Town of Collierville, 409 F.3d 684, 686 (6th Cir. 2005). An abuse of discretion occurs where "[a] district court ... relies on clearly erroneous findings of fact, or when it improperly applies the law or uses an erroneous legal standard." Christian Schmidt Brewing Co. v. G. Heileman Brewing Co., 753 F.2d 1354, 1356 (6th Cir. 1985) (citation omitted).

B. Costs and attorney-fee awards upon remand

A civil case that is filed in state court may be removed by the defendant to federal district court if the plaintiff could have chosen to file there originally. 28 U.S.C. § 1441. If the district court later determines that it lacks subject matter jurisdiction, however, the case must be remanded. 28 U.S.C. § 1447(c). The remand statute provides that "[a]n order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." Id. This language places an award of costs and attorney fees (hereinafter sometimes collectively referred to simply as "fees" or "fee awards") squarely within the discretion of the district court, but subject to the guidance set forth by the Supreme Court in Martin v. Franklin Capital Corp., 546 U.S. 132, 136-37, 126 S.Ct. 704, 163 L.Ed.2d 547 (2005).

"Absent unusual circumstances," the Supreme Court instructs that fee awards are appropriate "only where the removing party lacked an objectively reasonable basis for seeking removal." Id. at 141, 126 S.Ct. 704. This court has similarly instructed that "an award of costs, including attorney fees, is inappropriate where the defendant's attempt to remove the action was `fairly supportable,' or where there has not been at least some finding of fault with the defendant's decision to remove." Bartholomew, 409 F.3d at 687 (quoting Ahearn v. Charter Twp. of Bloomfield, No. 97-1187, 1998 WL 384558 at *2 (6th Cir. June 18, 1998) (unpublished) (emphasis in original)).

Warthman asserts in her brief that "[w]hen a district court denies attorney fees it abuses its discretion where the Defendant's argument for removal was devoid of even fair support." She takes this statement of the rule from Bartholomew, 409 F.3d at 687, an opinion that quoted from the unpublished Ahearn decision. 1998 WL 384558 at *2. This language suggests that the district court's "discretion" under § 1447(c) is basically a binary determination: if the defendant's argument for removal was objectively reasonable, the court may not award fees to the plaintiff; if it was not, the district court must award such fees. This court applied that rule in Ahearn. Following a finding that the removal to federal court in Ahearn lacked "fair support," the court remanded the case with an instruction to "make an evidentiary determination as to the fees actually incurred in conjunction with the removal petition." Id. at *4.

Bartholomew quoted the rule as it was stated in Ahearn, but did not apply it in the same way because the defendant's removal in Bartholomew was fairly supportable. Bartholomew, 409 F.3d at 687-88. In Bartholomew, we accordingly affirmed the district court's denial of fees to the plaintiff. Id. at 688. Just eight months after Bartholomew, however, the Supreme Court decided Martin, which is now the leading case on discretionary fee awards pursuant to § 1447(c).

The Supreme Court in Martin noted that Congress designed the costs-and-fees provision in § 1447(c) to permit removal in appropriate cases, while simultaneously "reduc[ing] the attractiveness of removal as a method for delaying litigation and imposing costs on the plaintiff."...