Chief Justice Roberts on Remand: No Presumption in Favor of Awarding Fees

At Legal Underground, there was a discussion in the comments a few months ago about a 7th Circuit opinion in which Judge Easterbrook ruled that a case had been improperly removed to federal court. He ended his opinion like this: "[W]e also invite the plaintiffs to file (in the district court) an appropriate request for reimbursement of the additional legal expenses to which they have been put by [defendant's] efforts to move this litigation from state to federal court."

Judge Easterbrook's invitation to seek fees was based on 28 U.S.C. § 1447(c), in which a federal district court can order payment of fees and expenses when a case is remanded back to state court. Under the 7th Circuit's approach,  § 1447(c) has been viewed as a fee-shifting statute in which Plaintiffs are presumptively entitled to fees.

This is no longer the law after Chief Justice Roberts' opinion in Martin v. Franklin Capital Corp. Writing for a unanimous court, Roberts stated:

[T]he standard for awarding fees should turn on the reasonableness of the removal. Absent unusual circumstances, courts may award attorney's fees under § 1447(c) only where the removing party lacked an objectively reasonable basis for seeking removal. Conversely, when an objectively reasonable basis exists, fees should be denied.

The "objectively reasonable" standard effectively abolishes any presumption in favor of an award of fees upon remand.

Comments

[Robert Williamson (Construction Owners and Builders Law blog)]

As a practical matter, didn't Robert's and the Court establish a presumption against an award of fees? Presumably the injured party will have to demonstrate the absence of an objectively reasonable basis for the removal. Robert's is bound to know that the value of the time required to carry that burden may equal or exceed the value of the time expended securing remand. That's especially true when the time required for an appeal is factored in. The existence or non-existence of an objectively reasonable grounds for removal presumably is a question of law subject to de novo review. The decision is likely to make what many perceived to be a serious problem--defendants removing cases on flimsy grounds worse.

[Evan]

Agreed, except that I'm not sure the threat of fee award was ever much of a deterrent to defendants wishing to remove.

[John Robert Stratton]

Evan

You may want to check the working of the second paragraph of your post, unless the current wording in the post is an accurate reflection of your interpretation of 1447(c).

[Evan]

If you're referring to my use of the term "fee-shiting," I fixed it.