Convent Corporation v. City of North Little Rock, 2015 U.S. App. LEXIS 6859

Convent Corporation sued the City of North Little Rock and various city officials in state court to challenge a city council resolution condemning its property and asserted federal civil‑rights claims (42 U.S.C. §§ 1983, 1985, 1986, 1988) plus state claims.
Defendants removed the action to federal district court based on the federal claims.
Defendants moved to dismiss, arguing primarily that city officials have absolute legislative immunity and secondarily that Convent had failed to exhaust statutorily prescribed administrative remedies.
The district court found it lacked subject‑matter jurisdiction because Convent had not exhausted administrative remedies and remanded the case to state court.
Convent then sought attorneys’ fees and costs under 28 U.S.C. § 1447(c), 28 U.S.C. § 1927, and the court’s inherent power, arguing the removal was improper and motivated to force dismissal; the district court denied fees.
Convent appealed; the court of appeals affirmed, holding defendants had an objectively reasonable basis to remove and no abuse of discretion occurred in denying fees or sanctions.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether removal was improper and fee award required under 28 U.S.C. § 1447(c)	Removal was a sham aimed solely at obtaining dismissal for lack of jurisdiction; fees should be awarded	Removal was authorized because Convent pleaded federal claims (§ 1983 etc.), so removal was objectively reasonable	Denied: removal was objectively reasonable; district court did not abuse discretion in denying § 1447(c) fees
Whether defendants acted to provoke dismissal by arguing lack of jurisdiction after removal	Defendants removed solely to have federal court dismiss; analogous to pre‑Martin cases warranting fees	Defendants advanced multiple substantive grounds (legislative immunity, failure to state a claim) in addition to exhaustion argument	Denied: defendants did not remove solely to force dismissal; other reasonable grounds existed
Whether sanctions are appropriate under 28 U.S.C. § 1927	Defendants’ counsel multiplied proceedings by unreasonable misrepresentations; sanctions warranted	Counsel’s conduct did not objectively manifest intentional or reckless disregard of duties	Denied: no basis to find conduct meeting § 1927 standard
Whether inherent‑power sanctions are warranted for bad faith removal	Defendants acted in deliberate bad faith and caused delay; inherent powers justify fees	No clear bad‑faith delay or disruption sufficient to invoke inherent powers	Denied: no abuse of discretion in refusing inherent‑power sanctions

Martin v. Franklin Capital Corp., 546 U.S. 132 (fee award under § 1447(c) depends on objective reasonableness of removal)
Cooter & Gell v. Hartmarx Corp., 496 U.S. 384 (federal courts may consider collateral issues and award costs after dismissal)
Valdes v. Wal‑Mart Stores, Inc., 199 F.3d 290 (5th Cir.) (objective‑reasonableness inquiry at time of removal; motive not considered)
Williams v. Ragnone, 147 F.3d 700 (8th Cir.) (presence of a federal claim allows removal of the entire case)
Gaming Corp. of Am. v. Dorsey & Whitney, 88 F.3d 536 (8th Cir.) (same principle on complete removal when federal question present)
Grapentine v. Pawtucket Credit Union, 755 F.3d 29 (1st Cir.) (§ 1983 claims arise under federal law and support federal‑question jurisdiction)
Tenkku v. Normandy Bank, 348 F.3d 737 (8th Cir.) (standards for sanctions under § 1927)