Keehan Tennessee Investments, LLC v. Guardian Capital Advisors, Inc., 692 F. App'x 445

Plaintiffs sued in Ohio state court over financing for a golf course development; Defendants removed to federal court asserting diversity jurisdiction under 28 U.S.C. § 1332.
Plaintiffs subsequently amended their complaint to add two defendants; the action was transferred to the District of Nevada.
The Nevada court sua sponte ordered jurisdictional discovery after questioning federal jurisdiction; discovery revealed facts destroying diversity and the case was remanded to state court.
Both sides moved for attorney’s fees and costs under 28 U.S.C. § 1447(c); the district court awarded $23,365.50 to Praetorium and Cresson (and awarded fees to Guardian and Miller as well).
The Ninth Circuit reversed the fee awards to Praetorium and Cresson (and vacated the awards to Guardian and Miller), concluding the district court abused its discretion and that both sides share responsibility for the jurisdictionally deficient federal litigation.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether §1447(c) permits awarding fees to the removing party	§1447(c) allows fees only to the non-removing party	Removing party may obtain fees if removal was improper	Court declined to decide the statutory question here but assumed arguendo and reversed on abuse-of-discretion grounds
Whether Plaintiffs were responsible for improper removal and thus liable for fees	Plaintiffs argued they were not responsible for the improper removal	Defendants argued Plaintiffs’ pleadings led to improper removal and they should pay fees	District court’s finding that Plaintiffs were responsible was an abuse of discretion; reversed — parties share blame
Whether defendants met their burden to establish federal diversity jurisdiction on removal	Plaintiffs argued defendants failed to plead or investigate members’ citizenship of LLCs/partnerships	Defendants relied on general allegations and state-court complaint recitals without member-citizenship facts or requesting discovery	Court held defendants failed to carry the removal jurisdiction burden by not alleging members’ citizenship or seeking jurisdictional discovery
Whether awards to Guardian and Miller should stand when they did not appear on appeal	Plaintiffs urged vacation of those awards given overall ruling	Guardian and Miller did not defend their awards on appeal	Court vacated those awards in light of its ruling on Praetorium and Cresson

Patel v. Del Taco, Inc., 446 F.3d 996 (9th Cir. 2006) (fee-award review standard: abuse of discretion)
Washington v. Chimei Innolux Corp., 659 F.3d 842 (9th Cir. 2011) (defendant bears burden to establish removal jurisdiction)
Johnson v. Columbia Props. Anchorage, LP, 437 F.3d 894 (9th Cir. 2006) (LLC/partnership citizenship equals citizenship of every member/partner)
Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876 (9th Cir. 2010) (procedural guidance on vacating awards on appeal)