Marlin Business Bank v. Halland Companies, LLC
18 F. Supp. 3d 239
E.D.N.Y2014Background
- Plaintiff Marlin Business Bank sued Defendant Halland Companies, LLC in Philadelphia County Court of Common Pleas for breach of an Equipment Lease Contract.
- The Lease (dated Sept. 12, 2012) required payments and included a forum selection clause selecting Pennsylvania courts and Pennsylvania law.
- Defendant removed the case to federal court on Apr. 14, 2014 invoking diversity jurisdiction under 28 U.S.C. § 1332.
- Plaintiff moved to remand and seek costs and attorneys’ fees on Apr. 23, 2014.
- This case was referred for arbitration on Apr. 28, 2014, and the court subsequently granted remand and declined transfer, with leave to renew as to costs/fees.
- The court held that removal was not supported by original jurisdiction and remanded to state court; it allowed renewal on costs/fees with supplementation of fee information.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether removal to federal court was proper under § 1441(a) | Marlin contends removal lacked original jurisdiction | Halland asserts removal based on diversity jurisdiction | Removal improper; remand granted |
| Whether the case should be remanded and clerk closed the matter | Remand appropriate with costs | Removal valid; court can transfer under § 1404 | Remand granted; case to be closed; no transfer granted |
| Whether Plaintiff is entitled to costs and attorneys’ fees under § 1447(c) | Attorney fees should be awarded due to improper removal | Fees require objective basis; may be denied if reasonable | Remand granted but fee award denied without prejudice pending supplementation |
| Whether the removal was made in bad faith or subjectively improper | Evidence of lack of jurisdiction supports improper removal | Removal contested on technical merits only | Court found removal objectively unreasonable; allowed fee submission to renew |
| Whether to award costs and fees based on post-remand documentation as to rate/expertise | Provide evidence of expertise and reasonable Philadelphia rate | Submissions incomplete; may renew with proper documentation | Costs denied without prejudice; plaintiff may supplement within 30 days |
Key Cases Cited
- In re Refco, Inc. Sec. Litig., 628 F.Supp.2d 432 (S.D.N.Y. 2008) (jurisdiction burden on removal; standard for remand)
- In re WorldCom, Inc. Sec. Litig., 293 B.R. 308 (S.D.N.Y. 2003) (burden on removal; favorable standard for remand)
- In re Nasdaq Mkt. Makers Antitrust Litig., 929 F.Supp.174 (S.D.N.Y. 1996) (constructing jurisdiction in removal; favor remand on disputes)
- Morgan Guar. Trust Co. of New York v. Republic of Palau, 971 F.2d 917 (2d Cir. 1992) (discretion in awarding costs/fees under § 1447(c))
- Martin v. Franklin Capital Corp., 546 U.S. 132 (U.S. 2005) (fee-shifting standard: award only if lack of reasonable basis for removal)
- Doukas v. Ballard, 825 F.Supp.2d 377 (E.D.N.Y. 2011) (context on bad faith not required for § 1447(c) awards; objective basis test)
- Whitestone Sav. & Loan Ass’n v. Romano, 484 F.Supp. 1324 (E.D.N.Y. 1980) (note on evolution of § 1447(c) following 1988 amendment)
- Little Rest Twelve, Inc. v. Visan, 458 B.R. 44 (S.D.N.Y. 2011) (bad faith not required for costs; non-dispositive factor in discretion)