Mints v. Ed Testing SerMints v. Ed Testing Ser
B. John Pendleton, Jr.
Mary Ann Mullaney
McCarter & English
100 Mulberry Street
Four Gateway Center
Newark, NJ 07101-0652
Attorneys for Appellant
Jeffrey A. Mints
60 Montague Avenue
Ewing, NJ 08628
Appellee pro se
*Honorable Douglas W. Hillman, Senior Judge of the United States District Court for the Western District of Michigan, sitting by designation.
GREENBERG, Circuit Judge.
Educational Testing Service (“ETS“) appeals from an order entered January 5, 1996, awarding appellee Jeffrey A. Mints $8,436.78 in attorney‘s fees and costs pursuant to
I. FACTUAL AND PROCEDURAL HISTORY
Mints‘s complaint in the Superior Court included six counts which we describe in detail. In the first count, he alleged that ETS terminated his employment on May 17, 1993, “by reason of his age” and thus violated the New Jersey Law Against Discrimination,
In the second count, Mints claimed that ETS discharged him by reason of his sex and that its actions constituted unlawful sex discrimination under the New Jersey Law Against Discrimination. He alleged that he suffered the same losses from sex discrimination as he suffered from age discrimination. Significantly, Mints did not allege that ETS‘s action violated Title VII of the Civil Rights Act of 1964,
In Mints‘s fourth, fifth, and sixth counts he asserted common law claims for breach of contract, wrongful discharge, and defamation. Mints alleged in the breach of contract and wrongful discharge counts that he suffered the same losses as he set forth in the three discrimination counts, but in the defamation count he set forth only general losses and did not assert that he suffered the employment related losses he claimed in the other counts. Mints did not allege that he had a right to recovery under ERISA or any other federal law in any of these three counts.
Mints‘s omission of federal statutory causes of action under the ADEA, Title VII, and the ADA clearly was intentional, for at the time he filed his Superior Court action he also filed an action in the district court which tracks his state case but adds these three federal statutes as bases for relief. Thus, he made a strategic decision to file parallel actions in the federal and state courts, but to limit his state action to claims founded under state law.
On July 13, 1995, ETS filed a timely notice of removal of the Superior Court action to the district court. In the notice, ETS quoted the portion of the Superior Court complaint in which Mints alleged that ETS discharged him “within two years of vesting his eligibility for early retirement, including, but not limited to, pension, medical and other benefits.” In addition, ETS set forth in the notice of removal that Mints was seeking benefits pursuant to a group employee welfare benefit plan. In view of these allegations, ETS asserted that the district court had jurisdiction under
Mints then moved in the district court to remand the
The district court indicated, however, that in Metropolitan Life Ins. Co. v. Taylor, which ETS cited in its notice of removal, the Supreme Court recognized that “Congress may so completely pre-empt a particular area that any civil complaint raising this select group of claims is necessarily federal in character.” 481 U.S. at 63-64, 107 S.Ct. at 1546. The district court then indicated that ERISA would preempt an action completely only if the defendant established “that the underlying state action involves the recovery of benefits due under the terms of a plan, the enforcement of rights under a plan or the clarification of the right to future benefits under the plan.” Mints v. Educational Testing Serv., No. 95-3446, slip op. at 6 (Sept. 19, 1995). See Metropolitan v. Taylor, 481 U.S. at 66, 107 S.Ct. at 1547-48;
The court noted that ETS claimed that the case was removable because the complaint called into question Mints‘s rights under ERISA. The court said that while Congress under ERISA has preempted state law claims “related to” employee pension and benefit plans,
On September 19, 1995, the clerk of the district court mailed a certified copy of the remand order to the clerk of the Superior Court. On September 29, 1995, ETS moved for reconsideration. On November 9, 1995, the district court entered an order and accompanying opinion denying the motion for reconsideration. Notwithstanding Trans Penn Wax Corp. v. McCandless, 50 F.3d 217, 225 (3d Cir. 1995), and Hunt v. Acromed Corp., 961 F.2d 1079, 1081-82 (3d Cir. 1992), which indicate that once the district court mails a certified copy of the remand order to the state court the federal court is divested of jurisdiction, the district court denied the motion for reconsideration on the merits.
On December 8, 1995, Mints moved for an award of attorney‘s fees and costs to compensate him for moving for the
The district court next considered the standard governing whether attorney‘s fees and costs should be assessed against a defendant who has removed a case from the state to the federal court when the court remands the case. The court pointed out that prior to its amendment in 1988, section 1447(c) authorized the award of fees when a case was “removed improvidently.” Under that standard there was authority that a court could assess fees only if the defendant acted in bad faith in removing the action. See Schmitt v. Insurance Co. of N.A., 845 F.2d 1546, 1552 (9th Cir. 1988). The court indicated that the basis for awarding the plaintiff fees when a case is remanded now may be broader, as the court has broad discretion to award fees since the “removed improvidently” language has been removed from section 1447(c). See Gotro v. R & B Realty Group, 69 F.3d 1485, 1487 (9th Cir. 1995); Morgan Guar. Trust Co. v. Republic of Palau, 971 F.2d 917, 923-24 (2d Cir. 1992). The court nevertheless indicated that the propriety of the removal still may be a consideration in a determination of whether to require the party removing the action to pay costs and fees. See Miranti v. Lee, 3 F.3d at 928. The court, however, did not set forth definitively the basis for awarding fees, as it held that even under the pre-1988 standard, ETS improvidently removed the case. Thus, it entered the order for $8,437.68 in fees and costs. ETS then appealed.
II. DISCUSSION
ETS makes both procedural and substantive arguments to support a reversal. Citing Trans Penn Wax v. McCandless, 50 F.3d at 225, and Hunt v. Acromed, 961 F.2d at 1081-82, ETS initially makes the procedural argument that the district court lost jurisdiction when the district court clerk sent the certified copy of the order of remand to the clerk of the Superior Court of New Jersey. It then points out that section 1447(c) provides
ETS makes the substantive argument that the court abused its discretion in awarding fees. This argument has three component parts: (1) ETS properly removed the case; (2) the case was not obviously nonremovable; (3) ETS did not act in bad faith in removing the case. Of course, ETS does not seek to reverse the order remanding the case, as under
We address ETS‘s procedural claims first, exercising plenary review, as these claims raise only issues of law. We agree with the district court that it did not lose jurisdiction to award fees and costs when the clerk of the district court mailed a certified copy of the order of remand to the clerk of the Superior Court. While there is no doubt that under Hunt v. Acromed Corp., 961 F.2d at 1081-82, the district court should not have reconsidered the order of remand after the clerk of the district court sent the certified copy of the order to the clerk of the Superior Court, the principles underlying our opinion in that case are not applicable with respect to the fee application. In Trans Penn Wax v. McCandless, 50 F.3d at 225, we explained that the Hunt v. Acromed holding was predicated in part on “the need to establish a determinable jurisdictional event after which the state court can exercise control over the case without fear of further federal interference.” If the district court entertains a post-remand application for fees and costs, it does not interfere with or even affect the proceedings in the state court. Thus, we see no reason why a district court cannot entertain a request for attorney‘s fees and costs in a remanded case merely because the clerk of the district court has mailed a certified copy of the order of remand to the state court.
Of course, a holding that the divesting of jurisdiction by the mailing of a certified copy of the order of remand does not preclude the award of attorney‘s fees and costs is consistent with Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 110 S.Ct. 2447, which held that a district court could impose sanctions under
Even though Hunt v. Acromed does not bar the post-remand award of fees and costs, there understandably is support for ETS‘s argument that an award of attorney‘s fees under section 1447(c) must be included in the body of the order itself, since section 1447(c) states that an order remanding a case “may require payment of just costs and any actual expenses, including attorney‘s fees, incurred as a result of the removal.” See United Broadcasting Corp. v. Miami Tele-Communications, Inc., 140 F.R.D. 12, 14 (S.D. Fla. 1991) (“This court is of the opinion that the plain language of the statute controls and clearly provides that if the court is going to award costs and expenses, including attorneys’ fees pursuant to
Other courts, however, do not regard section 1447(c) itself as a bar to a post-remand award of fees and costs. In Moore v. Permanente, 981 F.2d 443, the court of appeals affirmed an order assessing attorney‘s fees against a defendant after the court remanded the matter. In the course of its opinion, the Moore court explained that: “[w]hile we have not addressed the specific question whether a district court retains jurisdiction to award costs and fees pursuant to section 1447(c) after remand, it is clear that an award of attorney‘s fees is a collateral matter over which a court normally retains jurisdiction even after being divested of jurisdiction on the merits.” Id. at 445.
In our view, section 1447(c), by providing that a court “may require payment” of costs and attorney‘s fees incurred as a result of the removal does not imply that the court cannot enter an order for payment of such costs and fees at some later time. In this regard, we observe that section 1447(c) provides that “[i]f at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded.” The duty of the district court to remand the case for lack of subject matter jurisdiction is not dependent on either party moving for a remand. Accordingly, while undoubtedly the appropriate practice for a district court which proposes
If the district court remanded the matter on its own motion, a conclusion that the order for remand must include any provision for costs and attorney‘s fees would deprive the plaintiff of the opportunity to seek to recover its fees and costs. While we recognize that in some cases those fees and costs would be limited to proceedings with respect to a motion to remand, so that the plaintiff would not have any costs and fees to recover in a case that the court remanded on its own motion, section 1447(c) does not provide that the court may require the defendant to pay only the plaintiff‘s costs and attorney‘s fees incurred in a motion to remand. Rather, section 1447(c) provides that the court may require payment of the costs and fees “incurred as a result of the removal.” Such costs and fees could include items distinct from those incurred on a motion to remand. Accordingly, though we acknowledge that sometimes language such as “may require” can be deemed mandatory, we find that this is not such a situation.
In fact, we think that Congress used the “may require” language not to direct that an order for payment of costs and fees must be made, if at all, in the order of remand, but to make clear that the district court has discretion whether to order such payment. Our conclusion is supported by the courts’ recognition that when remanding a case they are not required to order the payment of costs and fees. See, e.g., Moore v. Permanente, 981 F.2d at 447. So understood the “may require” language in section 1447(c) is not temporal and does not govern when a motion for costs and attorney‘s fees can be made or when an order for the payment of costs and fees can be entered.
We realize that it might be argued that by not limiting entry of an order for fees and costs to the time the order for remand is entered we would leave an open-ended period for a party, usually the plaintiff, to move for fees and costs after a remand. Such a fear, however, would not be well grounded.
ETS also argues that if section 1447(c) was not applicable in determining when Mints had to make his fee application, then Rule 54(d)(2)(B) was applicable, and under that rule Mints‘s motion for fees and costs was late. This argument certainly seems to be correct because Mints filed his motion on December 8, 1995, which was more than 14 days after November 9, 1995, when the district court entered its order denying reconsideration of its order of remand. Thus, even if we measure the 14 days from the denial of the motion for reconsideration rather than from the entry of the order of remand, Mints‘s motion was untimely.
Mints responds that ETS did not argue in the district court that Mints‘s motion was untimely under Rule 54(d)(2)(B). He thus contends that we should not entertain the argument, as ETS is raising the issue on appeal for the first time. We have examined the brief ETS filed in the district court on Mints‘s motion and have concluded that Mints‘s assertion is accurate. ETS did not cite Rule 54(d)(2)(B) in that brief. Rather, in the district court brief it made the procedural arguments that (1) section 1447(c) requires that an order for costs and attorney‘s fees must be included in the order of remand and (2) that once the clerk sent the certified copy of the order of remand to the Superior Court the district court lost jurisdiction.
We see no reason to entertain ETS‘s Rule 54(d)(2)(B) argument on appeal. Under
We now address the merits of ETS‘s appeal. We review the award of counsel fees on an abuse of discretion standard. See Deisler v. McCormack Aggregates Co., 54 F.3d 1074, 1087 (3d Cir. 1995); Moore v. Permanente, 981 F.2d at 447 (abuse of discretion standard used in fee award under section 1447(c)). The district court in its opinion granting fees and costs indicated that prior to 1988, section 1447(c) provided that the court could order payment of costs and fees on remanding a case
Like the district court, we see no need to establish definitive criteria against which costs and attorney‘s fee applications under section 1447(c) must be judged. ETS argues that it did not remove the case in bad faith. While we will assume that this contention is correct, this assumption does not control our result, as we agree with the other courts of appeals which have held that the district court may require the payment of fees and costs by a party which removed a case which the court then remanded, even though the party removing the case did not act in bad faith. See Morris v. Bridgestone/Firestone, Inc., 985 F.2d 238, 240 (6th Cir. 1993); Moore v. Permanente, 981 F.2d at 447; Morgan Guar. Trust Co. v. Republic of Palau, 971 F.2d at 923-24. Rather, a district court has broad discretion and may be flexible in determining whether to require the payment of fees under section 1447(c). See Moore v. Permanente, 981 F.2d at 449; Morgan Guar. Trust Co. v. Republic of Palau, 971 F.2d at 924.
We note that in Moore v. Permanente, 981 F.2d at 447, the court indicated that even though a remand order is unreviewable under section 1447(d), “some evaluation of the merits of the remand order is necessary to review an award of attorney‘s fees, regardless of the test applied.” While we do not go so far as to hold that an evaluation of the merits of a remand order is always necessary to review an award of fees under section 1447(c), we agree that section 1447(d), in precluding an appeal from an order of remand for a reason provided for remand in section 1447(c), does not preclude all evaluation of a remand order. Section 1447(d) is intended to avoid the delays attendant upon appeal from an order of remand. See Liberty Mut. Ins. Co. v. Ward Trucking Corp., 48 F.3d 742, 745 (3d Cir. 1995). An evaluation of an order of remand in the context of the review of an award of fees under section 1447(c) does not raise the concerns regarding delay that section 1447(d) seeks to avoid, as that evaluation will not interfere with the proceedings in the state court. We also point out that a court of appeals might be reluctant to uphold an award of fees under section 1447(c) if it concluded that the district court erred in remanding the case for a reason enumerated in section 1447(c) even though it could not reverse the order of remand.
In some cases there are very difficult issues raised when a party removes a case filed in a state court to the district court and another party moves to remand. See, e.g., Goepel v. National Postal Mail Handlers Union, 36 F.3d 306 (3d Cir. 1994), cert. denied, 115 S.Ct. 1691 (1995). But this case is not difficult as there was no colorable basis for the removal. Mints brought this action under state law. He made no claim that ETS‘s actions in terminating him and in failing to rehire him
While this case is not the vehicle in which to set forth in detail when state causes of action will be deemed completely preempted by ERISA so that regardless of how the plaintiff pleads them they are of federal character and thus arise under federal law, we do state that this case is not even close to being in that category. See Dukes v. U.S. Healthcare, Inc., 57 F.3d at 356-61. Thus, the assertion in the removal petition that the district court had jurisdiction was, if not frivolous, at best insubstantial. In the circumstances, we cannot possibly conclude that the district court abused its discretion in ordering ETS to pay Mints‘s attorney‘s fees and costs with respect to the motion to remand and for reconsideration.
Mints has made a motion under
The order of January 5, 1996, will be affirmed.