Vision Bank v. Bama Bayou, LLC et al

Filing 66

ORDER denying 34 Motion for Attorney Fees as set out. Signed by Judge Kristi K. DuBose on 5/7/2012. (cmj)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
VISION BANK,

)
)
Plaintiff,
)
)
vs.
)
)
BAMA BAYOU, LLC, et al,
)
)
Defendants / Counterclaim Plaintiffs )
)
vs.
)
)
VISION BANK, et al,
)
)
Counterclaim Defendants
)

CIVIL ACTION NO. 11-0568-KD-M

ORDER
This action is before the Court on the motion for attorney’s fees and costs filed by the
Marine Park parties wherein they move the Court to award their just costs and actual expenses
including attorney’s fees resulting from the FDIC’s removal of this action (doc. 34), the Federal
Deposit Insurance Corporation’s preliminary opposition to the motion for attorneys fees and
costs (doc. 48), the submission of fee claim documentation filed by the Marine Park parties (doc.
55), and the FDIC’s response (doc. 63). Upon consideration and for the reasons set forth herein,
the motion for attorney’s fees and costs is DENIED.
Statement of the law
Pursuant to 28 U.S.C. § 1447(c), an order of remand “may require payment of just costs
and any actual expenses, including attorney fees, incurred as a result of the removal.” In order to
determine whether to award attorneys fees, the Court “should recognize the desire to deter
removals sought for the purpose of prolonging litigation and imposing costs on the opposing
party, while not undermining Congress' basic decision to afford defendants a right to remove as a
general matter, when the statutory criteria are satisfied.” Martin v. Franklin Capital Corp., 546

U.S. 132, 140, 126 S.Ct. 704, 163 L.Ed.2d 547 (2005). “In light of these large objectives, [] the
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.” Id. at 140-141, 126 S.Ct. at 711 (2005) (internal
citations and quotations omitted).
In Martin, the Supreme Court rejected “the notion that the statute created a presumption
in favor of awarding fees, the Court explained that § 1447(c) only authorized an award of costs
and fees when such an award was just.” Bauknight v. Monroe County, Fla., 446 F.3d 1327, 1329
(11th Cir.2006) citing Martin, at 709-10. “The reasonableness standard was ultimately the result
of balancing ‘the desire to deter removals sought for the purpose of prolonging litigation and
imposing costs on the opposing party, while not undermining Congress' basic decision to afford
defendants a right to remove as a general matter, when the statutory criteria are satisfied.’”
Bauknight, 446 F. 2d at 1329 citing Martin, at 711.
Relevant background in the state court
The FDIC explains that a motion to join the FDIC as an indispensible party was filed in
the state court but the state court judge advised the parties that the court would hear and rule on
the claim for which the FDIC wished to intervene - whether the foreclosure transactions were
unconscionable - before ruling on the motion to join the FDIC. Fearing serious impairment to its
rights, the FDIC filed a motion to intervene. The state court did not rule on the motion to join or
the motion to intervene and the FDIC removed the action on the eve of the hearing.
Discussion
Marine Park argues that the FDIC lacked an objectively reasonable basis for seeking
removal because at the time of removal, it had not been substituted as a party in the state court
case and there was no bank party for which the FDIC could be substituted. (Doc. 34). In
response, the FDIC explains that the present removal was based on the FDIC’s motion to
2

intervene and that a motion to substitute had been the basis in 2010. The FDIC also points out
that it removed this action based on a number of cases wherein the FDIC was considered a party
for removal purposes when it filed a motion to intervene “and when the state court refused to
rule on that motion.” (Doc. 48, p. 6). The FDIC argues that its basis for removal - that it became
a party to the state court litigation when it filed the motion to intervene - cannot be held
unreasonable where there is no controlling authority in the Eleventh Circuit and conflicts among
other circuits as to the “question of when the FDIC becomes a party for purposes of removal
upon filing a motion to intervene.” (Doc. 48, p. 9).
The absence of controlling authority in this Circuit and the conflicts among the circuits
which have addressed this issue or similar procedural issues related to the FDIC’s statutory right
of removal, leads the Court to conclude that the FDIC’s removal did not lack an objectively
reasonable basis. Further, as the FDIC points out, it was “testing the bounds of the law with
regard to the FDIC’s removal powers under 12 U.S.C. § 1819(b)(2)(B)”. (Doc. 48, p. 12).
Accordingly, the motion for attorneys fees and costs is DENIED.
DONE this the 7th day of May, 2012.
s/ Kristi K. DuBose
KRISTI K. DuBOSE
UNITED STATES DISTRICT JUDGE

3