Gulf Coast Minerals, LLC et al v. Valentine Ventures, LLC et al

Filing 6

Order re: 2 MOTION to Remand and for Award of Attorney's Fees for Improvident Removal filed by Gulf Coast Minerals, LLC. Plaintiff is ordered by 10/31/2014 to file materials in support of its request for attorney's fees. Defendants' Response is due by 11/7/2014. Signed by Chief Judge William H. Steele on 10/21/2014. (tgw)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
GULF COAST MINERAL, LLC,
Plaintiff,
v.
VALENTINE VENTURES, LLC, et al.,
Defendants.

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) CIVIL ACTION 14-0386-WS-N
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ORDER
This matter is before the Court on the motion of the plaintiff1 to remand and
for an award of attorney’s fees. (Doc. 2). The parties have filed briefs and/or
evidentiary materials in support of their respective positions, (Docs. 2, 4, 5), and
the motion is ripe for resolution.
The defendants removed on the basis of federal question jurisdiction. (Doc.
1).2 The four-count complaint asserts claims for breach of contract, promissory
fraud, accounting, and for declaratory judgment under Alabama law. (Doc. 1-1).
It is obvious that none of these claims is brought under federal law, and the
defendants do not argue otherwise. Instead, they assert that the plaintiff, in the
course of the business relationship underlying the complaint, committed RICO
violations. (Doc. 1 at 1-3).

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The style of the motion to remand lists five plaintiffs, but the body of the motion
states it is brought by the single plaintiff listed in the style of this order. A review of the
notice of removal and associated documents indicates there is but one plaintiff, with the
individuals listed in the style of the motion to remand being “counter-defendants” to the
defendants’ “counter-complaint.” (Docs. 1-1, 1-3).
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The defendants do not assert diversity jurisdiction, and it appears from the
complaint that complete diversity does not exist. (Doc. 1-1 at 1).

As relevant to these proceedings, a cause of action may arise under federal
law in any of three situations: (1) federal law “‘creates the plaintiff’s cause of
action,’” Franchise Tax Board v. Construction Laborers Vacation Trust, 463 U.S.
at 8-9 (1983) (quoting American Well Works Co. v. Layne & Bowler Co., 241 U.S.
257, 260 (1916)); (2) “some substantial, disputed question of federal law is a
necessary element of one of the well-pleaded state claims,” id. at 13; or (3) “a
federal cause of action completely preempts a state cause of action.” Id. at 24.
The first and third of these possibilities plainly have no application here. Thus, the
defendants must rely on the second.
A question of federal law is not a “necessary element” of a state claim
unless a “well-pleaded complaint establishe[s] that [the plaintiff’s] right to relief
under state law requires resolution of a substantial question of federal law.”
Franchise Tax Board, 463 U.S. at 13. If state law “establishes a set of conditions,
without reference to federal law, under which” the plaintiff may recover, such that
“federal law becomes relevant only by way of a defense to an obligation created
entirely by state law,” the federal question is not a “necessary element” of the state
claim. Id.
The plaintiff cites the well-pleaded complaint rule, (Doc. 2 at 20-23), and
the defendants ignore it. Instead, they confirm that their argument is nothing more
than that the complaint “alleges state causes of action in which they [the plaintiff
and others] are seeking financial benefits by committing violations of the RICO
Act.” (Doc. 4 at 7). That may furnish a basis for a counterclaim or even a
defense, but it cannot possibly show that Alabama law requires a plaintiff to
prove, as an element of a claim for fraud or breach of contract, or to obtain an
accounting or declaratory relief, that the plaintiff has not violated RICO. It is thus
clear that this case must be remanded.
“An order remanding the case may require payment of just costs and any
actual expenses, including attorney fees, incurred as a result of the removal.” 28
U.S.C. § 1447(c). “Absent unusual circumstances, courts may award attorney’s
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fees under § 1447(c) only where the removing party lacked an objectively
reasonable basis for seeking removal.” Martin v. Franklin Capital Corp., 546
U.S. 132, 141 (2005). The grant or denial of fees is committed to the discretion of
the district court. E.g., Bauknight v. Monroe County, 446 F.3d 1327, 1329 (11th
Cir. 2006). The defendants plainly lacked any objectively reasonable basis for
seeking removal, since even the most cursory review would have revealed that
removal was improper based on their assertion of RICO violations by the plaintiff.
The plaintiff is thus entitled to an award of fees.
The plaintiff suggests that the Court remand the action but retain
jurisdiction to determine a reasonable fee award. (Doc. 2 at 27). The Court
declines the suggestion. The plaintiff is ordered to file and serve, on or before
October 31, 2014, all materials on which it relies in support of its request for
attorney’s fees. The defendants are ordered to file and serve any response on or
before November 7, 2014. The Court will take the matter under submission on
November 7, 2014.
DONE and ORDERED this 21st day of October, 2014.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE

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