D.H. et al v. Nobel Learning Communities, Inc. et al

Filing 11

ORDER denying 8 Motion for Attorney's Fees. This order disposes of allpending issues, and the Clerk shall close the docket. Signed by Judge Larry Alan Burns on 12/16/15. (kas)

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UNITED STATES DISTRICT COURT

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SOUTHERN DISTRICT OF CALIFORNIA

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D.H., a minor, by his guardian ad litem
A.H., et al.,

CASE NO. 15cv460-LAB (KSC)

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ORDER DENYING MOTION FOR
ATTORNEY’S FEES

Plaintiffs,
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vs.
NOBEL LEARNING COMMUNITIES,
INC., et al.,

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Defendants.
This action, originally filed in state court, concerned Defendants’ disenrollment of a

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student diagnosed with Attention Deficit Hyperactivity Disorder, and sought the student’s

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reinstatement as soon as possible. On the eve of a scheduled hearing in state court,

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Defendants removed this action. Plaintiffs quickly filed a motion to expedite their hearing for

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a temporary restraining order, arguing that the student should be allowed to finish the eighth

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grade, and pointing out that the school year ended on June 10, 2015, so time was of the

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essence.

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Because it appeared the Court lacked jurisdiction, it issued an order to show cause.

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Plaintiffs then moved for remand, emphasizing again that time was of the essence. They

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also requested for an award of attorney’s fees, for improper removal. Defendants responded

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by arguing that the Court could exercise both federal question and diversity jurisdiction. The

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fee request argues that Defendants removed for the improper purpose of delaying a hearing

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scheduled before the state court.

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The Court on March 17 remanded the case, but retained jurisdiction over the fee

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request (Docket no. 8) and ordered Defendants to respond. The issue is now fully briefed

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and ready for decision.

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Legal Standards

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Unwarranted removals cause needless delays, impose costs on opposing parties, and

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waste judicial resources.

Martin v. Franklin Capital Corp., 546 U.S. 132, 140 (2005). A

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district court may, in its discretion, “require payment of just costs and any actual expenses,

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including attorney fees, incurred as a result of [improper] removal.”• 28 U.S.C. § 1447(c).

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“Absent unusual circumstances, courts may award attorney's fees under § 1447(c) only

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where the removing party lacked an objectively reasonable basis for seeking removal.”

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Martin, 546 U.S. at 141.

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The fact that an argument does not prevail does not mean it is objectively

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unreasonable; “removal is not objectively unreasonable solely because the removing party's

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arguments lack merit, or else attorney's fees would always be awarded whenever remand

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is granted.” Lussier v. Dollar Tree Stores, Inc., 518 F.3d 1062, 1065 (9th Cir. 2008). Where

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precedent clearly forecloses the basis for removal, removal is objectively unreasonable. Id.

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at 1066 (citing Lott v. Pfizer, Inc., 492 F.3d 789 (7th Cir. 2007)). But where the law was not

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so clear as to be beyond reasonable debate, removal is not objectively unreasonable. Id.

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(citing with approval Lott’s analogy to qualified immunity analysis).

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Discussion

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In opposition to the fee motion, Defendants argue that federal question did exist. But

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for reasons explained in the remand order, it clearly did not. This was an ordinary contract

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dispute, and state law created all of Plaintiffs’ rights of actions. The fact that the contract

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had some relationship to federal law was of no import. This is well established law, and the

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Court’s order cited multiple cases supporting its determination. If this were the only basis

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for removal, a fee award would be appropriate.

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Diversity was a much closer call. There was no dispute the parties were diverse; the

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only question was whether the amount in controversy was met. The complaint sought
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around $31,500 in damages, but included requests for other damages and relief.

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Defendants, relying on verdicts and awards in other cases, arrived at what they considered

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a conservative estimate of the value of the other relief sought, which they said pushed the

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value of the case to $76,500.

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The Court reviewed the awards Defendants relied on, and found the cases not

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analogous, and Defendants’ estimates too speculative.

By a preponderance of the

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evidence, the Court therefore determined Defendants had failed to meet their burden of

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showing that the amount in controversy exceeded $75,000.

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While the Court disagreed with Defendants’ analysis, the basis on which they argued

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for a higher amount in controversy was not so clearly wrong as to be objectively

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unreasonable. See Lussier, 518 F.3d at 1066. In particular, the likely amount of an

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emotional damages award was inherently nebulous, since such damages are frequently

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difficult to predict, and closely analogous cases are often difficult to find. See Brantley v.

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Boyd, 2013 WL 3766911 (N.D. Cal., July 16, 2013) (noting the “difficulty of ascertaining

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damages resulting from emotional distress, in part, due to its subjective nature and the

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uniqueness of each claim”). While the Court found by a preponderance that the amount in

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controversy was not met, there was still some evidence to support Defendants’ position.

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Conclusion and Order

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A fee award is discretionary, and should serve the ends of justice. Martin, 546 U.S.

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at 139. While the timing of the removal gives reason to suspect Defendants’ motives and

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there was clearly no federal question jurisdiction, the Court finds the removal on the basis

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of diversity was not objectively unreasonable. The Court exercises its discretion in this case

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not to award fees, and the fee request (Docket no. 8) is DENIED. This order disposes of all

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pending issues, and the Clerk shall close the docket.

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IT IS SO ORDERED.
DATED: December 16, 2015

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HONORABLE LARRY ALAN BURNS
United States District Judge
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