Access Information Management of Hawaii, LLC. et al v. Shred-It America, Inc. et al

Filing 45

FINDINGS AND RECOMMENDATION TO DENY PLAINTIFFS ACCESS INFORMATION MANAGEMENT OF HAWAII, LLC, SIH LLC, dba SHRED-IT HAWAII, and EDWARD MACNAUGHTON'S MOTION FOR ATTORNEY FEES AND COSTS re: 37 . Signed by JUDGE RICHARD L. PUGLISI on 5/18/2 011. (afc) CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on the date of this docket entry

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII
ACCESS INFORMATION MANAGEMENT
OF HAWAII, LLC, SIH LLC, dba
SHRED-IT HAWAII, and EDWARD
MACNAUGHTON,

)
)
)
)
)
)
Plaintiffs,
)
)
vs.
)
)
)
SHRED-IT AMERICA, INC., DOE
)
DEFENDANTS 1-5,
)
)
Defendants.
______________________________ )

CIVIL NO. 10-00621 DAE-RLP
FINDINGS AND RECOMMENDATION TO
DENY PLAINTIFFS ACCESS
INFORMATION MANAGEMENT OF
HAWAII, LLC, SIH LLC, dba
SHRED-IT HAWAII, and EDWARD
MACNAUGHTON’S MOTION FOR
ATTORNEY FEES AND COSTS

FINDINGS AND RECOMMENDATION TO DENY PLAINTIFFS ACCESS INFORMATION
MANAGEMENT OF HAWAII, LLC, SIH LLC, dba SHRED-IT HAWAII, and
EDWARD MACNAUGHTON’S MOTION FOR ATTORNEY FEES AND COSTS1
Before the Court is Plaintiffs Access Information
Management of Hawaii, LLC (“Access”), SIH LLC, dba Shred-It
Hawaii (“SIH”), and Edward MacNaughton’s (“MacNaughton”)
(collectively “Plaintiffs”) Motion for Attorney Fees and Costs
(“Motion”), filed herein on January 10, 2011.

Plaintiffs request

an award of $10,184.00 in attorneys’ fees (plus $424.87 in

1

Within seventeen (17) days after a party is served with a
copy of the Findings and Recommendation, that party may, pursuant
to 28 U.S.C. § 636(b)(1)(B), LR 74.2 of the Local Rules of
Practice for the United States District Court for the District of
Hawaii, and Rule 6(d) of the Federal Rules of Civil Procedure,
file written objections in the United States District Court. A
party must file any objections within the seventeen-day period
allowed if that party wants to have appellate review of the
Findings and Recommendation. If no objections are filed, no
appellate review will be allowed.

general excise tax) and $42.00 in costs for a total of $10,650.87
incurred in remanding this action back to the First Circuit
Court, State of Hawaii, after Defendant Shred-It America’s
(“SIA”) improper removal to this Court.

SIA filed its memorandum

in opposition to Plaintiffs’ Motion on March 3, 2011
(“Opposition”), and Plaintiffs filed their reply on March 10,
2011.
The Court finds this matter suitable for disposition
without a hearing pursuant to LR 7.2(d) of the Local Rules of
Practice for the United States District Court for the District of
Hawaii.

Based on the following, and after careful consideration

of the Motion, the supporting memoranda and declarations attached
thereto, and the record established in this action, the Court
FINDS AND RECOMMENDS that Plaintiffs’ Motion be DENIED.
BACKGROUND
This action is one of four related cases involving
similar parties and issues filed in the District of Hawaii.2

On

September 22, 2010, Access and SIH filed suit in Hawaii state
court against SIA for declaratory and injunctive relief, seeking
a determination that the Franchise Agreement between SIA and SIH

2

The parties and the Court are intimately familiar with
the factual and procedural background of this case. Accordingly,
the Court will only discuss those facts that are relevant to the
determination of the instant Motion.
2

(through MacNaughton) was void as violating Hawaii law.3

See

Access Info. Mgmt. of Haw., LLC v. Shred-It Am., Inc., Civil No.
10-1-2028-09 PWB, First Circuit Court, State of Hawaii.

Access

and SIH subsequently filed a First Amended Complaint, joining
MacNaughton as a plaintiff and adding additional state court
claims on October 12, 2010.
action to this Court.

On October 20, 2010, SIA removed the

See Access Info. Mgmt. of Haw., LLC v.

Shred-It Am., Inc., Civil No. 10-00614 DAE-KSC, United States
District Court, District of Hawaii.

Access, SIH, and MacNaughton

dismissed the suit without prejudice the next day.
Meanwhile, SIA filed suit in this Court against
MacNaughton, SIH, and Access on September 24, 2010, alleging
inter alia that SIH and MacNaughton breached the Franchise
Agreement by selling business assets to Access, an SIA
competitor, misappropriating trade secrets, and infringing SIA’s
trademarks.

See Shred-It Am., Inc. v. MacNaughton, Civil No. 10-

00547 DAE-KSC, United States District Court, District of Hawaii.
Subsequently, Access, SIH, and MacNaughton filed two
separate actions against SIA in Hawaii state court on October 21,
2010, which are particularly relevant to the instant Motion.
Access filed the first action against SIA, alleging state law

3

On July 27, 1998, SIA entered into a written Franchise
Agreement with MacNaughton, as trustee for the yet-to-be-formed
SIH, which granted MacNaughton the exclusive right to operate a
Shred-It franchise in the State of Hawaii for a period of ten
years.
3

claims for unfair methods of competition and misconduct.

See

Access Info. Mgmt. of Haw., LLC v. Shred-It Am., Inc., Civil No.
10-1-2259-10 KKS, First Circuit Court, State of Hawaii.

SIA

removed the action to federal court on October 25, 2010.

See

Access Info. Mgmt. of Haw., LLC v. Shred-It Am., Inc., Civil No.
10-00622 JMS-KSC, United States District Court, District of
Hawaii.

On October 27, 2010, Access filed a Motion for Temporary

Restraining Order to Halt Deceptive and Unfair Practices or, in
the Alternative, Remand.

United States District Judge J. Michael

Seabright found that there was no basis for federal jurisdiction
over the suit, and remanded it back to Hawaii state court on
November 2, 2010.
Access, SIH, and MacNaughton filed the second action
against SIA, seeking to enjoin SIA’s efforts to force arbitration
under the Franchise Agreement on the basis that the agreement was
void.

See Access Info. Mgmt. of Haw., LLC v. Shred-It Am., Inc.,

10-1-2260-10 PWB, First Circuit Court, State of Hawaii.

SIA also

removed this action to federal court on October 25, 2010.

See

Access Info. Mgmt. of Haw., LLC v. Shred-It Am., Inc., Civil No.
10-00621 DAE-LEK, United States District Court, District of
Hawaii.

On October 27, 2010, Access, SIH, and MacNaughton filed

an Emergency Motion to Remand, or in the Alternative, Motion for
Preliminary Injunction to Enjoin Arbitration.

United States

District Judge David Alan Ezra similarly found that the action

4

was improperly removed to federal court, and remanded it back to
Hawaii state court on December 27, 2010.
ANALYSIS
A.

Legal Standard for Determining Entitlement to Removal
Expenses
Plaintiffs seek attorneys’ fees and costs incurred as a

result of SIA’s improper removal of the instant case to federal
court.

When a federal court remands a case back to state court,

it “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); Garner v. UICI, 508 F.3d 559, 561 (9th Cir.
2007).

By enacting the removal statute, Congress did not intend

to make fee shifting automatic.

Martin v. Franklin Capital

Corp., 546 U.S. 132, 140 (2005).

Rather, the United States

Supreme Court has held that the standard for awarding fees turns
on the reasonableness of the removal: “Absent unusual
circumstances, the court 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 141.
In applying this rule, the Ninth Circuit cautioned that
“removal is not objectively unreasonable solely because the
removing party’s arguments lack merit, or else attorney’s fees
would always be awarded whenever remand is granted.”
5

Lussier v.

Dollar Tree Stores, Inc., 518 F.3d 1062, 1065 (9th Cir. 2008).
Instead, the objective reasonableness of the removal depends on
the clarity of the applicable case law and whether such law
“clearly foreclosed” the defendant’s basis for removal.

Id. at

1066-67 (citing Lott v. Pfizer, Inc., 492 F.3d 789, 793 (7th Cir.
2007)).

See also Garner, 508 F.3d at 562 (holding that removal

costs were not warranted where a reasonable litigant in position
of the removing party “could have concluded” that federal court
was the proper forum).
The district court retains discretion to determine
whether a given case presents unusual circumstances that warrant
a departure from this rule.

Martin, 546 U.S. at 141.

When a

court exercises its discretion in this manner, however, its
reasons for departing from the general rule should be “faithful
to the purposes” of awarding fees under § 1447(c).

Id. (quoting

Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19 (1994) (listing
nonexclusive factors to guide district courts’ discretion in
awarding attorneys’ fees as “frivolousness, motivation, objective
unreasonableness (both in the factual and in the legal components
of the case) and the need in particular circumstances to advance
considerations of compensation and deterrence.”)).

The Martin

Court also instructed:
The appropriate test for awarding fees under §
1447(c) 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
6

decision to afford defendants a right to
remove as a general matter, when the statutory
criteria are satisfied.
Id. at 140.
B.

Relevant Law Did Not Clearly Foreclose SIA’s Basis for
Removal
Plaintiffs first argue that they are entitled to an

award of removal expenses because SIA lacked an objectively
reasonable basis for removing this matter to federal court.
SIA’s assertion of removal jurisdiction stemmed from
the Franchise Agreement that SIA, a Nevada corporation with its
then principal place of business in California, and MacNaughton,
in trust for what later became SIH, entered into in July 1998.
See Removal Notice ¶ 8.

The Franchise Agreement provides that,

to the extent it is not governed by the Lanham Act, it is to be
interpreted according to California law, and that any action must
be brought in Orange County, California.
“A”, Franchise Agreement at 30.

See Removal Notice Ex.

The Franchise Agreement also

contains a provision requiring the parties to submit all disputes
to arbitration to be determined under the rules of the American
Arbitration Association.

Id. at 30-31.

SIA contended that this arbitration provision “falls
under” the Convention on the Recognition and Enforcement of
Foreign Arbitral Awards (the “New York Convention”), such that
the district court had original jurisdiction under 9 U.S.C. § 203

7

and federal question jurisdiction pursuant to 28 U.S.C. § 1331.
See Removal Notice ¶ 8.

Section 203 states that “[a]n action or

proceeding falling under the [New York Convention] shall be
deemed to arise under the laws and treaties of the United States.
28 U.S.C. § 203.

When such an action is initially filed in state

court, the action can be removed to federal court, pursuant to
Section 205, if (1) the arbitration agreement “falls under” the
New York Convention; and (2) the parties’ dispute “relates to”
the arbitration agreement.

Beiser v. Weyler, 284 F.3d 665, 666

(5th Cir. 2002); Acosta v. Master Maint. & Constr., Inc., 452
F.3d 373, 376 (5th Cir. 2006).
Section 202 outlines the circumstances under which an
action or proceeding “falls under” the New York Convention.

This

provision requires the following four factors: (1) an agreement
in writing within the meaning of the New York Convention; (2) the
agreement provides for arbitration within a territory of a
signatory of the New York Convention; (3) the agreement arises
out of a legal relationship, whether contractual or not, which is
considered commercial; and (4) a party to the agreement is not an
American citizen, or the commercial relationship at issue
involves property located abroad, envisages performance or
enforcement abroad, or has some reasonable relation with one or
more foreign states.

Balen v. Holland Am. Line, Inc., 583 F.3d

8

647, 654-55 (9th Cir. 2009) (quoting Bautista v. Star Cruises,
396 F.3d 1289, 1294 n.7 (11th Cir. 2005)).
The parties in the instant action did not dispute that
the first three factors were met or that both SIA and SIH are
United States companies.

SIA also did not argue that its

relationship with SIH involves property abroad or envisages
performance and/or enforcement abroad; rather, SIA only contended
that its relationship with SIH had “some other reasonable
relation” to Canada.
The focus of whether a commercial relationship has a
reasonable relation to a foreign state is not on the Franchise
Agreement alone, but on the “legal relationship in which the
arbitration agreement or arbitral award arises.”

Ensco Offshore

Co. v. Titan Marine LLC, 370 F. Supp. 2d 594, 601 (S.D. Tex.
2005).

Courts have also characterized this factor as requiring

the presence of an “important foreign element.”

See

Freudensprung v. Offshore Technical Servs., Inc., 379 F.2d 327,
340 (5th Cir. 2004); Jones v. Sea Tow Servs. Freeport NY Inc., 30
F.3d 360, 366 (2d Cir. 1994).

Indeed, if the parties to the

agreement are both United States citizens, “their agreement to
arbitrate falls under the New York Convention only if significant
extra-domestic elements animate their relationship and enhance
the concerns favoring recognition of foreign arbitration

9

agreements.”

Matabang v. Carnival Corp., 630 F. Supp. 2d 1361,

1363-64 (S.D. Fla. 2009).
In its opposition to remand, SIA argued that the
Franchise Agreement and the arbitration provision therein had an
“important foreign element” because of the following specific
connections to Canada: (1) the Franchise Agreement licenses
proprietary marks that are registered and owned by SIA’s Canadian
parent corporation; (2) all payments under the Franchise
Agreement are made directly to SIA’s corporate office in Canada;
(3) all shredding trucks required to be purchased under the
Franchise Agreement are manufactured and sold in Canada; (4) all
reports under the Franchise Agreement are submitted to SIA’s
corporate office in Canada; (5) all SIA employees who administer
the Franchise Agreement are based at SIA’s corporate office in
Canada; (6) all decisions related to the Franchise Agreement are
made at SIA’s corporate office in Canada; (7) all records related
to the Franchise Agreement are kept and maintained at SIA’s
corporate office in Canada; (8) SIA regularly conducts
conventions, training, conferences, and other meetings from its
corporate office in Canada; and (9) SIA administers the Ad Fund
required by the Franchise Agreement in Canada.

SIA also provided

a laundry list of “services, support and activities” offered by
SIA under the Franchise Agreement that are generated by SIA’s
corporate office in Canada.

10

Judge Ezra found that the facts presented by SIA in
this case were similar to those on which other courts have found
no reasonable relation to a foreign state.

See, e.g., Matabang,

630 F. Supp. 2d at 1367 (no important foreign element to
employment relationship where employer cruise ship flew a
Bahamian flag, spent nights in the Bahamas, and was at sea five
days per week during the employee’s employment); Wilson v.
Lignotock U.S.A., Inc., 709 F. Supp. 797, 799 (E.D. Mich. 1989)
(employment relationship was not “reasonably related” to Europe
where employee’s duty was to sell products manufactured abroad in
the U.S.); Jones, 30 F.3d at 366 (no important foreign element
when U.S. citizens hired a U.S. company to rescue their yacht
from waters off of Long Island and only purported foreign element
in contract was a clause mandating arbitration in England under
English law); Ensco, 370 F. Supp. 2d at 599-601 (no reasonable
connection between the parties’ commercial relationship and a
foreign state where contract involved two U.S. corporations and
concerned a drilling rig in the Gulf of Mexico).

Compare with

Freudensprung, 379 F.3d at 341 (agreement between two U.S.
citizens contemplating performance in West Africa had a
reasonable connection between the parties’ commercial
relationship and a foreign state that was independent of the
arbitral clause itself); Lander Co., Inc. v. MMP Invs., Inc., 107
F3d 476, 482 (7th Cir. 1997) (parties’ relationship involved

11

performance abroad or had some other reasonable relation with a
foreign country where contract concerned distribution of products
in Poland).
In light of the above case law and the facts of the
instant action, Judge Ezra held that any connection SIH has to
Canada “result solely from [SIA’s] unilateral decision to perform
its obligations under the Franchise Agreement in that country.”
Ezra Order at 25.

Judge Ezra reasoned:

The Franchise Agreement itself does not
provide
any
evidence
that
the
parties
contemplated [SIA] would conduct its business
such that the support required under the
Franchise Agreement would be rendered in
Canada.
Furthermore, at the time that the
parties signed the Franchise Agreement, [SIA]
was based in California, making it difficult
for the parties to predict exactly how much
activity would take place in Canada. Reduced
to its terms, the Franchise Agreement was
executed between two American companies,
granted a franchise to be operated only within
the State of Hawaii, and enumerated certain
duties required of the franchisor that would
benefit the Hawaii franchise. [SIA] cannot
unilaterally insert an “important foreign
element” into the Franchise Agreement after
the
fact
by
deciding
to
perform
its
obligations under the agreement in Canada.
Id. at 25-26.

Therefore, on balance, the Court concluded that

SIA’s relationship with SIH, as embodied in the Franchise
Agreement, does not involve a “reasonable relation” with Canada
to warrant a finding of an “important foreign element” in this
case.

Id. at 26.

Accordingly, the Court ultimately determined

12

that the Franchise Agreement does not “fall under” the New York
Convention for removal purposes.

Id.

Notwithstanding Judge Ezra’s conclusion that SIA’s
arguments for removal lacked merit, in order to determine whether
Plaintiffs are entitled to removal expenses, this Court must
decide whether SIA’s basis for removal was objectively
reasonable.

See Martin, 546 U.S. at 141.

As previously stated,

the Ninth Circuit has interpreted this standard to mean that a
plaintiff is entitled to removal expenses only where relevant
case law “clearly foreclosed” the defendant’s basis for removal.
See Lussier, 578 F.3d at 1066-67 (citing Lott, 492 F.3d at 793).
After careful consideration of the parties’ submissions
in support of and in opposition to removal, the Court finds that
SIA had an objectively reasonable basis for removing the instant
case.

While the Court disagrees that the fact that “the combined

record developed on the removal petition, motions for remand, and
the two Court Orders total 998 pages” necessarily “demonstrates”
the objectively reasonable basis for removal, as SIA asserts, the
Court agrees that SIA’s removal was based upon a “complex,
infrequently cited provision of the Federal Arbitration Act
governing disputes that fall under the [New York Convention].”
See Opposition at 4-5; Kitazato v. Black Diamond Hospitality
Invs., LLC, Civil No. 09-00271 DAE-LEK, 2009 WL 3824851, at *6
(D.Haw. Nov. 13, 2009) (overruling the Magistrate Judge’s

13

recommendation to award attorneys’ fees for improper removal in
part due to the complexity of the statute).
Moreover, the Court cannot conclude that relevant case
law “clearly foreclosed” SIA’s basis for removal.

In particular,

SIH failed to cite, and indeed the Court did not identify, any
controlling precedent from either the United States Supreme Court
or the Ninth Circuit that clearly foreclosed SIA’s argument that
its relationship with SIH, as outlined in the Franchise
Agreement, created a “reasonable relation” with Canada such that
an “important foreign element” existed in this case.

Rather,

Judge Ezra and SIH relied exclusively on non-binding, persuasive
authority from other circuits regarding this dispositive issue.
Notably, however, SIA cited other similarly relevant persuasive
case law upon which SIA and Judge Ezra “could have concluded”
that federal jurisdiction existed.

See Garner, 508 F.3d at 562.

Accordingly, the Court finds that SIA had an objectively
reasonable basis for bringing its removal petition, and
Plaintiffs are not entitled to removal expenses on this ground.
C.

SIA’s Continued Opposition to Remand After Judge Seabright
Determined that Civil No. 10-00622 Was Improperly Removed
Does Not Constitute Unusual Circumstances
Plaintiffs also argue that, even if there was an

objectively reasonable basis for SIA’s removal petition, there
was no justification for continued opposition to remand of this
action after Judge Seabright rejected SIA’s arguments for federal
14

jurisdiction in Civil No. 10-622.

Despite Judge Seabright’s

November 2, 2010 order remanding Civil No. 10-00622 back to state
court, SIA filed its opposition to Plaintiffs’ Emergency Motion
to Remand in the instant case, Civil No. 10-00621, on November 9,
2010.

Plaintiffs allege that SIA’s “stubborn persistence” caused

significant delay in obtaining remand in this action (six weeks
until Judge Ezra’s order was issued on December 27, 2010), which
resulted in a delay in scheduling Plaintiffs’ motion for
preliminary injunction by several months.

Consequently,

Plaintiffs contend that SIA’s conduct constitutes unusual
circumstances that warrant an award of removal expenses.
Although SIA agrees that the legal theory for removal
in the two cases was the same, i.e., that the Franchise
Agreement’s arbitration provision fell under the New York
Convention, it claims that Plaintiffs are not entitled to removal
expenses because the factual bases for removal were “critically
different.”

See Opposition at 5.

Specifically, SIA contends

that the actions involve different plaintiffs (Access vs. Access,
SIH, and MacNaughton), distinct claims for relief (state law
claims for unfair methods of competition vs. injunction of
arbitration), and additional evidence that was purportedly
unavailable at the time Judge Seabright issued his remand order.4
4

SIA’s new evidence consisted of MacNaughton’s deposition
testimony that (1) he understood SIA’s franchise system was based
in Canada at the time he entered into the Franchise Agreement;
15

While the Court is not inclined to go so far as to characterize
the two removal petitions as “critically different,” the Court
does find that the factual differences between the two lawsuits
are dissimilar enough to preclude a finding of unusual
circumstances that would justify an award of removal expenses.
Moreover, a district court’s decision to remand a case
to state court is within the court’s sole discretion.

See 28

U.S.C. § 1447(d) (save one inapplicable exception, “[a]n order
remanding a case to the State court from which it was removed is
not reviewable on appeal or otherwise”); Lively v. Wild Oats
Markets, Inc., 456 F.3d 933, 937 (9th Cir. 2006).

Despite being

faced with the same legal theory for removal and similar facts,
Judge Seabright’s order granting remand in Civil No. 10-00622 was
in no way binding upon Judge Ezra, who correctly conducted an
independent review of whether the Franchise Agreement “falls
under” the New York Convention in this matter.

See Hart v.

Massanari, 266 F.3d 1155, 1174 (9th Cir. 2001) (holding that the
binding authority rule could “just as easily operate so that the
first district judge to decide an issue within a district, or
even within a circuit, would bind all similarly situated district
judges, but it does not”); City of Fresno v. United States, 709

(2) he personally made four trips to Canada to visit SIA’s
corporate office; (3) he received training in Canada; and (4) the
marketing and advertising funds described in the Franchise
Agreement were administered in Canada.
16

F. Supp. 2d 888, 909 (E.D. Cal. 2010) (“District court opinions
are relevant for their persuasive authority but they do not bind
other district courts within the same district.”).

Thus, while

unlikely, it was possible that Judge Ezra could have reached the
completely opposite conclusion regarding removal from Judge
Seabright based on the relevant persuasive case law and facts
presented.

Therefore, the Court finds that removal expenses are

not warranted where a party’s basis for removal is not clearly
foreclosed, especially in light of the non-appealability of a
district judge’s order divesting said party of federal
jurisdiction.
Finally, the Court is persuaded by case law from other
circuits dealing with requests for removal expenses involving
similar scenarios.

The Court finds Lyons v. U.S. Steel Corp.,

No. 09-12097, 2010 WL 374016 (E.D. Mich. Jan. 25, 2010),
particularly instructive.

In Lyons, the plaintiffs sought

removal expenses on the ground that the defendant should have
ceased its removal efforts once it received an adverse ruling on
the same issue in a companion case.

Id. at *3.

Just as was the

case here, the defendant filed a brief opposing the pending
removal petition less than a week later.5
5

Id.

While the court

Although not specified in the court’s opinion, the ruling
in the companion case was issued on September 30, 2009, and the
opposition was filed on November 3, 2009. See Order, Pichler v.
U.S. Steel Corp., Civil No. 09-10843, United States District
Court, Eastern District of Michigan, dkt. no. 91.
17

ultimately disagreed with the defendant’s removal arguments, it
found that there was no evidence that the defendant’s position
was frivolous, in bad faith, or unsupported by law such that
removal efforts were objectively unreasonable or vexatious.

Id.

As a result, the court held that the plaintiff’s request for
attorneys’ fees was unwarranted.

Id.

See also Hernandez v.

First Student, Inc., No. 10-8243, 2010 WL 5313293 (C.D. Cal. Dec.
16, 2010) (holding that defendants declination of plaintiff’s
request to withdraw their removal papers was not evidence of
dilatory conduct or an attempt to unnecessarily delay
adjudication of the case).

Similarly, even though SIA’s removal

petitions were denied and the practical result of its continued
opposition was a delay in litigation and increased costs to SIH,
there is no evidence in this case that SIA’s position was
frivolous, in bad faith, or unsupported by law.

Therefore, the

Court finds that this case does not present unusual
circumstances, and Plaintiffs are not entitled to removal
expenses on this basis.
CONCLUSION
In accordance with the foregoing, the Court FINDS and
RECOMMENDS that Plaintiffs’ Motion for Attorney Fees and Costs,
filed January 10, 2011, be DENIED.
IT IS SO FOUND AND RECOMMENDED.
///

18

DATED AT HONOLULU, HAWAII, MAY 18, 2011

_____________________________
Richard L. Puglisi
United States Magistrate Judge
ACCESS INFO. MGMT. OF HAW., LLC v. SHRED-IT AM., INC.; CIVIL NO.
10-00621 DAE-RLP; FINDINGS AND RECOMMENDATION TO DENY PLAINTIFFS’
MOTION FOR ATTORNEY FEES AND COSTS

19