Ada County Highway District v. Northwest Pipeline GP

Filing 25

MEMORANDUM DECISION AND ORDER granting 22 Motion for Attorney Fees. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (krb)

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF IDAHO

ADA COUNTY HIGHWAY DISTRICT,
a body politic corporate of the State of
Idaho,

Case No. 1:12-cv-00184-BLW
MEMORANDUM DECISION AND
ORDER

Plaintiff,
v.
NORTHWEST PIPELINE GP, a general
partnership,
Defendant.

INTRODUCTION
Before the Court is Plaintiff Ada County Highway District’s Renewed Motion for
Attorneys’ Fees (Dkt. 22). Having reviewed the parties’ briefs and the record, the Court
will grant the Highway District’s Motion.
BACKGROUND
Northwest is a general partnership. Its two partners are two limited liability
companies: Williams Pipeline Partners Holdings, LLC and WGPC Holdings, LLC.

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On April 11, 2012, Defendant Northwest Pipeline GP removed this matter from
state court. Northwest based removal on diversity. In its Notice of Removal, Northwest
alleged that both WGPC Holdings, LLC and Williams Pipeline Partners Holdings LLC
were Delaware LLCs with their principal place of business in Oklahoma. Notice of
Removal at 2, Dkt. 1. Northwest failed to allege any facts regarding the citizenship of
the members of these two LLCS.
The Highway District filed a motion to remand on the grounds that Northwest
could not establish complete diversity of citizenship, and Northwest stipulated to remand.
Now the Highway District has moved for attorney fees pursuant to 28 U.S.C. § 1447(c).
ANALYSIS
Awarding attorneys’ fees on remand is discretionary. Section 1447(c) provides:
“An order remanding the case may require payment of just costs and actual expenses,
including attorney fees, incurred as a result of the removal.” 28 U.S.C. § 1447(c). The
Supreme Court has held that, “absent unusual circumstances, attorney’s fees should not
be awarded when the removing party has an objectively reasonable basis for removal.”
Martin v. Franklin Capital Corp., 546 U.S. 132, 140 (2005).
Northwest defends its removal as “objectively reasonable.” But its Notice of
Removal failed to demonstrate the requirements of federal subject matter jurisdiction
because it insufficiently alleged Northwest’s citizenship. In its Notice, Northwest alleged
that both WGPC Holdings, LLC and Williams Pipeline Partners Holdings LLC were
Delaware LLCs with their principal place of business in Oklahoma. Notice of Removal at

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2, Dkt. 1. The citizenship of a corporation is determined by the place of incorporation
and principal place of business. See 28 U.S.C. § 1332(c)(1). Northwest, however, is a
general partnership comprised of two LLCs, and “the citizenship of an LLC is determined
by the citizenship of its members.” Carden v. Arkoma Assocs., 494 U.S. 185,195 (1990).
Thus, the Notice of Removal was deficient on its face.
Moreover, the pathway of Northwest’s citizenship appears to lead unavoidably to
a limited partnership, Williams Partners L.P., which has over 73,000,000 publicly-traded
partnership units. Thus, it would prove very difficult for Northwest to demonstrate
complete diversity as the citizenship of a limited partnership, like an LLC, is determined
by the citizenship of all its partners – both general and limited. Id.
Northwest, however, argues that “the fact that 28% of Williams Partners L.P.’s
shares are publicly traded did not deprive Northwest of an objectively reasonable basis
for removal.” Northwest’s Resp. Br. at 5, Dkt. 23. Williams Partners L.P. is a Master
Limited Partnership, and, according to Northwest, MLPs are “atypical” from limited
partnerships because they have “many indicia of a corporation centralization of
management; limited liability of investors; free transferability of ownership interests,
which are publicly traded; and a continuity of life not dependent on natural life.” Id.
This may be true, but courts have never distinguished between limited partnerships
and master limited partnerships. Instead, it is hornbook law that a limited partnership is a
citizen of each state in which its general and limited partners hold citizenship. 1 Fed.
Proc., L.ed. § 1:165. Because Northwest can point to no cases that appear to deviate

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from this general rule, its removal of the case to federal court was not objectively
reasonable. Thus, the Court will award the Highway District the attorneys’ fees it
incurred as a result of Northwest’s improper removal. The Highway District shall submit
an affidavit detailing the fees incurred and their reasonableness.
ORDER
IT IS ORDERED that Plaintiff Ada County Highway District’s Renewed Motion
for Attorneys’ Fees (Dkt. 22) is GRANTED. The Highway District shall submit an
affidavit detailing the fees incurred and their reasonableness.

DATED: October 3, 2012

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

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