Midland Funding, LLC v. Froth
Filing
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MEMORANDUM OPINION re 7 Order on Motion to Remand to State Court. Signed by District Judge Sharion Aycock on 7/29/2014. (psk)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
OXFORD DIVISION
MIDLAND FUNDING, LLC
V.
PLAINTIFF
CIVIL ACTION NO. 3:13-cv-00290-SA-SAA
VICTORIA FOTH
DEFENDANT
MEMORANDUM OPINION
Before the Court is Plaintiff’s Motion to Remand [3]. Upon due consideration of the
motion, responses, rules, and authorities, the Court finds as follows:
Factual and Procedural Background
Plaintiff, Midland Funding, LLC, filed suit against Defendant Foth in the County Court
of Desoto County, Mississippi on July 18, 2013, based on her default on payments under a credit
arrangement. Plaintiff served Defendant Foth with the Summons and Complaint on August 29,
2013. On November 15, 2013, Defendant Foth filed an Amended Answer and a Counterclaim
raising a federal question issue. Following, on November 22, 2013, Defendant filed a Notice of
Removal [1] based on federal question jurisdiction asserted in the Counterclaim. Plaintiff filed a
Motion to Remand [3] on December 16, 2013, on the basis that removal was untimely and
improperly based on a federal question counterclaim. Additionally, Plaintiff met with counsel
for Defendant Roth and informed them of the defects in their Notice of Removal [1] and, as a
result of his failure to withdraw the Notice of Removal, seeks attorney’s fees pursuant to 28
U.S.C. § 1447(c).
Standard
The Judiciary Act of 1789 provides that “any civil action brought in a State court of
which the district courts of the United States have original jurisdiction, may be removed by the
defendant or the defendants, to the district court of the United States for the district and division
embracing the place where such action is pending.” 28 U.S.C. § 1441(a).
However, the
Defendant must file a Notice of Removal within thirty days of service of the Summons and
Complaint, according to 28 U.S.C. § 1446(b)(1)(B). “Failure to comply with the thirty-day time
limitation . . . renders the removal procedurally defective.” Ingram v. Jones, 1997 US Dist.
Lexis 20928 (N.D. Miss. Dec. 16, 1997) (citing Jones v Scogin, 929 F. Supp. 987, 988 (W.D. La.
1996)).
Upon removal of a case, the plaintiff may move to remand, and “if it appears that the
district court lacks subject matter jurisdiction, the case shall be remanded.” 28 U.S.C. § 1447(c).
A motion to remand for any defect other than lack of subject matter jurisdiction must be made
within thirty days of the filing of the notice of removal. See 28 U.S.C. § 1447(c). Moreover, the
Fifth Circuit has held that “ambiguities are construed against removal because the removal
statute should be strictly construed in favor of remand.” Manguno v. Prudential Prop. & Cas. Ins.
Co., 276 F.3d 720, 723 (5th Cir. 2002) (citing Acuna v. Brown & Root, Inc., 200 F.3d 335, 339
(5th Cir. 2000)).
Analysis and Discussion
The Plaintiff argues in its Motion to Remand [3], and Foth agrees in her Response to
Motion to Remand [5], that the Notice of Removal [1] was defective. Foth was initially served
with process on August 29, 2013 but did not file her Notice of Removal [1] until November 22,
2013, well over the thirty days allowed by statute. Because the Notice of Removal [1] was not
filed within the required thirty day limit, removal was procedurally defective.
The Notice of Removal [1] was also jurisdictionally defective because the Plaintiff’s
well-pleaded complaint did not allege any claims invoking federal question jurisdiction, as
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required for federal question jurisdiction to be proper. The Defendant’s assertion of a federal
question counterclaim is not sufficient to create a jurisdictional basis for federal court. A
counterclaim cannot serve as the basis for “arising under” jurisdiction. Holmes Grp., Inc. v.
Vornado Air Circulation Sys., Inc., 535 U.S. 826, 831, 122 S. Ct. 1889, 153 L. Ed. 2d 13 (2002).
Plaintiff requests that the Court award costs and fees incurred in responding to the Notice
of Removal. Pursuant to 28 U.S.C. § 1447(c), “[a]n order remanding the case may require
payment of just costs and any actual expenses, including attorney fees, incurred as a result of the
removal.” However, the Fifth Circuit has held that “[t]here is no automatic entitlement to an
award of attorney’s fees.” Am. Airlines, Inc. v. Sabre, Inc., 694 F.3d 539, 541-42 (5th Cir. 2012)
(quoting Valdes v. Wal–Mart Stores, Inc., 199 F.3d 290, 292 (5th Cir. 2000) (holding that the
“mere determination that removal was improper” does not require a district court to award
attorney’s fees)). Further, “[a]bsent 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.” Martin v. Franklin Capital Corp., 546 U.S. 132, 141, 126 S. Ct. 704, 163 L. Ed. 2d 547
(2005).
The Supreme Court has held that “[t]he appropriate test for awarding fees under §
1447(c) should recognize Congress’ desire to deter removals intended to prolong litigation and
impose 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, 546 U.S. at 133, 126 S. Ct. 704. Thus, as the Fifth Circuit has recognized, “[i]n that
regard, § 1447(c) fee awards are cost recoupments, hence punitive in policy only.” Am. Airlines,
Inc., 694 F.3d at 542.
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Although Defendant’s Notice of Removal [1] was procedurally defective, the Court finds
that an award of attorney’s fees is not appropriate in this case.
Conclusion
For the foregoing reasons, the Court finds removal of this matter is not available based on
federal question jurisdiction. Further, the Court finds that the award of costs to Plaintiff is
inappropriate.
Accordingly, Plaintiff’s Motion to Remand is GRANTED and this matter is hereby
REMANDED to the County Court of Desoto County, Mississippi. Additionally, Plaintiff’s
request for costs is DENIED.
SO ORDERED, this the 29th day of July, 2014.
/s/ Sharion Aycock_________
U.S. DISTRICT JUDGE
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