Citibank, N.A. v. Jackson

Filing 62

ORDER Denying 48 Motion for Attorney Fees. Signed by Senior Judge Graham Mullen on 2/23/2018. (jaw)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
CASE NO. 3:16-cv-00712-GCM
CITIBANK, N.A.

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Plaintiff,
v.
GEORGE W. JACKSON,
Defendant.
GEORGE W. JACKSON,
Third-Party Plaintiff,
v.
HOME DEPOT U.S.A., INC. and
CAROLINA WATER SYSTEMS, INC.
Third-Party Defendants.

ORDER

THIS MATTER is before the Court following the Order and Mandate of the Fourth
Circuit Court of Appeals and on the Motion for Attorney Fees filed by George W. Jackson (Doc.
No. 48).
I. Background
This case was initially filed in the Superior Court of Mecklenburg County as an attempt
by Citibank, N.A. (“Citibank”) to collect an allegedly outstanding debt for a water filtration
system purchased by George W. Jackson (“Jackson”) from Home Depot U.S.A., Inc. (“Home
Depot”) and Carolina Water Systems (“CWS”). Jackson filed a counterclaim against Citibank
and a third-party class action suit against Home Depot and CWS, alleging that Home Depot and

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CWS had a scheme of misleading customers about the alleged dangerousness of their water and
subsequently selling them unnecessary water filtration systems.
Citibank voluntarily dismissed its claims against Jackson without prejudice on
September, 23 2016. Home Depot removed the matter into this Court on October 12, 2016,
asserting that the Court had subject matter jurisdiction under the Class Action Fairness Act of
2005 (“CAFA”), which established federal jurisdiction over certain class action suits in which
the matter in controversy exceeds the sum or value of $5,000,000. 28 U.S.C. § 1332(d).
Jackson moved to remand on November 8, 2016, arguing that (1) the amount in
controversy does not exceed $5 million, as required by CAFA, (2) the requirements for the Local
Controversy Exception have not been met, and (3) third-party defendants, such as Home Depot,
are prohibited from removal under the statute. This Court granted Jackson’s Motion to Remand
on Jackson’s third ground, finding that Fourth Circuit precedent precluded a third-party
defendant from removing a case from state court under CAFA.
Home Depot filed for permission to appeal this Court’s Remand Order to the Fourth
Circuit. This Court stayed the Remand Order while the case was pending before the Fourth
Circuit. After the appeal was filed, Jackson filed a Motion for Attorney’s Fees in this Court,
alleging that Home Depot’s attempt at removal was not objectively reasonable. The Fourth
Circuit subsequently affirmed the Remand Order and issued its Mandate on February 13, 2018.
II. Remand
Pursuant to the Fourth Circuit’s opinion affirming the Remand Order of this Court, this
matter must be remanded to the Superior Court of North Carolina, Mecklenburg County.

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III. Attorney Fees
28 U.S.C. § 1447(c) provides that “[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.”
The Supreme Court has held that courts should award 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). A court’s decision to award fees is discretionary. Id.
at 139.
Here, Jackson’s only argument in support of a fee award is that Home Depot knew or
should have known that the amount in controversy requirement was not met.1 In its Notice of
Removal, Home Depot relied on the allegations of Jackson’s complaint, which sought restitution
and treble damages—among other forms of relief—on behalf of “several hundred class
members” for “the unlawful sale of $9,000 water treatment systems” to determine that the
speculative amount demanded by Jackson on behalf of the class “is at least $5,400,000.” (Notice
of Removal, 6). The Notice of Removal also stated that the request for attorneys’ fees and
injunctive relief would further increase the amount in controversy. (Id.).
When the amount in controversy is disputed, a court must evaluate the evidence and find
whether, by a preponderance of the evidence, the case puts more than $5 million at issue. Dart
Cherokee Basin Operating Co. v. Owens, 135 S. Ct. 547, 554 (2014). However, at the time of
removal, the notice of removal “need only include a plausible allegation that the amount in
controversy exceeds the jurisdictional threshold.” Id. Thus, merely because a defendant may

Jackson also raises the argument that Home Depot’s attempted removal as a third-party defendant was
objectively unreasonable in his reply memorandum. This argument does not appear in his initial motion
or memorandum in support and thus will not be considered. See Clawson v. FedEx Ground Package Sys.,
Inc., 451 F. Supp. 2d 731, 734 (D. Md. 2006) (“The ordinary rule in federal courts is that an argument
raised for the first time in a reply brief or memorandum will not be considered.”).
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later be unable to prove by a preponderance of the evidence that the amount in controversy is
satisfied does not mean that filing a notice of removal is objectively unreasonable. Otherwise,
every remand for failure to meet the amount in controversy would result in an award for attorney
fees. See e.g., Ellison v. Credit Acceptance Corp., 177 F. Supp. 3d 967 (S.D. W. Va. 2016)
(declining to award fees when the amount in controversy requirement was not satisfied); Blettner
v. Masick, 1:15cv474, 2015 WL 7575924 (M.D.N.C. Nov. 25, 2015) (same).
Home Depot has provided evidence that at least 259 North Carolina customers have
purchased water treatment systems, totaling $1,623,424. Assuming the full value of each of
those contracts would be voided (per Jackson’s complaint) and then trebled, this amount reaches
$4,870,273. Home Depot then argues that the demanded injunctive relief and attorney fees in
Jackson’s complaint easily push the amount in controversy over $5 million. Both injunctive
relief and attorney fees can be considered in evaluating the amount in controversy. See JTH Tax,
Inc. v. Frashier, 624 F.3d 635, 639 (4th Cir. 2010) (accounting for injunctive relief); Aikens v.
Microsoft Corp., 159 F. App’x 471, 475 (4th Cir. 2005) (accounting for attorney fees). And the
state statutes that Jackson relies upon allow for these awards. E.g., N.C.G.S. § 75-16.1 (attorney
fee award).
While the Court need not determine whether Home Depot has proven that the amount in
controversy exceeds $5 million by a preponderance of the evidence, the Court does find that
Home Depot’s allegations regarding the amount in controversy made at the time of filing the
notice of removal were objectively reasonable. Thus, the Court declines to award fees in this
matter.

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IV. CONCLUSION
For the foregoing reasons, it is hereby:
ORDERED that this Court’s prior stay is lifted; it is further
ORDERED that Jackson’s Motion for Attorney Fees (Doc. No. 48) is DENIED;
it is further
ORDERED that this case is remanded to the Superior Court of Mecklenburg
County.
SO ORDERED.
Signed: February 23, 2018

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