Dakota, Minnesota & Eastern Railroad Corporation v. Schieffer

Filing 98

ORDER denying 91 Defendant's Second Renewed Motion for Attorneys Fees and Expenses. Signed by U. S. District Judge Roberto A. Lange on 6/28/13. (DJP)

FILED
JUN 28 2013
UNITED STATES DISTRICT COURT
DISTRICT OF SOUTH DAKOTA
SOUTHERN DIVISION
DAKOTA, MINNESOTA & EASTERN
RAILROAD CORPORATION, a
Delaware Corporation,
Plaintiff,
vs.
KEVIN V. SCHIEFFER,
Defendant.

*
*
*
*
*
*
*
*
*
*
*

~4.m-

CIV 10-4037-RAL

ORDER DENYING
DEFENDANT'S SECOND
RENEWED MOTION FOR
ATTORNEYS FEES AND
EXPENSES

On April 9, 2010, Plaintiff Dakota, Minnesota & Eastern Railroad Corporation
("DM&E") filed a Complaint, Doc. 1, seeking injunctive relief to prevent Defendant Kevin
Schieffer ("Schieffer") from pursuing a Demand for Arbitration before the American Arbitration
Association ("AAA"). On June 16, 2010, this Court issued an Opinion and Order, Doc. 26,
granting Defendant's motion to dismiss for lack of subject matter jurisdiction.

Dakota,

Minnesota & E. R.R. Corp. v. Schieffer, 744 F. Supp. 2d 987, 997 (D.S.D. 2010).

DM&E

appealed and the United States Court of Appeals for the Eighth Circuit affirmed this Court in
part and remanded on an issue that was not addressed previously by the parties or this Court.
Dakota, Minnesota & E. R.R. Corp. v. Schieffer, 648 F.3d 935, 940 (8th Cir. 2011). After
further briefing and argument, this Court again ruled that it lacked subject matter jurisdiction
over DM&E's Complaint because the Employment Agreement between the parties was a free­
standing contract-and one where diversity jurisdiction was lacking-and was not an ERISA
plan nor did it relate to an ERISA plan such that federal question jurisdiction was proper.
Dakota, Minnesota & E. R.R. Corp. v. Schieffer, 857 F. Supp. 2d 886, 889 (D.S.D. 2012). On
March 28, 2013, the Eighth Circuit affirmed that decision. Dakota, Minnesota & E. R.R. Corp.

v. Schieffer, 711 F.3d 878, 883 (8th Cir. 2013).
Section 9(b) ofthe Employment Agreement at issue obliges DM&E to pay Schieffer legal
fees and expenses incurred if Schieffer prevails in a dispute regarding rights and benefits under
the Employment Agreement. On April 24, 2010, Schieffer filed Defendant's Second Renewed
Motion for Attorneys' Fees and Expenses, Doc. 91, in this Court while concurrently seeking
attorney fees before the Eighth Circuit under the same legal theory. Doc. 97 at 2. The Eighth
Circuit's Local Rule 47C states that a party may file a motion for attorney fees with the clerk
within 14 days ofthe entry ofjudgment. 8th Cir. R. 47C; Doc. 92 at 7. After hearing objections
from the opposing party, the Eighth Circuit "may grant ... reasonable attorney fees to a
prevailing party." 8th Cir. R. 47C(a). Schieffer states that
[He followed Local Rule 47C] and moved the Eighth Circuit for
an award of attorneys fees and also for remand to this Court for
consideration of the same. Schieffer respectfully suggests that
this Court should hold off on ruling on this motion until the
Eighth Circuit has determined whether it will fix compensation
or ask this Court to hear and determine the entirety of Schieffer's
request.
Doc. 92 at 7.
On May 30,2013, the Eighth Circuit denied Schieffer's motion for attorney fees because,
just as federal courts lacked subject matter jurisdiction over DM&Es' Complaint based on the
Employment Agreement, federal courts lack jurisdiction to determine an award of attorney fees
pursuant to the Employment Agreement's provisions. Dakota, Minnesota & E. R.R. Corp. v.
Schieffer, 715 F.3d 712, 712 (8th Cir. 2013). The Eighth Circuit denied his motion to remand
to this Court for a determination of reasonable attorney's fees because "neither [the Eighth
Circuit] nor the district court has jurisdiction to award fees based on the contracts at issue." Id.

2

at 713.
Because Schieffer moved concurrently in the Eighth Circuit for an award of attorney's
fees under pursuant to his contracts with DM&E, and because the Eighth Circuit denied his
motion for lack of federal jurisdiction over those contracts, this Court must deny Schieffer's
motion for those reasons stated by the Eighth Circuit. This Court has previously observed "[i]f
the Eighth Circuit affirms the Opinion and Order of this Court granting Schieffer's motion to
dismiss for lack of subject matter jurisdiction (Doc. 26), the arbitrator under the AAA appears
to have authority to decide the issue presented by Schieffer's Motion for Attorney's Fees and
Expenses." Doc. 84. Thus, Schieffer must press his demand for attorney fees in a different
forum.
Therefore, it is hereby
ORDERED that Defendant's Second Renewed Motion for Attorney's Fees and Expenses,
Doc. 91, is denied.
Dated June ~~ 2013.
BY THE COURT:

ROBERTO A. LANGE
UNITED STATES DISTRICT JUDGE

3