Decatur Hospital Authority v. Aetna Health Inc

Filing 26

Memorandum Opinion and Order...Plaintiff have and recover from deft $14,500 as attorneys' fees. (Ordered by Judge John McBryde on 3/7/2016) (wrb)

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li.S. IWiTIUCT COURT
IN THE UNITED STATES DISTinc'J'O~(Im!.li\ DISTRICT Of TEXAS .

NORTFHOERR:
DECATUR HOSPITAL AUTHORITY,
D/B/A WISE REGIONAL HEALTH
SYSTEM,

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:or:TTHRIDCI~Io:IL~XAS [~F !F:J)~.
§
§
§

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1

·

_,

MAR -72016
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Cl FllK, U.S. lliSTRICT COlJI{T

§

Plaintiff,

By ---;-,----c----

§

·------------------------

llqHI!~·

§

vs.

§

NO. 4:15-CV-922-A

§

AETNA HEALTH INC.,
Defendant.

§
§
§

MEMORANDUM OPINIO~
and
ORDER
Before the court for decision is the motion of plaintiff,
Decatur Hospital Authority, d/b/a Wise Regional Health System,
for an award of attorneys' fees under the authority of 28 U.S.C.
§ 1447(c).

After having considered plaintiff's motion, the

response thereto of defendant, Aetna Health, Inc., pertinent
parts of the record of this action, and applicable legal
authorities, the court has concluded that attorneys' fees should
be awarded in favor of plaintiff against defendant as authorized
by§ 1447(c) and that an award of $14,500.00 is an appropriate
one.
The relevant background and the reasons why the court
ordered this action remanded to state court are set forth in the
memorandum opinion and order the court issued in the above-

captioned action on February 19, 2016.

Doc. 18. 1

There is no

need for the court to repeat those details in this memorandum
opinion and order.

Simultaneously with issuance of the order and

judgment of remand to state court, the court issued an order
authorizing plaintiff to file a formal motion asking the court to
award it fees and costs it incurred that would not have been
incurred had the above-captioned action not been removed from
state court.

Doc. 20.

The motion plaintiff filed pursuant to

that authorization is the one now under consideration.

Doc. 22.

The grounds of plaintiff's motion to remand were that (1)
this court did not have subject matter jurisdiction over the
action and (2) defendant's notice of removal was untimely.
7 at 1.

Doc.

While the court considered both grounds before ordering

that the case be remanded, the court decided that it did not need
to resolve the subject matter jurisdiction issue because the
record established that defendant did not timely remove the
action.

Doc. 18 at 4.

Plaintiff's motion for attorneys' fees

likewise limits its discussion to the timeliness issue, arguing
that defendant "had no objectively reasonable basis on which to
remove this action, as the deadline for removal had already long
since passed .

Doc. 22 at 2.

Accordingly, the court is

'The "Doc. _ " references are to the numbers assigned to the referenced items on the docket in
this Case No. 4: 15-CV -922-A.
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limiting its discussion as to the appropriateness of an award of
attorneys' fees to the issue of whether defendant had an
objectively reasonable basis for a conclusion that its removal
was timely.
As the Fifth Circuit reminded in American Airlines,

Inc. v.

Sabre, Inc., the test for evaluating propriety of an award of
attorneys' fees under§ 1447(c) is whether "the removing party
lacked an objectively reasonable basis for seeking removal."
F.3d 539, 542

(5th Cir. 2012).

694

The Fifth Circuit, quoting from

Martin v. Franklin Capital Corp., 546 U.S. 132, 140 (5th Cir.
2005), added that considerations that led to the adoption of that
test include:
the desire to deter removals sought for the purpose of
prolonging litigation and imposing 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.
Am. Airlines, Inc., 694 F.3d at 542
quotation mark omitted) .

(5th Cir. 2012) (internal

"A defendant's subjective good faith

belief that removal was proper is insufficient to establish that
the district court abused its discretion in awarding attorney's
fees under Section 1447(c) ."

Id. at 542 n.2.

Defendant was served with plaintiff's state court pleading
on June 30, 2015.

If that pleading put defendant on notice of

3

the facts that would authorize removal of the action, defendant
had thirty days thereafter within which to remove the action.
pertinent part, 28 U.S.C.

§

In

1446(b) provides:

The notice of removal of a civil action or proceeding
shall be filed within 30 days after the receipt by the
defendant, through service or otherwise, of a copy of
the initial pleading setting forth the claim for relief
upon which such action or proceeding is based.

[I]f the case stated by the initial pleading is not
removable, a notice of removal may be filed within 30
days after receipt by the defendant, through service or
otherwise, of a copy of an amended pleading, motion,
order or other paper from which it may first be
ascertained that the case is one which is or has become
removable.
28

u.s.c.

§

1446 (b) (1)

&

(3).

Defendant maintains that the (b) (3)
§

•other paper" part of

1446(b) controls, arguing that the initial pleading did not

disclose that the action was removable, and that plaintiff's
answers to interrogatories, which defendant received on
November 4, 2015, was the •other paper" from which defendant was
first able to ascertain that this case was, or had become,
removable.

Doc. 9 at 2-3.

The court is no more persuaded by defendant's timeliness
argument now than it was when it ordered the action remanded to
state court.

4

On May 27, 2015, plaintiff, through counsel, sent defendant
a letter informing defendant of the nature of its claims, and
advising defendant that if defendant needed more information
plaintiff's counsel would, upon request,

"provide you with a

detailed list of the claims at issue and the penalty Aetna owes
to date on each claim."

Doc. 17 at Supp. App. 1-4.

On June 19,

2015, counsel for defendant requested plaintiff's counsel to
provide "the claims data for the medical claims referenced in
your letter to Aetna of May 27, 2015."

Id. at Supp. App. 2 & 6.

Plaintiff's counsel responded on June 22, 2015, by providing
defendant's counsel the requested claims list.

Id. at Supp. App.

2 & 6.

Plaintiff could not have been more specific in the state
court pleading it filed June 24, 2015, in identifying the claims
at issue.

It alleged that:

11. The Hospital provided pre-suit notice to
Aetna of the claims for which the Hospital believes it
is entitled to prompt pay penalties on May 27, 2015.
The Hospital has provided a list of the claims at issue
to Aetna's counsel prior to the filing of this
Petition.
Doc. 1, Ex. B at 3, , 11 (emphasis added).
The "other paper" that plaintiff says caused it to first
ascertain that this case is one that was removable was a set of
interrogatory answers served by plaintiff on defendant on

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November 4, 2015.

Doc. 10 at A0003,

~

5 & A0007-A0010.

Interestingly, the interrogatory responses that defendant claims
caused it to be aware that the case was removable provides it no
more information than plaintiff provided to defendant by the
allegations in paragraph 11 of its state court pleading.

In each

of the interrogatory responses calling upon plaintiff to provide
a list of the claims that form the basis of plaintiff's cause of
action, plaintiff responded •wise Regional refers Defendant to
the spreadsheet served on its counsel on or about June 22, 2015."
Id. at A0009

(responses to interrogatories 1 & 2) (emphasis

added) .
Thus, plaintiff's initial pleading disclosed on its face, by
specific reference to a list previously provided by plaintiff to
defendant, the facts upon which defendant says it relied in
deciding to remove this action to federal court approximately six
months after it had been served with the state court pleading.
Defendant's contention that it first ascertained from the
interrogatory answers that the case is one that was removable
borders on being absurd considering that the state court pleading
of plaintiff provided defendant exactly that same information.
court finds and concludes that defendant lacked an objectively
reasonable basis for seeking removal of this action almost five
months after expiration of the thirty-day deadline for removal.
6

The

The court is not persuaded that either of the court
decisions upon which defendant relies.

The first, Chapman v.

Powermatic, Inc., 969 F.2d 160 (5th Cir. 1992), involved a
removal from state court to federal court based on diversity of
citizenship jurisdiction.

The plaintiff did not plead for a

specific amount of damages in his state court pleading.

The

defendant was served with process, including a copy of the state
court pleading, on July 10, 1990.

On August 17, 1990, the

plaintiff served on defendant answers to interrogatories, stating
that he had suffered damages in excess of $800,000.00.

Ten days

after receiving the answers, the defendant filed a notice of
removal.

The plaintiff moved to remand, contending that the

notice of removal was not timely filed.

The Fifth Circuit held

that the notice of removal was timely filed because the
interrogatory answers constituted an "other paper" from which the
defendant learned for the first time that the case was removable.
In the course of its opinion, the Fifth Circuit concluded
that for the purposes of the first paragraph of
1446(b), the thirty day time period in which a
defendant must remove a case starts to run from
defendant's receipt of the initial pleading only when
the pleading affirmatively reveals on its face that the
plaintiff is seeking damages in excess of the minimum
jurisdictional amount of the federal court.
§

Chapman, 969 F.2d at 163.

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From the rule expressed in Chapman, the inference can be
drawn that the thirty-day time period for removal on the basis of
federal question jurisdiction starts to run from the date of the
defendant's receipt of the initial pleading only when the
pleading affirmatively reveals on its face the facts upon which
the defendant relies for its contention that federal question
jurisdiction exists.

Applying that principle to the instant

action, the court concludes that plaintiff's initial state court
pleading did affirmatively reveal on its face the facts upon
which defendant relies for its contention that federal question
jurisdiction exists.

That is so because plaintiff affirmatively

pleaded that it previously had provided to defendant's counsel a
list of the claims at issue.

In other words, plaintiff, in

effect, adopted by reference in its state court pleading the list
that it previously had provided to defendant's counsel.

That

same list contained the very information that defendant now
argues caused it to understand when it received the interrogatory
answers in November 2015 that it had basis for contending that
this court had federal question jurisdiction.
The other case upon which defendant relies is the district
court decision in Argenbright v. Zix, Corp., No. 3:04-CV-1061-H,
2004 WL 1732482

(N.D. Tex. Aug. 3, 2004).

question case.

The issue was whether the notice of removal was
8

Zix was a federal

timely filed.

The district court noted that "Plaintiff's

Original Petition did not contain a federal question on its face"
and "[i)ndeed . . . lacked any information• that would suggest
existence of a federal question.

Id, at *3.

In contrast to the

plaintiff's petition in Zix, the petition in the instant action
did not lack information bearing on federal question
removability.

Instead, the petition here made specific reference

to the list of claims upon which defendant relies as disclosing
to it that federal question jurisdiction exists.
For the reasons given above, the court has concluded that an
award of attorneys' fees should be made against defendant in
favor of plaintiff under the authority of 28 U.S.C.

§

1447(c).

After having considered the presentations of the parties on the
proper amount to be awarded as attorneys' fees, the court has
concluded that an award of attorneys' fees in favor of plaintiff
against defendant of $14,500.00 would be appropriate to
compensate plaintiff for the additional fees it incurred by
reason of the removal of this action from state court.
In reducing the $17,337.00 amount sought by plaintiff to
$14,500.00, the court has used a per-hour level of compensation
more consistent with charges the court would expect attorneys in
the Fort Worth area to make for the work done by plaintiff's
counsel, and the court has made adjustments to eliminate the
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effect of what appear to be certain duplicative activities of
plaintiff's counsel.

In addition,

in arriving at the $14,500.00

to be awarded, the court has taken into consideration, and given
effect to, all of the other factors that are to be taken into
account in determining the proper amount to be awarded as
attorneys' fees.
Therefore,
The court ORDERS that plaintiff have and recover from
defendant $14,500.00 as attorneys' fees.
SIGNED March 7, 2016.

Judge

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