Perkumpulan Investor Crisis Center Dressel WBG v. Sherer et al

Filing 49

MEMORANDUM DECISION AND ORDER granting 44 Motion for Attorney Fees (Perkumpulan is awarded $22,627.50 in addition to the previous award of $31,156.00); denying 46 Motion for Reconsideration. Signed by Judge David Nuffer on 5/12/15 (alt)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH, CENTRAL DIVISION
PERKUMPULAN INVESTOR CRISIS
CENTER DRESSEL WBG,

v.

MEMORANDUM DECISION AND
ORDER GRANTING MOTION FOR
ATTORNEY FEES AND DENYING
MOTION TO RECONSIDER FEE
AWARD

JARED SHERER and MICHELLE SHERER,

Case No. 2:12-cv-952 DN

Plaintiff,

Defendants.

District Judge David Nuffer

Originally filed as an in rem action in Alaska state court, this case was removed 1 to the
District of Utah by defendants Michelle and Jared Sherer (“the Sherers”), a mother and son.
Plaintiff Perkumpulan Investor Crisis Center Dressel WBG (“Perkumpulan”) filed a motion to
remand, requesting costs and attorneys’ fees. 2 Because the removal was improper, the case was
remanded to Alaskan state court. 3 After additional briefing, plaintiff’s attorneys’ fees were
granted in the amount of $31,156.00. 4 Subsequent to the remand, the Sherers filed motions to
disqualify the judge 5 and vacate the fee award. 6 In the order denying those motions,

1

Docket no. 1, filed October 11, 2012.

2

Docket no. 4, filed November 2, 2012.

3

Memorandum Decision and Order to Remand for Improper Removal and Lack of Subject Matter Jurisdiction,
docket no. 17, filed June 5, 2013 (“Order to Remand”).

4

Memorandum Decision and Order Granting Plaintiffs’ Attorneys’ Fees, docket no. 26, filed August 6, 2013
(“Order Granting Fees”).
5
6

Motion to Disqualify Judge David Nuffer, docket no. 30, filed April 4, 2014 (“Motion to Disqualify”).

Motion to Vacate Order of Attorney Fees Issued by Judge David Nuffer Pursuant to Rule 60(b) on Grounds that
Plaintiff’s Counsel Committed Fraud upon the Court, docket no. 29, filed April 4, 2014 (“Motion to Vacate”).

Perkumpulan’s second request for fee award was granted. 7 On March 5, 2015, Perkumpulan
filed the motion for the second fee award. 8 On March 12, 2015, the Sherers filed an opposition to
that motion 9 and a motion to reconsider the denial of the motion to vacate the initial fee award. 10

TABLE OF CONTENTS
Perkumpulan’s Motion for and Proof of Fees................................................................................. 3
I.
Jurisdiction and Standard ........................................................................................ 3
II.
Perkumpulan’s Fee Award is Proper ...................................................................... 3
A.
The number of hours billed was reasonable ............................................... 4
B.
The billed rates were reasonable ................................................................. 6
C.
There are no rare and special circumstances sufficient to merit an
adjustment ................................................................................................... 7
D.
The Sherers’ other arguments in opposition ............................................. 13
III.
Conclusion on the Second Fee Award Motion ..................................................... 18
The Sherer’s Motion for Reconsideration of the Order denying the motion to vacate the award of
attorneys’ fees ................................................................................................................... 18
I.
Standard ................................................................................................................ 18
II.
There is no Basis to Amend the Order Denying the Motion to Vacate the Award
of Attorneys’ Fees ................................................................................................. 19
A.
The removal was improper, regardless of intent ....................................... 19
B.
The underlying awards of attorneys’ fees are proper, not harsh ............... 20
C.
The Sherers’ “newly discovered evidence” is irrelevant to the procedure of
remand....................................................................................................... 22
III.
Conclusion on the Sherers’ Motion for Reconsideration ...................................... 22
ORDER ......................................................................................................................................... 23

7

Amended Memorandum Decision and Order Denying Motions to Disqualify, to Vacate Fee Award, and for Rule
11 Sanctions; Granting Request for Fee Award, at 15, docket no. 43, filed Feb. 19, 2015 (“Order Denying Motion to
Vacate Fees”).
8

Motion and Proof of Costs and Attorneys’ Fees, Pursuant to February 19, 2015 Order (DKT. NO 43), docket no.
44, filed Mar. 5, 2015 (“Perkumpulan’s Second Fee Award Motion”).
9

Opposition to Perkumpulan’s Motion for Additional Attorney Fees Pursuant to February 19, 2015 Order (DKT.
NO 43), docket no. 45, filed Mar. 12, 2015 (Opposition to the Second Fee Award).

10

Motion for Reconsideration of Rule 60, docket no. 46, filed Mar. 12, 2015 (“Motion for Reconsideration”).

2

PERKUMPULAN’S MOTION FOR AND PROOF OF FEES
I.

Jurisdiction and Standard

Courts have discretion to “require payment of just costs and any actual expenses,
including attorney fees, incurred as a result of the removal,” 11 and several circuits have held that
district courts retain jurisdiction over the parties for purposes of the fee award continuing after
remand. 12 This fee award is collateral to the remand, and therefore, jurisdiction over the parties
remains for the fee awards, separate from and continuing after the remand.
II.

Perkumpulan’s Fee Award is Proper

It has already been determined that the Sherers’ removal of this case from Alaska state
court was not only improper, 13 but “clearly improper,” 14 wholly lacking “an objectively
reasonable basis.” 15 It has also already been determined that because Perkumpulan is entitled to
attorneys’ fees “incurred as a result of the removal,” 16 and because the additional delay, cost, and
waste the Sherers’ filings create is only “incurred as a result of the removal,” Perkumpulan is
entitled to an fees for opposing the Sherers’ post-remand filings. 17 Therefore, this order
determines the proper amount of Perkumpulan’s fees.

11

28 U.S.C. § 1447(c).

12

See Bryant v. Britt, 420 F.3d 161, 165 (2d Cir. 2005) (holding that “a district court has jurisdiction to resolve a
motion for fees and costs under § 1447(c) after a remand order has issued”); Wisconsin v. Hotline Indus., Inc., 236
F.3d 363, 365–68 (7th Cir. 2000) (holding that a district court retains jurisdiction to consider collateral matters after
remand, and attorneys’ fees may be awarded under a separate order, even when remand is based on the defendant’s
voluntary stipulation); Stallworth v. Greater Cleveland Reg’l Transit Auth., 105 F.3d 252, 255–57 (6th Cir. 1997)
(holding that a district court may make an award of attorney’s fees and costs in a separate order after issuing a
remand order); Mints v. Educ. Testing Serv., 99 F.3d 1253, 1260 (3d Cir. 1996) (holding that district courts have
broad discretion in fee awards under 28 U.S.C. § 1447(c)); and Moore v. Permanente Med. Group, Inc., 981 F.2d
443, 448 (9th Cir. 1992) (district court retains jurisdiction to award fees after remand).
13

Order to Remand at 9.

14

Id. at 3.

15

Id. at 6.

16

28 U.S.C. § 1447(c).

17

Order Denying Motion to Vacate Fees at 16.

3

The Tenth Circuit applies the Lodestar test to calculate an award of attorney fees. 18 “The
lodestar . . . is the ‘the number of hours reasonably expended on the litigation multiplied by a
reasonable hourly rate,’ which produces a presumptively reasonable fee that may in rare
circumstances be adjusted to account for the presence of special circumstances.” 19 “The court
determines reasonable hourly rates based on evidence of what the market commands for . . .
analogous litigation and the prevailing market rate in the relevant community.” 20 The court first
considers whether the number of hours billed was reasonable, then whether the billed rates were
reasonable, and finally whether rare and special circumstances exist suggesting an adjustment of
the fee to be awarded.
A. The number of hours billed was reasonable
The first step in the Lodestar analysis is to consider whether the number of hours billed
was reasonable. Perkumpulan submitted declarations of counsel Douglas Gross 21 and Peter
Donaldson, 22 reflecting the attorney work performed related to the Sherers’ improper motions,
the Rule 11 motions, and the preparation of the Second Fee Award Motion. Perkumpulan’s
counsel reasonably expended 62.5 attorney hours opposing the Sherers’ improper motions, 23
39.1 hours preparing the Rule 11 motions, and 6.8 hours preparing Perkumpulan’s Second Fee
Award Motion. Perkumpulan’s request for attorney fees was granted for the opposition to the
18

In re Miniscribe Corp., 309 F.3d 1234, 1243 (10th Cir. 2002) (“We conclude that the lodestar test . . . is the
appropriate method of calculation.”).
19

Anchondo v. Anderson, Crenshaw & Assoc., L.L.C., 616 F.3d 1098, 1102 (10th Cir. 2010) (quoting Hensley v.
Exkerhart, 461 U.S. 424, 433 (1983); Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 551–54 (2010)).
20

EarthGrains Baking Companies, Inc. v. Sycamore Family Bakery Inc., No. 2:09CV523DAK, 2012 WL 6553739,
at *1 (D. Utah Dec. 14, 2012) (citations and quotations omitted).
21

Declaration of Douglas Gross in Support of Plaintiff’s Motion for Attorneys’ Fees Pursuant to 28 U.S.C. §
1447(c), attached as Exhibit 1 to Perkumpulan’s Second Fee Award Motion, docket no. 44-1, filed Mar. 5, 2015
(“Declaration of Douglas Gross”).
22

Declaration of Peter Donaldson in Support of Plaintiff’s Motion for Attorneys’ Fees Pursuant to 28 U.S.C. §
1447(c), filed as Exhibit 1 to Perkumpulan’s Second Fee Award Motion, docket no. 44-1, filed Mar. 5, 2015.
23

Perkumpulan’s Second Fee Award Motion at 2.

4

Sherers’ motions, not the Rule 11 motions, 24 so time spent on the Rule 11 motions will not be
calculated.
In total, the distribution of costs and fees is as follows:
Motion Practice (Not including Fee Petition or Rule 11 Motions):
Hofheimer Gartlir & Gross, LLP
Durham Jones & Pinegar, P .C.

$
$

18,955.00
962.50

Total

$

19,917.50

Goetz Fitzpatrick for Hofheimer 25
Durham Jones & Pinegar, P.C.

$
$

2,160.00
550.00

Total

$

2,710.00

Combined Total

$

22,627.50 26

Perkumpulan’s Second Fee Award Motion:

The Sherers objected to the amount of time billed, stating that the “legal billings are
fraught with non-related and/or superfluous costs. Perkumpulan counsel passed this around, each
counsel adding unnecessary and extremely costly billing.” 27 This is the entirety of the Sherers’
opposition to the amount of hours billed. They cite nothing from the declarations, nor do they
specify what they conclude to be “non-related,” “superfluous,” or “unnecessary.”
Additionally, in the briefing on the initial fee award, the Sherers cited Tenth Circuit
authority on the importance of the complexity of the legal issues, 28 arguing that “[h]ere, the legal

24

See Order Denying Motion to Vacate Fees at 15–16.

25

The prior law firm of Mr. Gross, Hofheimer Gartlir & Gross, LLP, dissolved as of August 1, 2014. Mr. Gross
performed the work on the Second Fee Award Motion at his new law firm, Goetz Fitzpatrick LLP. See Second Fee
Award Motion at 3.

26

Declaration of Douglas Gross, 7; Declaration of Peter Donaldson, ¶ 10.

27

Opposition to the Second Fee Award at 3.

28

Twilly v. Integris Baptist Medical Center, 16 Fed App’x 923, 926 (10th Cir. 2001) (internal citations omitted).

5

concept is simple.” 29 The court responded by noting that “[i]t is true that the legal concept was
simple, but the Sherers chose to pursue their removal, filing lengthy briefs raising several
complex arguments.” 30 Here, even if the Sherers had done more to argue that the hours billed
were unnecessary, the same response would likely remain: the Sherers have overcomplicated an
otherwise simple procedure with multiple lengthy and convoluted filings. Furthermore, Donald
Sherer, a disbarred attorney who has not denied improper representation his wife and son, the
defendants, has admitted that this is a complex case: “[i]t takes me literally hundreds of hours to
research and draft documents.” 31
Perkumpulan’s counsel has offered evidence documenting the time spent and how it was
spent, with nothing but conclusory opposition from the Sherers, and therefore, the number of
hours billed is reasonable.
B. The billed rates were reasonable
The second step in the Lodestar analysis is to consider whether the billed rates were
reasonable. Perkumpulan’s counsel support the reasonableness of their billed rates:
Douglas Gross was a partner of Hofheimer with over thirty years of experience.
His billing rate on this case was $450 an hour, which was a rate more than 25%
reduced from his standard rate in 2014 of $610 an hour. Ofer Reger and Gary
Smith were both associates with over five years of experience, and were billed at
$275 an hour. 32
Peter Donaldson is a shareholder of DJP with over ten years of experience. His
billing rate on this case was $275 an hour. This rate is reasonable for an attorney
of Mr. Donaldson’s experience.
....

29

Opposition to Motion at 3.

30

Order Granting Fees at 7.

31

Id.

32

Declaration of Douglas Gross ¶ 8.

6

The rates of the Hofheimer attorneys, as described in the Declaration of Douglas
Gross, are reasonable and are within the normal range charged by Salt Lake City
attorneys. 33
The Sherers objected to these billing rates, stating that “[t]he hourly charges are
extremely unreasonable, and do not meet the local standard.” 34 Interestingly, the Sherers did not
argue that Perkumpulan’s counsel’s rates were unreasonable during the briefing on the initial fee
award. And now they cite no evidence of the local standards.
Because the rates meet the local standard, because Perkumpulan has offered evidence of
the underlying reasoning for these rates, and because the Sherers have not refuted these rates
with any evidence, the rates are found to be reasonable.
C. There are no rare and special circumstances sufficient to merit an adjustment
The third and final step in the Lodestar analysis is to consider whether there are rare and
special circumstances present that would be sufficient to merit an adjustment of the fee to be
awarded. In their opposition, the Sherers only include one sentence relevant to this factor:
“Defendants are impecunious, Jared Sherer is 100% disabled from combat service, Michelle
Sherer’s husband is 100% disabled from combat service.” 35 Additionally, the opposition
incorporates affidavits of Jared Sherer 36 and Donald Sherer 37 which were attached to the Sherers’
motion to reconsider the court’s ruling upholding the initial fee award. The filings the Sherers
incorporate into their opposition focus generally on two arguments why an adjustment in the
amount of fees is warranted: (1) disability and an inability to work, and (2) financial hardship. As
33

Declaration of Peter Donaldson ¶ 8.

34

Opposition to the Second Fee Award at 3.

35

Id. at 5.

36

Affidavit of Jared Sherer In Support of Motion Opposing Award of Attorney Fees (“Affidavit of Jared Sherer”),
attached as Exhibit G to Motion to Reconsider Rule 60, docket no. 46-4, filed Mar. 12, 2015.
37
Affidavit of Donald Sherer In Support of Motion Opposing Award of Attorney Fees and Motion for
Reconsideration of Rule 60 Motion (“Affidavit of Donald Sherer”), attached as Exhibit F to Motion to Reconsider
Rule 60, docket no. 46-3, filed Mar. 12, 2015.

7

described below, these arguments do not rise to the level of rare and special circumstances
required to merit an adjustment of the fee award.
Notably, Donald Sherer is not a named party in this case, and his level of involvement as
disbarred legal counsel and self-presumed party remains suspect. Accordingly, his income and
disability cannot factor heavily into the consideration of an adjustment of the fee award.
(1)

Disability and the Inability to Work

Jared Sherer, the only named party to file an affidavit, states that he is “100% disabled
from military service in Iraq,” and his “only income is disability from the V.A.” 38 He states that
he been unemployed years and receives psychological and emotional counseling “from the V.A.
on a regular basis,” 39 was “exposed to chemicals in Iraq” and has “lung related issues.” 40
Michelle Sherer, the only other named party, did not submit an affidavit.
Donald Sherer states that his “wife Michelle Sherer was taking care of [his] mother full
time,” although she “is now in a convalescent center.” 41 He further states that Michelle Sherer is
not employed, cares for Donald Sherer, and recently underwent four surgeries. 42
Non-party Donald Sherer states that his only income is “100% disability from the
Veteran’s Administration.” 43 He states and documents that he has “recently been determined to
be ‘house bound’ by the V.A. due to heart damage” and “has been diagnosed with combat PTSD
and several Agent Orange diseases, namely coronary artery disease and Type II Diabetes.” 44

38

Affidavit of Jared Sherer ¶ 1.

39

Id. ¶ 2.

40

Id. ¶ 2.

41

Affidavit of Donald Sherer ¶ 3.

42

Id. ¶ 3.

43

Id. ¶ 2.

44

Id. ¶ 2.

8

Although disability and other circumstance may prevent the Sherers from earning as
much as before, they have exhibited ability to pursue their own interests over the course of their
many filings. They have “spent hundreds of hours” investigating and developing a case against
Dressel, 45 showing that they are capable of overcoming these burdens to suit their own interests.
They cannot raise disability as a shield from the consequences of their own actions where those
actions prove capability.
(2)

Financial hardship

Jason Sherer states that he has no savings and does not own any stocks, bonds, or other
assets. 46 He states that he has had to refinance several times a home that was originally
purchased with a zero-down veteran’s loan. 47 He states that this wife recently left for Brazil and
that it is possible she will not return, leaving him to provide sole care to eight children. 48 He
states that he and his parents “spent hundreds of hours” and “a lot of time and money
investigating Dressel,” 49 assisting Utah attorneys David Turcotte and Brennan Moss develop a
case against it, services for which they were never reimbursed. 50 He states that he borrowed
$100,000 to invest with those attorneys and was never repaid. 51 He attached several credit union,
credit card, and loan statements showing multiple thousands of dollars of debt. 52
Michelle Sherer, as stated above, did not file an affidavit or any documentation. Donald
Sherer seeks to take her place in the case. He states that “[w]e have no savings or any other
45

Affidavit of Jared Sherer ¶ 8; see also Affidavit of Donald Sherer ¶ 5.

46

Affidavit of Jared Sherer ¶ 5.

47

Id. ¶ 10.

48

Id. ¶ 10.

49

Id. ¶¶ 11–12.

50

Id. ¶ 8.

51

Id. ¶ 9.

52

See financial statements, attached to Affidavit of Jared Sherer, docket no. 46-4, filed Mar. 12, 2015.

9

assets except three lots in Wrangell, Alaska.” 53 Like Jason Sherer, Donald Sherer states that
“[w]e spent a lot of time and money attempting to discover the true nature of Dressel
holdings/investments in Asia.” 54 He echoes Jason Sherer’s claim that Utah attorneys promised
compensation for expenditures made to investigate Dressel, but never paid, 55 and he outlines
some of the work performed on their behalf on property at Wrangell and Candle, Alaska. 56 He
states that he has spent “many thousands of dollars” and with his family, has conducted
“hundreds of hours in labor,” and is “trying to recover some of [his] expenses” which “have
created much debt which is not resolved.” 57
Donald Sherer also attached a bank account summary, loan statements, and credit card
summaries. 58 Several pieces are noteworthy. First, Michelle Sherer’s name only appears on one
credit card summary with an outstanding balance of $841.37. 59 The remaining documentation
refers to non-party Donald Sherer’s only, with at least one credit union statement not identifying
a name at all. Although he notes that his only assets are land in Wrangell, Alaska, 60 his own
documentation shows loans in his name for a home in Hurricane, Utah and a luxury vehicle. 61
The Cadillac Escalade has a healthy amount of equity in it based on the balance remaining on the
auto loan, 62 and the residence was previously described by Dressel attorney Dwight Williams as
53

Affidavit of Donald Sherer ¶ 3.

54

Id. ¶ 5.

55

Id. ¶ 6.

56

Id. ¶ 10.

57

Id. ¶ 10.

58

See financial statements, attached to Affidavit of Donald Sherer, docket no. 46-3, filed Mar. 12, 2015.

59

See Capital One Visa Summary, attached to Affidavit of Donald Sherer, docket no. 46-3, filed Mar. 12, 2015.

60

Affidavit of Donald Sherer ¶ 3.

61

See Cyprus Credit Union Account Summary and CNG Financial Loan Statement, attached to Affidavit of Donald
Sherer, docket no. 46-3, filed Mar. 12, 2015.

62

See Cyprus Credit Union Account Summary, attached to Affidavit of Donald Sherer, docket no. 46-3, filed Mar.
12, 2015.

10

a “luxury single family home near a golf course” that Donald Sherer allegedly confessed to
purchasing with Dressel funds. 63
The Sherers took issue with the reference to Mr. Williams’s financial statement 64 and
report 65 in the Order Denying Motion to Vacate Fees. 66 Mr. Williams concluded “that the
Sherers stole millions of dollars of investor funds through the Dressel Ponzi Scheme. 67 Donald
Sherer attacked the credibility of Mr. Williams in his own affidavit, 68 an affidavit by paralegal
Robert Jinks,69 and an affidavit of former Dressel bookkeeper, Kelly Thacker. 70 According to
Perkumpulan and their submitted affidavits, the Sherers cannot be trusted, and according to the
Sherers and their submitted affidavits, Perkumpulan’s exhibits cannot be trusted. At best, these
competing allegations of dishonesty diminish the reliability of both parties’ filings. The Order
Denying Motion to Vacate Fees was not based on Mr. Williams’s affidavit. Rather, the order
referred to the affidavit as an indication that there is a larger financial picture than what is before
the court. The Sherers’ filings prove that by revealing a previously un-disclosed asset in a luxury

63

Report on Critical Historical Facts Surrounding Performance of Don Sherer, “Director in Charge” of Dressel
Investment Ltd. (BVI) Through June, 2005 and Aftermath at 7, attached as Exhibit H to Plaintiff’s Memorandum in
Opposition to Motion to Disqualify Judge David Nuffer, docket no. 34-8, filed May 5, 2014.
64

Dressel Investment Limited, Inc. Financial Statements, attached as Exhibit G, docket no. 34-7, filed May 5, 2014.

65

Report on Critical Historical Facts Surrounding Performance of Don Sherer, “Director in Charge” of Dressel
Investment Ltd. (BVI) Through June, 2005 and Aftermath, attached as Exhibit H to Plaintiff’s Memorandum in
Opposition to Motion to Disqualify Judge David Nuffer, docket no. 34-8, filed May 5, 2014.
66

Affidavit of Donald Sherer ¶ 1.

67

Memorandum in Opposition to Motion to Disqualify Judge David Nuffer and Request for Costs and Expenses,
Including Attorneys’ Fees at 9, docket no. 33, filed May 5, 2014.

68

Affidavit of Donald Sherer ¶¶ 1, 5.

69

See Sworn Affidavit & Testimony of Robert W. Jinks, attached as Exhibit C to Motion to Reconsider, docket no.
46-1, filed Mar. 12, 2015.
70

See Affidavit of Kelley Thacker in Support of Motion Opposing Award of Attorney Fees, attached as Exhibit D to
Motion to Reconsider, docket no. 46-2, filed Mar. 12, 2015.

11

vehicle. However, even if Mr. Williams’s financial statement 71 and report 72 are disregarded
entirely, the Sherers must still show rare and special circumstances to adjust the fee award.
As to the land in Alaska, Donald Sherer complains that “[t]he court misconstrues the
value of these lots, and what we paid for them.” 73 In its Order Denying Motion to Vacate Fees,
the court quoted Michelle Sherer:
Furthermore, the Sherers attached an exhibit to their present motion to disqualify
that suggests the opposite of their alleged poverty. In her declaration, Michelle
Sherer states that she and husband Donald Sherer purchased “several [contiguous]
lots on Wrangell Island, Alaska” for $450,000 in total, having only sold two of
the five lots described. 74
There is no comment on the present value of the lots, and purchase price is merely a computation
of Michelle Sherers’ stated amount of five lots at $50,000 apiece. Additionally, Donald Sherer
argues that he out-leveraged the lots, and the “rapid deterioration in [his] health has complicated
matters” regarding the improvement and sale of the lots. 75
Regardless of the complaints about the prior discussion of the Sherers’ assets, the point
remains that they have assets yet to be liquidated, including landholdings in Alaska and
residence in Hurricane, as well as a luxury vehicle. In the briefing on the initial fee award, none
of these assets were discussed, and the Cadillac Escalade was only revealed in the Sherers’ debt
documentation, but never discussed. Furthermore, the Sherers have not shown the source of the
money used to service all of their debts. Given the evolving picture of assets and the lack of
income information, it becomes difficult to formulate a reliable financial picture. That said, their
71

Dressel Investment Limited, Inc. Financial Statements, attached as Exhibit G, docket no. 34-7, filed May 5, 2014.

72

Report on Critical Historical Facts Surrounding Performance of Don Sherer, “Director in Charge” of Dressel
Investment Ltd. (BVI) Through June, 2005 and Aftermath, attached as Exhibit H to Plaintiff’s Memorandum in
Opposition to Motion to Disqualify Judge David Nuffer, docket no. 34-8, filed May 5, 2014.
73

Affidavit of Donald Sherer ¶ 4.

74

Order Denying Motion to Vacate Fees at 9 (quoting Affidavit of Michelle Sherer in Support of Summary
Judgment Motion, attached as Exhibit E to Motion to Disqualify, docket no. 30-4, filed April 4, 2014).
75

Affidavit of Donald Sherer ¶ 4.

12

debts are not so extraordinary as to relieve them of the consequence of the legal costs they have
imposed by their improper removal and over-extensive filings. As Perkumpulan states in the
reply on the Second Fee Award Motion, “Defendants’ alleged poverty is no excuse for
misconduct. Nor does a haphazard presentation of financial records prove poverty. . . . Alleged
poverty does not give the Sherers license to engage in improper litigation tactics without
consequences.” 76
D. The Sherers’ other arguments in opposition
In the briefing on the initial fee award, The Sherers mistakenly argued several standards
for deciding whether fees should be awarded, including arguing that Perkumpulan’s filing of the
Alaska case already created an unreasonable financial burden and that the removal was made in
good faith. 77 Those arguments “ignore[d] the previous order already granting the attorney fees.
The proper question in [the initial fee award] motion is not whether to award attorney fees, but
what amount of fees to award.” 78
Similarly, in the briefing on their motion to disqualify the judge, the Sherers took issue
with an alleged lack of consideration for what were irrelevant arguments. 79 In the briefing on
their motion to vacate the initial fee award, the Sherers failed to make an argument relevant to
the fee award, making several irrelevant arguments related to the substance of the Alaska case. 80
Because of this tendency to argue irrelevant points, the scope of the opposition to the Second Fee
Award Motion the Sherers were allowed to file was specifically limited: “This response is

76

Reply in Further Support of Motion and Proof of Costs and Attorneys’ Fees, Pursuant to February 19, 2015, Order
(DKT. NO 43), at 2, docket no. 47, filed Mar. 26, 2015.
77

Order Granting Fees at 3–4.

78

Order Granting Fees at 4.

79

Order Denying Motion to Vacate at 8, 11–12.

80

Id. at 14–16.

13

strictly limited to the reasonableness of the number of hours expended to oppose the Sherers’
motions, the reasonableness of the billing rate, and special circumstances that would reasonably
cause an adjustment to a presumptively reasonable fee award.” 81
(1)

Incorrectly arguing whether the fees should be granted

As they did with the initial fee award, the Sherers spend much of their brief on misplaced
arguments as to whether the court should award fees, again ignoring that the purpose of this
motion and briefing is to determine the reasonableness of the amount of the fees, not to readdress
the previously decided issue of whether to award fees. The Order Denying Motion to Vacate
Fees clearly treated Perkumpulan’s request for attorneys’ fees, noting that “The Sherers did not
oppose Perkumpulan’s request for costs and attorneys’ fees: they failed to reply to
Perkumpulan’s Memorandum in Opposition re Motion to Disqualify Judge, 82 and their reply on
the Rule 60(b)(3) motion 83 again recites irrelevant substantive arguments in the Alaska case,
never addressing the request for fees.” 84 Because the Sherers’ motions caused Perkumpulan to
incur costs “as a result of removal” as required by § 1447(c) to merit a fee award, Perkumpulan’s
request for another fee award was granted. 85
The Sherers cite the U.S. Supreme Court decision of Martin v. Franklin Capital Corp.,86
with an incomplete sentence: “But just as there is no basis for supposing Congress meant to tilt
the exercise of discretion in favor of fee awards under § 1447(c) . . .” 87 However, the completion

81

Id. at 18.

82

Memorandum in Opposition re Motion to Disqualify Judge at 9, docket no. 33, filed May 5, 2014.

83

Reply to Opposition to Motion to Vacate Order of Attorney Fees Issued by Judge David Nuffer Pursuant to Rule
60(b) on Grounds that Plaintiff’s Counsel Committed Fraud Upon the Court, docket no. 35, filed May 12, 2014.
84

Opposition to Motion to Vacate Fees at 15.

85

Id. at 15–16, 18.

86

546 U.S. 132 (2005).

87

Opposition to the Second Fee Award at 4 (citing Martin, 546 U.S. at 138).

14

of that sentence is important: “so too there is no basis here for a strong bias against fee awards. .
. . We see nothing to persuade us that fees under § 1447(c) should either usually be granted or
usually be denied.” 88 Perkumpulan’s request for attorney fees was granted and the next issue was
reasonableness of the fee amount stated. The language the Sherers cite from Martin undercuts
any argument that this decision is outside the discretion of the court.
The Sherers argue that the court has invited multiple improper fee awards:
[T]he court invites Perkumpulan to seek attorney fees on attorney fees, doubling
the risk to defendants for their harmless error, which error constituted objective
reasonableness. The fact that this court remanded the Fairbanks case does not
render the removal decision “unreasonable.” The award of attorney fees does not
enhance the fee aspects of the removal statute, but in fact, denatures it and is in
opposition to the intent of Congress as determined by the Supreme Court in
Martin, above.” 89
First, Perkumpulan, not the court, requested attorneys’ fees, and did so pursuant to the remand
statute. Second, the Sherers removal was not “harmless error,” nor did it constitute “objective
reasonableness.” The removal has already been determined to be “clearly improper,” 90 and
wholly lacking “an objectively reasonable basis.” 91 Similarly, it is not the remand that renders
the removal “unreasonable,” but the “clearly improper” 92 nature of the removal itself. Finally,
Sherers improperly read Martin.
The Sherers presumably continue to argue whether fees should be granted by citing the
Ninth Circuit case of Baddie v. Berkeley Farms 93 which held that a fee award under § 1447(c)

88

Martin, 546 U.S. at 138–39.

89

Opposition to the Second Fee Award at 5.

90

Order to Remand at 3.

91

Id. at 6.

92

Id. at 3.

93

64 F.3d 487 (9th Cir. 1995).

15

was unauthorized “when the initial removal was proper.” 94 At another point in their opposition,
the Sherers take the tenuous position of presupposing that had they removed the case to a federal
court in Alaska, that court “in all probability would have transferred it to the court in Utah
having original jurisdiction.” 95 However, the Sherers’ removal has already been determined to be
“clearly improper,” 96 and wholly lacking “an objectively reasonable basis.” 97 Furthermore, the
Sherers make no effort to analyze Baddie or state a reason it should apply here, especially in this
briefing concerning the Lodestar factors.
The Sherers’ final argument that an award of attorney fees is improper, although made
after the propriety of the award was determined, is that the fees incurred by Perkumpulan to
oppose the Sherers’ motions are not “incurred as a result of the removal,” the triggering language
of § 1447(c). 98 This argument was already discussed and rejected in the Order Denying Motion
to Vacate Fees:
Having already determined that an award of costs and fees was proper because the
Sherers’ removal was unreasonable, 99 § 1447(c) allows an award of costs and fees
“incurred as a result of the removal.” Fees were already granted for the initial
costs of remanding the case. However, the Sherers have chosen to continually
pursue arguments, largely of irrelevant substance, further delaying resolution,
creating additional costs, and wasting judicial resources. Because the Sherers
94

Id. at 490.

95

Opposition to the Second Fee Award at 4.

96

Order to Remand at 3.

97

Id. at 6.

98

Opposition to the Second Fee Award at 6.

99

Order to Remand at 6–7:
[T]he defendants lack an objectively reasonable basis for seeking removal. . . . [T]he Sherers
removed an in rem action against mining claims in Alaska to the wrong court in a separate and faroff federal district. Jurisdiction in this court is clearly absent. Furthermore, even if all these
important deficiencies were not present, all the defendants did not join in removal. The case has
continued in the Alaska Court regardless of the Sherers’ removal to this court, and the Sherers
have actively participated in the Alaska proceedings by filing an Answer on April 8, 2013, during
the pendency of the motions in this court. It is clear that the defendants lacked an objectively
reasonable basis for seeking removal, and have since disregarded the proceedings in this court by
participating in the Alaska Court.

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make these motions, creating delay, cost, and waste, solely “as a result of
removal,” another award of Perkumpulan’s costs and fees is warranted. 100
The prior discussion of this issue disposes of the Sherers’ argument. The Sherers’ post-remand
motions were specifically intended to reverse the decision of the court on remand. Therefore, it is
completely illogical to file motions related to a fee award granted on remand, only to
subsequently argue that those motions are entirely unrelated to the remand in question.
Perkumpulan would not have incurred their costs but for the Sherers’ removal and continued
filings founded upon that removal. Therefore, this second fee award is just as much “incurred as
a result of remand” as the first.
(2)

Other irrelevant arguments

The Sherers began their brief by discussing the Private Securities Litigation Reform Act
of 1995, 101 arguing that Perkumpulan avoided paying “over several hundred thousand in attorney
fees” when a Seattle court dismissed their securities claims but erred in not awarding fees. 102
However, now Perkumpulan’s counsel “sanctimoniously . . . seek their pound of flesh from pro
se litigants for making a small, honest mistake.” 103 Prior rulings of a Seattle court regarding fee
awards under the Private Securities Litigation Reform Act are irrelevant to a discussion of a fee
award based on improper removal under 28 U.S.C. § 1447(c). Furthermore, this fee award is not
related to “a small, honest mistake,” 104 but a procedural action that has already been determined
“clearly improper,” 105 and wholly lacking “an objectively reasonable basis.” 106

100

Order Denying Motion to Vacate Fees at 15–16 (internal citations omitted).

101

Opposition to the Second Fee Award at 1–3.

102

Id. at 2.

103

Id. at 2–3.

104

Id. at 3.

105

Order to Remand at 3.

106

Id. at 6.

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The Sherers next argue that Perkumpulan’s counsel violated federal law by filing a civil
RICO case in Seattle. 107 This argument does not relate to the Lodestar factors at issue with this
fee award, nor does it relate to the removal that brought the parties to the district of Utah, nor
does it relate to the Sherers’ post-remand motions. Therefore, it carries no weight.
The Sherers next argue that the full faith and credit clause required Perkumpulan to
challenge a separate case in Utah, not in Alaska. 108 The Sherers make no effort to state a reason
this should matter here, but it is patently obvious that whatever their argument is, full faith and
credit does not relate to any of the Lodestar factors to determine the amount of a fee award, the
only question at issue here.
III.

Conclusion on the Second Fee Award Motion

Perkumpulan’s counsel billed a reasonable number of hours at reasonable rates, and there
are no rare and special circumstances present that would suggest an adjustment of the amount
Perkumpulan incurred as a result of the Sherers’ improper removal. Perkumplan’s claimed fee
amount of $22,627.50 is proper.
THE SHERER’S MOTION FOR RECONSIDERATION OF THE ORDER DENYING
THE MOTION TO VACATE THE AWARD OF ATTORNEYS’ FEES
I.

Standard

“The purpose [of a Rule 59(e)] motion is to correct manifest errors of law or to present
newly discovered evidence.” 109 The only grounds for amending or altering a judgment under
Rule 59(e) are: “(1) an intervening change in the controlling law, (2) new evidence previously
unavailable, and (3) the need to correct clear error or prevent manifest injustice.” 110

107

Opposition to the Second Fee Award at 4.

108

Id. at 5.

109

Webber v. Mefford, 43 F.3d 1340, 1345 (10th Cir.1994) (citation omitted) (quotations omitted).

110

Somerlott v. Cherokee Nation Distributors, Inc., 686 F.3d 1144, 1153 (10th Cir. 2012) (quotations omitted).

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II.

There is no Basis to Amend the Order Denying the Motion
to Vacate the Award of Attorneys’ Fees

The Sherers move under Rule 59(e) to reconsider the Order Denying Motion to Vacate
Fees on three grounds: (a) that “the removal attempt, although a mistake of law, was based on a
need to correct or prevent manifest injustice, and was well reasoned;” 111 (b), that “this court was
unduly harsh in its award to plaintiff of attorney fees, and findings of fact by the court were
erroneous;” 112 and (c) that “newly discovered evidence . . . should be considered.” 113
A. The removal was improper, regardless of intent
The Sherers’ first basis for reconsideration under Rule 59(e) is that “the removal attempt,
although a mistake of law, was based on a need to correct or prevent manifest injustice, and was
well reasoned.” 114 Presumably this falls within the category of “the need to correct clear error or
prevent manifest injustice.” 115
The Sherers seek to excuse their actions and alter the court’s judgment based on their
intent as well as doctrines unrelated to remand and removal procedures. They argue that their
removal served a greater purpose in international law. “Perkumpulan attempts to seize ownership
of a patented mining property at Candle, Alaska” and “[t]his attempted seizure violates
international comity and a Hague Convention having the United States and Mexico as
signatories.” 116 The Sherers spend pages of their motion discussing the Hague Convention,
international comity, and Full Faith and Credit, among other arguments. 117

111

Motion for Reconsideration at 2.

112

Id.

113

Id.

114

Id.

115

Somerlott, 686 F.3d at 1153.

116

Motion for Reconsideration at 3.

117

Id. at 3–9.

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The Sherers fail to realize that none of these far-off topics give the District of Utah
removal jurisdiction from state court in Alaska. Removal under § 1441 does not incorporate or
otherwise defer to any sort of international policy in affording removal jurisdiction to federal
district courts. Furthermore, contrary to Sherers’ argument that the removal was “well-reasoned,”
the court ruled long ago that the Sherers’ removal was “clearly improper,” 118 wholly lacking “an
objectively reasonable basis,” 119 and granted attorneys’ fees. The Sherers’ efforts to muddy the
waters with citations of international comity and characterizations of the removal that directly
oppose prior rulings cannot create the necessary grounds to alter judgment for legal error.
B. The underlying awards of attorneys’ fees are proper, not harsh
The Sherers next argue that “this court was unduly harsh in its award to plaintiff of
attorney fees, and findings of fact by the court were erroneous.” 120 The Sherers argue that “[t]he
reasoning for defendant’s attempted removal was neither frivolous nor brought in bad faith, but
brought in consideration of the integrity of Utah’s federal court system and federally signed
treaties;” 121 that they are “whistleblowers who are being punished for their good faith
actions;” 122 that they cannot pay the judgments against them; 123 and the court relied on facts that
are false. 124 They then return to the long-settled issue of the court’s discretion in arguing that the
grant of fees is not mandatory and should not occur in this case. The Sherers once again argue
outside of the scope of the question at issue: the amount of attorneys’ fees to be awarded.

118

Order to Remand at 3.

119

Id. at 6.

120

Motion for Reconsideration at 2.

121

Id. at 9.

122

Id. at 9.

123

Id. at 11–13.

124

Id. at 10–11.

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First, as noted above, the reasoning for the Sherers’ removal is not at issue. To whatever
extent the Sherers are whistleblowers, they are not being punished for their good faith actions.
They could have capitulated immediately upon the filing of Perkumpulan’s motion to remand,
acknowledging their blatant error as they do now, avoiding the costly briefing that has taken
place. Instead, they vigorously opposed remand and caused a great amount of attorneys’ fees.
They are not punished for any good faith actions; rather they are required to compensate
Perkumpulan for the time and expense caused to oppose the blatant error. To any extent Sherers
seek “to correct clear error or prevent manifest injustice” 125 under Rule 59(e), there is no
injustice in the refusal to vacate the fee award.
The Sherers’ financial hardships were sufficiently discussed and considered above in
conjunction with their opposition to Perkumpulan’s Second Fee Award Motion. To the extent it
would apply to the Rule 59(e) analysis “to correct clear error or prevent manifest injustice,” 126
there is no manifest injustice or clear error that needs correction.
The Sherers’ allegations that the court improperly relied on false facts were also
sufficiently discussed and considered above in Section II(C)(2) as it relates to Dressel attorney
Dwight Williams and the values of the Sherers’ property in Alaska. Regardless of the complaints
about the prior discussion of the Sherers’ assets, the point remains that they have assets yet to be
liquidated. Under a Rule 59(e) analysis, Sherers’ arguments about the court’s reference to Mr.
Williams or the Sherers’ landholdings in Alaska do not constitute newly discovered evidence or
an injustice sufficient to justify altering judgment.

125

Somerlott, 686 F.3d at 1153.

126

Id.

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C. The Sherers’ “newly discovered evidence” is irrelevant to the procedure of remand
The Sherers’ “newly discovered evidence” focuses on the amounts owed to law firms in
an underlying lawsuit, leasing of mining property in Alaska, further proceedings in the Alaskan
state court, comments in affidavit about the trustworthiness of Mr. Williams, and the Utah State
Bar suspension of Mr. Williams.127 None of these facts pertain to the Order Denying Motion to
Vacate Fees. The reasonableness of the removal and post-remand fee awards is unaffected by
whether a law firm has been paid, land has been leased, or any other proceedings in Alaska. The
reasoning has been shown to stand even if Mr. Williams’s affidavit is totally disregarded. And
furthermore, to whatever extent Mr. Williams should be discredited for having his license to
practice law suspended, surely Donald Sherer’s disbarment weighs at least as heavily on
credibility. Therefore, there is no “newly discovered evidence” meriting alteration of judgment.
III.

Conclusion on the Sherers’ Motion for Reconsideration

To prevail under Rule 59(e) to reconsider the Order Denying Motion to Vacate Fees, the
Sherers must have shown “an intervening change in the controlling law, new evidence previously
unavailable, and the need to correct clear error or prevent manifest injustice.” 128 They have
failed. The removal was improper, regardless of intent; the underlying awards of attorneys’ fees
are proper, not harsh; the Sherers’ “newly discovered evidence” is irrelevant to the procedure of
remand; and there is not clear error or manifest injustice.
In addition, Perkumpulan could have continued to vigorously oppose the Sherers because
their “moving for Rule 60(b) relief twice to object to the same underlying ruling is the epitome
of frivolous conduct.” 129 However, Perkumpulan has generously chosen not to continue to meet
127

Motion for Reconsideration at 8–9.

128

Somerlott, 686 F.3d at 1153.

129

Memorandum in Opposition to Defendants’ Rule 60(b) Motion and Request for Costs and Expenses, Including
Attorneys’ Fees at 2, docket no. 48, filed Mar. 26, 2015.

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the Sherers’ every grievance, thereby limiting the amount of attorneys’ fees that could be
incurred. 130 As Perkumpulan states: “[t]he Sherers simply recycle and recycle the same
arguments. Enough is enough.” 131 By not going to great lengths to oppose this latest motion but
letting it fail on its own weakness, thereby not incurring costs for a third fee award, Perkumpulan
has offered an end to the fees incurred by the Sherers. This allows the Sherers’ to mitigate their
expenses by refraining from causing any further legal costs incurred as a result of removal.

ORDER
For the reasons state above, the court ORDERS as follows:
1.

Perkumpulan’s motion 132 is GRANTED;

2.

Perkumpulan is awarded $22,627.50 in addition to the previous award of
$31,156.00; and

3.

The Sherers’ motion for reconsideration 133 is DENIED.

Signed this 12th day of May, 2015.
BY THE COURT:

________________________________________
David Nuffer
United States District Judge

130

Id.

131

Id.

132

Motion and Proof of Costs and Attorneys’ Fees, Pursuant to February 19, 2015 Order (DKT. NO 43), docket no.
44, filed Mar. 5, 2015.
133

Motion for Reconsideration of Rule 60, docket no. 46, filed Mar. 12, 2015.

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