Opinion
CV-01-1347-ST.
May 3, 2002
FINDINGS AND RECOMMENDATION
INTRODUCTION
Plaintiffs, individually and on behalf of all persons similarly situated, initiated this class action to recover unpaid wages, overtime wages, and civil penalty wages for present and former employees of defendant Rent-A-Center, Inc. They filed suit on August 20, 2001, in Multnomah County Circuit Court for the State of Oregon, Rob Pucci, Sam Patton, Chris Schrill [sic], individually and on behalf of all persons similarly situated v. Rent-A-Center, a foreign corporation, dba Rent-A-Center, Civil Case No. 0108-08548, alleging state law claims. On September 28, 2001, Rent-A-Center filed a Notice of Removal to this court, pursuant to 28 U.S.C. § 1441(a), alleging diversity jurisdiction under 28 U.S.C. § 1332(a).
On January 3, 2002, this court found that the removal was improper because defendant did not submit adequate support for the contention that the amount in controversy exceeds $75,000 as to each plaintiff (docket #32). On February 7, 2002, Judge Anna Brown remanded this case to state court (docket #35). Plaintiffs now request that they be awarded reasonable attorney fees incurred in moving for remand in the sum of $8,482.50 (docket #36). This court recommends denial of that request.
ANALYSIS
Pursuant to 28 U.S.C. § 1447(c), a court may require "payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." As held in Moore v. Permanente Med. Group, Inc., 981 F.2d 443, 446 (9th Cir 1992), "Congress has unambiguously left the award of fees to the discretion of the district court." Pursuant to the 1988 amendment to 28 U.S.C. § 1447(c), a finding of "bad faith" by the party unsuccessfully seeking removal is no longer necessary for the court to award costs. Id. The commentary on that amendment advises that the court should consider "the nature of the removal and the nature of the remand" in deciding whether to award such fees. Id, citing Commentary on 1988 Revision by David D. Siegel at 28 U.S.C.A § 1447, p. 58 (West Supp 1992). As a result, "some evaluation of the merits of the remand order is necessary to review an award of attorney's fees." Moore, 981 F.2d at 447.
There are no federal questions in this action. Thus, Rent-A-Center based its removal petition on what it thought was the existence of diversity jurisdiction. Since the Complaint does not specify the amount of damages for any of the named plaintiffs, Rent-A-Center bore the burden of demonstrating that the amount in controversy for at least one named plaintiff, including apportioned attorney fees and costs, exceeds $75,000. Rent-A-Center prepared its own calculations of the named plaintiffs' damages which revealed that removal was proper based on the requisite jurisdictional amount. Plaintiffs then responded with their own affidavits calculating damages less than the jurisdictional amount. In light of Rent-A-Center's heavy burden of proof and the need to resolve any doubts in favor of remanding to state court, this court rejected Rent-A-Center's calculations.
Faced with a Complaint that was silent as to the amount of damages, this court concludes that it was reasonable for Rent-A-Center to believe it had a colorable basis for removal. In fact, ascertaining the amount of plaintiff's alleged damages would have been necessary had the case not been removed from state court. At the time it removed this action, Rent-A-Center did not know that the United States District Court for the Western District of Washington had granted remand in a similar case filed by other employees against Rent-A-Center based on violations of Washington law. That decision was entered September 27, 2001, after this case was removed. Plaintiffs' Submission of Recent Court Decision to Supplement Motion to Remand (docket #16), Exhibit A. Moreover, it involved different named plaintiffs with different amounts of damages which would not have necessarily put Rent-A-Center on notice that its calculation of plaintiffs' damages was in error.
It is not unusual for courts to decline to award attorney fees and costs where a defendant provides arguable grounds for removal. Plute v. Roadway Package Sys., Inc., 141 F. Supp.2d 1005, 1012 (N.D. Cal 2001) (finding that "an award of costs and fees is not warranted in this case, given that the removal was based on a reasonable and supported interpretation of unsettled California law."); Toxic Injuries Corp. v. Safety-Kleen Corp., 57 F. Supp.2d 947, 957-58 (C.D. Cal 1999) (finding that removal was not "so obviously barred as to warrant an award. Indeed, this case involved complicated issues. Although Defendants' arguments were ultimately unpersuasive, they were not frivolous or an improper basis for removal."); Boydstun Metal Works, Inc. v. Parametric Tech. Corp., 1999 WL 476265, *6 (D Or 1999) (declining to award fees and costs on removal where defendant failed to meet its burden to prove fraudulent joinder); Fafara v. American States Life Ins. Co., 976 F. Supp. 1368, 1372 (D Or 1997) (declining to award fees and costs on removal given the lack of case law directly on point); Schrader v. Hamilton, 959 F. Supp. 1205, 1212 (C.D. Cal 1997) (finding that an ERISA preemption issue was "far from frivolous."); Zandi-Dulabi v. Pacific Ret. Plans Inc., 828 F. Supp. 760, 764 (N.D. Cal 1993) (declining to award fees and costs "[b]ecause Defendants presented a colorable argument for removal").
Plaintiffs could have avoided removal in the first instance had they alleged the amount of their damages in their Complaint, or at least alleged damages less than $75,000 for each named plaintiff. Because Rent-A-Center presented an arguable basis for removal based on its own calculations of plaintiffs' damages, plaintiffs' request for attorney fees incurred in removal should be denied.
RECOMMENDATION
For the reasons set forth above, plaintiffs' Motion for Attorneys Fees (docket #36) should be DENIED.
SCHEDULING ORDER
Objections to the Findings and Recommendation, if any, are due May 24, 2002. If no objections are filed, then the Findings and Recommendation will be referred to a district court judge and go under advisement on that date.
If objections are filed, the response is due no later than June 10, 2002. When the response is due or filed, whichever date is earlier, the Findings and Recommendation will be referred to a district court judge and go under advisement.