Opinion
Case No. 4:20-cv-00073-SMR-SBJ
2020-12-22
AMES MUNICIPAL ELECTRIC SYSTEM, Petitioner, v. IOWA UTILITIES BOARD, Respondent, United States Department of Agriculture, Respondent.
David Jay Lynch, Brown Winick Law Firm, Des Moines, IA, for Petitioner. Jon C. Tack, Matthew T. Oetker, Iowa Utilities Board, Des Moines, IA, for Respondent Iowa Utilities Board. David L.D. Faith, Kristin Elaine Olson, William C. Purdy, United States Attorney's Office, Des Moines, IA, for Respondent United States Department of Agriculture.
David Jay Lynch, Brown Winick Law Firm, Des Moines, IA, for Petitioner.
Jon C. Tack, Matthew T. Oetker, Iowa Utilities Board, Des Moines, IA, for Respondent Iowa Utilities Board.
David L.D. Faith, Kristin Elaine Olson, William C. Purdy, United States Attorney's Office, Des Moines, IA, for Respondent United States Department of Agriculture.
ORDER ON MOTION FOR REMAND
STEPHANIE M. ROSE, JUDGE
In this civil action, originally filed in the Iowa District Court for Story County, Ames Municipal Electric System ("Ames") petitions for judicial review of the Iowa Utilities Board's ("IUB") January 23, 2020 decision modifying the exclusive utility service territory boundaries of property owned by the United States Department of Agriculture ("USDA"). USDA intervened and promptly removed the case to federal court under the auspices of 28 U.S.C. § 1442(a). [ECF No. 11]. Ames, joined by Intervenors Iowa Association of Municipal Utilities ("IAMU") and Office of Consumer Advocate ("OCA"), move to remand the case. [ECF Nos. 14; 15; 17]. IUB joined in Ames’ motion and moved to remand on additional grounds. [ECF No. 16]. Because the Court concludes Ames's petition for judicial review does not presently contain a basis for removal, the motions to remand are GRANTED.
I. BACKGROUND
USDA is a federal agency that operates the National Centers for Animal Health (the "Center"), a large research facility, in Story County, Iowa, where it conducts "critical animal research, including research using dangerous pathogens." [ECF No. 11-2 at 3] (IUB Decision). Research laboratories operate at various containment levels on a scale from Biosafety Level 1 ("BSL-1") (low) to Biosafety Level 4 ("BSL-4") (high). [ECF No. 11-4 at 29]. Although most of the Center's work is done in laboratories operating at Biosafety Level 2 ("BSL-2"), handling pathogens and agents posing a moderate risk to human health, it also contains laboratories operating at Biosafety Level 3 ("BSL-3"), which handles dangerous pathogens such as tuberculosis, brucellosis, anthrax, tularemia, and the plague. Id. ; see also [ECF No. 11-4 at 27, 29]. Because of the dangers these facilities pose to public health, they require multiple redundant and reliable power systems to service their containment protocols. Id. at 4.
The Center was developed on the original sites of several former USDA laboratories, leading to the current electric service territory bisecting the Center's contiguous parcel and leaving it with two electric service providers. Id. at 2–3. Historically, Ames serviced the southern portion of the Center, and IPL serviced the northern portion. Id. at 3. The Center's Building 21, the key building in this dispute, was constructed as part of a larger USDA modernization project; though designed to be a stand-alone facility, USDA planned to integrate the building into its combined facilities once Congress approved further appropriations for the project. Located at the northern edge of Ames’ exclusive service territory, Building 21 contains both BSL-2 and BSL-3 laboratories.
In 2011, USDA moved forward with its modernization project to move all BSL laboratories to a centralized power grid. The federal agency cited an inadequately reliable power supply to Building 21 and unacceptable risk of power outages, compromising the Center's containment protocols and inhibiting the USDA's ability to safely carry out its federal mission. USDA awarded a contract to connect Building 21 to the Center's power grid, supplied by IPL, and disconnecting it from Ames’ infrastructure. Id. at 5. The project has been completed up to the point of disconnecting Building 21 from Ames’ infrastructure. Id.
On September 11, 2018, USDA filed a customer complaint with IUB asking the state regulatory body to "evaluate Ames’ ability ‘to meet the Center's highly specialized electrical needs’ " and "modify the service territory boundary" running through the federal land. Id. at 1. In essence, USDA sought a modification that would allow it to remove Building 21 from Ames's exclusive service territory so it could connect to IPL's utility infrastructure. The parties—USDA, Ames, and IPL—jointly submitted three issues for IUB's consideration: (1) whether, at USDA's request, IUB may alter existing boundaries of an electric utility exclusive service area under Iowa Code § 476.25(1) and, if so, whether the record evidence justified moving that boundary for the Center's Building 21 to fall within the exclusive service area of IPL; (2) whether, if modified, Ames was entitled to compensation; and (3) whether, in the event IUB declined to alter the existing utilities boundaries, USDA was entitled to, on its own initiative, disconnect Building 21 from Ames’ infrastructure and connect it to USDA's own self-managed power grid, which is partially served by IPL and partially served by USDA's own electric turbine. [ECF No. 11-5 at 1–2].
After holding a contested hearing and receiving evidence, testimony, and briefs from USDA, Ames, and IPL, IUB issued its written decision on January 23, 2020. UIB noted Iowa law did not permit USDA to initiate proceedings to alter electric service territories by customer complaint, but the administrative body determined it was not prevented from investigating allegations of inadequate utility service on its own initiative to address the public health and safety concerns that had been brought to its attention. [ECF No. 11-2 at 7]. After balancing the public interest, preservation of existing service areas, prevention of unnecessary duplication of facilities, and natural and physical barriers, IUB determined a modification was appropriate and altered the utility service boundaries servicing the Center by consolidating all of USDA's property within the exclusive service territory of IPL. See generally id. at 6–12. Because IUB modified the exclusive service territories of Ames and IPL concerning the location of Building 21, IUB did not reach the third issue concerning whether USDA could engage in self-help. Id. at 11.
In re: Interstate Power & Light Co. and Ames Mun. Elec. Sys. , Dkt. No. FCU-2018-0007 (C-2018-0478), 2020 WL 430956 (I.U.B. Jan. 23, 2020).
Ames petitioned for judicial review under Iowa Code § 17A.19 in the Iowa District Court for Story County, seeking to overturn IUB's decision and reverse the reapportionment of the utility service boundaries servicing USDA's land. See [ECF No. 11-1 at 3–5]. After the state court granted USDA's request to intervene and be named a respondent in the case, [ECF No. 11-3 at 1] (citing Iowa Code § 17A.19(2) ; Iowa R. Civ. P. 1.407 ), USDA removed the action to this Court pursuant to 28 U.S.C. § 1442(a), asserting Ames’ petition is "against or direct to" an agency of the United States of America, [ECF No. 11].
II. ANALYSIS
Ames, IUB, IAMU, and OCA seek to remand this case back to state court. [ECF Nos. 14; 15; 16; 17]; see 28 U.S.C. § 1447(c) ("If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded."). The parties challenge the propriety of removal under § 1442(a) and contend the Court lacks subject matter jurisdiction over the appeal of IUB's administrative decision. IUB separately argues federal courts cannot exercise jurisdiction over actions initiated in state court under chapter 17A of the Iowa Code and that Eleventh Amendment immunity prevents the case from proceeding in a federal forum. USDA, as the removing party invoking federal jurisdiction, bears the burden of demonstrating that removal was proper. Wilson v. Republic Iron & Steel , 257 U.S. 92, 97, 42 S.Ct. 35, 66 L.Ed. 144 (1921) ; Winters v. Diamond Shamrock Chem. Co. , 149 F.3d 387, 397 (5th Cir. 1998).
A. Agency Removal
Title 28, section 1442 of the United States Code permits the removal to federal court any "civil action ... that is commenced in a State court and that is against or directed to ... [t]he United States or any agency thereof." 28 U.S.C. § 1442(a)(1). The statute's history reflects that its " ‘basic’ purpose is to protect the Federal Government from the interference with its ‘operations’ " because local prejudice from state governments "may impede enforcement of federal law" or "deprive federal officials of a federal forum in which to assert federal immunity defenses." Watson v. Philip Morris Cos., Inc. , 551 U.S. 142, 150–51, 127 S.Ct. 2301, 168 L.Ed.2d 42 (2007) (citations omitted). In addition to permitting removal, the statute "establishes an independent basis for federal jurisdiction." United States v. Todd , 245 F.3d 691, 693 (8th Cir. 2001) ; see Mesa v. California , 489 U.S. 121, 137, 109 S.Ct. 959, 103 L.Ed.2d 99 (1989) (" Section 1442(a) ... is a pure jurisdictional statute ...."). Indeed, "[f]ederal jurisdiction rests on a ‘federal interest in the matter,’ " and "the right of removal under [§] 1442(a)(1) is made absolute whenever a suit in a state court is for any act ‘under color’ of federal office." Willingham v. Morgan , 395 U.S. 402, 406, 89 S.Ct. 1813, 23 L.Ed.2d 396 (1969) (citation omitted). The removal statute "is not ‘narrow’ or ‘limited,’ " and the Supreme Court has cautioned that the statute's policy "should not be frustrated by a narrow, grudging interpretation of § 1442(a)(1)." Id. at 407, 89 S.Ct. 1813.
Section 1442 provides, in relevant part:
(a) A civil action or criminal prosecution that is commenced in a State court and that is against or directed to any of the following may be removed by them to the district court of the United States for the district and division embracing the place wherein it is pending:
(1) The United States or any agency thereof or any officer (or any person acting under that officer) of the United States or of any agency thereof, in an official or individual capacity, for or relating to any act under color of such office or on account of any right, title or authority claimed under any Act of Congress for the apprehension or punishment of criminals or the collection of the revenue.
...
(d) In this section, the following definitions apply:
(1) The terms "civil action" and "criminal prosecution" include any proceeding (whether or not ancillary to another proceeding) to the extent that in such proceeding a judicial order, including a subpoena for testimony or documents, is sought or issued. If removal is sought for a proceeding described in the previous sentence, and there is no other basis for removal, only that proceeding may be removed to the district court.
"Historically, removal under § 1442(a)(1) and its predecessor statutes was meant to ensure a federal forum in any case where a federal [actor] is entitled to raise a defense arising out of [its] official duties." Arizona v. Manypenny , 451 U.S. 232, 241, 101 S.Ct. 1657, 68 L.Ed.2d 58 (1981). Indeed, prior versions of the federal removal statute only permitted officers or agents of the federal government to remove disputes to federal court, not agencies themselves. See Int'l Primate Prot. League v. Admin'rs of Tulane Educ. Fund , 500 U.S. 72, 79–80, 111 S.Ct. 1700, 114 L.Ed.2d 134 (1991) (concluding "the [former] statutory language excludes agencies from the removal power" because the prior version of the statute granted such ability "to only one grammatical subject, ‘[a]ny officer,’ which [was] then modified by a compound prepositional phrase: ‘of the United States or [of] any agency thereof’ "). This made sense, at the time: "agencies were not being sued" because "Congress had not consented to such suits and the agencies were therefore shielded by sovereign immunity"; thus, "[t]he first nine incarnations of the federal officer removal statute clearly reflect Congress’ belief that state courts could be trusted to dismiss the agency as defendant." Id. at 85, 111 S.Ct. 1700. The immunity of federal officers, by contrast, "hinged on ‘the crucial question ... whether the relief sought in a suit nominally addressed to the officer [was] relief against the sovereign.’ " Id. (quoting Larson v. Domestic & Foreign Corp. , 337 U.S. 682, 687, 69 S.Ct. 1457, 93 L.Ed. 1628 (1949) ). This changed in 1996, when Congress amended § 1442(a) to specifically allow removal by "the United States or any agency thereof." Federal Courts Improvement Act of 1996, Pub. L. No. 104–317, § 206, 110 Stat. 3847, 3850 (1996). With the Removal Clarification Act of 2011, § 1442(a) was amended again to specify that actions "against or directed to " federal entities qualified for removal to federal court, allowing for removal even when the removing entity is not a traditional defendant. See Pub. L. No. 112–51, § 2, 125 Stat. 545, 545 (2011) (emphasis added). The primary purpose of the 2011 amendments was "to ensure that any individual drawn into a State legal proceeding based on that individual's status as a Federal officer has the right to remove the proceeding to a U.S. district court for adjudication" and meant to counteract the state court practice of permitting pre-suit discovery against federal actors. H.R. Rep. No. 112–17(I), at 1 (2011). In essence, § 1442(a)(1) abrogates the "well-pleaded complaint" rule to allow the federal government or its agents to removal a case to federal court even when a federal question is not raised directly in the complaint. Mesa , 489 U.S. at 136–37, 109 S.Ct. 959.
The first requirement to effect removal under § 1442(a) is that the lawsuit be "against" or "directed to" the United States or one of its agencies. The United States Supreme Court has not examined the scope of § 1442(a) ’s "directed at" language, but "[t]he general rule is that a suit is against the sovereign if ‘the judgment sought would expend itself on the public treasury or domain, or interfere with the public administration,’ or if the effect of the judgment would be ‘to restrain the Government from acting, or compel it to act.’ " Dugan v. Rank , 372 U.S. 609, 620, 83 S.Ct. 999, 10 L.Ed.2d 15 (1963) (citing Land v. Dollar , 330 U.S. 731, 738, 67 S.Ct. 1009, 91 L.Ed. 1209 (1947) (first quote); Domestic & Foreign Commerce Corp. , 337 U.S. at 704, 69 S.Ct. 1457 (second quote)) (emphasis added). Several courts, attempting to decipher the meaning of this language, have concluded that the ordinary meaning of "direct" requires that a litigant "aim" a civil action at a federal entity in order for the action to be removable under § 1442(a)(1). See, e.g., Ottaviance v. AVS Props., LLC , Civ. No. 18-16429, 2019 WL 3183642, at *6 (D.N.J. July 15, 2019) ; In re Rotondo , Case No. 16-13324, 2018 WL 3741993, at *4 (E. D Mich. Aug. 7, 2018) ; Guggenberger v. Starkey Labs., Inc. , Civil No. 16-2021 JRT/LIB, Civil No. 16-2022 (JRT/LIB), 2016 WL 7479542, at *7 (D. Minn. Dec. 29, 2016).
Properly defining the scope of the "civil action" before the Court leads to the conclusion that, at present, Ames's petition for judicial review is not "aimed at" USDA within the meaning of § 1442(a)(1). IUB's administrative decision—the decision presently before the Court on judicial review—determined that, on balance, Iowa law necessitated the need for a single electric utility to service all of USDA's facilities to accommodate its need for power redundancy and supported a modification placing all of USDA's federal land under the exclusive service territory of IPL. See [ECF No. 11-2 at 10–11]. Ames seeks relief from this decision, asking the reviewing court to "[r]everse or modify the IUB ruling to restore Ames's service territory" or, alternatively, to "[r]emand this matter to the IUB with instructions to make a proper determination and resolution of the complaint proceeding, restoring Ames's service territory." [ECF No. 11-1 at 5]. Thus, the civil action presently before the Court concerns only the application of state utilities law and policy to the decision of a state administrative body modifying the exclusive territories of two competing utility providers servicing the federal land.
USDA contends the broader context of this litigation is "ultimately about whether the United States is required to continue to purchase power from the City of Ames." See [ECF No. 18 at 8]. It argues the effect of relief requested by Ames would be for a state administrative body to compel the federal government to manage its power grid in a particular way against its interests, interfering with the redundant electrical systems and containment protocols that are critical to the administration of its federal research mission and threaten the public health with exposure in the event of a power failure. But the question of whether Iowa law supports a modification of exclusive service territory covering USDA's property does not implicate whether or not USDA is bound to respect it. IUB did not reach a determination on that latter question subsumed in the third issue presented to it—whether USDA could engage in self-help without violating Iowa Code § 476.25(3) —because the Board instead concluded it was appropriate to modify the service territories in USDA's favor. If successful in this civil action, Ames would receive a judgment concerning whether the modification was proper under Iowa Code § 476.25(1) (Issue #1); whether USDA is subject to the requirements of Iowa utilities law or immune from regulation as an arm of the federal government (Issue #3) is not before the Court. See General Tel. Co. of the Midwest v. Iowa State Commerce Comm'n , 275 N.W.2d 364, 367 (Iowa 1979) (holding that because the petition for judicial review concerned a "contested case" under chapter 17A of the Iowa Code, "review is limited to those questions considered by the [agency]"); see also Drake Univ. v. Davis , 769 N.W.2d 176, 185 (Iowa 2009) (holding that because the agency did not address one of the issues submitted by the parties, the petitioner was not "aggrieved" or "adversely affected" by the final agency decision under Iowa Code § 17A.19(1) to empower the district court to review the issue in the first instance). Although USDA undoubtedly has a strong federal interest in the reliability of the power systems securing its redundant containment protocol, review of the administrative decision itself simply will not itself restrain or compel the federal government. Cf. Jax Leasing, LLC v. Xiulu Ruan , 359 F. Supp. 3d 1129, 1134 (S.D. Ala. 2019) (action seeking to "judicially establish that the plaintiff's lien primes the United States’ competing lien"); In re Lusk , Case No. SACV 16-0930 AG (JCGx), 2016 WL 4107671, at *3 (C.D. Cal. July 30, 2016) (state bar disciplinary proceedings sought to "seize the law practice of a federally certified JAG" and "[s]uch an action may interfere with the United States’ operation of its federal JAG program"). Its interest in the case—the federal land upon which its public charge is conducted-is simply too attenuated from the present iteration of this lawsuit to satisfy the purpose of § 1442(a)(1).
Under the Iowa Administrative Procedure Act ("IAPA"), a "contested case" is a proceeding "in which the legal rights, duties or privileges of a party are required by Constitution or statute to be determined by an agency after an opportunity for an evidentiary hearing." Iowa Code § 17A.2(5). State proceedings alleging a violation of exclusive utility service territories under § 476.25(3) involves "a contested case proceeding with [IUB] under chapter 17A." This approach is generally consistent with federal administrative law. See INS v. Ventura , 537 U.S. 12, 17, 123 S.Ct. 353, 154 L.Ed.2d 272 (2002) ("Generally speaking, a court ... should remand a case to an agency for decision of a matter that statutes place primarily in agency hands....").
Ames agrees this civil action "is a purely state law matter concerning the Iowa Utilities Board's modification of an exclusive service territory." [ECF No. 14-1 at 8]; see also [ECF No. 20 at 4–5] (submitting that "IUB did not actually rule on [the third] issue" concerning USDA's ability to engage in self-help and "[j]udicial review under Iowa Code § 17A.19 is generally limited to those questions considered by the agency").
This conclusion becomes even more apparent when examining USDA's assertion of sovereign immunity in support of the second generally-recognized requirement for removal under § 1442(a)(1) —a colorable federal defense. USDA asserts its sovereign immunity under the United States Constitution entitles it to unilaterally act to disconnect from Ames's utility infrastructure as a form of "self-help," and that its actions as a federal agency are immune to direct regulation by the State of Iowa. But USDA raised that defense in arguing that it as a federal agency could not be held responsible for compensating Ames for any loss in service territory (Issue #2), and that as a utility customer it could not violate § 476.25(3) and further was not subject to the regulation of the State (Issue #3). See [ECF No. 11-2 at 12–14, 56–57]. Sovereign immunity, as asserted by USDA, has no bearing on the matter actually ruled on by IUB and from which Ames seeks judicial review regarding the modification of service territories of two utility providers under state law (Issue #1).
Removal under the "federal officer removal statute" has traditionally always required a federal defense because, as noted above, the statute originally only specified removal by federal officers, necessitating the determination of whether the officer was acting in his or her official capacity under color of federal office (as opposed to in his or her individual capacity). See Int'l Primate Prot. League , 500 U.S. at 85–86, 111 S.Ct. 1700. But "the United States and federal agencies are not ‘sued in an official or individual capacity’ and are not sued for an ‘act under color of such office,’ " obviating this inquiry. City of Cookeville v. Upper Cumberland Elec. Membership Corp. , 484 F.3d 380, 389 (6th Cir. 2007). Accordingly, some courts have concluded that the requirement that a federal official demonstrate a colorable federal defense for removal under § 1442(a)(1) does not also apply to agencies themselves. See, e.g., id. at 388–91. The Eighth Circuit's most authoritative decision on § 1442(a) removal, United States v. Todd , 245 F.3d 691 (8th Cir. 2001), found the federal defense requirement was met when the United States Attorney's removal of a civil lawsuit filed in state court by a federal criminal defendant to obtain documents and records belonging to the federal government under the Arkansas Freedom of Information Act. Id. at 693 ("To qualify for removal, a defendant must, among other things, raise ‘a "colorable defense arising out of [the defendant's] duty to enforce federal law." ’ " (quoting Mesa , 489 U.S. at 133, 109 S.Ct. 959 )). Being issued prior to the most recent amendment to the removal statute, Todd did not consider the question whether a federal agency , unlike a federal officer , was actually required to do so to remove under that statute.
That is not to say that this case could not at some future time become "aimed at" USDA. Suppose Ames prevails before an Iowa court in this action, reversing the decision to modify the exclusive service territories covering the federal land. If IUB then determines USDA has no right to self-help without violating § 476.25(3), USDA could petition for judicial review in federal court challenging the administrative decision as contrary to federal law in violation of its sovereign immunity. See City of Chicago v. Int'l Coll. of Surgeons , 522 U.S. 156, 118 S.Ct. 523, 139 L.Ed.2d 525 (1997) (analyzing removal of state administrative proceedings as "civil actions" under § 1441); Wong v. Minn. Dep't of Human Servs. , 820 F.3d 922, 931–33 (8th Cir. 2016). Or, USDA could refuse to honor the service territory boundaries and wait to be sued. On the other hand, if IUB finds in favor of USDA concerning its ability to engage in self-help, and Ames again petitions for judicial review in state court, then USDA's sovereign immunity and federal supremacy defense bears on the resolution of that issue. In any event, it could almost certainly be said that the action, at that point, would be "against" or "directed to" USDA. See Nationwide Invs. v. Miller , 793 F.2d 1044, 1045–47 (9th Cir. 1986). At present, however, none of this has yet come to pass and the matter is simply not in-issue in the current iteration of this litigation to support removal jurisdiction under § 1442(a)(1). USDA's sovereign immunity is a question reserved for another day.
B. Federal Question
Alternatively, USDA contends Ames and company opened the door to accepting jurisdiction on the basis of a substantial federal question by invoking a federal statute to argue that sovereign immunity does not shield the United States from regulation under state utilities law, and requests leave to amend its notice of removal on the basis of federal question jurisdiction. [ECF No. 23 at 5–6]; see 28 U.S.C. §§ 1331, 1441(a). Unlike removal jurisdiction based on § 1442(a)(1), "[a] case ‘aris[es] under’ federal law within the meaning of § 1331 ... if ‘a well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial question of federal law.’ " Empire Healthchoice Assurance, Inc. v. McVeigh , 547 U.S. 677, 689–90, 126 S.Ct. 2121, 165 L.Ed.2d 131 (2006) (citation omitted). "[F]ederal jurisdiction over a state law claim will lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress." Gunn v. Minton , 568 U.S. 251, 258, 133 S.Ct. 1059, 185 L.Ed.2d 72 (2013) (citing Grable & Sons Metal Prods., Inc. v. Darue Eng'r & Mfg. , 545 U.S. 308, 313–14, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005) ). Although USDA contends sovereign immunity and federal supremacy shields it from regulation by state utilities law, Ames and IAMU argue § 8093 of the Department of Defense Appropriations Act of 1988, 101 Stat. 1329, 1329–79 (Dec. 22, 1987) (codified as amended at 40 U.S.C. § 591 ), abrogates that immunity because it prohibits USDA, or any federal agency, from using funds appropriated by Congress "to purchase electricity in a manner inconsistent with State law governing the provision of electric utility service, including State utility commission rulings and electric utility franchises or service territories established pursuant to State statute, State regulation, or State-approved territorial agreements." See also 48 C.F.R. § 41.201(d)(1) ; cf. West River Elec. Ass'n, Inc. v. Black Hills Power & Light Co. , 918 F.2d 713, 714 (8th Cir. 1990).
This federal issue, though substantial, is not necessarily raised here. As discussed above, the resolution of this civil action does not turn on USDA's entitlement to self-help or immunity from violation under Iowa Code § 476.25(3). Though it will undoubtedly become critical should IUB's decision on the modification issue be reversed, it is not properly raised within the scope of judicial review in the current iteration of this lawsuit. USDA's request to amend based on federal question jurisdiction is therefore denied.
Because remand is appropriate on jurisdiction grounds under § 1442(a)(1), the Court declines to address IUB's separate arguments for remand.
C. Costs and Attorneys’ Fees
Ames and company seek costs and attorneys fees associated with bringing their successful motion to remand. [ECF No. 14 at 9]. "An order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal." 28 U.S.C. § 1447(c) (emphasis added). Given the permissive nature of the statute, there is no presumption in favor of awarding fees when granting remand. Martin v. Franklin Cap. Corp. , 546 U.S. 132, 137, 126 S.Ct. 704, 163 L.Ed.2d 547 (2005). An award of fees is appropriate "only where the removing party lacked an objectively reasonable basis for seeking removal." Id. at 141, 126 S.Ct. 704. Given the exceptionally complicated issues of federal jurisdiction contained in the present dispute, USDA raised legitimate grounds for removal that were genuinely in dispute and possessed a good faith basis to remove the case to federal court. The Court declines to award costs and attorneys’ fees.
III. CONCLUSION
For the reasons discussed above, the Petitioner Ames Municipal Electric System's Motion for Remand, [ECF No. 14], is GRANTED. Respondent Iowa Utilities Board's Motion for Remand, [ECF No. 16], is DENIED as moot. The remanding parties’ request for attorneys’ fees and costs is DENIED. USDA's request for leave to amend, see [ECF No. 23 at 5–6], is DENIED. Pursuant to 28 U.S.C. § 1477(c), the Clerk of Court is DIRECTED to mail a certified copy of this Order to the Clerk of the Iowa District Court for Story County.
IT IS SO ORDERED.