Opinion
No. 3-03-CV-1872-R.
July 2, 2004
FINDINGS AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE
Third-Party Defendants State of Oklahoma ex rel. Protective Health Services of the State Department of Health, Leslie M. Beitsch, M.D., Henry F. Hartsell, Jr., Ph.D., Darlene Simmons, Nick E. Slaymaker, Mary D. Womack, and Charles L. Broadway, collectively referred to as the "OSDH Parties," have filed a motion for attorney's fees and costs under 28 U.S.C. § 1447(c). For the reasons stated herein, the motion should be granted.
I.
This case originated in Oklahoma state district court as a receivership action brought OSDH against Cottonwood Nursing Center a/k/a Walnut Villa Nursing Center, a unlicensed intermediate care facility operated by Comprehensive Consulting, Inc. ("CCI") and Walnut Nursing Center, L.L.C. On August 18, 2003, the Oklahoma court issued a temporary restraining order appointing a successor receiver and directing CCI and its affiliates to relinquish operational control and management of the nursing home. An emergency hearing was scheduled for August 20, 2003. On the day of the hearing, CCI filed a motion for leave to file a counterclaim against OSDH and a third-party petition against six OSDH employees. CCI also filed a separate complaint the OSDH Parties alleging violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1861, et seq. Before any of the newly joined OSDH employees were served with process, CCI removed the state court action to federal court based on its RICO claim. Recognizing that removal was improper, CCI filed a motion to remand on September 17, 2003. The OSDH Parties filed their own motion to remand on September 18, 2003. By order dated September 22, 2003, the court granted both motions. On October 6, 2003, the OSDH Parties filed the instant motion seeking $22,729.00 in attorney's fees and $352.82 in costs, for a total of $23,081.82, as a result of the improper removal of this action. CCI has not filed a response to the motion. The parties have been given an opportunity to brief the issues and this matter is ripe for determination.II.
A district court has discretion to award "just costs and any actual expenses, including attorney fees, incurred as a result of the removal." 28 U.S.C. § 1447(c). The propriety of removal is central to this determination. See Valdes v. Wal-Mart Stores, Inc., 199 F.3d 290, 293 (5th Cir. 2000); Miranti v. Lee, 3 F.3d 925, 929 (5th Cir. 1993). An award of fees and expenses need not be "predicated on a finding of bad faith or negligent or frivolous removal." Miranti, 3 F.3d at 929, citing News-Texan, Inc. v. City of Garland, 814 F.2d 216, 220 (5th Cir. 1987). Instead, the relevant inquiry is "whether the defendant had objectively reasonable grounds to believe the removal was legally proper." Valdes, 199 F.3d at 293; Kent v. Ford Motor Co., 200 F. Supp.2d 670, 672 (S.D. Miss. 2002). This determination must be based on an objective view of the legal and factual elements in each particular case. Valdes, 199 F.3d at 293.
Although the district judge did not specify his reasons for remanding this case to Oklahoma state court, a review of the record leads to the inescapable conclusion that CCI did not have objectively reasonable grounds to believe that removal was legally proper. It is apparent that CCI filed a complaint with a RICO claim in the state court action — while its motion for leave to file a counterclaim and third-party petition was pending — in order to create a basis for removing this case to federal court. However, as CCI admitted in its own motion to remand, the newly joined OSDH employees were not served with process prior to removal. Moreover, to the extent CCI could have reasonably believed that federal jurisdiction was proper, this case should have been removed to the United States District Court for the Western District of Oklahoma, the district embracing the place where the state action was pending. See 28 U.S.C. § 1441(a). CCI could not have reasonably believed that removal jurisdiction was proper in the Northern District of Texas.
The only remaining issue is the amount of fees and costs to be awarded. The court has reviewed the fee application and exhibits attached thereto, and finds that the time spent, services performed, expenses incurred, and hourly rates charged by counsel are justified under the factors set forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974). CCI has not filed a response or otherwise contested the amount of fees requested. Accordingly, the OSDH Parties are entitled to $22,729.00 in attorney's fees and $352.82 in costs, for a total of $23,081.82.
RECOMMENDATION
The OSDH Parties' motion for attorney's fees and costs should be granted. The OSDH Parties should be awarded $22,729.00 in attorney's fees and $352.82 in costs, for a total of $23,081.82, pursuant to 28 U.S.C. § 1447(c).A copy of this report and recommendation shall be sent to all counsel of record. Any party may file written objections to this recommendation by July 16, 2004. The failure to file written objections shall bar the aggrieved party from appealing the factual findings and legal conclusions of the magistrate judge that are accepted or adopted by the district court, except upon grounds of plain error or manifest injustice. See Douglass v. United Services Automobile Ass'n, 79 F.3d 1415, 1417 (5th Cir. 1996).