ORDER DENYING MPUD'S MOTION FOR AWARD OF ATTORNEY'S FEES AND COSTS
On November 16, 2010, Plaintiff HSBC Bank USA ("HSBC") filed a Motion for Partial Summary Judgment against Defendant Mariposa Public Utility District ("MPUD"). In the motion, HSBC asked the Court to judicially declare that HSBC's lien on the subject property was superior to MPUD's interest. On January 20, 2011, the Court dismissed MPUD from this action based on mootness because MPUD's lien against the subject property had been extinguished. Subsequently, MPUD filed a Motion for Award of Attorney's Fees and Costs on February 17, 2011. For the reasons that follow, the motion will be denied.
MPUD has requested costs in the amount of $739.01. (Doc. 154 at 1.) Rule 54(d)(1) of the Federal Rules of Civil Procedure provides that "costs--other than attorney's fees--should be allowed to the prevailing party." "Rule 54(d)(1) creates a presumption in favor of awarding costs to a prevailing party, but the district court may refuse to award costs within its discretion." Champion Produce, Inc. v. Ruby Robinson Co., Inc., 342 F.3d 1016, 1022 (9th Cir. 2003) (citations omitted). However, "costs under Rule 54(d) may not be awarded where an underlying claim is dismissed for lack of subject matter jurisdiction, for in that case the dismissed party is not a 'prevailing party' within the meaning of Rule 54(d)." Miles v. State of California, 320 F.3d 986, 988 (9th Cir. 2003).
In this case, MPUD was dismissed from the action based on mootness. Mootness deprives a federal court of subject matter jurisdiction to hear a case. North Carolina v. Rice, 404 U.S. 244, 246 (1971). Therefore, since MPUD was dismissed for lack of subject matter jurisdiction, costs are not recoverable under Rule 54(d). Accordingly, MPUD's Motion for Costs is DENIED.
B. Motion for Attorney's Fees
"In an action involving state law claims, [federal courts] apply the law of the forum state to determine whether a party is entitled to attorneys' fees, unless it conflicts with a valid federal statute or procedural rule." MRO Commc'ns v. Am. Tel. & Tel. Co., 197 F.3d 1276, 1282 (9th Cir. 1999). Here, MPUD requests attorney's fees under California Civil Code § 1717 and California Public Utilities Code § 16647.
1. California Civil Code § 1717
California Civil Code § 1717 provides in relevant part:
(a) In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs. . . .
(b)(1) The court, upon notice and motion by a party, shall determine who is the party prevailing on the contract for purposes of this section, whether or not the suit proceeds to final judgment. Except as provided in paragraph (2), the party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract. The court may also determine that there is no party prevailing on the contract for purposes of this section.
The California Supreme Court has explained: in deciding whether there is a 'party prevailing on the contract,' the trial court is to compare the relief awarded on the contract claim or claims with the parties' demands on those same claims and their litigation objectives as disclosed by the pleadings, trial briefs, opening statements, and similar sources. The prevailing party determination is to be made only upon final resolution of the contract claims ...