United States District Court, N.D. California
ORDER DENYING MOTION FOR ATTORNEYS' FEES AND
VACATING MOTION HEARING RE: DKT. NO. 14
JOSEPH
C. SPERO CHIEF MAGISTRATE JUDGE
I.
INTRODUCTION
Plaintiff
Ngo filed this action in the Superior Court of the State of
California, County of Alameda, asserting state law employment
discrimination claims against his former employer, United
Airlines (“United”), and two of his former
supervisors, Mohammed Buksh and Yvonne Pierce. United removed
to federal court on the basis of diversity jurisdiction,
arguing that although Defendants Buksh and Pierce are
citizens of California - as is Ngo - there is diversity of
citizenship because Buksh and Pierce were fraudulently joined
in this action. In its November 15, 2019 Order (“the
November 15 Order”), the Court found that Buksh and
Pierce were not sham defendants and remanded the case to
State court on the basis that there was no subject matter
jurisdiction over the action. Presently before the Court is
Plaintiff's Motion for Attorneys' Fees Pursuant to 28
U.S.C. § 1447(c) (“Motion”). The Court finds
that the Motion is suitable for determination without oral
argument and therefore vacates the hearing set for January
10, 2020 pursuant to Civil Local Rule 7-1(b). For the reasons
stated below, the Motion is DENIED.[1]
II.
BACKGROUND
Ngo
asks the Court to award $75, 836.00 in fees and $64.50 in
costs that he contends were incurred as a result of
United's improper removal of this action to federal
court. He argues that an award of fees is warranted because
United lacked an “objectively reasonable basis for
seeking removal.'” Motion at 3 (citing
Grancare, LLC v. Thrower by & through Mills, 889
F.3d 543, 552 (9th Cir. 2018)); Reply at 2. This amount
includes fees incurred in drafting the instant Motion and
responding to United's Opposition, as well as fees for
other work on the case while it was in federal court. Ngo has
supplied declarations of his attorneys, Katharine Chao and
Xinying Valerian, documenting the time billed and rates
charged by counsel.
United
opposes the motion, arguing that removal was not objectively
unreasonable as the operative pleading at the time of removal
did not assert a harassment claim against Buksh and Pierce
and the conduct alleged as to those defendants was not
actionable as harassment as it arose out of necessary
personnel management duties. United further asserts that if
the Court awards fees and costs it should reduce the amount
because: 1) some of the fees Ngo requests were not incurred
as a result of the removal; 2) Ngo has not adequately
documented the hours billed or has billed for improper tasks;
and 3) because the hourly rates Ngo requests are excessive.
III.
ANALYSIS
A.
Legal Standards Governing Award of Attorneys' Fees under
28 U.S.C. § 1447(c)
Pursuant
to 28 U.S.C. § 1447(c), “[a]n 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). The Supreme
Court has held that, “[a]bsent unusual circumstances,
courts may award attorney's fees under § 1447(c)
only where the removing party lacked an objectively
reasonable basis for seeking removal. Conversely, when an
objectively reasonable basis exists, fees should be
denied.” Martin v. Franklin Capital Corp., 546
U.S. 132, 141, 126 S.Ct. 704, 163 L.Ed.2d 547 (2005). The
Court in Martin explained that “district
courts retain discretion to consider whether unusual
circumstances warrant a departure from the rule in a given
case.” Id. In Lussier v. Dollar Tree
Stores, Inc., the Ninth Circuit cautioned that
“removal is not objectively unreasonable solely because
the removing party's arguments lack merit, or else
attorney's fees would always be awarded whenever remand
is granted.” 518 F.3d 1062, 1065 (9th Cir. 2008).
Rather, the objective reasonableness of the removal depends
on the clarity of the applicable law and whether such law
“clearly foreclosed” the defendant's
arguments for removal. Id. at 1066-67.
B.
Whether an Award of Attorneys' Fees is Warranted
Although
the Court considered the allegations in Ngo's First
Amended Complaint (“FAC”) in determining whether
there was a “a possibility” that Ngo's
original complaint stated a cause of action against Buksh and
Pierce, it is undisputed that the FAC had not yet been served
at the time of removal and therefore, that the operative
complaint for the purposes of determining whether removal was
objectively unreasonable was the original complaint filed in
state court. See Noorazar v. BMW of N. Am., LLC, No.
18-CV-02472 W (JLB), 2019 WL 442477, at *3 (S.D. Cal. Feb. 5,
2019) (“The Central and Northern Districts have
consistently held that an amended complaint supersedes the
original only when served on the opposing party.”).
Therefore, in determining whether removal was objectively
unreasonable, the Court looks to the original complaint in
this case. While this question presents a close call, the
Court concludes that removal was not objectively
unreasonable.
As the
Court noted in its November 15 Order, “‘[a]
defendant invoking federal court diversity jurisdiction on
the basis of fraudulent joinder bears a “heavy
burden” since there is a “general presumption
against finding fraudulent joinder.”'”
Grancare, LLC v. Thrower ex rel. Mills, 889 F.3d
543, 549 (9th Cir. 2018) (internal brackets omitted) (quoting
Hunter v. Philip Morris USA, 582 F.3d 1039, 1046
(9th Cir. 2009)). Thus, “[a] court may find fraudulent
joinder only if the claim against the non-diverse defendant
is ‘wholly insubstantial and frivolous.”
Grancare, LLC v. Thrower ex rel. Mills, 889 F.3d
543, 549 (9th Cir. 2018) (internal quotation and citation
omitted). Further, the California Supreme Court found in
Roby that under some circumstances personnel
management actions can be evidence of harassment. Roby v.
McKesson Corp., 47 Cal.4th 686, 709 (2009), modified,
Feb. 10, 2010). Moreover, even “[a] single incident of
harassing conduct is sufficient to create a triable issue
regarding the existence of a hostile work environment if the
harassing conduct has unreasonably interfered with the
plaintiff's work performance or created an intimidating,
hostile, or offensive working environment.” Cal.
Gov't Code section 12923(b) (effective January 1, 2019).
Applying these standards, the Court concluded that Ngo was
required only to demonstrate only that there was a
possibility that a state court would find that one
of his claims against Buksh and Pierce was adequately
alleged. The Court further found that Ngo's allegations
“easily” met that standard based on his claims
for harassment.
Notwithstanding
the Court's conclusion that remand was warranted, it also
recognizes that there is some ambiguity in California case
law regarding the degree to which official personnel actions
can form the basis for a hostile work environment claim
against a supervisor. Even in Roby, the California
Supreme Court reiterated the principle that “the
exercise of personnel management authority properly delegated
by an employer to a supervisory employee might result in
discrimination, but not harassment.” Roby v.
McKesson Corp., 47 Cal.4th 686, 707-708 (2009). Further,
while the Court in this case concluded that there was at
least one incident alleged in both the original complaint and
the FAC that fell outside the ambit of an official personnel
action (the request by Buksh that the police perform a
welfare check even though he had no basis for believing that
one was warranted, allegedly to harass and intimidate Ngo),
it is true that the vast majority of the specific conduct
alleged in the original complaint on the part of Buksh and
Pierce clearly arose out of their supervisorial positions
(e.g., determining whether Ngo was authorized to return to
work). Therefore, the Court does not find the case law on
this question to be so well-established that it was
objectively unreasonable for United to remove the case to
federal court. Accordingly, the Court declines to exercise
its discretion under 28 U.S.C. § 1447(c) to award
attorneys' fees.
IV.
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