Summary
The Second Circuit affirmed the district court's award of attorneys' fees and costs to the City of New York under 28 U.S.C. § 1447(c) following a grant of remand to state court. The district court determined that Exxon Mobil lacked an objectively reasonable basis for persisting with multiple jurisdictional arguments that had previously been rejected by this Court and other federal tribunals. The appellate panel concluded that the district court acted within its discretion by assessing the reasonableness of the arguments at the time of the renewed motion to remand rather than at the initial removal.
Topics
Practice areas
Questions Presented
- Whether a district court may award attorneys' fees and costs under 28 U.S.C. § 1447(c) when the removing party had one objectively reasonable ground for removal but continued to press other objectively unreasonable grounds after the legal landscape had materially changed.
- Whether the district court properly assessed the reasonableness of the defendants' continued opposition to remand based on the circumstances existing in 2023, rather than only on the circumstances existing when the action was initially removed in 2021.
- Whether the district court abused its discretion in limiting the fee award to work performed after the Second Circuit's decision in Connecticut and to five of the six asserted jurisdictional grounds.
Holdings
- Under 28 U.S.C. § 1447(c) and Martin v. Franklin Capital Corp., the existence of one objectively reasonable basis for removal does not preclude a fee award in unusual circumstances. A district court may award fees and costs when the removing party continued to press multiple jurisdictional arguments that had been rejected by the governing circuit and numerous other courts, even though one alternative ground was not objectively unreasonable.
- A district court may evaluate whether it was reasonable for a removing party to continue opposing remand based on the legal landscape existing when the renewed remand motion was briefed, rather than being limited to the legal landscape at the time of the initial removal.
- The district court did not abuse its discretion by awarding only the fees and costs attributable to the objectively unreasonable grounds asserted after the Connecticut decision and by excluding fees associated with the diversity argument.
Key quotations
“Absent 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.” (at 21-22)
“This case, in our view, clearly presented unusual circumstances.” (at 23-24)
“At that point, it was largely irrelevant whether Exxon had reasonable grounds for removing the case in 2021; the question was whether, given the undeniable change in the legal landscape, Exxon had reasonable grounds for prolonging litigation by continuing to oppose remand.” (at 27-28)
“The district court exercised its discretion to award fees and costs in a measured way -- that is, only with respect to fees associated with the objectively unreasonable grounds for removal and only for work required after the legal landscape had shifted significantly.” (at 29-30)
Factual background
The City alleged that the defendant oil companies and their trade association violated New York City's Consumer Protection Law by misleading consumers about the role of fossil-fuel products in causing climate change. The defendants removed the action on multiple federal-jurisdiction theories, including federal-question, federal-officer, federal-enclave, diversity, Class Action Fairness Act, and First Amendment theories. After the Second Circuit rejected similar removal arguments in Connecticut and other courts nationwide rejected substantially similar arguments, the defendants continued opposing remand on five of those theories while abandoning their OCSLA argument.
Procedural history
The City filed a New York state-law deceptive-advertising action in New York state court. The defendants removed to federal court, and the City moved to remand. After the district court stayed the remand proceedings pending the Second Circuit's decision in Connecticut v. Exxon Mobil Corp., the court lifted the stay, permitted renewed briefing, granted remand, and awarded fees and costs for five of the six grounds the defendants continued to press after the Connecticut decision. The Second Circuit affirmed the award.