LAW.coLAW.co

OWEN v. Ramzy P. Ladah, Defendant. (2021)

United States Court of Appeals, Ninth Circuit.2021-03-15No. No. 20-15129

Summary

Holding. The appeal of the remand order is dismissed as non-reviewable under 28 U.S.C. § 1447(d), and the award of attorneys' fees in the amount of $8,520.00 is affirmed as not an abuse of discretion.

Christine Owen, a co-owner of Half Price Lawyers LLC, filed state law claims against her business partner Adam Stokes in state court seeking her share of company profits. Stokes removed the case to federal court, but the district court remanded it back to state court and awarded Owen attorneys' fees, finding that the removal lacked an objectively reasonable basis. Stokes appealed both the remand and fee award.

The court held that the remand order itself was not reviewable on appeal. However, it reviewed the attorneys' fees award and found it proper. Stokes' arguments for federal jurisdiction were baseless: merely owning a federally-protected trademark or securities in the company does not create federal question jurisdiction, Owen was not required to raise federal law arguments to give the court jurisdiction, and parties cannot confer federal jurisdiction by contract. The court also found that Stokes made misrepresentations to both the district court and the appellate court about the agreements supposedly creating federal questions.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Whether a remand order based on lack of federal question jurisdiction is reviewable on appeal
  • Whether federal trademark or securities ownership creates federal question jurisdiction
  • Whether parties can confer federal jurisdiction through contractual agreement
  • Whether attorneys' fees were reasonably calculated under the lodestar method

Procedural posture

Owen filed state law claims in state court; Stokes removed to federal court; the district court granted Owen's motion to remand and awarded attorneys' fees; Stokes appealed.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

MEMORANDUM ***

Christine Owen and Adam Stokes own Half Price Lawyers LLC (“HPL”). Owen filed fifteen state law claims against Stokes, HPL, and others (collectively “Stokes”) in state court, alleging that she had not received her share of HPLs profits under various contracts. Stokes removed the case, but the district court granted Owens motion to remand and her motion for attorneys fees based on improper removal under 28 U.S.C. § 1447(c). Stokes appeals. We dismiss in part and affirm in part.

1. Owens claims were subject to non-discretionary remand under 28 U.S.C. § 1447(c), and that remand order is not reviewable. 28 U.S.C § 1447(d) (“An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise․”); see Stevens v. Brinks Home Sec., Inc., 378 F.3d 944, 948–49 (9th Cir. 2004) (explaining that only non-jurisdictional, discretionary orders of remand are reviewable on appeal).

2. We review de novo whether the district court applied the correct legal standard for an award of attorneys fees, Moore v. Permanente Med. Grp., Inc., 981 F.2d 443, 445–46 (9th Cir. 1992), and review the award of fees and costs for abuse of discretion, Lussier v. Dollar Tree Stores, Inc., 518 F.3d 1062, 1065 (9th Cir. 2008). “The court recognized that its decision turned on the reasonableness of the attempted removal, which is the correct legal standard.” Id.; see Martin v. Franklin Cap. Corp., 546 U.S. 132, 141, 126 S.Ct. 704, 163 L.Ed.2d 547 (2005) (“[C]ourts may award attorneys fees under § 1447(c) only where the removing party lacked an objectively reasonable basis for seeking removal.”).

Stokess attempts to manufacture federal question jurisdiction were baseless and premised on misrepresentation. First, Stokes argues that because “Half Priced Lawyers” is a trademark, and because Owen and Stokes own securities in HPL, any claims Owen may have necessarily arise under federal trademark and securities law. But “the mere existence of [a] protected trade name ․ does not provide a basis for federal jurisdiction.” Postal Instant Press v. Clark, 741 F.2d 256, 257 (9th Cir. 1984). Stokes has provided no authority suggesting that the rule is any different in the securities context. Second, Stokes argues that Owen could raise arguments based on federal law, but “[j]urisdiction may not be sustained on a theory that the plaintiff has not advanced.” Merrell Dow Pharms. Inc. v. Thompson, 478 U.S. 804, 809 n.6, 106 S.Ct. 3229, 92 L.Ed.2d 650 (1986). Finally, Stokess arguments that the parties’ Operating and Licensing Agreements create a federal question fail, because neither document binds the parties to only federal law, and even if they did, “[t]he parties have no power to confer jurisdiction on the district court by agreement or consent.” Morongo Band of Mission Indians v. Cal. State Bd. of Equalization, 858 F.2d 1376, 1380 (9th Cir. 1988). Moreover, Stokess arguments to the district court and to this Court concerning the Agreements contain misrepresentations. The district court therefore did not abuse its discretion in determining that there was no objectively reasonable basis for removal.

3. Stokes argues that the district courts fee award in the amount of $8,520.00 was excessive. To the contrary, the district court properly applied a reasonable hourly rate to the hours Owens counsel spent on federal litigation, except those hours spent opposing Stokess motion to compel arbitration because that motion would have been filed whether the case was in state or federal court. Morales v. City of San Rafael, 96 F.3d 359, 363–64 (9th Cir. 1996) (describing the “lodestar” method of determining fees). The amount of the award was not an abuse of discretion.

DISMISSED IN PART AND AFFIRMED IN PART.