United States District Court, M.D. Florida, Orlando Division
BUILDING MATERIALS CORPORATION OF AMERICA and ROOFING SUPPLY GROUP ORLANDO LLC, Plaintiffs,
HENKEL CORPORATION, Defendant.
CONWAY United States District Judge
cause comes before the Court on Plaintiffs' Verified
Motion to Quantify Fees and Costs (Doc. 180) filed on May 8,
2017 following the Court's previous Order finding
Plaintiffs entitled to reasonable attorneys' fees and
costs incurred as a result of Defendant's improper
removal. The United States Magistrate Judge has submitted a
report (Doc. 184) recommending that the Motion be granted in
part and denied in part, to which Plaintiffs have filed
an independent de novo review of the record in this
matter, including Plaintiffs' Objections (Doc. 185), the
Court agrees entirely with the findings of fact and
conclusions of law in the Report and Recommendation. For the
reasons stated below, Plaintiffs' Verified Motion to
Quantify Fees and Costs (Doc. 180) will be GRANTED in
part and DENIED in part.
BACKGROUND FACTS and PROCEDURAL HISTORY
March 10, 2015, Plaintiffs Building Materials Corporation of
America d/b/a GAF Materials Corporation
(“GAF”) and Roofing Supply Group Orlando LLC
(“Roofing Supply”) (collectively
“Plaintiffs”) filed a breach of contract action
in state court against Defendant Henkel Corporation based on
Defendant's alleged failure to indemnify Plaintiffs for
underlying litigation stemming from a water-based adhesive
product. Doc. 2. Defendant timely removed the action to the
Middle District of Florida. Doc. 1. In the Notice of Removal,
Defendant asserted that it was a Connecticut corporation and
maintained its principal place of business in Connecticut.
Doc. 1 ¶ 6. Because Plaintiff GAF was a Delaware
corporation with its principal place of business in New
Jersey, and Plaintiff Roofing Supply was a limited liability
company organized under Delaware law with its principal place
of business in Florida, Defendant alleged diversity
jurisdiction to support a claim pursuant to 28 U.S.C. §
1332 existed, with the requisite amount in controversy
greater than $75, 000. Doc. 1. Plaintiffs did not file a
motion to remand the case, and the case proceeded with a
discovery period lasting approximately one year. Doc. 28, 50.
August 30, 2016, the Court granted Defendant's motion for
summary judgment and denied Plaintiffs' motion for
partial summary judgment. Doc. 153. Plaintiffs filed an
appeal on September 22, 2016 challenging the Court's
summary judgment ruling, and a second appeal on November 28,
2016 challenging the cost judgment against them. Docs. 157,
163. As part of a subject matter jurisdiction review for the
appeal, on October 17, 2016, the Eleventh Circuit questioned
the citizenship of Plaintiff Roofing Supply Group, LLC,
noting that a party must identify each member of a limited
liability company and provide each member's citizenship.
Doc. 172-3. At that point, Defendant informed the Eleventh
Circuit and Plaintiffs that it had mistakenly asserted in its
notice of removal that it was a Connecticut corporation when,
in fact, Defendant is a Delaware corporation. Doc. 172-6 at
5. Because both Defendant and Plaintiff GAF asserted to the
Eleventh Circuit that they were Delaware corporations,
case was remanded on January 31, 2017 to this Court for
consideration of subject matter jurisdiction on the basis of
diversity. Doc. 168.
February 24, 2017, Defendant filed a motion to remand to
state court. Doc. 171. Plaintiffs filed a motion to vacate
the summary judgment entered against them, to remand the case
to state court, and for attorney's fees and costs. Doc.
172. Plaintiffs sought to recover their attorney's fees
and costs as well as sanctions against Defendant for
all of their attorney's fees and costs incurred
in “litigating this action” in federal court.
Doc. 178 at 7.
April 17, 2017, the Court granted the motion to remand and
vacated the rulings on the dispositive motions and the
judgment in favor of Defendant. Doc. 178 at 10-11. The Court
denied Plaintiffs' request for sanctions, but granted in
part Plaintiffs' request for an award of attorney's
fees and costs for Defendant's improvident removal of the
case under 28 U.S.C. § 1447(c), allowing Plaintiffs to
file a motion to determine the appropriate amount of fees and
costs. Id. The Eleventh Circuit subsequently issued
the mandates in the two appeals on August 22 and 23, 2017,
dismissing them for lack of jurisdiction as moot and denying
as moot any outstanding motions. Doc. 182 (Appeal No.
16-16180), Doc. 183 (Appeal No. 16-17323).
Court's Order finding an award of attorney's fees and
costs to be appropriate for the improvident removal
Defendant lacked an objectively reasonable basis when it
removed this case after failing to investigate and determine
its state of incorporation. . . . Because Defendant's
sole explanation for removing this case is that it
“inadvertently overlooked” its own state of
incorporation and “considered only the principal place
of business, ” Defendant has not demonstrated a
reasonable basis for removing this action. The result of
Defendant's carelessness is a removal that was blatantly
unjustified under settled law. . . . The Court has discretion
to award attorney's fees for a removal such as this that
is patently improper. Though Plaintiffs could have- and
should have-moved to remand this case themselves, the Court
cannot excuse Defendant's failure to investigate and
properly assert its own citizenship. Defendant's improper
removal has wrought needless litigation costs upon the other
party, upset the sensitive principles of federalism
underlying our nation's dual court system, and frustrated
judicial economy. Furthermore, awarding Plaintiffs reasonable
attorney's fees and costs does not serve a punitive
purpose, and instead reimburses Plaintiffs for unnecessarily
incurred expenses caused by Defendant's wrongful removal.
For the foregoing reasons, Defendant should be held liable
for Plaintiffs' “just costs and actual expenses,
including attorney fees, incurred as a result of the
removal.” 28 U.S.C. §1447(c). Courts have
interpreted the “incurred as a result” language
to include expenses caused by the improper removal, including
those expenses incurred in remanding the case and the
necessary expenses of being in the second judicial system.
The Court rejects Plaintiffs' request for all fees and
costs incurred in this litigation as this amount is
unreasonable. A large majority of the parties'
fees were incurred performing work that would have been
necessary, and will likely be necessary, for litigation in
the state forum. Plaintiffs are only
entitled to those additional attorney's fees and costs
incurred by litigating in federal court as opposed to state
Doc. 178 at 8-10 (citations and quotations omitted; emphasis
these marching orders, when Plaintiffs filed their Motion
requesting the Court award $569, 589 in fees (Doc. 180),
Magistrate Judge Kelly issued a Report and Recommendation
recommending that Plaintiffs be reimbursed for only 5% of the
fees incurred, or $16, 705, for fees related to the
improvident removal. Magistrate Judge Kelly recommended an
award of 5% of the reasonable hours expended because, based
on his experience, litigating the case in federal court
required, at most, five percent more work than litigating in
state court; he further recommended a reduced cost award of
$491 instead of the $2, 144 sought. Doc. 184 at 19-20.
November 1, 2017, Plaintiffs filed their Objections to the
Magistrate Judge's Report and Recommendation, arguing
that the recommended 95% reduction in the amount of fees
sought was arbitrary, penal, and without foundation in the
case law; Plaintiffs also objected to the reasonable hourly
rates to be reimbursed, arguing they should be much higher.
Doc. 185. For the reasons discussed below, the Court finds
that a 95% reduction in the hours submitted is reasonable,
and an award calculated at the hourly rates actually
billed to Plaintiffs is reasonable.
STANDARD OF REVIEW
Review of Magistrate Judge's Report and
courts review de novo any portion of a magistrate
judge's disposition of a dispositive motion to which a
party has properly objected. Fed.R.Civ.P. 72(b)(3);
Ekokotu v. Fed. Express Corp., 408 F. App'x 331,
336 n.3 (11th Cir. 2011) (per curiam). The district
judge may reject, modify, or accept in whole or in part the
magistrate judge's recommended disposition, among other
options. Fed.R.Civ.P. 72(b)(3). De novo review of a
magistrate judge's findings of fact must be
“independent and based upon the record before the
court.” LoConte v. Dugger, 847 F.2d 745, 750
(11th Cir. 1988). The district court “need only satisfy
itself that there is no clear error on the face of the
record” in order to affirm a portion of the Magistrate
Judge's recommendation to which there is no timely
objection. Fed.R.Civ.P. 72 advisory committee's note
(1983) (citations omitted); see also, Gropp v.
United Airlines, Inc., 817 F.Supp. 1558, 1562 (M.D. Fla.
1993). The District Court reviews legal conclusions de
novo regardless of whether objections have been filed.
Cooper-Houston v. S. Ry.Co., 37 F.3d 603, 604
(11th Cir. 1994).
Recovery of Fees for Improvident Removal
the general rule in this country that, unless Congress
provides otherwise, parties are to bear their own
attorney's fees. Fogerty v. Fantasy, Inc., 510
U.S. 517, 533, 114 S.Ct. 1023, 1033, 127 L.Ed.2d 455 (1994)
(citing Alyeska Pipeline Service Co. v. Wilderness
Society, 421 U.S. 240, 247 (1975) (tracing the origins
and development of the American Rule)). Costs and
attorney's fees are not awarded on remand as a matter of
course. Martin v. Franklin Capital Corp., 546 U.S.
132, 139, 126 S.Ct. 704, 710, 163 L.Ed.2d 547 (2005)
(“we see nothing to persuade us that fees under §
1447(c) should either usually be granted or usually be
denied.”). However, the Court has already determined
that Plaintiffs are entitled to an award of attorney's
fees pursuant to 28 U.S.C. § 1447(c) for improvident
removal. Doc. 178. Under 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).” Rae v. Perry, 392 Fed. App'x
753, 754- 55 (11th Cir. 2010). An award of attorney's
fees pursuant to § 1447(c) is left to the district
court's discretion. Id.
Calculation of Reasonable ...