United States District Court, E.D. New York
April 11, 2005.
ROBERT JACOBS and GLORY JACOBS, suing both individually and on behalf of all others similarly situated Plaintiffs,
ABN-AMRO BANK N.V., et al., Defendants.
The opinion of the court was delivered by: NICHOLAS G. GARAUFIS, District Judge
MEMORANDUM & ORDER
On April 21, 2004, the court issued a Memorandum & Order
("M&O"), Jacobs v. ABN-AMRO Bank, N.V., No. 03-CV-4125, 2004 WL
869557, in which it granted the plaintiffs' motion to remand the
above-captioned case to the Supreme Court of the State of New
York, Queens County. The M&O did not address the issue of
awarding costs and attorney's fees to the plaintiffs. Following
the entry of the M&O, however, the plaintiffs moved the court for
such an award, pursuant to 28 U.S.C. § 1447(c). Not surprisingly,
the defendants have opposed this motion. For the reasons that
follow, the plaintiffs' motion is denied.
In response to the plaintiffs' motion for fees and costs, the
defendants initially contend that this court lacks jurisdiction
to entertain the motion. Specifically, the defendants argue that
the language of 28 U.S.C. § 1447(c) demands that any award of
fees and costs must be made in the order remanding the case, or
not at all. Following remand, the defendants claim, a district
court lacks jurisdiction to rule on such a motion. Because the
court must have jurisdiction to reach the merits of this motion, it considers this issue first.
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." The wording
of this provision has caused varying interpretations of a
district court's authority to decide a motion for fees and costs
after remand. Compare United Broadcasting Corp. v. Miami
Tele-Communications, Inc., 140 F.R.D. 12, 14 (S.D.Fla. 1991)
("the plain language of the statute controls and clearly provides
that if the court is going to award costs and expenses, including
attorneys' fees pursuant to 28 U.S.C. § 1447(c), it must be taken
care of in the order of remand.") with 14C Wright, Miller,
Cooper, Federal Practice & Procedure 3d § 3739, at 490 (1998)
("Under the language of Section 1447(c) it is not clear whether
or not a court is prohibited from awarding costs and attorney
fees after remanding the case.") and with 16 James Wm. Moore,
et al., Moore's Federal Practice § 107.41[a][iii] (3d ed.
2004) ("The district court retains jurisdiction, even after
remand, to award attorney's fees.").
Despite the defendants' claim that "New York courts have
consistently followed [the statute's] plain language" and found
jurisdiction lacking after remand (Def. Opp. at 4), the standard
employed in the Second Circuit is not so well settled. Although
one court has clearly expressed the view that a district court
lacks jurisdiction after the remand order has been entered, see
Frydman v. Cosmair, Inc., No. 94-CV-3772, 1996 WL 417516, at *1
(S.D.N.Y. July 25, 1996) ("Having remanded the case to the New
York Supreme Court, I no longer have subject matter jurisdiction
to hear this motion."), the other cases cited in support by the
defendants are much less committed to the principle that
jurisdiction is lacking than the defendants represent.
In Britt v. Britt, No. 03-CV-9135, 2004 WL 1664003, at *1 n.
3 (W.D.N.Y. July 23, 2004) (citing Frydman), only after denying an award of fees on the
merits, did the court observe in a footnote: "Moreover, there is
some question as to whether this Court has subject matter
jurisdiction to grant a request for fees under § 1447(c)." While
in Intertec Contracting v. Turner Steiner International, S.A.,
No. 98-CV-9116, 2001 WL 396517, at *1 (S.D.N.Y. Apr. 18, 2001),
the court, acting sua sponte, observed that § 1447(c)
"appears" to answer in the negative the question of whether it
could retain jurisdiction over a fee award, but provided that
"counsel for either side may submit letter briefs expressing a
contrary view, with citations to authority." Based on this
limited support, it is far from settled that federal courts in
New York consistently find jurisdiction over fees and costs to be
lacking after remand has occurred.
Although this issue has not been taken up by the Second
Circuit, a number of other circuit courts have considered it and
concluded that a district court maintains limited jurisdiction
after remand. A central rationale underlying these decisions is
that "an award of attorney's fees is a collateral matter over
which a court normally retains jurisdiction even after being
divested of jurisdiction on the merits." Moore v. Permanente
Medical Group, Inc., 981 F.2d 443, 445 (9th Cir. 1992); see
also Mints v. Educational Testing Serv., 99 F.3d 1253, 1258
(3d Cir. 1996) ("a post-remand application for fees and costs is
collateral to the decision to remand and cannot affect the
proceedings in the state court.") (citing Moore). For instance,
a court retains jurisdiction to award attorney's fees pursuant to
a motion under Rule 11 of the Federal Rules of Civil Procedure
after a voluntary dismissal and may also award costs after a case
is dismissed for lack of jurisdiction. Id. (citing Cooter &
Gell v. Hartmarx Corp., 496 U.S. 384 (1990) (Rule 11) and
28 U.S.C. § 1919 (lack of jurisdiction)).
The argument that the "plain language" of § 1447(c) demands
that fees and costs be awarded in the remand order, if at all, has also been considered
by a number of courts and rejected. As the Sixth Circuit
the language of the statute "an order remanding the
case may require payment of . . . attorney fees" is
enabling, but does not purport to be exclusive. If
the order does not include an award of attorney fees,
there is nothing in the statute to suggest that there
cannot be a supplemental or amended order. That there
could be additional orders is consistent with the
continued jurisdiction of the district court to
consider collateral matters after remand.
Stallworth v. Greater Cleveland Reg. Transit Auth.,
105 F.3d 252, 256-57 (6th Cir. 1997). This reasoning has been echoed in
the decisions of other courts. See Wisconsin v. Hotline
Indus., Inc., 236 F.3d 363
, 365 (7th Cir. 2000) ("the statute
does not purport to be exclusive, and it contains no language to
suggest that there cannot be a supplemental order."); Mints,
99 F.3d at 1258 ("In our view, section 1447(c), by providing that a
court `may require payment' of costs and attorney's fees incurred
as a result of the removal does not imply that the court cannot
enter an order for payment of such costs and fees at some later
This court finds the reasoning of those courts that have held
that a district court retains jurisdiction following remand to
decide motions for fees and costs under § 1447(c) to be
persuasive. The court therefore declines to follow the cases
cited by the defendants because it is unconvinced that the
language of § 1447(c) mandates that jurisdiction for imposing
fees and costs ceases at the moment of remand. Rather, the court
finds that the exercise of jurisdiction over such a motion is in
keeping with traditional notions of a district court's residual
authority over collateral issues, even after the action has
concluded. Accordingly, this court has jurisdiction to consider
the merits of the plaintiffs' motion for fees and costs.
B. The Award of Fees and Costs
Section 1447(c) "affords a great deal of discretion and
flexibility to the district courts in fashioning awards of costs and fees." Morgan Guar. Trust Co. of
New York v. Republic of Palau, 971 F.2d 917, 924 (2d Cir. 1992).
"In exercising their discretion, district courts look to whether
the grounds for removal were substantial or presented a close
question . . . or colorable, even if ultimately unpersuasive."
Natoli v. First Reliance Standard Life Ins. Co., No.
00-CV-5914, 2001 WL 15673, at *5 (S.D.N.Y. Jan 5, 2001) (internal
quotations and citations omitted).
In this case, the defendants removed the case based, inter
alia, on an argument that a then-recent decision by the Supreme
Court, Beneficial National Bank v. Anderson, 539 U.S. 1 (2003),
could be construed to mean that the plaintiffs' claim regarding
bank fees was preempted from consideration in state court by the
National Bank Act. Although this court ultimately rejected the
defendants' argument, because Beneficial had been recently
decided at the time of removal and its scope had only been
addressed by one other court in the country, see Jacobs at
*5, the court finds that the defendants presented a colorable
claim. Therefore, the court exercises its discretion in denying
the plaintiffs' motion for costs and fees under § 1447(c).
For the foregoing reasons, the plaintiffs' motion for costs and
attorney's fees, pursuant to 28 U.S.C. § 1447(c), is DENIED.
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