Case: Document: 84 Page: 1 11/24/ cv(L), cv(CON) IN THE. United States Court of Appeals

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1 Case: Document: 84 Page: 1 11/24/ cv(L), cv(CON) IN THE United States Court of Appeals FOR THE SECOND CIRCUIT DANIEL WILLIAMS, EDWARD WILLIAMS, Plaintiffs-Appellees-Cross-Appellants, vs. INTERNATIONAL GUN-A-RAMA, KIMBERLY UPSHAW, JAMES NIGEL BOSTIC, CORNELL CALDWELL, JOHN DOE TRAFFICKERS 1-10, Defendants, BEEMILLER, INC. dba HI-POINT, CHARLES BROWN, MKS SUPPLY, INC., Defendants-Appellants-Cross-Appellees. ON APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NEW YORK. BRIEF ON BEHALF OF PLAINTIFFS-APPELLEES-CROSS-APPELLANTS DANIEL WILLIAMS, EDWARD WILLIAMS CONNORS & VILARDO, LLP BRADY CENTER TO PREVENT GUN TERRENCE M. CONNORS, ESQ., Of Counsel JAMES W. GRABLE, JR., ESQ., Of Counsel 1225 Eye Street, NW, Suite Liberty Building Washington, DC Main Street Telephone: (202) Buffalo, New York Telephone: (716) VIOLENCE LEGAL ACTION PROJECT Attorneys for Plaintiffs-Appellees-Cross-Appellants BATAVIA LEGAL PRINTING, INC. Telephone (866)

2 Case: Document: 84 Page: 2 11/24/ TABLE OF CONTENTS Page PRELIMINARY STATEMENT...1 JURISDICTIONAL STATEMENT...4 STATEMENT OF THE ISSUES...5 STATEMENT OF THE CASE AND STATEMENT OF FACTS...6 SUMMARY OF THE ARGUMENT...12 ARGUMENT...13 I. The District Court s Award of Fees and Costs Was Warranted and Consistent with the Standard Under 1447(c) A. The Standard of Review is Abuse of Discretion B. The District Court Properly Exercised its Discretion to Award Fees and Costs Removal Without Unanimous Consent Was Improper and Appellants Arguments to the Contrary Were Spurious The District Court Applied the Correct Standard, and Its Findings Establish Appellants Breach of the Martin Objectively Reasonable Standard Appellants Removal Was Improper for Other Reasons as Well i-

3 Case: Document: 84 Page: 3 11/24/ TABLE OF CONTENTS CONT. Page II. The District Court Correctly Concluded that an Award of Fees and Costs Is Warranted Regardless of a Contingency Fee Arrangement A. The Standard of Review is Abuse of Discretion...31 B. Fees and Costs Are Recoverable Under 1447(c) Regardless of the Fee Arrangement III. The District Court Did Not Err In Awarding Attorneys Fees and Costs In Connection With the Prior Appeal to this Court A. The Standard of Review is Abuse of Discretion B. The District Court Did Not Abuse Its Discretion In Awarding Attorneys Fees and Costs in Connection with the Prior Appeal IV. The Amount of Fees and Costs Awarded by the District Court Was Reasonable A. The Standard is Abuse of Discretion B. The District Court s Award of Fees and Costs was Reasonable...42 CONCLUSION ii-

4 Case: Document: 84 Page: 4 11/24/ Cases: TABLE OF AUTHORITIES Page Avitts v. Amoco Prod. Co., 111 F.3d 30 (5th Cir. 1997)...36 Barlett v. Hoseclaw, 1995 WL (W.D.N.Y. Sept. 7, 1995)...14 Barlett v. Hoseclaw, No. 95-CV-0388E(F), 1995 WL (W.D.N.Y. Sept. 7, 1995) Baych v. Herrick Douglass, 227 F.Supp.2d 620 (E.D.Tex. 2002) Bliven v. Hunt, 579 F.3d 204 (2d Cir. 2009)...13 Brown and Michaels PC v. Cardoso, No. 5:05 CV209, 2005 WL (N.D.N.Y. June 27, 2005)...27 Bryant v. Britt, 420 F.3d 161 (2d Cir. 2005)...12, 33 Central States Southeast and Southwest Areas Health and Welfare Fund v. Merck-Medco Managed Care, L.L.C., 504 F.3d 229 (2d Cir. 2007)...13 Chen v. Chen Qualified Settlement Fund, 552 F.3d 218 (2d Cir. 2009)...14 Chicago R.I.& P.R.. Co. v. Martin, 178 U.S. 245 (1900)...14 Circle Indus. USA, Inc. v. Parke Constr. Group, Inc., 183 F.3d 105 (2d Cir. 1999)...27 Codapro Corp. v. Wilson, 997 F.Supp.322 (E.D.N.Y. 1998) iii-

5 Case: Document: 84 Page: 5 11/24/ TABLE OF AUTHORITIES CONT. Page Dela Rosa v West 141 LLC, No. 08 Civ (PKL), 2009 WL (S.D.N.Y. June 24, 2009)...21 Deluca v. Ocwen Loan Servicing, LLC, et.al., No. 5:10-cv-00421, 2010 WL , (S.D.W.Va. May 26, 2010)...20 Discon, Inc v. NYNEX Corp., 4 F.3d 130 (2d Cir. 1993)...4 Ecology & Environment, Inc. v. Automated Compliance Systems, Inc., No. 00-CV-0887E(F), 2001 WL (W.D.N.Y. Sept. 4, 2001)...29 Falcon v. Ochoa, et.al., No JJB-SCR, 2010 WL (M.D.La. Dec. 16, 2009)...21 Forman v. Equifax Credit Info. Svcs., Inc., No. Civ. A , 1997 WL (E.D.La. Apr. 4, 1997)...20 Four Key Leasing & Maintenance Corp., v. Simithis, 849 F.2d 770 (2d Cir. 1988)...28 Garbie v. Daimler Chrysler, 211 F.3d 407 (7th Cir. 2000)...31, 32, 35 Gotro v. R&B Realty Group, 69 F.3d 1485 (9th Cir. 1995)...32, 33 Guajardo v. Powermate Corp., No. C , 2010 WL (S.D. Tex. July 28, 2010)...18, 19 Hammer v. Scott, 137 Fed. Appx. 472 (3d Cir. 2005) iv-

6 Case: Document: 84 Page: 6 11/24/ TABLE OF AUTHORITIES CONT. Page Harlow Aircraft Mfg.,Inc. v. Dayton Mach. Tool Co., No JTM, 2005 WL (D. Kan. May 16, 2005)...19, 20 Harris v. Home Depot U.S.A., Inc., No. 05-C-164-S, 2005 WL (W.D. Wis. July 6, 2005)...32 Harvey v. Quality Loan Services Corp. of Washington, No. C RSM, 2010 WL (W.D.Wash. Jan. 11, 2010)...20 Huffman v. Saul Holding Ltd. Pershing, 262 F.3d 1128 (10th Cir. 2001) 34, 39, 40 Keesling v. Richman, 2003 WL (S.D.Ind. 2003)...32 Keys v. Konrath, 1994 WL (N.D.Ill. March 10, 1994)...17 Laurie v. Nat l Rd. Pass. Corp., No. Civ. A , 2001 WL (E.D.Pa. Mar. 13, 2001)...19, 20 Lawrence ex rel. Estate of Lawrence v. Biotronik, Inc., 2005 WL (N.D.Ill. Sept. 20, 2005)...32 Lott v. Pfizer, Inc., 492 F.3d 789 (7th Cir. 2007)...21 Martin v. Franklin Capital Corp., 546 U.S. 132 (2005)...9, 24, 25, 26, 27, 33 Mba v. World Airways, Inc., 369 Fed. Appx. 194 (2d Cir. 2010)...13 Milstead Supply Co. v. Cas. Ins. Co., 797 F.Supp. 569 (W.D.Tex. 1992) v-

7 Case: Document: 84 Page: 7 11/24/ TABLE OF AUTHORITIES CONT. Page Morgan Guar. Trust Co. Of New York v. Republic of Palau, 971 F.2d 917 (2d Cir. 1992)...13, 42 Owczarek v. The Austin Co., No. 03-CV-0750E (F), 2004 WL (W.D.N.Y. Feb. 11, 2004)...15, 16 Pampillonia v. RJR Nabisco, Inc., 138 F.3d 459 (2d Cir. 1998)...29 Paul J.H. v. Lum, 291 A.D.2d 894, 895, 736 N.Y.S.2d (4th Dep t 2002) (construing CPLR 213-6)...30 Piacente v. State University of New York at Buffalo, 362 F.Supp.2d 383 (W.D.N.Y. 2004)...14 Pianovski v. Laurel Motors, Inc., 924 F.Supp. 86 (N.D.Ill. 1996)...16 PNC Bank, National Ass n v. Rencher/ American Manor, LLC, No. 4:10-cv BLW, 2010 WL (D. Idaho Sept. 23, 2010)...20 Prescia v. U.S. Life Ins. Co. In City of New York, 2010 WL (S.D.N.Y. Nov. 1, 2010)...14, 27, 28 Ross v. Thousand Adventures of Iowa, Inc., 178 F.Supp. 2d 996 (S.D. Iowa 2001)...20 Rowe v. Jagdamba, Inc., 302 Fed. Appx. 59 (2d Cir. 2008)...14 Samuel v. Town of Cheektowaga, No. 09-CV-381A, 2009 WL (W.D.N.Y. Dec. 20, 2009) vi-

8 Case: Document: 84 Page: 8 11/24/ TABLE OF AUTHORITIES CONT. Page Sheldon v. Khanal, No cv, 2010 WL (2d Cir. 2010)...39 Simenz v. Amerihome Mortgage Co., LLC, 544 F. Supp. 2d 743 (E.D. Wis. 2008)...32 Simon & Flynn, Inc., v. Time Inc., 513 F.2d 832 (2d Cir. 1975)...37 Sinclair v. City of Rochester, No. 07-CV-6277, 2007 WL (W.D.N.Y. 2007)...27 Snoussi v. Bivona, No. 05-cv-3133 (RJD)(LB), 2010 WL (E.D.N.Y. Sept. 29, 2010)...38 Steinfield v. Marks, 1997 WL (S.D.N.Y. Sept. 8, 1997)...38 Syms, Inc., v. IBI Sec. Service, Inc., 586 F.Supp. 53 (D.C.N.Y. 1984)...28 Tate v. Mercedes- Benz USA, Inc., 151 F. Supp. 2d 222 (N.D.N.Y. 2001)...14, 17 Traynor v. O Neil, 94 F.Supp.2d 1016 (W.D.Wis. 2000) Victor v. Argent Classic Convertible Arbitrage Fund, L.P., F.3d, 2010 WL (2d Cir. 2010)...12, 31, 35, 36 Wallace v. Wiedenbeck, 985 F. Supp. 288 (N.D.N.Y.1998) vii-

9 Case: Document: 84 Page: 9 11/24/ TABLE OF AUTHORITIES CONT. Page White v. Shalala, 7 F.3d 296 (2d Cir. 1993)...31 Wilds v. United Parcel Serv., Inc., 262 F. Supp. 2d 163 (S.D.N.Y. 2003)...29 Wisconsin v. Hotline Indus., 236 F.3d 363 (7th Cir. 2000)...34 Wisconsin Department of Correction v. Schacht, 524 U.S. 381 (1998) (Kennedy, J., concurring) viii-

10 Case: Document: 84 Page: 10 11/24/ PRELIMINARY STATEMENT This appeal results from Appellants five-year-long litigation of a meritless removal position. Though it has been abundantly clear for all those five years that removal was improper both because all the defendants had not consented to removal and because there is an absence of diversity between plaintiffs and defendants Appellants nevertheless adopted a strategy of scorched-earth litigation and fought each and every step of the way. That strategy ultimately failed in one sense: the district court s decision to remand the matter to state court is not the subject of this appeal. In another sense, however, the strategy of litigating a meritless appeal resulted in five years of delay and, more relevant to the issues on this appeal, caused Plaintiffs five years of expense and effort associated with undoing an improper removal. Fortunately for Plaintiffs-Appellees ( Plaintiffs ), the removal statute anticipates the inequity of such needless expense, and gives a district court discretion to award fees and costs when there is no objectively reasonable basis for removal. The court below carefully considered Appellants arguments and found their removal position to be spurious. That finding was well within the district -1-

11 Case: Document: 84 Page: 11 11/24/ court s discretion under the removal statute, and entry of an award of fees and costs was therefore proper. On appeal, Appellants continue their scorched-earth strategy. Notwithstanding the district court s finding that removal was spurious, Appellants argue that the district court did not assess whether their removal was objectively reasonable. Appellants advance the illogical argument that because the district court did not use the words objectively reasonable, the court did not apply the correct standard. That argument is as spurious as was Appellants removal position. Similarly, circuit authority stands for the proposition that the removal statute allows an award of fees and costs in contingent fee cases. But that too has not dissuaded Appellants from prolonging the federal proceedings by arguing to the contrary. On this appeal they argue that this Court should make new circuit law disallowing fees and costs in a contingent fee case. Appellants also assert that the fees and costs associated with their prior appeal of the removal issue are not recoverable. But the purpose of the remand fee provision is to deter parties from removing improperly and without basis. Few acts in federal litigation are as easy as filing a notice of removal, but that simple act can have the impact of grinding a case to a halt for years, depriving a plaintiff -2-

12 Case: Document: 84 Page: 12 11/24/ of his chosen forum, and generating needless and wasteful expense of time and resources. The district court correctly concluded that fees for the prior appeal are warranted under the removal statute because the appeal resulted directly from Appellants improper removal. In other words, Plaintiffs would not have incurred those fees and expenses if Appellants had conceded the obvious somewhere along the way and admitted that their removal was spurious. Finally, Appellants contend that the award of fees and costs is too high. But five years of fighting a spurious removal notice is more than enough justification for the relatively modest award that the district court entered, which was well within its broad discretion and supported by the district court s careful, line-by-line review of the amounts sought. The district court s Order awarding fees and costs is a proper exercise of the court s discretion and should be affirmed. -3-

13 Case: Document: 84 Page: 13 11/24/ JURISDICTIONAL STATEMENT Appellants wrongfully removed this action to federal court: They failed to comply with the rule of unanimity, and the parties to this action were not completely diverse. Consequently, on June 25, 2009, the case was remanded to state court due to Appellants improper removal. The district court found that Appellants improper removal warranted the imposition of costs and fees pursuant to 28 U.S.C. 1447(c) because Appellants removal position was spurious. On March 10, 2010, the district court entered a Decision and Order awarding Plaintiffs fees and costs. Appellants timely filed their Notice of Appeal on April 9, Fed. R. App. P 4(a)(1)(A). Appellate jurisdiction is proper pursuant to 28 U.S.C because an award of attorneys fees and costs is a final and appealable order once the amount of such an award has been fixed. Discon, Inc. v. NYNEX Corp., 4 F.3d 130, 132 (2d Cir. 1993). -4-

14 Case: Document: 84 Page: 14 11/24/ STATEMENT OF THE ISSUES 1. Is a finding that removal was spurious sufficient to demonstrate that the district court applied the objectively reasonable standard of Martin v. Franklin Capital Corp., 546 U.S. 132 (2005)? 2. Should this Court be the first circuit court to declare that a proper award of attorneys fees and just costs is unavailable in a contingency fee case? 4. Did the district court properly award fees from a prior appeal directly related to the improper remand? 5. Was the amount of fees and costs awarded reasonable? -5-

15 Case: Document: 84 Page: 15 11/24/ STATEMENT OF THE CASE AND STATEMENT OF FACTS On August 16, 2003, Daniel Williams was shot in the stomach by a so-called Saturday Night Special an inexpensive, low quality, easily concealed gun. (See Joint Appendix (hereinafter JA ) ) The gun, a Hi-Point 9mm semiautomatic pistol, was manufactured by defendant Beemiller, Inc. d/b/a Hi-Point, and distributed to defendant MKS Supply, Inc. (JA 68.) The President of MKS Supply, Inc., defendant Charles Brown, sold the handgun to a straw purchaser, defendant Kimberly Upshaw; that sale took place at a gun show where Upshaw was purchasing guns alongside a gun trafficker with an extensive criminal record, defendant James Nigel Bostic. (See JA ) The shooter, defendant Cornell Caldwell, was a drug dealer and gang member who shot Daniel in a case of mistaken identity. (JA 68.) Daniel and his father commenced this lawsuit in New York State Supreme Court by filing a summons and complaint on July 28, (JA ) They amended the complaint on October 17, 2005, before issue was joined. (See JA ) On November 23, 2005, defendants Beemiller, Inc. d/b/a Hi-Point, and Charles Brown removed this action to federal court. (JA ) Later, -6-

16 Case: Document: 84 Page: 16 11/24/ International Gun-A-Rama and MKS Supply, Inc., consented to removal. (JA ) Defendants Bostic, Cornell Caldwell, and Kimberly Upshaw neither consented to nor joined in removal. (JA 166.) The defendants who had not consented to removal, Bostic, Caldwell, and Upshaw, all had been served with the summons and complaint prior to the notice of removal. Bostic was served on November 2, Caldwell on November 16, and Upshaw on November 22 all before Appellants filed their notice of removal. (See JA ; SPA 34-36). And although the notice of removal had been filed on November 23, 2005, there is no indication that Appellants did anything after that date and before the time to obtain consent had expired to obtain the consent of Bostic, Caldwell, or Upshaw. (See generally JA , , 204; SPA 37.) On December 23, 2005, Plaintiffs moved to remand this matter back to New York State Supreme Court. (JA ) The Appellants opposed. (JA ) On January 4, 2006, the district judge, the Hon. William M. Skretny, issued an order referring all pre-trial matters, including the determination of all nondispositive motions, to United States Magistrate Judge Leslie G. Foschio. (JA 180.) -7-

17 Case: Document: 84 Page: 17 11/24/ On June 29, 2006, Magistrate Judge Foschio issued a Decision and Order granting Plaintiffs motion to remand and awarding Plaintiffs costs and attorneys fees. (JA ) Magistrate Judge Foschio explicitly found that the asserted ground for removal was contrary to applicable law and established authority and that the argument in opposition to remand was spurious. (JA ) On July 17, 2006, Appellants filed objections to Magistrate Judge Foschio s Decision and Order. (JA ) By order entered September 21, 2006, United States District Judge Skretny denied the objections to the Decision and Order, concluding that the Decision and Order was neither clearly erroneous nor contrary to law. (JA ) On October 25, 2006, Appellants appealed to this Court. (JA 280.) On January 12, 2007, Appellants filed their initial brief with this Court. Plaintiffs moved to dismiss the appeal on January 22, (JA 273.) Appellants opposed. In an order filed April 12, 2007, this Court granted Plaintiffs motion to dismiss the appeal regarding the award of attorneys fees, but otherwise denied the motion. (JA ). This Court directed briefing on three specific issues and implemented a briefing schedule. -8-

18 Case: Document: 84 Page: 18 11/24/ On July 30, 2007, Appellants filed a revised brief. (JA 290.) Plaintiffs filed a responding brief on August 29, (JA 304.) Appellants filed a reply brief on September 12, (JA 310.) On May 28, 2008, this Court concluded that the magistrate judge could recommend but not order remand and therefore remanded the appealed-from order. (See JA 322.) The Second Circuit specifically stated that it express[ed] no view as to the merits of Plaintiffs-Appellants motion to remand under 1447(c). (JA ) In response to this Court s mandate, the district court re-referred Plaintiffs motion for remand back to Magistrate Judge Foschio for a Report and Recommendation ( R&R ) (JA 360), which Magistrate Judge Foschio issued on October 31, (JA ) Magistrate Judge Foschio again found Appellants arguments spurious; he recommended that Plaintiffs motion for remand be granted. (JA ) On November 17, 2008, Appellants filed another set of objections. (JA ) In those objections, Appellants cited the Supreme Court s decision in Martin v. Franklin Capital Corp., 546 U.S. 132, 126 S. Ct. 704 (2005) (JA ), which established a standard for the award of costs and fees under 28 U.S.C. -9-

19 Case: Document: 84 Page: 19 11/24/ (c). Appellants argued that an award of fees and costs was unwarranted because removal was objectively reasonable. (JA ) On June 25, 2009, the district court issued an Order deciding the matter. (SPA ) After noting that it had reviewed the R&R, the objections, and the applicable law, the district court adopted the R&R of Magistrate Judge Foschio. (SPA ) The district court asked both sides to submit papers regarding the amount of attorneys fees and costs. (JA ) On July 9, 2009, Plaintiffs submitted an affidavit in support of costs and attorneys fees. That document chronicled, with contemporaneous time records, the work done and costs expended by Plaintiffs counsel in battling the improper removal. (JA ). An affidavit in further support of costs and attorneys fees was submitted on August 24, (JA ). All told, Plaintiffs requested $83, (JA ) On March 10, 2010, the district court issued a Decision and Order awarding attorneys fees and costs pursuant to 28 U.S.C. 1447(c). (JA ; SPA ) In the Decision and Order, the district court reviewed the request in great detail and reduced or eliminated several of the specific requests made by Plaintiffs. (See JA ; SPA ) Ultimately, the district court awarded Plaintiffs $53, (JA ). -10-

20 Case: Document: 84 Page: 20 11/24/ A month later, on April 9, 2010, Appellants filed a Notice of Appeal in this action. (JA ). On April 22, 2010, Plaintiffs filed a Notice of Cross-Appeal. (JA ). -11-

21 Case: Document: 84 Page: 21 11/24/ SUMMARY OF THE ARGUMENT The facts and record of this case demonstrate that Appellants removed this matter improperly and thus delayed this case for years. In awarding attorneys fees, the district court applied well-settled law, carefully reviewed the time and costs expended, and exercised its discretion in a sound and logical manner. Against that backdrop, Appellants make a number of arguments that have no foundation in the law. They suggest that finding removal to be spurious is insufficient to support an award of attorneys fees. Notwithstanding clear authority to the contrary, they argue that fees and costs should be precluded in this matter because Plaintiffs counsel has been retained on a contingent fee basis. They assert, contrary to logic, precedents, and the language of this Court s prior Order, that fees and costs should be disallowed in connection with the prior appeal in the case and that the law of the case doctrine precluded the district court from making that award. Finally, they invite this Court to create an exception to well-settled federal law by embracing two district court cases that have been discredited and rejected in their respective districts. In truth, Appellants arguments here are no different than those made before the district court arguments about what the Appellants wish the law was, -12-

22 Case: Document: 84 Page: 22 11/24/ designed to delay this matter and deprive Plaintiffs of their chosen forum. Like their removal, Appellants arguments here are, in a word, spurious. The district court s Decision and Order should be affirmed. ARGUMENT I. The District Court s Award of Fees and Costs Was Warranted and Consistent With the Standard Under 28 U.S.C. 1447(c). A review of the record and the applicable law reveals that the district court s decision to award attorneys fees and other costs was well within the court s discretion and was consistent with applicable federal law. A. The Standard of Review Is Abuse of Discretion. In their brief, Appellants assert that this Court should conduct a de novo review of the award of fees and costs because it is purely a question of law. See Brief for Defendants-Appellants-Cross-Appellees ( Appellants Brief ) at 16. That argument is unfounded and contrary to well-settled Second Circuit precedent. This Court reviews district court decisions to grant attorneys fees and costs for an abuse of discretion. See Victor v. Argent Classic Convertible Arbitrage Fund, L.P., 623 F.3d 82, 87 (2d Cir. 2010). Indeed, that is the standard that has been applied by this very Court to this very issue: review of an award of fees and -13-

23 Case: Document: 84 Page: 23 11/24/ costs under 28 U.S.C. 1447(c). See Bryant v. Britt, 420 F.3d 161, 163 (2d Cir. 2005); Morgan Guar. Trust Co. v. Republic of Palau, 971 F.2d 917, 924 (2d Cir. 1992) ( [Section 1447(c)] as a whole... affords a great deal of discretion and flexibility to the district courts in fashioning awards of costs and fees. ). This Court has repeatedly concluded that the decision whether to award costs and fees is better left to the discretion of district courts, who are in a far better position than the Court of Appeals to make those determinations. Mba v. World Airways, Inc., 369 F. App x. 194, 198 (2d Cir. 2010); see also Bliven v. Hunt, 579 F.3d 204, 213 (2d Cir. 2009) ( In light of the district court s familiarity with the particular case, its award of attorney s fees is reviewed only for abuse of discretion. ); Central States Southeast and Southwest Areas Health and Welfare Fund v. Merck-Medco Managed Care, L.L.C., 504 F.3d 229, 248 (2d Cir. 2007). B. The District Court Properly Exercised its Discretion to Award Fees and Costs. The Appellants conduct warranted an award of attorneys fees and costs. This Court has held that a district court abuses or exceeds its discretion in awarding or denying attorneys fees only when: (1) its decision rests on an error of law, such as the application of the wrong legal standard or a clearly erroneous factual finding, or (2) its decision does not fall within the range of permissible -14-

24 Case: Document: 84 Page: 24 11/24/ decisions. See Chen v. Chen Qualified Settlement Fund, 552 F.3d 218, 225 (2d Cir. 2009); see also Rowe v. Jagdamba, Inc., 302 F. App x. 59, 63 (2d Cir. 2008). Neither of those circumstances are present here. 1. Removal Without Unanimous Consent Was Improper and Appellants Arguments to the Contrary Were Spurious. Appellants asserted below that removal was proper and that it was not their burden to establish that all defendants consented to it. (JA , ) That argument was a misstatement of federal law and contrary to overwhelming authority explicitly holding that it is always the removing defendants burden to prove that removal was proper. See Prescia v. U.S. Life Ins., No 10 CV 2518, 2010 WL , at *3 (S.D.N.Y. Nov. 1, 2010); Tate v. Mercedes-Benz USA, Inc., 151 F. Supp. 2d 222, 226 (N.D.N.Y. 2001); Codapro Corp. v. Wilson, 997 F. Supp. 322, 326 (E.D.N.Y. 1998); Barlett v. Hoseclaw, 95-CV-00388E(F), 1995 WL , at *1 (W.D.N.Y. Sept. 7, 1995). In this case, Appellants could not and cannot meet their burden. Appellants removed to federal court without obtaining the consent of other defendants who had been served at the time of removal. (JA ) This was contrary to the wellsettled rule of unanimity. See Chicago, R.I. & P. Ry. Co. v. Martin, 178 U.S. 245, 248 (1900); Wisconsin Dept. of Corr. v. Schacht, 524 U.S. 381, 393 (1998) (Kennedy, J., concurring); Piacente v. State University of New York at Buffalo,

25 Case: Document: 84 Page: 25 11/24/ F. Supp.2d 383, 384 & n.3 (W.D.N.Y. 2004); Owczarek v. The Austin Co., No. 03- CV-0750E(F), 2004 WL , at *1 (W.D.N.Y. Feb. 11, 2004). That rule requires each defendant who has been served at the time of a notice of removal to consent to the removal in writing. See Piacente, 362 F. Supp.2d at 384 & n.3 (listing cases explaining rule of unanimity required by federal courts, even though not expressly required by statute). A representation by one defendant that all defendants have consented is insufficient; each defendant must independently notify the court of its consent. See, e.g., Owczarek, 2004 WL , at *1. Here, Appellants notice of removal incorrectly asserted that some of their co-defendants had not yet been served. (Compare JA with JA 165, 205.) In fact, at the time of removal all defendants had been served with the summons and complaint. (JA 376.) Indeed, one of the defendants from whom consent was required had been served nineteen days prior to the filing of Appellants notice of removal. (JA 165.) Appellants failed to obtain the consent of that defendant and two other defendants before removing. (See JA 374.) And after removal, but before the time to obtain consent expired, Appellants apparently did nothing to obtain the consent required by law. (See JA 205.) Appellants contend that their failure to comply with the rule of unanimity did not provide a basis for an award of fees and costs under 1447(c) because the -16-

26 Case: Document: 84 Page: 26 11/24/ proofs of service failed to give them notice that non-consenting defendants had been served. But contrary to Appellants argument, the proper inquiry on the issue of consent is not whether the removing defendants had constructive or actual knowledge that the other, non-consenting defendants have been served. See Tate v. Mercedes-Benz USA, Inc., 151 F. Supp. 2d 222, 225 (N.D.N.Y. 2001) (rejecting Appellants argument). Instead, the issue is whether a non-consenting defendant was, in fact, properly served. See id. In other words, whether the removing defendants had constructive knowledge is irrelevant; rather, the focus is on the non-consenting defendant or defendants, each of whom has its own obligation, once properly served, to either timely file his or her own removal petition or join in the petition of the Appellants. See id.; Owczarek, 2004 WL at *1. What is more, the onus is on the removing party and the various defendants to arrive at unanimous consent, not on the plaintiff to spoon feed a removing party the information necessary to obtain it. Stated another way, a removing party needs to do the work necessary to obtain the consent of its co-defendants, see, e.g., Pianovski v. Laurel Motors, Inc., 924 F. Supp. 86 (N.D.Ill. 1996) (phone calls to the clerk s office and inquiry to the docketing clerk insufficient to relieve removing defendant of rule of unanimity); see also Keys v. Konrath, 1994 WL (N.D. Ill., Mar. 10, 1994), or those co-defendants must consent on their -17-

27 Case: Document: 84 Page: 27 11/24/ own. The rule of unanimity is not horseshoes or hand grenades close is not close enough. The burden is on the defendants not on the plaintiff to tell the removing party who needs consent and how to get it. Appellants should have realized that this was the law in the district court to which they hoped to remove. Had Appellants bothered to look, they would have realized that their arguments had previously been considered by the very district court to which they removed and had been rejected in a 1995 decision. See Barlett v. Hoseclaw, No. 95-CV-0388E(F), 1995 WL , at *2 (W.D.N.Y. Sept. 7, 1995). The fact that the operation of this rule holds the removing defendants responsible for the action or inaction of their co-defendants is of no moment: the carefully crafted mandates of the removal statute are interpreted strictly in order to balance a plaintiff s right to select its forum against the need to promote unanimity among defendants. Tate, 151 F. Supp. 2d at 225 (citing Getty Oil Corp. v. Ins. Co. of N. Am., 841 F.2d 1254, 1263 (5th Cir. 1988)). Where that unanimity is lacking, as here, the wishes of some portion of the defendants who would prefer a forum different than the one selected by the plaintiffs must yield to the right of the plaintiffs to select their forum. -18-

28 Case: Document: 84 Page: 28 11/24/ Appellants contend that the district court should have created an exception to the rule of unanimity that would excuse the lack of unanimity if the removing parties did not have constructive awareness that their co-defendants had been served. See Appellants Brief at In support of this proposition, Appellants rely on two district court cases, both from outside the Second Circuit. The second of the two relies on the first, and both have been rejected since they were adjudicated. Indeed, both cases not only are contrary to better, binding authority but also are inapposite because they are based on facts far different from the facts here. The first of these cases, Milstead Supply Co. v. Cas. Ins. Co., 797 F. Supp. 569, 573 (W.D. Tex. 1992), cannot even be cited in the district where it was issued in the manner that Appellants urge here. Compare Appellants Brief at and Milstead, 797 F. Supp. at 573, with Guajardo v. Powermate Corp., No. C , 2010 WL , at *3 (S.D. Tex. July 28, 2010), KLN Steel Products v. CNA Ins. Cos., No. SA-06-CA-0709-XR, 2006 WL , at *5-*6 (W.D. Tex. Nov. 6, 2006), and Vanouwerkerk v. Owens-Corning Fiberglass Corp., No. 1:99CV179, 1999 WL , at *12 (E.D. Tex. May 26, 1999). Milstead attempted to fashion an equitable exception to the rule of unanimity. See 797 F. Supp. at 573. But since Milstead, the federal district courts of Texas have truncated -19-

29 Case: Document: 84 Page: 29 11/24/ and narrowed that equitable rule. Now, the application of the Milstead exception requires findings of bad faith, forum manipulation, and fraud on the part of the plaintiff, as well as diligence on the part of the removing defendant. See Guajardo, 2010 WL , at *3; KLN Steel Products, 2006 WL , at *5-*6; Vanouwerkerk, 1999 WL , at *12. Appellants ignore these significant changes in Milstead s own jurisdiction and do not cite the cases which have limited Milstead. The other case Appellants invoke in favor of their constructive notice argument is Laurie v. Nat l Rd. Pass. Corp., No. Civ. A , 2001 WL (E.D. Pa., Mar. 13, 2001), a case that is equally unavailing. That case followed Milstead based on the district judge s opinion that an exception to the rule of unanimity based on constructive notice would be a better rule than the current law in his district. See Laurie, 2001 WL , at *1. Since that decision was issued, it has been cited only once by a case rejecting its reasoning in much the same way that Milstead has been rejected. See Harlow Aircraft Mfg., Inc. v. Dayton Mach. Tool Co., No JTM, 2005 WL , at *3 (D. Kan. May 16, 2005). As with Milstead, Appellants ignore the negative treatment Laurie has received, asking this Court to be the first to adopt or agree with its reasoning. -20-

30 Case: Document: 84 Page: 30 11/24/ Indeed, with the exception of Milstead and Laurie, no federal court has applied the equitable rule fashioned by Milstead. Other federal district courts that have considered it have repeatedly and routinely rejected an invitation to follow its reasoning. See Harlow Aircraft Mfg., Inc., 2005 WL , at *3; Ross v. Thousand Adventures of Iowa, Inc., 178 F. Supp. 2d 996, 1000 (S.D. Iowa 2001); Forman v. Equifax Credit Info. Svcs., Inc., No. Civ. A , 1997 WL , at *2 (E.D. La. Apr. 4, 1997). In sum, Appellants position flies in the face of well-settled federal law establishing that the onus is on the defendants to ensure unanimity. As the courts repeatedly have held, the absence of unanimity justifies an award of attorneys fees and costs when the district court, in its exercise of its broad discretion, determines that such fees and costs are warranted. See, e.g., PNC Bank, National v. Rencher/American Manor, LLC, No. 4:10-cv BLW, 2010 WL , at *2 (D. Idaho Sept. 23, 2010); Deluca v. Ocwen Loan Servicing, LLC, et. al., No. 5:10-cv-00421, 2010 WL , at *5 (S.D. W.Va. May 26, 2010) (recognizing that failure to adhere to the rule of unanimity could warrant the award of costs and fees); Harvey v. Quality Loan Services Corp., No. C RSM, 2010 WL , at *6 (W.D. Wash. Jan. 11, 2010); Falcon v. Ochoa, No JJB-SCR, 2009 WL , at *2-4 (M.D. La. Dec. 16, 2009); Dela Rosa v

31 Case: Document: 84 Page: 31 11/24/ West 141 LLC, No. 08 Civ (PKL), 2009 WL , at *5-6 (S.D.N.Y. June 24, 2009) (where defendants failed to obtain consent from all state court defendants, the award of fees and costs was warranted as a reasonable inquiry into the applicable law would have revealed that the statutory criteria for removing this action to federal court were not satisfied ); see also Lott v. Pfizer, 492 F.3d 789, 792 (7th Cir. 2007) (removal is not reasonable if it is foreclosed by law that is clearly established at the time of removal); Hammer v. Scott, 137 F. App x. 472 (3d Cir. 2005); Traynor v. O Neil, 94 F. Supp. 2d 1016 (W.D. Wis. 2000). Notwithstanding this sound authority, Appellants argue that exceptional or extraordinary circumstances exist to allow for removal even where removal was procedurally incorrect. See Appellants Brief at 33. In support of this position, Appellants cite cases setting forth the type of exceptional circumstances that they claim would allow for removal even where the procedure of the removal itself was tainted. See Appellants Brief at 33. For example, in one case cited by Appellants, the court applied an equitable exception to the thirty-day time limit because it held that plaintiff had engaged in forum manipulation. See White v. White, 32 F.Supp.2d 890, (W.D. La. 1988). In another case cited by Appellants, the court excused a procedural defect in removal because plaintiff had convinced the defendant not to remove the case by promising to -22-

32 Case: Document: 84 Page: 32 11/24/ dismiss it. See Staples v. Joseph Merth Co., 444 F.Supp. 1312, 1313 (E.D.N.Y. 1978). Appellants cannot and do not allege similarly egregious conduct here. Instead, Appellants here argue that they had no practical ability to contact the nonremoving defendants because the affidavits of service contained addresses different from those identified on the Summons. See Appellants Brief at 35. This is sheer nonsense. As demonstrated by Appellants Notice of Removal itself, Appellants knew where defendants Bostic and Upshaw were located. (JA 10.) Indeed according to paragraph 13 of the Appellants Notice of Removal, Appellants knew that Mr. Bostic was presently incarcerated at the U.S. Penitentiary in Lewisburg, Pennsylvania as a result of his involvement in the shooting. (JA 10.) What is more, Appellants also knew the name of Mr. Bostic s attorney. (JA 10.) Despite this knowledge, Appellants apparently did nothing to try to contact him or his attorney to obtain consent. (JA 205.) With respect to defendant Upshaw, Appellants likewise knew at the time of removal that she was a resident of Ohio. (JA 10 ( 11).) Appellants can point to no efforts they made to try to contact her. Importantly, just two days after the Appellants removed this matter, and well within the thirty-day time period for removal, plaintiff filed an affidavit of service with Upshaw s current address. (JA 175.) Obviously, had -23-

33 Case: Document: 84 Page: 33 11/24/ Appellants tried to find Upshaw they would have been able to do so. With respect to defendant Caldwell, the affidavit of service was filed the very same day that Appellants filed their Notice of Removal and showed Caldwell s address to be the same as that listed on the Summons thus, there is no excuse for their failure to contact him, either. (JA 16, 177.) Stated simply, the Appellants are required to exercise reasonable diligence to try to locate any of all defendants. See, e.g., White v. Bombardier Corp., 313 F.Sup.1295 (W.D. Fla. 2004). Their failure to do so precludes them from arguing exceptional circumstances now. This is so even where a co-defendant is unaware that service has been effectuated on another co-defendant. See Tate v. Mercedes Benz U.S.A., Inc., 151 F.Sup.2d 222 (N.D.N.Y. 2001). Indeed, the removing party still must act diligently to obtain the other s consent, whether not the affidavit of service has been filed. See id. The Appellants failed to act diligently here and there are no extraordinary or exceptional circumstance to excuse this failure. 2. The District Court Applied the Correct Standard, and Its Findings Establish Appellants Breach of the Martin Objectively Reasonable Standard. Appellants also argue that the district court and magistrate judge refused to apply the objectively reasonable standard set forth in Martin v. Franklin -24-

34 Case: Document: 84 Page: 34 11/24/ Capital Corp., 546 U.S. 132, 126 S. Ct. 704 (2005). See Appellants Brief at 1, Appellants are simply incorrect. First, the magistrate judge and district court found that removal was spurious. That finding more than meets the objectively reasonable standard cited in Martin. Spurious is defined as of falsified or erroneously attributed origin or of a deceitful nature or quality. Webster s Ninth New Collegiate Dictionary (1991). By definition, something that is spurious cannot be objectively reasonable. Stated another way, the district court found that the Appellants grounds for removal were far worse than not objectively reasonable it found that their grounds were spurious. Moreover, Appellants argument that because the district court did not explicitly cite Martin or use the words objectively reasonable, the court must have ignored sound Supreme Court precedent is unwarranted and offensive. Appellants brought Martin to the district court s attention and argued aggressively that it compelled denial of the request for fees and costs. (See JA ) In their objections to the R&R, Appellants urged the district court to apply Martin, quoted extensively from the case, and argued that the magistrate judge s R&R had failed to apply the Martin standard. (See JA ) Indeed, that was their -25-

35 Case: Document: 84 Page: 35 11/24/ principal argument to the district court, just as it is on appeal. (Compare id. with Appellants Brief at 1, ) Appellants now conclude that because the district court did not cite Martin, the court must have refused to apply Martin. See Appellants Brief at 1. But that unfairly characterizes the record below. In its Order awarding costs and attorneys fees, the court noted: This Court has thoroughly reviewed de novo Judge Foschio s Report and Recommendation, the Defendants Objections thereto, and the applicable law. Upon due consideration, this Court finds no legal or factual error in Judge Foschio s Report and Recommendation.... (SPA 46 (emphasis added).) The Appellants brief makes no mention of this finding by the district court. See generally Appellants Brief. Based on this language in the court s Order and the fact that the Appellants aggressively argued Martin to the district court, there is no reason to believe that the district court refused to apply Martin. On the contrary, the logical conclusion is that the district court considered Martin and the Appellants arguments but agreed with the R&R that Appellants position was spurious and therefore not objectively reasonable. In fact, it is just as unfair to conclude that the magistrate judge ignored Martin. The R&R s discussion of whether fees and costs were warranted refers to situations in which removing defendants have failed to establish any reasonable -26-

36 Case: Document: 84 Page: 36 11/24/ basis for removal and have, by attempting to remove the case, delayed further action pending resolution of the remand motion. (SPA (emphasis added).) From that discussion, the R&R reached the conclusion that Appellants position was spurious. Although the R&R does not explicitly cite Martin, the fair conclusion from reading the magistrate judge s words is that by using the word spurious, the magistrate judge concluded that the Appellants position was not objectively reasonable. Appellants point to no authority that would require the district court or the magistrate judge to explicitly cite Martin or use its magic words. And that is not surprising. Every time a court rules against a litigant, the court need not explicitly reference the cases cited or even the arguments made by that party. It is a patently unfair leap to conclude that a court committed egregious error because it did not cite a particular case or use particular words, especially when the record as a whole makes it crystal clear that under the appropriate standard the losing party s position is untenable. And even if the magistrate judge and district court somehow lost sight of Supreme Court precedent cited at length by Appellants, Martin did not nullify the existing Second Circuit precedent. Indeed, the district court explicitly relied on cases that remain good law and that are not overruled or modified by Martin. See -27-

37 Case: Document: 84 Page: 37 11/24/ Sinclair v. City of Rochester, No. 07-CV-6277, 2007 WL , at *2 (W.D.N.Y. 2007) (citing Circle Indus. USA, Inc. v. Parke Constr. Group, Inc., 183 F.3d 105 (2d Cir. 1999), a case that pre-dates Martin by six years, for the Circuit s construction of 1447(c), before discussing how Martin offered guidance to the construction of the provision). If anything, Martin simply reinforced the strength of pre-martin precedent from this Court and from the Western District of New York. See, e.g., Prescia, 2010 WL , at *3; Samuel v. Town of Cheektowaga, No. 09-CV-381A, 2009 WL (W.D.N.Y. Dec. 20, 2009); Brown and Michaels PC v. Cardoso, No. 5:05 CV209, 2005 WL (N.D.N.Y. June 27, 2005); Wallace v. Wiedenbeck, 985 F. Supp. 288, 291 (N.D.N.Y.1998). 3. Appellants Removal Was Improper for Other Reasons as Well. Although the district court did not reach the issue, this Court can consider another, equally compelling reason why removal was patently improper here: the federal courts lack subject matter jurisdiction over this case. Cf. Lyndonville Sav. Bank v. Lussier, 211 F.3d 697, (2d Cir. 2000) (noting that the circuit court can consider subject matter jurisdiction sua sponte). -28-

38 Case: Document: 84 Page: 38 11/24/ The notice of removal asserts that there is diversity jurisdiction. (JA ). But there is not, because there is at least one non-diverse defendant 1 : The shooter, Cornell Caldwell, is a citizen of New York, the same state in which the Plaintiffs are citizens. (JA ) This absence of diversity jurisdiction provides an independent additional basis for an award of fees and costs. See Four Keys Leasing & Maint. Corp. v. Simithis, 849 F.2d 770, 774 (2d Cir. 1988); Prescia, 2010 WL , at *3; Syms, Inc., v. IBI Sec. Service, Inc., 586 F. Supp. 53, (S.D.N.Y. 1984). Appellants argued below and on appeal that in a case involving responsibility for the shooting of Daniel Williams, the citizenship of the person who pulled the trigger should be disregarded because he is a fraudulently joined party. See, e.g., Appellants Brief at That frivolous argument requires little response. In order to establish fraudulent joinder, Appellants bear the burden of demonstrating, by clear and convincing evidence... that there [was] no possibility, based on the pleadings, that plaintiff can state a cause of action against the non-diverse defendant in state court. See Pampillonia v. RJR Nabisco, Inc., 138 F.3d 459, 461 (2d Cir. 1998). All factual and legal ambiguities must be resolved in favor of Plaintiffs, and 1 Plaintiffs have alleged that co-defendant Bostic also was a resident of New York. (JA of the amended complaint); 201.) Appellants contended that Bostic was a citizen of Nevada. (JA 11.) Thus, it is unclear whether Bostic, in addition to Caldwell, is non-diverse. -29-

39 Case: Document: 84 Page: 39 11/24/ the complaint is subjected to less scrutiny than on a motion to dismiss for failure to state a claim. Ecology & Envir., Inc. v. Automated Compliance Systems, Inc., No. 00-CV-0887E(F), 2001 WL , at *5 (W.D.N.Y. Sept. 4, 2001); see also Wilds v. United Parcel Serv., Inc., 262 F.Supp. 2d 163, 176 (S.D.N.Y. 2003). Plaintiffs need merely colorably assert a claim against the non-diverse defendant and leave open the possibility that the state court would deem the Complaint to state a claim. Ecology and Envir., 2001 WL at *5. Here, the complaint alleges that Caldwell shot Daniel Williams. (JA 13 ( 18).) What is more, it alleges that Caldwell violated federal, state, and local statutes, regulations and ordinances by engaging in illegal gun trafficking and illegally buying or trading the Hi-Point handgun, and that his conduct and omissions constitute intentional violations of federal, state and local statutes, regulations and ordinances. (J.A ) Joining him as a party was anything but fraudulent. Appellants also assert that Caldwell was fraudulently joined because the statute of limitations had expired with respect to his actionable conduct. See Appellants Brief at 14, 21 & n.6. That assertion is false. New York law allows victims of violent felony crimes seven to ten years to bring civil actions for intentional torts, calculated from the date of the defendant s conviction. See CPLR -30-

40 Case: Document: 84 Page: 40 11/24/ b; see also, e.g., Paul J.H. v. Lum, 291 A.D.2d 894, 895, 736 N.Y.S.2d 561, 562 (4th Dep t 2002) (construing CPLR 213-b). Caldwell was convicted of firstdegree assault on January 30, 2004, only nineteen months before Plaintiffs filed this action on July 28, (See JA 71-72). Thus, Appellants argument that Caldwell was fraudulently joined because claims against him were barred by the applicable statute of limitations was simply incorrect and contrary to well-established law. II. The District Court Correctly Concluded that an Award of Fees and Costs Is Warranted Regardless of a Contingency Fee Arrangement. Appellants contend the award of fees and costs was erroneous because fees and costs are not reasonable if there is a contingency fee arrangement between Plaintiffs and their counsel. This also is contrary to well-established law. A. The Standard of Review is Abuse of Discretion. Appellants assert that this Court s decision in White v. Shalala, 7 F.3d 296, 299 (2d Cir. 1993), stands for the proposition that this Court reviews de novo whether a district court correctly interpreted a statute. See Appellants Brief at 42. But this assertion misses the mark. Indeed, it is well settled that the standard -31-

41 Case: Document: 84 Page: 41 11/24/ for reviewing a district court s decision to award attorneys fees is abuse of discretion and asking whether the court made a mistake of law or clearly erroneous factual finding. Victor v. Argent Classic Convertible Arbitrage Fund, 623 F.3d 82 (2010) (internal citations and quotations omitted); see also Garbie v. Daimler Chrysler, 211 F.3d 407, 410 (7th Cir. 2000) (Easterbrook J.) (refusing to apply de novo review and noting that a deferential standard takes on special significance when reviewing fee decisions (internal citations and quotations omitted)). B. Fees and Costs Are Recoverable Under 1447(c) Regardless of the Fee Arrangement. Appellants assert that attorneys fees are not recoverable in a contingency fee case; they suggest that because of the contingent-fee arrangement, Plaintiffs have incurred no actual expenses and attorney s fees. That argument is contrary to sound authority and to the purposes of the federal remand statute. Appellants have no good authority to support their position, so they rest their argument on the dissent in a Ninth Circuit case. See Appellants Brief at (citing to and quoting from the dissent in Gotro v. R&B Realty Group, 69 F.3d 1485 (9th Cir. 1995) (O Scannlain, J., dissenting)). Indeed, the majority opinion in that case rejected the position espoused by Appellants: After a thoughtful examination of the text and legislative history of 28 U.S.C. 1447(c), -32-