Horvath v. JP Morgan Chase & Company, No. 3:2021cv01665 - Document 82 (S.D. Cal. 2022)
Court Description: ORDER denying 74 Motion for Entry of Judgment under Rule 54(b); denying 75 Motion for Entry of Judgment under Rule 54(b); denying 77 Motion for Entry of Judgment under Rule 54(b). Signed by Judge Barry Ted Moskowitz on 10/13/2022. (alns)
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Horvath v. JP Morgan Chase & Company Doc. 82 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 HELEN L. HORVATH, Plaintiff, 12 13 14 15 v. ORDER DENYING MOTION FOR COSTS, EXPENSES, AND ATTORNEY’S FEES. JP MORGAN CHASE & COMPANY, Defendant. 16 Case No.: 3:21-cv-01665-BTMAGS [ECF No. 74, 75, and 77] 17 Dr. Helen Horvath (“Plaintiff”), in Propria Persona, has filed motions for costs 18 19 20 21 22 23 24 25 26 27 and fees pursuant to Fed. R. Civ. P. 54(d)(1) and 28 U.S.C. § 1927. (ECF Nos. 74, 75, 77.) JP Morgan Chase (“Defendant”) filed an opposition. Plaintiff filed a response and a separate “Statement of Facts/Legal Issues”. (ECF Nos. 79 and 80.) Although this case is remanded, the Court retains jurisdiction over the collateral issue of costs and attorney’s fees under § 1447(c). The motions have been extensively briefed and oral argument would not add anything or aid the Court in deciding the motions. Therefore, under Civ. L.R. 7.1 (d)(1), the Court has exercised its discretion to decide the motions on the papers without oral argument. For the reasons discussed below, Plaintiff’s motions are DENIED. 28 1 3:21-cv-01665 BTM AGS Dockets.Justia.com 1 2 I. BACKGROUND On August 16, 2021, Plaintiff filed a complaint against JP Morgan Chase in 3 the small claims court of the Superior Court of California, County of San Diego. 4 (ECF No. 3 at 3.) The complaint requested damages for (1) violation of the Cares 5 Act reporting requirements when granting deferrals; (2) inaccurate reporting; (3) 6 failure to provide access to the balance liquidation programs in 2020; (4) failure to 7 grant COVID-19 deferrals; (5) denial of credit by Pentagon Federal Credit Union 8 and Geneva Financial; (6) not granting the balance liquidation; (7) violations of the 9 Fair Credit Reporting Act; (8) loss of time; and (9) punitive damages. (ECF No. 110 2 at 4 (“Compl.”).) On September 22, 2021, Defendant removed to federal court 11 on the basis of federal question jurisdiction. (ECF No. 1.) Defendant then 12 submitted a motion to dismiss for failure to plea sufficient facts under Rule 8(a)(2) 13 and failure to state a claim under Rule 12(b)(6). (ECF No. 3.) 14 After removal, Plaintiff submitted a response and justification to reject 15 removal of the case, among other reasons, on the basis Defendants did not timely 16 file the notice of removal. (ECF No. 5 at 2.) Plaintiff contested that “[t]he notice of 17 removal [was] dated September 22, 2021, more than 30 days after receipt of the 18 small claims action as stated by defendant's attorney.” (Id.) Plaintiff then 19 submitted additional motions to remand, also alleging improper removal. (ECF 20 Nos. 8 and 9.) On January 7, 2022, the Court issued an Order denying remand, 21 and granting Defendant’s motion to dismiss with leave to amend. (ECF No. 28.) 22 In January and February of 2022, Plaintiff submitted motions for 23 reconsideration. (ECF Nos. 34, 36, 38.) Plaintiff additionally filed a motion to 24 reassign the case to a different judge. (ECF No. 35.) Defendant responded in 25 opposition to these motions (ECF No. 37.) and on April 6, 2022, this Court issued 26 an order granting in part and denying in part Plaintiff’s motion for reconsideration. 27 (ECF No. 40.) This set a subsequent evidentiary hearing to determine the merits 28 of Plaintiff’s jurisdictional claim. (Id. at 24.) During this evidentiary hearing on May 2 3:21-cv-01665 BTM AGS 1 19, 2022, the Court took judicial notice of Plaintiff’s “Exhibit 8,” which provided 2 circumstantial evidence that Plaintiff’s complaint was delivered on August 20, 3 2021, making Defendant’s removal untimely. (ECF No. 66.) The Court granted 4 JP Morgan Chase 45 days in which to depose a representative of the U.S. Postal 5 Service (“USPS”) and resolve the discrepancy of fact, or alternatively agree to a 6 remand. (Id. 4-5.) During this period, Plaintiff filed four additional motions to 7 remand. (ECF. Nos. 67, 69, 70, and 72.) On July 25th, 2022, JP Morgan Chase 8 declined to depose a representative of the USPS and agreed to jointly remand, 9 stating it agreed “solely to avoid incurring further fees and costs.” (ECF No. 71.) 10 On July 29, 2022, the case was remanded to state court. (ECF No. 73.) 11 On August 11, 2022, Plaintiff filed a motion for entry of judgement under Rule 12 54(b) and 28 U.S.C. § 1927. (ECF No. 74.) Plaintiff filed subsequent motions, 13 memorandums, and addendums between August 12 and September 22, 2022. 14 (ECF Nos. 75, 77, 79, and 80.) Plaintiff contends that JP Morgan Chase’s failure 15 to agree to remand earlier entitles her to costs, expenses, and attorneys fees under 16 the law. Plaintiff requests a total amount of $89,528.10, including but not limited 17 to mileage and human costs, mailing costs, administrative costs, attorney’s fees, 18 and, if the court finds fit, additional costs for medical issues resulting from the case. 19 (ECF No. 77 at 10-14.) The Court now considers the motion for costs, expenses, 20 and fees under 28 U.S.C. § 1927 and costs under Fed. R. Civ. P. 54(d) in turn. 21 22 23 II. DISCUSSION The "American Rule" provides that each party bear the cost of its attorney's 24 fees regardless of the outcome of the litigation. Alyeska Pipeline Co. v. Wilderness 25 Soc'y, 421 U.S. 240, 247 (1975). As a general matter, prevailing litigants are only 26 entitled to collect attorney's fees where there is explicit statutory authorization or a 27 binding contractual provision providing for such awards. Key Tronic Corp. v. United 28 States, 511 U.S. 809, 814-15 (1994). 3 3:21-cv-01665 BTM AGS 1 A. Fees under 28 U.S.C. 1447(c). 2 28 U.S.C. § 1441 authorizes the removal of state cases to federal 3 court where the district court would have original jurisdiction, including over 4 federal question claims. 28 U.S.C. § 1447(c) provides for remand based on 5 lack of jurisdiction "[i]f at any time before final judgment it appears that the 6 district court lacks subject matter jurisdiction...". Further, "an order 7 8 9 10 11 12 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). The Court has discretion to grant fees when the removing party lacked an objectively reasonable basis for seeking removal. Martin v. Franklin Capital Corp., 546 U.S. 132, 141 (2005). Here, 13 Defendant removed to federal court on the basis of federal question 14 jurisdiction, allowed under 28 U.S.C. § 1441. Subsequent remanding of the 15 case was agreed to by the Defendant to avoid deposition costs associated 16 with Plaintiff’s untimely removal claim. As discussed in more detail below, 17 the Court finds JP Morgan Chase’s initial removal reasonable. Therefore, 18 the Court exercises its discretion under § 1447(c), and DENIES Plaintiff’s 19 request for fees and costs associated with the removal. 20 21 B. Sanctions, Costs and Fees under 28 U.S.C. § 1927 22 Plaintiff seeks an award of costs, expenses, and attorney's fees under 28 23 U.S.C. § 1927. Section 1927 dictates that: 24 27 “[a]ny attorney or other person admitted to conduct cases in any court of the United States or any Territory thereof who so multiplies the proceedings in any case unreasonably and vexatiously may be required by the court to satisfy personally the excess costs, expenses, and attorneys' fees reasonably incurred because of such conduct." 28 District courts have substantial discretion to decide whether to award 25 26 4 3:21-cv-01665 BTM AGS 1 sanctions under § 1927 or their inherent power, and in what amount. Haynes v. 2 City and County of San Francisco, 688 F.3d 984, 987-88 (9th Cir. 2012). The 3 purpose of a sanctions award "may be to deter attorney misconduct, or to 4 compensate the victims of an attorney's malfeasance, or to both compensate and 5 deter." Id. The award is intended only to cover excess costs incurred due to 6 unreasonable conduct; it is not meant to reimburse a party for ordinary trial costs. 7 See United States v. Associated Convalescent Enters., Inc., 766 F.2d 1342, 13478 48 (9th Cir. 1985). However, assessment of § 1927 sanctions requires a court to 9 make a finding of bad faith. West Theatre Corp. v. City of Portland, 897 F.2d 1519, 10 1528 (9th Cir. 1990); In re Keegan Mgmt. Co., 78 F.3d 431, 436 (9th Cir. 1996) 11 (“section 1927 sanctions ‘must be supported by a finding of subjective bad faith.’”); 12 United States v. Blodgett, 709 F.2d 608, 610 (9th Cir.1983); Barnd v. City of 13 Tacoma, 664 F.2d 1339, 1343 (9th Cir.1982). Bad faith is present whenever an 14 attorney or pro se party "knowingly or recklessly raises a frivolous argument, or 15 argues a meritorious claim for the purpose of harassing an opponent." Estate of 16 Blas Through Chargualaf v. Winkler, 792 F.2d 858, 860 (9th Cir. 1986); West Coast 17 Theater Corp. v. City of Portland, 897 F.2d at 1528; U.S. v. Associated 18 Convalescent Enterprises, Inc., 766 F.2d 1342 (9th Cir., 1985) (“The imposition of 19 liability under this statute requires a finding that an attorney has acted “recklessly 20 or in bad faith.”). “[W]hile it is true that reckless filings may be sanctioned, and 21 nonfrivolous filings may also be sanctioned, reckless nonfrivolous filings, without 22 more, may not be sanctioned.” In re Keegan Mgmt. Co., 78 F.3d at 436. Before a 23 party can recover excess costs under 28 U.S.C. § 1927, the court must find that 24 the "attorney or other person admitted to conduct cases" created "needless 25 proceedings" or "prolonged litigation,” and that the conduct was vexatious as well 26 as unreasonable. 27 28 \\ 5 3:21-cv-01665 BTM AGS 1 I. 2 28 U.S.C. § 1927 is "a penal statute designed to discourage unnecessary Needless or Prolonged Litigation 3 delay in litigation," and limit "multiplicity of suits or processes, where a single suit 4 or process might suffice.” Roadway Express, Inc. v. Piper, 447 U.S. 752, 759 5 (1980) (quoting 26 ANNALs OF CONG. 29 (1813)). Sanctions under § 1927 are 6 warranted when an attorney or pro se plaintiff intentionally or recklessly raises a 7 frivolous argument which results in the multiplication of proceedings. In re Girardi, 8 611 F.3d 1027, 1061 (9th Cir. 2010); see also Zambrano v. City of Tustin, 885 F.2d 9 1473, 1485 (9th Cir. 1989) (mere negligence is insufficient to levy sanctions). 10 “Because the section authorizes sanctions only for the ‘multipli[cation of] 11 proceedings,’ it applies only to unnecessary filings and tactics once a lawsuit has 12 begun.” In re Keegan Mgmt. Co., 78 F.3d at 436; see Zaldivar v. City of Los 13 Angeles, 780 F.2d 823, 831 (9th Cir. 1986); Matter of Yagman, 796 F.2d 1165, 14 1187 (9th Cir. 1986). 15 Plaintiff asserts that Defendants “lack of cooperation…led to the 16 multiplication of the case as the attorneys were aware that they missed the filing 17 deadline under 28 U.S.C. § 1446”. (ECF No. 77 at 8.) Moreover, she argues that 18 Defendants “could have stopped this case and dismissed it September 29, 2021 19 or agreed with Pacer document 8 instead of multiplying the case.” (Id. at 10.) 20 Defendant argues that JP Morgan Chase did not multiply the proceedings, stating 21 that after the Court initially ruled “that removal was proper and timely”, “Chase did 22 not file any subsequent documents… and was only forced to defend itself and 23 respond to Plaintiff’s various motions and actions.” (ECF No. 78 at 13.) 24 Case law under § 1927 aligns with Defendant’s argument that a fair attempt 25 at removal does not constitute bad faith multiplication of the proceedings. The 26 Ninth Circuit held in In re Peoro, 793 F.2d 1048 (9th Cir. 1986) that a creditor who 27 brought multiple lawsuits in violation of res judicata rules did not have any plausible 28 basis for his litigation, and accordingly was charged fees for vexatious 6 3:21-cv-01665 BTM AGS 1 multiplication. See also Cruz v. Savage, 896 F.2d 626 (1st Cir. 1990) (finding a 2 civil rights attorney sanctionable for filing multiple frivolous claims, unsupported by 3 evidence which unnecessarily multiplied litigation). While the proceedings in this 4 case posed an inconvenience for both Horvath and JP Morgan Chase, this Court 5 does not find that the Defendant “intentionally or recklessly” raised a “frivolous 6 argument,” in a way that multiplied the proceedings under § 1927. While 7 Defendants later declined to depose USPS, resulting in a remand, this does not 8 prove a “calculated” or bad faith effort to multiply litigation seen in In re Peoro, and 9 is not sanctionable under § 1927. Rather, it was Plaintiff that raised frivolous 10 motions to have the case reassigned to another judge and transfer the case. (See 11 ECF Nos. 35 and 55.) 12 13 II. 14 Additionally, the Court must determine if the conduct was “unreasonable or Unreasonable or Vexatious 15 vexatious.” In U.S. v. Associated Convalescent Enterprises, Inc., 766 F.2d 1342 16 (9th Cir. 1985) the Ninth Circuit held that an attorney unreasonably delaying trial 17 and causing himself to be disqualified one day before trial was scheduled, 18 constituted “calculated” and thus “unreasonable, vexatious, and irresponsible” 19 action under § 1927. See also Baker Industries, Inc. v. Cerberus LTD., 764 F.2d 20 204 (3rd Cir. 1985) (finding a flagrant breach of stipulation of consent to hybrid 21 reference process as “bad faith” sanctionable under § 1927). However, in 22 E.E.O.C. v. Banner Health, 402 Fed.Appx. 289 (9th Cir. 2010), the Ninth Circuit 23 held that the district court did not abuse its discretion for declining attorneys’ fees 24 when it found no bad faith in a discrimination complaint filed against an employer 25 for denying Christmas holiday leave. There, the court emphasized that a “finding 26 of subjective bad faith is essential to an award of attorneys' fees under either 27 section 1927 or a court’s inherent power.” Id. at 292. 28 Plaintiff argues that “the facts in this case meet the requirements for the 7 3:21-cv-01665 BTM AGS 1 Court…to declare the attorney vexatious since they continued the case knowing 2 that [they] missed the initial filing deadline for removal.” (ECF No. 74 at 7.) 3 Defendant argues that “Chase had an objectively reasonable basis to calculate the 4 deadline for filing the removal as September 22, 2021” and accordingly did not act 5 with the requisite bad faith required. (ECF No. 78 at 12.) Based on the facts 6 presented, this court agrees with the Defendant. As this Court noted in its order 7 remanding the case, “there remain[ed] a doubt as to whether Defendant timely 8 removed.” (ECF No. 73.) The Court did not hold that removal was in fact untimely. 9 (Id.) Plaintiff asserts she notified Defendant “that they missed the filing deadline 10 via email and telephonically,” which Defendant viewed as a dispute of fact. (ECF 11 No. 74 at 5.) However, Plaintiff’s motion does not assert sufficient facts to 12 demonstrate bad faith litigation. Defendants’ continued litigation was merited, and 13 does not qualify as unreasonable, vexatious, or in bad faith under § 1927. 14 Analysis of Eligibility for Attorney’s Fees 15 III. 16 Finally, Defendant has raised the question of Plaintiff’s eligibility for 17 attorney’s fees under § 1927. In her motion to award cost and fees, Plaintiff 18 requested $60,367.50 “which is in line with what defendants would have paid 19 attorneys if not more.” (ECF No. 74 at 10-13) (She later amended her request to 20 include an additional $27,650.00 in fees (ECF No. 77 at 11.) Defendant argues 21 that as a Plaintiff proceeding in Propria Persona, Horvath is not eligible to collect 22 the attorney’s fees under § 1927. 23 As stated above, the court may require the "attorney or other person 24 admitted to conduct cases . . . to satisfy personally the excess costs, expenses, 25 and attorney's fees reasonably incurred.” A statutory reading of § 1927 would 26 allow for pro se litigants the “excess costs, expenses” but deny “attorneys' fees 27 reasonably incurred” since in Propria Persona representation does not, by its very 28 nature, incur those fees. Similar logic has been followed across a variety of 8 3:21-cv-01665 BTM AGS 1 statutes. In Kay v. Ehrler, 499 U.S. 432, 435 (1991), the Supreme Court noted 2 that there is no disagreement "that a pro se litigant who is not a lawyer is not 3 entitled to attorney's fees" under 42 U.S.C. § 1988(b). The same has been held 4 for 42 U.S.C. § 1911 (“The Social Security Act”), where the Eleventh Circuit held 5 that "[b]ecause a party proceeding pro se cannot have incurred attorney's fees as 6 an expense, a district court cannot order a violating party to pay a pro se litigant a 7 reasonable attorney's fee as part of a sanction." Massengale v. Ray, 267 F.3d 8 1298, 1302-03 (11th Cir. 2001). Under the Freedom of Information Act, the District 9 of Columbia Circuit Court of Appeals permits pro se litigants to recover attorney's 10 fees because it interprets the phrase "reasonably incurred" in 5 U.S.C. § 11 552(a)(4)(E) to modify only "litigation costs," thereby allowing "reasonable attorney 12 fees" to be awarded even though not incurred. Cuneo v. Rumsfeld, 533 F.2d 1360, 13 1366 (D.C. Cir. 1977). However, this interpretation has been subsequently 14 rejected by the United States Courts of Appeals for the First, Fifth, Sixth, Seventh, 15 Tenth, and Eleventh Circuits. Crooker v. Department of Justice, 632 F.2d 916 (1st 16 Cir.1980); Barrett v. Bureau of Customs, 651 F.2d 1087 (5th Cir. 1981), cert. 17 denied, 455 U.S. 950 (1982); Falcone v. IRS, 714 F.2d 646 (6th Cir. 1983), cert. 18 denied, 466 U.S. 908 (1984); Wolfel v. United States, 711 F.2d 66 (6th Cir. 1983); 19 DeBold v. Stimson, 735 F.2d 1037 (7th Cir. 1984); Burke v. United States 20 Dep't of Justice, 559 F.2d 1182 (10th Cir. 1977); Clarkson v. IRS, 678 F.2d 1368 21 (11th Cir.1982). There is a pattern among courts of denying attorney’s fees to 22 those representing themselves. See Pickholtz v. Rainbow Technologies, Inc., 284 23 F.3d 1365, 1375 (Fed. Cir. 2002) ("[T]he word "attorney' connotes an agency 24 relationship between two parties (client and attorney), such that fees a lawyer 25 might charge himself are not "attorney fees,'" since "[o]ne cannot "incur' fees 26 payable to oneself”); Kay v. Ehrler, 499 U.S. 432, 435-36 (1991) ("[T]he word 27 "attorney' assumes an agency relationship..."); Manos v. U.S. Dept. of Air Force 28 829 F. Supp. 1191, 1192-1193 (N.D.Cal. 1993) (noting that federal circuit courts 9 3:21-cv-01665 BTM AGS 1 have overwhelmingly held that nonattorney pro se litigants cannot recover attorney 2 fees under the Freedom of Information Act, 5 U.S.C. § 552(a)(4)(B) et seq.); 3 Swanson & Setzke, Chtd. v. Henning, 774 P.2d 909, 910 (1989) ("a clear majority 4 of courts hold that if a nonlawyer undertakes to represent himself in litigation, he 5 is not entitled to an award of attorney fees"); Smith v. Batchelor, 832 P.2d 467, 6 474 (Utah 1992) (“It is the general rule that pro se litigants should not recover fees 7 for successful litigation”); Trope v. Katz, 11 Cal.4th 274, 279-282 (1995) (finding an 8 attorney pro se litigant could not recover attorney’s fees, regardless of his 9 profession, under California Civil Code Section 1717). 10 However, case law specifically defining “attorney’s fees” under § 1927 is 11 limited in this jurisdiction. See Wages v. Internal Revenue Serv., 915 F.2d 1230, 12 1235-36 (9th Cir. 1990) (finding pro se litigants could be liable for attorney’s fees 13 under 28 U.S.C. § 1927, but not answering if they could recover such fees). This 14 Court finds that the Defendant did not file or conduct this action in bad faith, and 15 Defendant’s counsel did not unreasonably multiply these proceedings. Plaintiff 16 already has no claim to attorney’s fees under 28 U.S.C. § 1927. Accordingly, the 17 Court does not decide whether pro se litigants’ are eligible for attorney’s fees. 18 Since Plaintiff does not meet the burden required for costs or fees under 28 U.S.C. 19 § 1927, her motion is DENIED. 20 21 C. Entitlement to Additional Costs under Fed. R. Civ. P. 54(d). 22 Horvath additionally petitions the court for costs incurred under the Fed. R. 23 Civ. P. Rule 54(d) which states, in relevant parts, that “costs—other than attorney's 24 fees—should be allowed to the prevailing party.” Most federal fee-shifting 25 provisions authorize courts to award costs if the “claimant was the ‘prevailing 26 party,’ the ‘substantially prevailing party,’ or ‘successful.’” Ruckelshaus v. Sierra 27 Club, 463 U.S. 680, 684 (1983). The award of costs under Rule 54 is a matter 28 within the court's discretion. Badillo v. Central Steel & Wire Co., 717 F.2d 1160, 10 3:21-cv-01665 BTM AGS 1 1165 (7th Cir. 1983). Rule 54(d)(1) provides that "costs … shall be allowed as of 2 course to the prevailing party unless the court directs otherwise." See also Civ. 3 L.R. 54.1(f) (“The determination of the prevailing party will be within the discretion 4 of the Court in all cases except where such determination is inconsistent with 5 statute or the Fed. R. Civ. P. or the rules of the appellate courts.”). Plaintiff asserts 6 entitlement to costs because she is a "prevailing party" within the meaning of Rule 7 54(d)(1). Accordingly, Plaintiff’s recovery of costs hinges upon her: 1) timely filing 8 a Bill of Costs outlining her 54(d) claims under the local rules, and 2) whether she 9 is a "prevailing party" by reason of remand. 10 First, Plaintiff here has not followed the Civ. L.R. 54.1 procedures required 11 to recover costs. Civ. L.R. 54.1 outlines that “[w]ithin fourteen (14) days after entry 12 of judgment, the party in whose favor a judgment for costs is awarded or allowed 13 by law, and who claims costs, must file with the Clerk the bill of costs, together with 14 a notice of when the Clerk will hear the application.” The same time limit is 15 imposed for a bill of cost under Rule 54(d)(1) (stating the “clerk may tax costs on 16 14 days’ notice.”). The U.S. District Court for the Southern District of California 17 provides AO 133 Bill of Cost form with instructions to first set a hearing date with 18 Clerk of Court before submitting the form on CM/ECF. See United States District 19 Court, Southern District of California, “Bill of Costs”, 20 https://www.casd.uscourts.gov /forms/billofcost.aspx (last visited Oct. 12, 2022). 21 This court issued its order remanding this case for untimely removal on July 29th, 22 2022. While Plaintiff provided information on estimated costs in her motion for 23 attorney’s fees, she did not timely file a Bill of Costs as required by the local rules. 24 Her motion to recover fees under 54(d) is now time barred. 25 Additionally, even if Plaintiff had complied with Civ. L.R. 54.1, this Court finds 26 she is not entitled to costs, as she is not a prevailing party under Rule 54(d). The 27 Supreme Court has defined a “prevailing party” as “a party in whose favor a 28 judgement is rendered, regardless of the amount of damages awarded.” 11 3:21-cv-01665 BTM AGS 1 Buckhannon Bd. & Care Home, Inc. v. W. Virginia Dep't of Health & Human Res., 2 532 U.S. 598, 605 (2001). The Supreme Court in CRST Van specifically noted 3 that a defendant need not obtain a judgment on the merits in order to qualify for 4 attorney's fees under a “prevailing party” analysis. 578 U.S. 419, 431 (2016) (“The 5 congressional policy regarding the exercise of district court discretion in the 6 ultimate decision whether to award fees does not distinguish between merits7 based and non-merits-based judgments. Rather…one purpose of the fee-shifting 8 provision is ‘to deter the bringing of lawsuits without foundation.’”; See also 9 Amphastar Pharmaceuticals, Inc. v. Aventis Pharma SA, 856 F.3d 696, 709 (2017) 10 (stating that “defendants who prevail for various non-meritorious reasons [could] 11 still be deemed ‘prevailing parties.’”). 12 Instead, “[t]he dispositive question is not whether the plaintiff ultimately 13 obtained some form of substantive relief, but rather whether there is a lasting 14 alteration in the legal relationship between the parties.” Wood v. Burwell, 837 F.3d 15 969 (9th Cir. 2016); Sole v. Wyner, 551 U.S. 74 (2007). “There is no “prevailing 16 party”—and thus no cost award—if there has not been a “material alteration of the 17 legal relationship of the parties.” Texas State Teachers Ass'n v. Garland Indep. 18 Sch. Dist., 489 U.S. 782, 792–793 (1989). This has been defined as the “material 19 alteration test,” asking whether there has been a “judicially sanctioned change in 20 the legal relationship of the parties”. Buckhannon, 532 U.S. at 605. In order to 21 qualify as a prevailing party, a party must have been awarded some relief by the 22 court resulting in a material alteration in the legal relationship between the plaintiff 23 and defendant. Buckhannon, 532 U.S. at 605. 24 While “Congress has included the term “prevailing party” in various fee- 25 shifting statutes, and it has been the Court's approach to interpret the term in a 26 consistent manner.” CRST Van, 578 U.S. at 422. Existing case law has primarily 27 found an alteration of a legal relationship sufficient to confer prevailing party status 28 when a ruling constitutes a “judicially sanctioned change” for purposes of Rule 12 3:21-cv-01665 BTM AGS 1 54(d) which confers a benefit on one party. Wood v. Burwell, 837 at 974 -75 (where 2 the Plaintiffs “left the courthouse with an [agency remand] order that the Secretary 3 violated the APA and had to undertake a ‘do over’ of her administrative review—a 4 victory that can hardly be described as leaving ‘emptyhanded’”); Carbonell v. INS, 5 429 F.3d 894, 899–902 (9th Cir. 2005) (holding that a district court’s order 6 incorporating a voluntary stipulation to a stay of deportation judicially sanctioned 7 and materially altered the relationship between Carbonell and the government 8 making the applicant a prevailing party). 9 However, jurisdictional remand, voluntary dismissals without prejudice, and 10 a change in venue, do not create a “prevailing party” without clear “material 11 alteration of the legal relationship of the parties.” Buckhannon, 532 U.S. at 604. 12 For example, the Ninth Circuit held that “a dismissal without prejudice does not 13 alter the legal relationship of the parties ‘because the defendant remains subject 14 to risk of re-filing.’” Oscar v. Alaska Dept. of Educ. & Early Dev., 541 F.3d 978, 981 15 (9th Cir. 2008). To qualify as a prevailing party, one side must “obtain[] relief 16 sufficiently enduring to satisfy the ‘material alteration of the parties’ legal 17 relationship[.]” Higher Taste, Inc. v. City of Tacoma, 717 F.3d 712, 716 (9th Cir. 18 2013); See also Ware v. Pine State Mortg. Corp., 745 F.Appx. 831, 833 (11th Cir. 19 2018) (holding there was no entitlement to award under 54(d) since remand did 20 not alter the legal relationship of the parties); Sequa v. Cooper, 245 F.3d 1036, 21 1037 (8th Cir. 2001) (upholding cost award under Court's inherent authority but 22 disagreeing with conclusion that Plaintiff's voluntary dismissal without prejudice 23 made Defendant a "prevailing party"); Szabo Food Serv., Inc. v. Canteen Corp., 24 823 F.2d 1073, 1076-1077 (7th Cir. 1987) (holding a voluntary dismissal without 25 prejudice did not make the Defendant a "prevailing party" because he remained at 26 risk to further litigation on the claim); Perez-Arellano v. Smith, 279 F.3d 791, 795 27 (9th Cir. 2002) (holding that applicant who was granted naturalization at the 28 administrative level while the federal court action was held in abeyance was not a 13 3:21-cv-01665 BTM AGS 1 prevailing party because he “unmistakably did not gain a change in his legal 2 relationship with the INS by judgment or consent decree”). 3 Here, the Court remand for untimely removal does not materially alter the 4 legal relationship between the Plaintiff and Defendant in any sufficiently enduring 5 way, but rather stated that the Court itself can not hear the claim. While JP Morgan 6 Chase opted to not pursue a deposition of an employee of USPS when ordered by 7 the Court, choosing instead to remand by that omission, this did not terminate 8 litigation, change material facts of the case, or sufficiently modify the previous 9 existing legal relationship in question. It simply moved the matter out of federal 10 jurisdiction due to a substantial doubt as to timely removal. Accordingly, it would 11 be inconsistent with Ninth Circuit precedent, and the “material alteration test”, to 12 find Plaintiff to be the prevailing party by means of remand. 13 For these reasons, the Court declines to find Horvath the “prevailing party” 14 on issue of remand. Her motion costs under 54(d) is DENIED. 15 16 \\ 17 \\ 18 \\ 19 \\ 20 \\ 21 \\ 22 \\ 23 \\ 24 \\ 25 \\ 26 \\ 27 \\ 28 \\ 14 3:21-cv-01665 BTM AGS 1 2 IV. CONCLUSION The Court finds that Plaintiff has failed to establish that Defendant’s removal 3 to federal court, or its original decision to resist a remand, constitute bad faith, or 4 unreasonable or vexatious multiplication meriting sanctions under 28 U.S.C. § 5 1927. The Court also holds that Plaintiff is not entitled to costs, expenses, or fees 6 under 28 U.S.C. §1447(c). Additionally, the Court holds that Plaintiff is not a 7 “prevailing party” as required for costs under Rule 54(d) and that the Plaintiff did 8 not timely file her bill of costs under Civ. L.R. 54.1. The Court therefore DENIES 9 Plaintiff’s motions for costs and attorneys’ fees. 10 11 IT IS SO ORDERED. 12 13 Dated: October 13, 2022 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 15 3:21-cv-01665 BTM AGS
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