United States District Court, D. Nevada
RICHARD F. BOULWARE, II UNITED STATES DISTRICT JUDGE
the Court is Defendant's Motion for Attorneys' Fees.
ECF No. 14.
removed this action to federal court on June 21, 2018. ECF
No. 1. On June 27, 2018, Plaintiffs filed an Emergency Motion
to Remand to State Court, ECF No. 5, and Defendant responded
on July 11, 2018, ECF No. 10. The Emergency Motion was
withdrawn on July 18, 2018, ECF No. 12, and Defendant filed a
Motion for Attorneys' Fees on July 24, 2018, ECF No. 14.
Plaintiffs responded on August 7, 2018, ECF No. 15, and
Defendant replied on August 14, 2018, ECF No. 16. A hearing
was held on this motion and others on January 7, 2019. ECF
who is a citizen of Montana, removed this petition to federal
court on the basis of diversity jurisdiction, asserting
“upon information and belief” that Paws Up Ranch,
LLC (“Paws Up”) is a Nevada company because
it's one member/officer is QZM, Inc., a Nevada
corporation, and that Camel, LLC (“Camel”) is a
Wyoming limited liability company, and that the Wyoming
Secretary of State indicates that Camel is a citizen of
Wyoming and Nevada. ECF No. 1 at 2. Plaintiffs asserted in an
Emergency Motion to Remand that both Paws Up and Camel are
Montana citizens. ECF No. 5 at 2. Specifically, they stated
that Paws Up is a Nevada company with a single member, Monroe
Capital Partners, L.L.C. (“MCP”), which
transferred 99% of its interests in Paws Up to Nadine Lipson.
Id. at 3. Further, MCP also transferred 99% of its
interests in Camel to Lipson. Because Lipson is a natural
person who “has called Montana her home for more than
20 years and has no present intention of relocating to
another state, ” id. at 3, Plaintiffs asserted
that there was no basis for diversity jurisdiction and the
case was improperly removed, id. at 4. Plaintiffs
attached Lipson's signed affidavit to their motion,
stating she is a Montana resident. Ex. 1 at 2, ECF No. 5-2.
Plaintiffs requested attorneys' fees pursuant to 28
U.S.C. § 1447(c). Id. at 8.
response to the Emergency Motion, Defendant asserted that
Lipson's Nevada residency was clear; that Lipson had held
herself out in previous actions as a Nevada resident, that
she was registered to vote in Nevada along with her husband,
who is the owner or manager of several Nevada businesses,
that Lipson's businesses are run out of Las Vegas, and
that she lists Nevada property as her residence and has
maintained a residence in Las Vegas for nearly twenty years.
ECF No. 10 at 1-3. Defendant further asserted that he had a
good faith basis for removal and that Plaintiffs failed to
meet and confer in good faith before filing the Emergency
Motion. Id. at 3-6. Finally, Defendant listed
several public records, including court filings and
affidavits by Lipson under oath, that indicate that Lipson
herself has asserted she is a citizen of the State of Nevada.
Id. at 6-13.
withdrew their Emergency Motion one week after
Defendant's response, stating that the Emergency Motion
was filed “based on facts in their possession at the
time” and that Plaintiffs were unaware of the facts
raised in Defendant's response. ECF No. 12 at 2-3.
then filed the instant Motion for Attorneys' Fees,
asserting, inter alia, that the Emergency Motion was
improper and necessitated that Defendant be reimbursed for
the time spent in response.
Equitable Power to Award Attorneys' Fees
the “American rule, ” attorney's fees may not
be awarded absent statutory or contractual authorization, or
a finding of bad faith. Alyeska Pipeline Serv. Co. v.
Wilderness Soc., 421 U.S. 240, 257 (1975).
“[F]ederal courts, in the exercise of their equitable
powers, may award attorneys' fees when the interests of
justice so require. Indeed, the power to award such fees
‘is part of the original authority of the chancellor to
do equity in a particular situation,' and federal courts
do not hesitate to exercise this inherent equitable power
whenever ‘overriding considerations indicate the need
for such a recovery.'” Hall v. Cole, 412
U.S. 1, 4-5 (1973) (citations omitted).
it is unquestioned that a federal court may award counsel
fees to a successful party when his opponent has acted
‘in bad faith, vexatiously, wantonly, or for oppressive
reasons.' In this class of cases, the underlying
rationale of ‘fee shifting' is, of course,
punitive, and the essential element in triggering the award
of fees is therefore the existence of ‘bad faith'
on the part of the unsuccessful litigant.” Id.
at 5 (citations omitted). “The imposition of sanctions
in this instance transcends a court's equitable power
concerning relations between the parties and reaches a
court's inherent power to police itself, thus serving the
dual purpose of “vindicat[ing] judicial authority
without resort to the more drastic ...