Monday, July 16, 2007

7th Circuit Holds Defendant's Reasonable Basis for Removal Means Plaintiffs Lose Attorneys' Fees Award

Per Lott v. Pfizer Inc ., --- F.3d ----, 2007 WL 1804261 (7th Cir. June 25, 2007) (NO. 06-3372):
As a general rule, if, at the time the defendant filed his notice in federal court, clearly established law demonstrated that he had no basis for removal, then a district court should award a plaintiff his attorneys' fees. By contrast, if clearly established law did not foreclose a defendant's basis for removal, then a district court should not award attorneys' fees.

Here, the district court erred by awarding the plaintiffs' attorneys' fees because Pfizer's attempt to remove the case under CAFA was objectively reasonable. When Pfizer filed its notice of removal, no circuit court had rejected Pfizer's argument that the word "commenced" means the date on which a case is removed to federal court. A few district courts had rejected the argument, see Hankins v. Pfizer, Inc., No. CV-1797-ABC-RZ, 2005 U.S. Dist. LEXIS 17191, *3 (C.D.Cal. Mar. 25, 2005); Smith v. Pfizer, Inc., No. 05-CV-0112, 2005 WL 3618319, *5 (S.D.Ill. Mar. 24, 2005); Pritchett v. Office Depot, Inc., 360 F.Supp.2d 1176, 1180 (D.Colo.2005), but a number of other district courts had held, in cases decided shortly after Congress raised the amount in controversy requirement for diversity cases, that "commenced" means the date on which a case is removed to federal court. See Cedillo v. Valcar Enters. & Darling Del. Co., 773 F.Supp. 932, 939 (N.D.Tex.1991); Hunt v. Transport Indem. Ins. Co., No. Civ. 90-00041 ACK, 1990 WL 192483, *5 (D.Haw. July 30, 1990); Lorraine Motors, Inc. v. Aetna Cas. & Sur. Co., 166 F.Supp. 319, 323 (E.D.N.Y.1958). District court decisions, let alone conflicting district court decisions, do not render the law clearly established. See Anderson v. Romero, 72 F.3d 518, 525 (7th Cir.1995). Accordingly, Pfizer acted reasonably when it attempted to remove this case under CAFA.


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