Martin v. Franklin Capital Corp
Martin sued Franklin Capital Corporation in state court for violating a New Mexico law regarding automobile financing. Franklin removed the case to federal court on the basis of diversity of citizenship. A year after the removal, Martin filed a motion to remand the action to state court, alleging that the amount in controversy requirement had not been met (the federal jurisdiction statute requires litigating parties to be citizens of different states and have a certain amount of money in controversy). The district court denied the motion, but the Tenth Circuit Court of Appeals reversed and ordered the district court to remand the case to state court. On remand, Martin filed a motion for an award of the fees he paid his attorney to get the case remanded. The district court denied this motion. On appeal, Martin argued that the district court should have applied a “plaintiff-based standard” that would award attorney's fees to the plaintiff any time removal to federal court is found improper. The Tenth Circuit rejected Martin's argument, ruling that a district court may deny attorney's fees if the defendants had a reasonable basis for believing that removal would be proper.
Question Presented:
What legal standard governs the decision whether to award fees and expenses under 28 U.S.C. ยง 1447(c) upon remanding a removed case to state court?
