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The Supreme Court, in the first opinion authored by Chief Justice Roberts since he joined the Court, held 12/7/05 that when a federal district court remands a case to state court despite the defendant’s objectively reasonable basis for seeking removal, the district court should not award attorney’s fees absent unusual circumstances. Under 28 U.S.C. § 1441, a defendant may generally remove a civil case commenced in state court to federal district court if the case could have been brought in federal court originally. But if the federal court subsequently determines that it lacks jurisdiction, the case must be remanded, and the remand order “may require payment” of attorney’s fees “incurred as a result of the removal.” 28 U.S.C. § 1447(c). In determining when attorney’s fees should be awarded under this provision, the Supreme Court stressed Congress’ twin desires to (1) afford defendants a right to remove when the statutory criteria are satisfied; while (2) deterring improper removals sought merely to delay litigation and impose costs on the plaintiff. Thus, the Court held that, absent unusual circumstances—such as a plaintiff’s delay in seeking remand or failure to disclose facts necessary to determine jurisdiction—a district court may award attorney’s fees under § 1447(c) only where the removing party had no objectively reasonable basis for seeking removal. This case is important to businesses involved in litigation that may be subject to removal.

Decision Below: 393 F.3d 1143 (10th Cir. 2004)