Opinion
No. C-07-3528 MMC.
September 25, 2007
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR SANCTIONS
Before the Court is plaintiffs City of Santa Rosa and People of the State of California's Motion for Sanctions, filed July 25, 2007. Defendants Raman D. Patel, Jas 4 Ray Properties, L.P., Rita Patel, David Stafford, and Prita Patel have filed opposition, to which plaintiffs have replied. Having considered the parties' submissions filed in support of and in opposition to the motion, the Court rules as follows.
By order filed September 19, 2007, the Court vacated the hearing on plaintiffs' motion. The Court notes it is not required to conduct an "oral or evidentiary hearing" before granting a motion for sanctions, see Pacific Harbor Capital, Inc. v. Carnival Air Lines, Inc., 210 F. 3d 1112, 1118 (9th Cir. 2000), and finds no such hearing is necessary here.
BACKGROUND
On October 26, 2005, plaintiffs commenced the instant action in state court. (See Casey Decl., filed July 25, 2007, ¶ 5.) In the operative pleading, specifically, the First Amended Complaint filed February 21, 2007, plaintiffs seek, inter alia, a declaration that defendants' property at 2400 Santa Rosa Avenue, Santa Rosa, California, is a public nuisance, an injunction precluding defendants from operating said alleged nuisance, an order of abatement, and civil penalties. (See Notice of Removal Ex. A.) Trial was set to begin in state court on July 13, 2007. (See Casey Decl. ¶ 12.) On May 4, 2007, defendants filed a cross-complaint for damages, alleging civil rights violations against the City of Santa Rosa, the Santa Rosa Police Department, more than twenty individuals, and two corporations. (See id. Ex. W.) On May 21, 2007, plaintiffs filed a motion to strike the cross-complaint, arguing leave of court was required to file a cross-complaint and that defendants had not obtained such leave; plaintiffs noticed a July 10, 2007 hearing on the motion for strike. (See id. Ex. X.) Thereafter, defendants filed opposition to the motion to strike, to which plaintiffs replied. (See id. Ex. Y.) On July 6, 2007, however, four days before the July 10, 2007 scheduled hearing and one week before the scheduled trial date, defendants removed the action to district court, alleging the district court had jurisdiction over the instant action pursuant to 28 U.S.C. § 1443(1).In their notice of removal, defendants alleged the instant action had been filed "because" each defendant is of "Asian-Indian" descent or married to a person of "Asian-Indian" descent. (See Notice of Removal ¶¶ 6-7.) Defendants also alleged they are unable to "protect their due process and civil rights" in state court because "they will not be permitted to prosecute a civil rights cross-complaint against the City of Santa Rosa and its various city officials." (See id. ¶ 9.) Defendants further alleged that even if they were permitted to prosecute their cross-complaint, "they would not receive a fair jury trial as there is an underrepresentation of minority jurors and especially jurors of Asian-Indian descent in Sonoma County for purposes of the jury pool." (See id. ¶ 10.)
Such allegation was, at best, premature, given that defendants removed the action before the state court had the opportunity to rule on plaintiffs' motion to strike defendants' cross-complaint.
By order filed July 24, 2007, the Court remanded the action sua sponte. On July 25, 2007, plaintiffs filed the instant motion for sanctions. On August 23, 2007, defendants filed a notice of appeal from the order remanding the action.
DISCUSSION
At the outset, the Court finds, contrary to defendants' argument, that defendants' filing of a notice of appeal from the order remanding the action does not divest this Court of jurisdiction to consider plaintiffs' motion for sanctions. See Masalosalo v. Stonewall Ins. Co., 718 F. 2d 955, 957 (9th Cir. 1983) (holding district court has jurisdiction to entertain motion seeking award of attorney's fees under court's inherent power, after notice of appeal from judgment filed). Further, the Court has jurisdiction to consider a motion for sanctions filed after an action has been remanded to state court. See Moore v. Permanente Medical Group, Inc., 981 F. 2d 443, 445 (9th Cir. 1992) ("The district court retain[s] jurisdiction after the remand to entertain [a] motion for attorney's fees."). The Court thus turns to the merits of the motion for sanctions.
Plaintiffs argue sanctions against defendants' counsel are appropriate because defendants filed the notice of removal in bad faith. Plaintiffs seeks sanctions under both 28 U.S.C. § 1927, which authorizes sanctions against an attorney who "multiplies the proceedings in any case unreasonably and vexatiously," and the Court's inherent power.
An award of sanction under § 1927 must be supported by a finding that the attorney who multiplied the proceedings acted with "subjective bad faith." See B.K.B. v. Maui Police Dep't, 276 F. 3d 1091, 1107 (9th Cir. 2002). Similarly, an award of sanctions under a district court's inherent power must be supported by a finding that the subject attorney engaged in conduct "tantamount to bad faith." See id. at 1108 (internal quotation and citation omitted). "Bad faith" is "present when an attorney knowingly or recklessly raises a frivolous argument, or argues a meritorious claim for the purpose of harassing an opponent." Id. at 1107.
In its order of removal, the Court cited unambiguous and binding authority as to what a defendant must allege in order to properly remove an action under § 1443(1):
A petition for removal under § 1443(1) must satisfy a two-part test. See Patel v. Del Taco, Inc., 446 F.3d 996, 998 (9th Cir. 2006). "First, the petitioners must assert, as a defense to the prosecution, rights that are given to them by explicit statutory enactment protecting equal racial civil rights." Id. at 999 (internal quotation and citation omitted). "Second, petitioners must assert that the state courts will not enforce that right, and that allegation must be supported by reference to a state statute or constitutional provision that purports to command the state courts to ignore federal rights." Id. (internal quotation and citation omitted).
(See Order Remanding Action at 1:26 — 2:5.)
The Court then found defendants had failed to satisfy the second part of the test:
Although defendants contend the instant action is being prosecuted against them because of their race in violation of their rights under 42 U.S.C. §§ 1981 and 1982 and the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution, (see Notice of Removal ¶¶ 7, 12), they do not, and cannot, point to any provision of California law "that purports to command the state courts to ignore federal rights.
(See Order Remanding Action at 2:5-10.)
Given defendants' failure to allege the existence of a "state statute or constitutional provision that purports to command the state courts to ignore federal rights," and there being no such California statute or constitutional provision, the Court finds defendants' removal on grounds of § 1443(1) was vexatious and frivolous. Moreover, given that counsel for defendants herein was counsel for the removing party in Patel v. Del Taco, the case cited by this Court in the order of remand, and in which the Ninth Circuit clearly and unambiguously stated what facts must be alleged in order to properly remove an action under § 1443(1), the Court finds counsel for defendants acted with knowledge of, and in disregard of, such unambiguous and binding authority. The knowing frivolousness of counsel's action is further demonstrated by the fact that, in Patel v. Del Taco, which also involved the removal of an action originally filed in California state court,see Patel v. Del Taco, 446 F. 3d at 998, the Ninth Circuit expressly stated the removing parties therein "had no objectively reasonable basis for removal," given their failure to allege a "formal expression of [California] state law that prohibits them from enforcing their civil rights in state court." See id. at 999-1001 (affirming order remanding action and holding district court did not abuse discretion in awarding attorney's fees to plaintiff under 28 U.S.C. § 1447(c)).
In their opposition, defendants cite various Supreme Court cases, for the proposition that the test set forth by the Ninth Circuit in Patel v. Del Taco is somehow at odds with Supreme Court precedent. None of the Supreme Court cases cited by defendants, however, contains any language suggesting the test set forth in Patel v. Del Taco is too narrow or otherwise incorrect. Indeed, the Supreme Court cases cited by defendants are wholly supportive of the holding inPatel v. Del Taco. In City of Greenwood v. Peacock, 384 U.S. 808 (1966), for example, the Supreme Court held allegations that "the charges against the defendant [alleged in a state court proceeding] are false" and "the defendant is unable to obtain a fair trial in a particular state court" are insufficient to warrant removal under § 1443(1), and further observed that a "consistent line" of Supreme Court decisions had so held. See id. at 827 and n. 26. The Supreme Court further explained that "[u]nder § 1443(1), the vindication of the defendant's federal rights is left to the state courts except in the rare situations where it can be clearly predicted by reason of the operation of a pervasive and explicit state or federal law that those rights will inevitably be denied by the very act of bringing the defendant to trial in the state court." Id. at 828 (emphasis in original) (citing cases).
Here, the notice of removal alleges defendants believe they will not receive a fair trial, either because the particular judge to which the matter was assigned is not fair or because the pool from which jurors will be drawn does not fairly reflect the population of Sonoma County. Even assuming these allegations are true, defendants have available remedies in state court. Defendants may, for example, seek recusal of any biased judicial officer, see Cal. Code Civ. Proc. §§ 170.1- 170.6, and challenge the composition of the jury pool, see, e.g., In re Rhymes, 170 Cal. App. 3d 1100, 1103, 1113-14 (1985) (affirming order vacating judgment where "panel of potential jurors" did not "meet the fair cross-section of the community requirements" under federal and state law). Removal under § 1443(1), however, is not an available remedy, see City of Greenwood, 348 U.S. at 828, and, as noted, defendants' counsel knew at the time the notice of removal was filed that the allegations he made in the notice could not support removal under § 1443(1).
In sum, defendants' counsel having been advised by the Ninth Circuit that a failure to allege the existence of a California state law prohibiting a defendant from enforcing a civil right in state court would render any notice of removal based on § 1443(1) "objectively unreasonable," see Patel v. Del Taco, 446 F. 3d at 999, the Court finds such counsel's decision to, again, remove a case under § 1443(1) and, again, fail to cite the requisite California law exceeds objective unreasonableness and rises to the level of subjective bad faith.
Accordingly, the Court finds sanctions are proper under both § 1927 and the Court's inherent power.
Plaintiffs seek the following sanctions: (1) an order suspending defendants' counsel from practice before this District; (2) an order requiring defendants' counsel to obtain a pre-filing certification from a judge of this District, before being allowed to file any complaint or notice of removal; and (3) an award of attorneys' fees to plaintiffs. The Court finds suspension and imposition of pre-filing requirements are not appropriate sanctions for the conduct at issue herein. The Court does find, however, that an award of attorneys' fees is appropriate.
In that regard, plaintiffs seek the following fees, based on a hourly rate of $325: (1) $8612.50, based on 26.5 hours expended in preparing a motion to remand; (2) $11,050, based on 28 hours ($9100) expended in preparing the instant motion for sanctions and 6 hours ($1950) in preparing a reply; and (3) $2925, based on 9 hours expended in preparing for the trial as scheduled in state court at the time of the removal.
Plaintiffs' motion was not filed in light of the Court's having issued sua sponte an order of remand before plaintiffs had the opportunity to file their motion.
The Court finds the requested hourly rate of $325 is reasonable, and that it was reasonable for plaintiffs to prepare a motion to remand. In light of the unambiguous and binding authority supporting such a motion, however, the Court finds the expenditure of 26.5 hours in the preparation of said motion is excessive. The Court will award sanctions based on 7 hours for such work, specifically, $2275. Additionally, the Court finds the expenditure of 34 hours in the preparation of the instant motion and reply is excessive. The Court will award sanctions based on a total of 8 hours for such work, specifically, $2600. Finally, assuming, arguendo, the Court has discretion to award sanctions based on work performed solely in connection with a state court action, the Court declines to make such an award here, as plaintiffs have failed to show all of that work necessarily will have to be repeated and plaintiffs have not provided a breakdown of the total amount claimed for such work.
Defendants have not challenged the hourly rate requested by plaintiffs.
Accordingly, the Court will award sanctions in favor of plaintiffs and against defendants' counsel in the total amount of $4875.
CONCLUSION
For the reasons stated above, plaintiffs' motion for sanctions is hereby GRANTED in part and DENIED in part, as follows:
1. Plaintiffs' motion for an award of sanctions is GRANTED and plaintiffs are hereby awarded $4875 as sanctions against defendants' counsel.
2. In all other respects, the motion is DENIED.