Filed: Jun. 03, 2016
Latest Update: Mar. 02, 2020
Summary: NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _ Nos. 14-4282; 15-3152 _ SOUTH ANNVILLE TOWNSHIP, LEBANON COUNTY AUTHORITY v. JAROMIR KOVARIK; DARIA KOVARIKOVA, Appellants _ Appeal from the United States District Court for the Middle District of Pennsylvania (D.C. Civ. No. 1-13-cv-01780) District Judge: Hon. Yvette Kane _ Submitted Under Third Circuit L.A.R. 34.1(a) March 24, 2016 _ Before: GREENAWAY, JR., VANASKIE, and SHWARTZ, Circuit Judges. (Opinion Filed: June 3, 2016
Summary: NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _ Nos. 14-4282; 15-3152 _ SOUTH ANNVILLE TOWNSHIP, LEBANON COUNTY AUTHORITY v. JAROMIR KOVARIK; DARIA KOVARIKOVA, Appellants _ Appeal from the United States District Court for the Middle District of Pennsylvania (D.C. Civ. No. 1-13-cv-01780) District Judge: Hon. Yvette Kane _ Submitted Under Third Circuit L.A.R. 34.1(a) March 24, 2016 _ Before: GREENAWAY, JR., VANASKIE, and SHWARTZ, Circuit Judges. (Opinion Filed: June 3, 2016)..
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
Nos. 14-4282; 15-3152
_____________
SOUTH ANNVILLE TOWNSHIP, LEBANON COUNTY AUTHORITY
v.
JAROMIR KOVARIK; DARIA KOVARIKOVA,
Appellants
_____________
Appeal from the United States District Court
for the Middle District of Pennsylvania
(D.C. Civ. No. 1-13-cv-01780)
District Judge: Hon. Yvette Kane
______________
Submitted Under Third Circuit L.A.R. 34.1(a)
March 24, 2016
______________
Before: GREENAWAY, JR., VANASKIE, and SHWARTZ, Circuit Judges.
(Opinion Filed: June 3, 2016)
______________
OPINION*
______________
VANASKIE, Circuit Judge.
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7
does not constitute binding precedent.
Appellants Jaromir Kovarik and Daria Kovarikova (the “Kovariks”) appeal both
the District Court’s grant of attorneys’ fees and costs in favor of Appellee South Annville
Township, Lebanon County Authority (the “Authority”), as well as the District Court’s
denial of relief sought by the Kovariks pursuant to Rule 60(b) of the Federal Rules of
Civil Procedure. Because we find that the District Court both appropriately exercised its
discretion in awarding attorneys’ fees and costs in favor of the Authority based upon the
Kovariks’ baseless removal of the underlying municipal lien action to federal court and
acted well within its ample discretion in denying the Kovariks’ Rule 60(b) motion, we
will affirm.
I.
We write primarily for the parties, who are familiar with the facts and procedural
history of this case. Accordingly, we set forth only those matters essential to our
analysis.
The Authority filed a municipal lien against the Kovariks in the Lebanon County
Court of Common Pleas asserting that they failed to pay sewer tapping and rental fees
amounting to $8,014.90. The Kovariks removed the case to the United States District
Court for the Middle District of Pennsylvania, claiming that the Authority filed the lien
action in retaliation for their exercise of First Amendment rights.1 The Authority filed a
1
At the time the Kovariks removed the case to federal court, this was the only
asserted basis for federal jurisdiction. They no longer contend that any First Amendment
claim provides a basis for federal jurisdiction.
2
motion to remand the case to state court on the ground that defenses and counterclaims
based on federal law are insufficient to confer federal subject matter jurisdiction.
The Kovariks filed a motion for an extension of time to respond to the Authority’s
motion to remand, which the District Court granted. The Kovariks then filed another
motion for extension, asking for an additional sixty days to respond and stating that they
needed to obtain documents from the Pennsylvania Infrastructure Investment Authority
(“Pennvest”) pursuant to Pennsylvania’s Right to Know Law, 65 Pa. Stat. Ann. §§
67.101–67.3104, to support their contention that there was federal subject matter
jurisdiction. Upon receiving the documents, however, the Kovariks were unable to
provide any evidence of the existence of a federal question. Instead, they filed an
affidavit stating that the documents Pennvest had provided included over 600 pages of
irrelevant information and claimed that Pennvest was unwilling or unable to provide the
information they needed. The Kovariks requested that the owners or creators of the
documents be deposed so that they could obtain the information they needed.
The District Court declined to extend discovery and denied the Kovariks’ third
motion to extend the time to respond to the Authority’s motion to remand. The District
Court further required the Kovariks to file a reply to the motion to remand within
fourteen days. Instead of filing a reply to the motion to remand, the Kovariks stipulated
to a remand to state court, asking for leave to remove the case to federal court if they
discovered evidence of federal subject matter jurisdiction.
3
Before the District Court could act on the stipulation, the Kovariks filed a motion
to withdraw their stipulation or, in the alternative, for the District Court to reconsider
jurisdictional discovery. The District Court denied the motion, granted the Authority’s
motion for remand, and requested supplemental briefing on whether the Kovariks should
be required to pay the Authority’s attorneys’ fees, costs, and expenses pursuant to 28
U.S.C. § 1447(c) for removing the case to federal court without an objectively reasonable
basis for doing so.
The District Court ultimately granted attorneys’ fees and costs in favor of the
Authority, finding that the underlying action, a municipal lien, failed to raise a federal
question and that the Kovariks’ “asserted grounds for removal were insubstantial.” J.A. 8
(citation and internal quotations marks omitted).2 The District Court rejected the
Kovariks’ argument that Grable & Sons Metal Products, Inc. v. Darue Engineering &
Manufacturing, 545 U.S. 308 (2005), authorized removal, observing that Grable involved
a substantial question of federal law in the complaint and the municipal lien action here
contains no issue of federal law. See J.A. 7. The Kovariks insisted that there was a
federal question because the Authority’s purported purpose in pursuing the lien was to
repay a loan to the United States Treasury under the American Recovery and
Reinvestment Act of 2009 (“ARRA”), Pub. L. No. 111-5. The District Court rejected
this argument and found that the Kovariks’ “attempt to invoke the ARRA and raise
2
“J.A.” shall refer to the appendix in case 14-4282.
4
questions pertaining to its limiting provisions and interpretations does not connect to [the
Authority’s] original lien.” J.A. 7 (citations omitted).
Ultimately, the District Court awarded the Authority $17,310.66 in fees and costs.
Specifically, the District Court found that: (1) the attorneys’ rates were reasonable for the
market and, regardless, the Kovariks failed to challenge them; and (2) the hours incurred
by the attorneys were reasonable in light of the Kovariks’ requests and motions. The
District Court also rejected the Kovariks’ motion for sanctions under Federal Rule of
Civil Procedure 37, finding that the Authority had adequately complied with its orders for
disclosure. The Kovariks appealed the fee award to this Court.
While this appeal was pending, the Authority withdrew the underlying municipal
lien. In response, the Kovariks moved pursuant to Federal Rule of Civil Procedure 60(b)
to set aside the judgment awarding fees, requesting the District Court to take judicial
notice of a state court docket revision relating to a judgment that had previously been
entered against the Kovariks. Both parties also filed motions for sanctions against each
other.
The District Court denied all motions and dismissed as moot the request to take
judicial notice of the state court docket revision. The Kovariks appeal the denial of their
Rule 60(b) motion as well as the District Court’s decision not to take judicial notice of
the docket revision.
II.
5
The Kovariks make three main arguments in support of their direct appeal of the
fee award: (1) there was an objectively reasonable basis for removing the case to federal
court and/or for seeking jurisdictional discovery; (2) the District Court abused its
discretion in failing to reduce the amount of fees awarded given the circumstances of the
case; and (3) the District Court abused its discretion in calculating the amount of fees
awarded. In their appeal from the denial of post-judgment relief, the Kovariks make two
arguments: (1) the District Court erred in denying their motion to vacate under Rule
60(b); and (2) the District Court erred by failing to take judicial notice of adjudicative
facts pursuant to Federal Rule of Evidence 201 before denying their motion to vacate.
We will address each appeal in turn. 3
A.
In general, a court may award fees under 28 U.S.C. § 1447(c) “only where the
removing party lacked an objectively reasonable basis for seeking removal.” Martin v.
Franklin Capital Corp., 546 U.S. 132, 141 (2005). We review a district court’s award of
fees under § 1447(c) for abuse of discretion. See Mints v. Educ. Testing Serv.,
99 F.3d
1253, 1260 (3d Cir. 1996). A district court does not abuse its discretion in awarding
attorneys’ fees and costs when the basis for removal was “frivolous” or “insubstantial.”
Id. at 1261.
1.
3
We have appellate jurisdiction under 28 U.S.C. § 1291 to review final orders of
the District Court.
6
When the Kovariks initially removed the case to federal court, their basis for
removal was that the lien was the Authority’s attempt to retaliate against them for
exercising their First Amendment rights. The Kovariks later changed the jurisdictional
foundation for removal, alleging that the Authority was pursuing the lien to repay a
federal government loan received and governed by ARRA. The Kovariks argue that
because Congress may impose conditions on ARRA fund recipients, this case presents a
substantial federal question, analogizing it to Grable.
Like the District Court, we find that the Kovariks’ reliance on Grable is
misplaced. In Grable, the Court found jurisdiction because the question of whether the
Internal Revenue Service, a federal agency, properly seized property under federal law
necessarily had to be decided to resolve the case. See Grable, 545 U.S. at 314–15. Here,
the Kovariks’ alleged federal question does not need to be decided to determine if the
Authority’s lien was proper. Even if the Authority had used ARRA funds to construct the
sewer project, the Kovariks are unable to point to any relevant conditions that Congress
placed on using such funds or any impact this may have on the propriety of the
Authority’s lien.
Ultimately, the Authority’s municipal lien against the Kovariks is nothing more
than a state law claim brought by a municipality. The Kovariks’ attempts to transform
the Authority’s lien into a federal claim are insubstantial and provide no “objectively
reasonable basis” for removal. For these reasons, we find that the District Court did not
abuse its discretion in awarding attorneys’ fees and costs in favor of the Authority.
7
2.
We address together the Kovariks’ second and third arguments relating to their
direct appeal of the fee award. The Kovariks argue that the amount awarded here was
unreasonable and that it is unfair for them to pay over $17,000 in attorneys’ fees in regard
to the removal issue when the entire amount in controversy for the case was barely
$8,000. The Kovariks also argue that the District Court incorrectly calculated the award
of attorneys’ fees. According to the Kovariks, the fees awarded included compensation
for “persistently grossly inflated hours” and for meetings and communications that
should not have been included. Appellant Br. at 26. The District Court found, however,
that the supporting information was satisfactory and engaged in a detailed explanation of
why it found the fees to be appropriate. The District Court did not abuse its considerable
discretion in determining the amount of fees and costs to award.
B.
We review a District Court’s denial of post-judgment relief under Rule 60(b) for
abuse of discretion. See Reform Party of Allegheny Cty. v. Allegheny Cty. Dep’t. of
Elections, 174 F.3d 305, 311 (3d Cir. 1990) (en banc). We may find that there has been
an abuse of discretion when “the district court’s decision rests upon a clearly erroneous
finding of fact, an errant conclusion of law or an improper application of law to fact.”
Id.
(quoting Int’l Union, UAW v. Mack Trucks, Inc.,
820 F.2d 91, 95 (3d Cir. 1987)).
Because our standard of review with respect to Rule 60(b) is quite deferential, “we will
not interfere with the [D]istrict [C]ourt’s exercise of discretion unless there is a definite
8
and firm conviction that the court . . . committed a clear error of judgment.” In re
Cendant Corp., 235 F.3d 176, 181 (3d Cir. 2000) (citation and internal quotation marks
omitted).
The Kovariks argue that the District Court erred by not considering the fact that
the Authority withdrew its underlying municipal lien claim after the case was remanded
to state court. This argument is meritless, however, because what happens on the merits
of the case in state court does not impact the propriety of the fee award for the improper
removal and associated proceedings. The Kovariks argue that the Authority could have
withdrawn its claim while it was in federal court, thereby avoiding the federal jurisdiction
litigation altogether. The Kovariks, however, assume that the Authority was planning to
withdraw its claim the whole time, but did not present any evidence to support such a
contention. Their argument also does not take into account the fact that the federal
jurisdiction litigation was in response to their own improper removal and that they also
could have avoided the jurisdiction litigation by not undertaking an improper removal.
We agree with the District Court’s reasonable explanations for rejecting each of
the Kovariks’ theories of relief under Rule 60(b). To the extent that the Kovariks
challenge the Authority’s standing to obtain an award of attorneys’ fees and costs, that
argument is inappropriate for a Rule 60(b) motion and should have been brought on
direct appeal. The Kovariks provide no reason for us to find that the District Court
abused its discretion in rejecting their request for relief under Rule 60(b).
9
We review a District Court’s decision to take judicial notice of facts for abuse of
discretion. In re NAHC, Inc. Sec. Litig., 306 F.3d 1314, 1323 (3d Cir. 2002). The
Kovariks argue that the District Court abused its discretion in failing to take judicial
notice pursuant to Federal Rule of Evidence 201(c)(2) of a docket entry revision in the
state court case relating to a judgment that had previously been entered against them. We
disagree because, as the District Court explained, the subsequent state proceedings were
immaterial to the question of whether the award of attorneys’ fees was appropriate for
litigating the subject matter jurisdiction question. The District Court correctly found that
a docket revision relating to the merits of the underlying suit did not need to be
considered to decide the Kovariks’ Rule 60(b) motion.
IV.
For the reasons set forth herein, we hold that the District Court did not abuse its
discretion in either awarding attorneys’ fees and costs in favor of the Authority or
determining the amount of fees to award, denying the Kovariks’ request for Rule 60(b)
relief, and declining to take judicial notice of the state court docket revision.
Accordingly, we will affirm the District Court’s orders entered September 25, 2014 and
August 4, 2015.
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