Leslie Warthman v. Genoa Township Board of Truste

RECOMMENDED FOR FULL-TEXT PUBLICATION

Pursuant to Sixth Circuit Rule 206

File Name: 08a0444p.06

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

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LESLIE WARTHMAN,

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Plaintiff-Appellant,

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No. 07-4528

v.

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Defendant-Appellee. -

GENOA TOWNSHIP BOARD OF TRUSTEES,

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Appeal from the United States District Court

for the Southern District of Ohio at Columbus.

No. 07-00860—Norah McCann King, Magistrate Judge.

Argued: October 29, 2008

Decided and Filed: December 15, 2008

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Before: MARTIN and GILMAN, Circuit Judges; DOWD, District Judge.

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COUNSEL

ARGUED: James E. Melle, BUCKLEY KING, Columbus, Ohio, for Appellant. David

A. Riepenhoff, DOWNES, HURST & FISHEL, Columbus, Ohio, for Appellee.

ON BRIEF: James E. Melle, BUCKLEY KING, Columbus, Ohio, for Appellant.

David A. Riepenhoff, Cheri B. Hass, DOWNES, HURST & FISHEL, Columbus, Ohio,

for Appellee.

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The Honorable David D. Dowd, Jr., Senior United States District Judge for the Northern District

of Ohio, sitting by designation.

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No. 07-4528 Warthman v. Genoa Township Board of Trustees Page 2

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OPINION

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RONALD LEE GILMAN, Circuit Judge. Leslie Warthman filed a complaint in

the Court of Common Pleas for Delaware County, Ohio, arguing that the Genoa

Township Board of Trustees violated the Ohio Open Meetings Law when it terminated

her employment without allowing her to respond to the allegations against her at a public

hearing. The Township removed the case to the federal district court on the basis that

a reference in the complaint to the Due Process Clause of the Fourteenth Amendment

to the United States Constitution created federal question jurisdiction. Holding that the

complaint did not state a federal cause of action, the district court remanded Warthman’s

lawsuit to the state court. The district court declined, however, to award Warthman the

costs and attorney fees associated with the removal and subsequent remand. For the

reasons set forth below, we VACATE the portion of the district court’s judgment that

denied Warthman her request for costs and attorney fees and REMAND the case for

reconsideration of that issue.

I. BACKGROUND

Warthman worked as a Zoning Inspector for the Genoa Township Board of

Trustees in Westerville, Ohio. The Genoa Township Zoning Commission (a separate

entity) held a meeting on March 12, 2007 in which sharp differences of opinion were

expressed regarding a thirty-acre parcel of property in the Township. Warthman sent an

email to the Board of Trustees the following day. According to her complaint in this

case, the email contained “harsh and unflattering” criticism of some Zoning Commission

members.

At a Board of Trustees meeting on March 14, 2007, a Zoning Commission

member requested an executive session between the Zoning Commission and the Board

of Trustees. The Board adopted a motion to hold such an executive session to consider

taking action against Warthman, unless she requested a public hearing. Warthman

No. 07-4528 Warthman v. Genoa Township Board of Trustees Page 3

responded to the Board’s action by requesting a public hearing, but no such hearing on

the matter was held. The Board of Trustees instead met in four separate executive

sessions and subsequently terminated Warthman’s employment on the ground that she

had “admitted to having violated Township policies.”

After Warthman was terminated, she filed a complaint in the Court of Common

Pleas for Delaware County, Ohio. Her complaint alleged in Count One that the

Township had violated the Ohio Open Meetings Law by adopting the resolution to fire

her in a meeting not open to the public. In Count Two, the complaint asserted that

“Defendant is estopped to deny Plaintiff’s right to a public name clearing hearing.” This

estoppel claim arose from Warthman’s contention that members of the Board of Trustees

and the Zoning Commission “agreed that Plaintiff was entitled to a public hearing but

at a later date,” and that they had made that representation to her. Paragraph 25 of

Warthman’s complaint contained the sole reference to federal law, stating that,

“[p]ursuant to the Due Process Clause of the Fourteenth Amendment to the United States

Constitution and Article I Section 16 of the Ohio Constitution, [she] was entitled to a

name clearing hearing.”

The Township removed the case to the United States District Court for the

Southern District of Ohio. In its Notice of Removal, the Township cited paragraph 25

of the complaint and Count Two, the estoppel claim, asserting that these portions of the

complaint “state[d] a Federal Question pursuant to 28 U.S.C. [§] 1331.” Warthman

moved to remand the case back to state court and requested an award of “costs and any

actual expenses, including attorney fees, incurred as a result of the removal.” See

28 U.S.C. § 1447(c). The motion to remand explained that paragraph 25 of the

complaint referenced the Due Process Clause of the Fourteenth Amendment simply to

satisfy the Ohio Supreme Court’s interpretation of the Ohio Open Meetings Law. See

Matheny v. Frontier Local Bd. of Educ., 405 N.E.2d 1041, 1046 (Ohio 1980) (explaining

that the law guarantees the right to a public hearing only if that right is “elsewhere

provided by law”).

No. 07-4528 Warthman v. Genoa Township Board of Trustees Page 4

Ruling on the motion to remand the case to state court, the district court

“conclude[d] that the complaint, fairly read, invoke[d] only claims under state law.” The

district court noted that the complaint made no reference to 42 U.S.C. § 1983 or any

other federal statute, that the first count expressly invoked only Ohio law, and that the

second count asserted only a common law estoppel claim. As a result, the district court

granted the motion to remand the case to the state court. Regarding Warthman’s request

for an award of costs and attorney fees, however, the district court said: “Because

removal of the action was based upon plaintiff’s reference in the Complaint to federal

law, the Court concludes that an award of fees or costs to plaintiff would be unjust and

is unwarranted.”

The district court’s decision to grant the motion to remand the case to state court

is not subject to review by this court. See 28 U.S.C. § 1447(d); Powerex Corp. v. Reliant

Energy Servs., Inc., 127 S. Ct. 2411, 2415-16 (2007) (noting that remands based on a

lack of subject matter jurisdiction are shielded from appellate review by § 1447(d)).

This leaves only the denial of costs and attorney fees to Warthman as an issue on appeal.

See Stallworth v. Greater Cleveland Reg’l Transit Auth., 105 F.3d 252, 255 (6th Cir.

1997) (holding that this court has jurisdiction to review the award or denial of attorney

fees under § 1447(c)).

II. ANALYSIS

A. Standard of review

District courts have considerable discretion to award or deny costs and attorney

fees under 28 U.S.C. § 1447(c), and we will overrule whatever decision is reached only

where such discretion has been abused. Bartholomew v. Town of Collierville, 409 F.3d

684, 686 (6th Cir. 2005). An abuse of discretion occurs where “[a] district court . . .

relies on clearly erroneous findings of fact, or when it improperly applies the law or uses

an erroneous legal standard.” Christian Schmidt Brewing Co. v. G. Heileman Brewing

Co., 753 F.2d 1354, 1356 (6th Cir. 1985) (citation omitted).

No. 07-4528 Warthman v. Genoa Township Board of Trustees Page 5

B. Costs and attorney-fee awards upon remand

A civil case that is filed in state court may be removed by the defendant to

federal district court if the plaintiff could have chosen to file there originally. 28 U.S.C.

§ 1441. If the district court later determines that it lacks subject matter jurisdiction,

however, the case must be remanded. 28 U.S.C. § 1447(c). The remand statute provides

that “[a]n order remanding the case may require payment of just costs and any actual

expenses, including attorney fees, incurred as a result of the removal.” Id. This

language places an award of costs and attorney fees (hereinafter sometimes collectively

referred to simply as “fees” or “fee awards”) squarely within the discretion of the district

court, but subject to the guidance set forth by the Supreme Court in Martin v. Franklin

Capital Corp., 546 U.S. 132, 136-37 (2005).

“Absent unusual circumstances,” the Supreme Court instructs that fee awards are

appropriate “only where the removing party lacked an objectively reasonable basis for

seeking removal.” Id. at 141. This court has similarly instructed that “an award of costs,

including attorney fees, is inappropriate where the defendant’s attempt to remove the

action was ‘fairly supportable,’ or where there has not been at least some finding of fault

with the defendant’s decision to remove.” Bartholomew, 409 F.3d at 687 (quoting

Ahearn v. Charter Twp. of Bloomfield, No. 97-1187, 1998 WL 384558 at *2 (6th Cir.

June 18, 1998) (unpublished) (emphasis in original)).

Warthman asserts in her brief that “[w]hen a district court denies attorney fees

it abuses its discretion where the Defendant’s argument for removal was devoid of even

fair support.” She takes this statement of the rule from Bartholomew, 409 F.3d at 687,

an opinion that quoted from the unpublished Ahearn decision. 1998 WL 384558 at *2.

This language suggests that the district court’s “discretion” under § 1447(c) is basically

a binary determination: if the defendant’s argument for removal was objectively

reasonable, the court may not award fees to the plaintiff; if it was not, the district court

must award such fees. This court applied that rule in Ahearn. Following a finding that

the removal to federal court in Ahearn lacked “fair support,” the court remanded the case

No. 07-4528 Warthman v. Genoa Township Board of Trustees Page 6

with an instruction to “make an evidentiary determination as to the fees actually incurred

in conjunction with the removal petition.” Id. at *4.

Bartholomew quoted the rule as it was stated in Ahearn, but did not apply it in

the same way because the defendant’s removal in Bartholomew was fairly supportable.

Bartholomew, 409 F.3d at 687-88. In Bartholomew, we accordingly affirmed the district

court’s denial of fees to the plaintiff. Id. at 688. Just eight months after Bartholomew,

however, the Supreme Court decided Martin, which is now the leading case on

discretionary fee awards pursuant to § 1447(c).

The Supreme Court in Martin noted that Congress designed the costs-and-fees

provision in § 1447(c) to permit removal in appropriate cases, while simultaneously

“reduc[ing] the attractiveness of removal as a method for delaying litigation and

imposing costs on the plaintiff.” Martin, 546 U.S. at 140. In cases where removal was

not objectively reasonable, Martin instructs the district courts to consider this underlying

purpose when they exercise their discretion. Id. at 141. In general, objectively

unreasonable removals should result in fee awards to plaintiffs. Id. District courts

should consider, however, whether “unusual circumstances warrant a departure from the

rule in a given case.” Id. For example, a court might find that “a plaintiff’s delay in

seeking remand or failure to disclose facts necessary to determine jurisdiction”

undermines the rationale that supports fee awards. Id.

In sum, Martin makes clear that a district court’s discretion to award or deny fees

under § 1447(c) involves more than an on-off switch that is solely dependent on the

objective reasonableness of the removal decision. See id. The rule that this court

articulated in Ahearn and Bartholomew therefore no longer applies.

C. Denial of Warthman’s request for costs and attorney fees

The district court denied Warthman’s request for costs and attorney fees upon the

remand of her case in a single sentence: “Because removal of the action was based upon

plaintiff’s reference in the Complaint to federal law, the Court concludes that an award

of fees or costs to plaintiff would be unjust and would be unwarranted.” As explained

No. 07-4528 Warthman v. Genoa Township Board of Trustees Page 7

above, however, a district court deciding whether to award fees in this situation may not

simply look to whether the complaint in the case referenced federal law. It must instead

decide whether the removal was objectively reasonable. Id. The district court should

deny fees “when an objectively reasonable basis exists.” Id. On the other hand, in cases

where the removal was not objectively reasonable or, in the words of this court, where

the removal attempt was not “fairly supportable,” the district court may exercise its

discretion to award fees or not, keeping in mind the underlying purposes of § 1447(c)

awards and the general presumption that fees should be awarded under such

circumstances. Id.; Bartholomew, 409 F.3d at 687.

In the present case, the district court did not apply the correct legal standard. We

therefore conclude that the court abused its discretion when it denied costs and attorney

fees to Warthman. See United States v. 2903 Bent Oak Highway, 204 F.3d 658, 665 (6th

Cir. 2000) (“[T]his court ordinarily extends a high degree of deference to the district

court’s decision, but does so only if the district court properly understood the pertinent

law . . . .”). But this does not mean that Warthman necessarily should receive a fee

award. See Martin, 546 U.S at 141. She must first establish that the Township’s

removal attempt was not objectively reasonable.

A defendant who seeks to remove a case pursuant to 28 U.S.C. § 1441(b) bears

the burden of demonstrating that the case as pled falls within the federal question

jurisdiction of the district court. Eastman v. Marine Mech. Corp., 438 F.3d 544, 549

(6th Cir. 2006). “[T]he scope of removal jurisdiction based on the existence of a federal

question” is “identical to the scope of federal question jurisdiction under [28 U.S.C.]

§ 1331.” Long v. Bando Mfg. of Am., 201 F.3d 754, 758 (6th Cir. 2000). Federal

question jurisdiction can be established by showing “either that federal law creates the

cause of action or that the plaintiff[’]s right to relief necessarily depends on resolution

of a substantial question of federal law.” Thornton v. Sw. Detroit Hosp., 895 F.2d 1131,

1133 (6th Cir. 1990) (quoting Franchise Tax Bd. v. Constr. Laborers Vacation Trust,

463 U.S. 1, 27-28 (1983)). Warthman’s request for costs and attorney fees on remand

must therefore be denied if, under an “objectively reasonable” reading of her complaint,

No. 07-4528 Warthman v. Genoa Township Board of Trustees Page 8

her right to relief either arose directly under federal law or depended upon the resolution

of a substantial federal question. See id.; Martin, 546 U.S. at 141.

As an initial matter, the Township could not have based removal jurisdiction on

Count One of Warthman’s complaint. That count rested exclusively upon the Ohio Open

Meetings Law, and the district court correctly noted that Count One “expressly

invoke[d] only Ohio Law.” See Ohio Rev. Code Ann. § 121.22. The Township made

no attempt in its Removal Notice to find a federal claim buried within the first count of

the complaint, and it makes no such attempt on appeal.

We nevertheless note that Count One incorporated paragraph 25, with its

reference to the Due Process Clause of the Fourteenth Amendment. But as the district

court recognized, this reference was made in order to satisfy the judicially created

limitation on the Ohio Open Meetings Law, which holds that the law provides a right to

a public hearing only if the hearing is “elsewhere provided by law.” See Matheny v.

Frontier Local Bd. of Educ., 405 N.E.2d 1041, 1046 (Ohio 1980). And because

paragraph 25 cited the parallel clause of the Ohio Constitution as an alternate source of

the right to a hearing, the question of whether the Due Process Clause in fact provides

such a right cannot support federal subject matter jurisdiction over Count One. See

Long, 201 F.3d at 759-60 (holding that where a complaint states an alternate basis in

state law upon which the underlying state-law claim can be resolved, there is no

substantial federal question to support federal subject matter jurisdiction).

The Township instead purported to find a federal question in Count Two of

Warthman’s complaint. That Count, like the first, incorporated paragraph 25’s reference

to the U.S. Constitution. The complaint then stated that “[d]efendant is estopped to deny

Plaintiff’s right to a public name clearing hearing.” In her prayer for relief pursuant to

Count Two, Warthman asked that the court “find, declare and determine that Defendant

is estopped from denying that Plaintiff had a right to a name clearing hearing which is

the predicate for her hearing under R.C. 121.22(G)(1)[,]” a provision of the Ohio Open

Meetings Law. The Township’s Notice of Removal asserted that paragraph 25 and

Count Two together stated a federal cause of action.

No. 07-4528 Warthman v. Genoa Township Board of Trustees Page 9

On appeal, the Board expands on this theory. It argues that “Plaintiff’s

Complaint appeared to attempt a . . . due process claim pursuant to the Fourteenth

Amendment to the United States Constitution.” The Fourteenth Amendment has in fact

been held to provide a procedural due process right to a name-clearing hearing in cases

that resemble Warthman’s. See, e.g., Quinn v. Shirey, 293 F.3d 315, 320 (6th Cir. 2002)

(“[W]hen a nontenured employee shows that he has been stigmatized by the voluntary,

public dissemination of false information in the course of a decision to terminate his

employment, the employer is required to afford him an opportunity to clear his name.”

(internal quotation marks omitted)).

A plaintiff employed by a public entity must plead a laundry list of elements in

order to effectively state a claim that stigmatizing statements “deprived [him or her] of

a liberty interest and entitled [him or her] to a name-clearing hearing.” Id. The

statements must have been made publicly and voluntarily by a public employer “in

conjunction with the plaintiff’s termination from employment.” Id. In addition, “the

plaintiff must claim that the charges made against him were false.” Id. The charges

must go beyond allegations of “merely improper or inadequate performance,

incompetence, neglect of duty[,] or malfeasance.” Id. Finally, the plaintiff must request

a name-clearing hearing from the employer before filing his or her complaint. Id. at 322.

The Township lists these elements, and correctly notes that the facts pled by

Warthman in this case might have supported a Due Process claim. But Warthman points

out in response that, had she sought relief pursuant to the Due Process Clause, she would

have been required to do so through the vehicle of a 42 U.S.C. § 1983 claim. See

Thomas v. Shipka, 818 F.2d 496, 500 (6th Cir. 1987) (vacated on other grounds, 488

U.S. 1036 (1989)) (“[I]t is unnecessary and needlessly redundant to imply a cause of

action arising directly under the Constitution where Congress has already provided a

statutory remedy of equal effectiveness through which the plaintiff could have vindicated

her constitutional rights.”). Section 1983 was not mentioned anywhere in Warthman’s

complaint.

No. 07-4528 Warthman v. Genoa Township Board of Trustees Page 10

Some complaints, however, particularly those filed by pro se plaintiffs, have

asserted claims for relief under the U.S. Constitution directly. District courts have on

occasion interpreted such claims as § 1983 actions. See, e.g., Jordan v. Moore, No. 99-

3489, 2000 WL 145368, at *1 (6th Cir. Feb. 2, 2000) (unpublished) (construing a

complaint that referenced the Fourth Amendment as a § 1983 claim because “this circuit

does not recognize direct constitutional claims against local officials and municipalities”

(citing Thomas, 818 F.2d at 499)). But the omission of a reference to § 1983 in a

carefully drafted complaint filed by a plaintiff represented by counsel should have

provided the Township with notice that Warthman’s reference to the Due Process Clause

was not intended to raise a federal cause of action.

Warthman took great care to assert only state-law claims in her complaint, a

choice that she was fully entitled to make even if it meant foregoing an available federal

cause of action. See Alexander v. Elec. Data Sys. Corp., 13 F.3d 940, 943 (6th Cir.

1994) (“The well-pleaded complaint rule generally provides that the plaintiff is the

master of his complaint, and the fact that the wrong asserted could be addressed under

either state or federal law does not ordinarily diminish the plaintiff’s right to choose a

state law cause of action.”). She explicitly alleged a violation of only the Ohio Open

Meetings Law in Count One, and clarified any ambiguity about her common law

estoppel claim in Count Two by asking the court to declare that she “had a right to a

name clearing hearing which is the predicate for her hearing under R.C. 121.22(G)(1).”

Warthman’s complaint was not sloppily drafted. It neatly laid out two state-law

causes of action and did not invite the Township—as a less careful complaint might have

done—to latch onto the constitutional reference and imply a federal claim where none

was stated. Warthman’s freedom to choose state law in this manner would be

significantly undermined by a rule that granted defendants the freedom to safely second

guess a plaintiff’s decision and remove to federal court on the basis of claims that could

have been pled, but were not. See Alexander, 13 F.3d at 943.

Other plaintiffs in Warthman’s situation—those who choose to forego federal

claims and secure a state forum—sometimes expressly disclaim any arguable federal

No. 07-4528 Warthman v. Genoa Township Board of Trustees Page 11

cause of action in the text of their complaints. See, e.g., Brown v. Vickers Employees

Credit Union, 162 F. Supp. 2d 528, 530 (S.D. Miss. 2001) (“[T]he plaintiff only set forth

state law causes of action in the Complaint and specifically disclaimed all federal causes

of action that might be available to him.”). Including such statements in complaints is

an excellent practice that we strongly encourage because it avoids the procedural delay

and expense of removal and remand as evidenced by the present case. But because the

removing defendant bears the burden to show federal jurisdiction, plaintiffs whose state-

law claims do nothing more than make reference to a federal constitutional provision or

statute should not be required to expressly forego federal claims in their complaints in

order to avoid removal. See Eastman v. Marine Mech. Corp., 438 F.3d 544, 549 (6th

Cir. 2006) (noting that, in the removal context, defendants bear the burden of

demonstrating that federal subject matter jurisdiction exists on the face of the

complaint). A contrary result would effectively shift the burden of establishing federal

question jurisdiction in removal cases away from defendants by requiring plaintiffs to

affirmatively establish the lack of such jurisdiction. Any complaint that included even

a passing mention of federal law would, so long as the facts could possibly have

supported an undeclared federal claim, be subject to the expensive and delaying

removals that § 1447(c) was designed to discourage. See Martin, 546 U.S. at 140.

Defendants in similar cases need not worry about losing opportunities to remove

where the plaintiff invokes only state law but later changes her mind. The defendant’s

right to remove is preserved if the plaintiff later reveals that she wishes to make a federal

claim after all. See 28 U.S.C. § 1446(b) (“If the case stated by the initial pleading is not

removable, a notice of removal may be filed within thirty days after receipt by the

defendant, through service or otherwise, of a copy of an amended pleading, motion,

order or other paper from which it may first be ascertained that the case is one which is

or has become removable . . . .”).

A reference to the U.S. Constitution in a complaint should be read in the context

of the entire complaint to fairly ascertain whether the reference states a federal cause of

action or, as in Warthman’s case, simply supports an element of a state claim. See, e.g.,

No. 07-4528 Warthman v. Genoa Township Board of Trustees Page 12

Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U.S. 804, 813 (1986) (“[T]he mere

presence of a federal issue in a state cause of action does not automatically confer federal

question jurisdiction.”); Diaz v. Sheppard, 85 F.3d 1502, 1504-05 (11th Cir. 1996)

(holding that the district court did not have subject matter jurisdiction where the

plaintiff’s claims for legal malpractice, negligence, and breach of contract included

passing mentions of federal constitutional law in his complaint, solely for the purpose

of supporting those claims). And if the defendant has a legitimate doubt as to whether

a complaint raises a federal cause of action, there is no law that prohibits the defendant

from simply contacting the plaintiff and requesting a written confirmation that only

state-law claims are being asserted. There is no evidence in the record that the Township

took such action in the present case.

The Township instead rested removal on an isolated mention of the Fourteenth

Amendment in a carefully drafted complaint that pled only state-law claims. Its basis

for removal was not “objectively reasonable” under these circumstances. We therefore

remand the case to the district court so that it may consider whether, in light of the

Martin standard discussed above, an award of costs and attorney fees to Warthman is

appropriate and, if so, the amount of the award. See Martin, 546 U.S at 141.

III. CONCLUSION

For all of the reasons set forth above, we VACATE the portion of the district

court’s judgment that denied Warthman her request for costs and attorney fees and

REMAND the case for reconsideration of that issue.