Opposition Brief — Avitts v. Amoco Production Co.

Supreme U.S

FILED

1

No. 97-423 @) = ow

oe CLERK

In the Supreme Court of the United States

OCTOBER TERM, 1996

W. H. AVITTS, ET AL.,

Petitioners,

v.

AMOCO PRODUCTION CO., ET AL.,

Respondents.

On Petition for a Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit

BRIEF IN OPPOSITION

FOR RESPONDENTS APACHE CORPORATION

AND MW PETROLEUM CORPORATION

ANDREW L. FREY*

MIRIAM R. NEMETZ

Mayer, Brown & Platt

2000 Pennsylvania Ave., N. W.

Washington, D.C. 20006

(202) 463-2000

Attorneys for Respondent

*Counsel of Record

i

QUESTION PRESENTED

Does 28 U.S.C. §1447(c), which permits a federal court

remanding a case to award costs and expenses “incurred as a

result of removal,” authorize such an award against a

defendant joined after a removal that the plaintiff never

challenged?

li

RULE 29.6 STATEMENT

Respondent Apache Corporation has no parent company.

Respondent MW Petroleum Corporation is a wholly-owned

subsidiary of Apache Corporation. Listed below are the

companies and partnerships that are partly but not wholly

owned by Apache Corporation or one of its wholly-owned

subsidiaries:

Apache International, Inc.

Apache Oil Australia Pty Limited

Apache Qarun Corporation LDC

Apache Offshore Investment Partnership

Apache 681/682 Joint Venture

Main Pass 151 Pipeline Company

Main Pass Block 151 - Offshore

Main Pass 151 Gas Pipeline Company

Apache Series 1996-A Trust

Apache Poland Sp. z 0.0. and FX Energy Poland

Sp. z 0.0. (East) Commercial Partnership

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TABLE OF CONTENTS

Page

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BRIEF IN OPPOSITION

FOR RESPONDENTS APACHE CORPORATION

AND MW PETROLEUM CORPORATION ..... l

ons ow 6 x WA Ae Sh gay aie0 O48 l

REASONS FOR DENYING THE PETITION ....... 3

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TABLE OF AUTHORITIES

Page

Cases

Excell, Inc. v. Sterling Boiler & Mechanical, Inc.,

tae £) i) Ue 8, ree 3

Miranti v. Lee, 3 F.3d 925 (Sth Cir. 1993) ........... 3

Morgan Guar. Trust v. Republic of Palau,

EL ide PEF Ca COE 0's bn bs Sac ew ges 4

Statutes

pg ae Dee er passim

Be Sheds APIIG is &0:0:h-o 5.9 6S 04 8 CAME Ee Ol 2

Miscellaneous

Commentary to the 1988 Revision of Section 1447

by David D. Siegel following 28 U.S.C.A.

© GE COPD ON a wh GRUER AE eee eee 3

In the Supreme Court of the Gnited States

OCTOBER TERM, 1996

No. 97-394

W. H. AVITTS, ET AL.,

Petitioners,

V.

AMOCO PRODUCTION CO., ET AL.,

Respondents.

On Petition for a Writ of Certiorari to the United States

Court of Appeals for the Fifth Circuit

BRIEF IN OPPOSITION

FOR RESPONDENTS APACHE CORPORATION

AND MW PETROLEUM CORPORATION

The petitioners challenge the Fifth Circuit’s decision that

the federal remand statute’s fee-shifting provision does not

. authorize an award of costs and expenses against a defendant

who was not a party at the time of removal. Because the

decision is so clearly correct and raises no issue on which the

courts of appeals are in conflict, the petition for certiorari should

be denied.

STATEMENT

The petitioners, a group of landowners, filed this action in

Texas state court against respondent Amoco Production

Company (“Amoco”) on July 2, 1990. The landowners

contended that Amoco’s oil field operations had harmed their

properties. Because the complaint alleged violations of federal

law, Amoco removed the case to the United States District

2

Court for the Southern District of Texas on October 15, 1990.

The landowners did not contest the removal. Pet. App. 16.

On October 17, 1991, more than a year after the

uncontested removal, the landowners filed their Third Amended

Complaint, which, for the first time, named respondents Apache

Corporation (“Apache”) and MW Petroleum Corporation

(“MW”) as co-defendants. Jd. at 16. The Third Amended

Complaint, which was served on Apache and MW on January

27, 1992, alleged federal jurisdiction. Throughout the district

court proceedings, the landowners continued to contend that

federal jurisdiction existed, defeating defendants’ motion to

dismiss for lack of jurisdiction. /d. at 16-17.

The case came to trial on November 8, 1993. Four days

after the trial began, the district court aborted the proceedings

and ordered Amoco, Apache, and MW to conduct an

environmental study of the property and to pay the plaintiffs’

attorney’s fees and expenses, citing the federal Oil Pollution Act

of 1990, 33 U.S.C. § 2701-2761. Pet. App. 17. Amoco

appealed both orders; Apache and MW appealed only the order

to pay attorney’s fees and expenses. On May 22, 1995, the

Court of Appeals for the Fifth Circuit held that the district court

lacked subject matter jurisdiction and instructed the district

court to remand the case to state court. /d. at 9.

On remand to the district court, the landowners sought costs

and expenses under 28 U.S.C. § 1447(c). The statute permits a

remand order to require payment of “just costs and any actual

expenses, including attorney fees, incurred as a result of

removal.” The district court found Amoco, Apache, and MW

jointly and severally liable to the landowners for $641,509.46,

which represented essentially all of the landowners’ litigation

costs, including reasonable attorney’s fees, incurred to that date.

Pet. App. 12 &n.1.

Amoco, Apache, and MW appealed the § 1447(c) award,

and the Fifth Circuit reversed. It ruled that Apache and MW

could not be ordered to pay any costs relating to the removal

= '

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because they became parties after the removal. Because “a

court’s discretion to award attorney’s fees under § 1447(c) is

triggered only if the court first finds that the defendant’s

decision to remove was legally improper,” the court reasoned,

defendants sued after the case had already been removed were

not subject to such an award. Pet. App. 18. The court then

denied the § 1447(c) award against Amoco on the ground that

the landowners themselves, who had never sought a remand,

“bear a substantial share of the responsibility for the case

remaining in federal court.” /d. at 22.

REASONS FOR DENYING THE PETITION

As explained in Amoco’s brief in opposition, the

landowners have identified no issues that even remotely begin

to merit this Court’s consideration. The Fifth Circuit correctly

held that the landowners could not recover costs and expenses

under § 1447(c) from any of the defendants under the particular

circumstances of this case, and no decision by any court of

appeals conflicts with that ruling. But even if this case

otherwise presented issues worthy of review, absolutely no

reason exists to revisit the Fifth Circuit’s holding that Apache

and MW are not liable for removal costs. There can be no doubt

that § 1447(c) does not authorize an award of removal costs

against defendants sued after removal.

Section 1447(c) provides that an order remanding a case

“may require payment of just costs and any actual expenses,

including attorney fees, incurred as a result of removal.” In

determining whether an award of costs and expenses is justified,

courts first examine the defendant’s conduct in removing the

case. See, e.g., Excell, Inc. v. Sterling Boiler & Mechanical,

Inc., 106 F.3d 318, 322 (10th Cir. 1997) (“the key factor is the

propriety of the defendant’s removal”); Miranti v. Lee, 3 F.3d

925, 928 (Sth Cir. 1993) (courts “invariably take into

consideration the defendants’ decision to remove’’); see also

Commentary to the 1988 Revision of Section 1447 by David D.

Siegel following 28 U.S.C.A. § 1447 (West 1994) (“subdivision

4

(c) now authorizes the court to add ‘actual expenses, including

attorney’s fees,’ should it find that it was improper for the

defendant to remove the case” (emphasis added)). There is no

basis for shifting costs to a defendant who was not a party at the

time of removal, because there is no relevant conduct by such a

defendant for the court to assess. No court has held otherwise.'

Noting that § 1447(c) does not expressly limit liability for

costs and expenses to removing defendants, the landowners

argue that Apache and MW should be liable because they

“accept[ed]” removal. Pet. 10. But it is ludicrous for the

landowners to try to shift their fees to Apache and MW for

failing to extricate this case from federal court. The landowners

themselves, who litigated this matter in federal court for 15

months before Apache and MW even became parties, never

challenged the removal, even though their right to remand for

lack of jurisdiction never expired. See § 1447(c). And, of

course, it was the landowners, not MW and Apache, who

induced removal by alleging violations of federal law in their |

complaint. Pet. App. 21-22.’ |

' Petitioners try to manufacture a circuit conflict by implying

that the court in Morgan Guar. Trust v. Republic of Palau, 971

F.2d 917 (2d Cir. 1992), found a non-removing defendant liable

for removal costs under § 1447(c). Pet. 10. In fact, the Morgan

case involved an award of fees against a removing defendant. The

decision in no way supports such an award against a defendant that

was not even a party at the time of the removal.

Petitioners also contend that the Fifth Circuit (presumably by

distinguishing between removing and non-removing defendants) 1

“rejected the ‘joint and several’ nature of the § 1447(c) award.”

Pet. 9. But, of course, a ruling that certain defendants are not

liable implies nothing about how liability would be shared among

parties that were liable.

2 It should be added that the landowners’ desire to penalize

(continued...)

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Indeed, if any fee-shifting between the landowners and

Apache and MW were appropriate here, then surely it would be

the /andowners who should pay Apache and MW’s costs and

expenses. Nothing in the language of the statute limits liability

thereunder to defendants. If a non-removing defendant may be

subject to an award of costs under § 1447(c), then there is no

reason why such an award should not be equally available

against a plaintiff. And the landowners bear far more

responsibility for the removal in this case than do Apache and

MW.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

ANDREW L. FREY*

MIRIAM R. NEMETZ

Mayer, Brown & Platt

2000 Pennsylvania Ave., N.W.

Washington, D.C. 20006

(202) 463-2000

*Counsel of Record

OCTOBER 1997

2 (...continued)

Apache and MW for their supposed inaction — after removal is

quite inconsistent with their argument that the Fifth Circuit should

not have considered their own post-removal conduct in denying the

§ 1447(c) award. Pet. 9.