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Vintage Assets, Inc. v. Tennessee Gas Pipeline Co., LLC

United States District Court, E.D. Louisiana

April 11, 2019

VINTAGE ASSETS, INC.
v.
TENNESSEE GAS PIPELINE COMPANY, L.L.C. ET AL.

         SECTION: “H”

          ORDER AND REASONS

          JANE TRICHE MILAZZO UNITED STATES DISTRICT JUDGE.

         Before the Court is Plaintiffs' Motion for Costs and Fees Related to Remand (Doc. 317). For the following reasons, the Motion is DENIED.

         BACKGROUND

         The motion before the Court arises out of an unexpected conclusion to a heavily litigated dispute. After pending before this Court for nearly 2-and-one-half years, ten summary judgment motions, and a six-day bench trial, all rulings made by this Court were vacated on appeal for want of diversity subject matter jurisdiction. The Fifth Circuit ordered this removed action to be remanded back to state court. Understandably disgruntled by this turn of events, Plaintiffs have filed the instant motion seeking all reasonable costs and attorneys' fees related to and arising from the remand. Plaintiffs allege that Defendants High Point Gas Transmission, LLC and High Point Gas Gathering, LLC (collectively “High Point entities”) possessed knowledge of their citizenship and failed to disclose such.

         The timeline of events is as follows. On December 18, 2015, Plaintiffs filed this action against Tennessee Gas Pipeline Company, LLC (TGP) and Southern Natural Gas Company, LLC (SNG) in the 25th Judicial District Court for the Parish of Plaquemines. On January 27, 2016, TGP and SNG removed the matter to this Court on the basis of diversity of citizenship. On October 24, 2016, Plaintiffs amended their Complaint to add the High Point entities, improperly pleading the citizenships of the LLCs as if they were corporations. The High Point entities did not challenge the representation of their citizenships or the jurisdiction of this Court.

         Plaintiffs allege that thereafter they propounded discovery requests on each of the High Point entities, seeking detailed descriptions of their corporate history. The entities responded revealing that each entity is owned by a string of parent LLCs, ending with American Midstream, LLC. The High Point entities did not provide information in their discovery responses regarding the members of American Midstream, LLC.

         At the prompting of the Fifth Circuit on appeal, the High Point entities revealed for the first time that the sole owner of American Midstream, LLC is American Midstream Partners, LP. American Midstream Partners, LP has a class of limited partners that are holders of “common units, ” which are publicly traded on the New York Stock Exchange. The High Point entities then represented that on the date they were added to this action, “an individual” who resided in Louisiana held shares in a common unit. Based on this representation, the Fifth Circuit vacated the judgment of this Court and remanded this matter back to this Court to be remanded to state court. Plaintiffs now seek all reasonable attorney's fees and costs arising out of the remand of this action.

         LAW AND ANALYSIS

         Plaintiffs seek an award of attorney's fees and costs under 28 U.S.C. § 1447(c), Federal Rule of Civil Procedure 37, 28 U.S.C. § 1927, and the Court's inherent power. This Court finds that none of these authorizes the award requested by Plaintiffs.

         A. 28 U.S.C. § 1447(c)

         Pursuant to 28 U.S.C. § 1447(c), “[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.” “[A] district court is not divested of jurisdiction to award attorney fees and costs pursuant to § 1447(c) after a remand has been certified.”[1] The High Point entities correctly point out that § 1447(c) entitles plaintiffs to an award of attorney's fees and costs “incurred as a result of the removal.” The High Point entities did not remove this case to federal court and indeed were not parties at the time of removal. Accordingly, this Court is not authorized under 28 U.S.C. § 1447 to award attorney's fees against them. Section 1447(c) is intended to deter baseless attempts at removal and an award against the High Point entities would be inconsistent with this intent.[2]

         B. Federal Rule of Civil Procedure 37

         Federal Rule of Civil Procedure 37(d)(3) allows an award of expenses for the failure to respond to discovery. Plaintiffs argue that they are entitled to an award under Federal Rule of Civil Procedure 37 because the High Point entities failed to ...


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