STAN SCHIFF, M.D., Ph. D., on behalf of himself v. LIBERTY MUTUAL FIRE INSURANCE COMPANY and LIBERTY MUTUAL INSURANCE COMPANY

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
STAN SCHIFF, M.D., Ph. D., on behalf of
himself and a class of similarly situated
providers,
Plaintiff-Appellee,
v.
LIBERTY MUTUAL FIRE INSURANCE
COMPANY and LIBERTY MUTUAL
INSURANCE COMPANY,
Defendants-Appellants.
No. 18-35116
D.C. No. 2:17-cv-00914-MJP
MEMORANDUM*
Appeal from the United States District Court
for the Western District of Washington
Marsha J. Pechman, District Judge, Presiding
Argued and Submitted July 12, 2019
Seattle, Washington
Before: BOGGS,** BERZON, and WATFORD, Circuit Judges.
Appellants Liberty Mutual Fire Insurance Company and Liberty Mutual
Insurance Company (Liberty), appeal from the district court’s award of attorney’s
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** The Honorable Danny J. Boggs, United States Circuit Judge for the
U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
FILED
AUG 12 2019
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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fees to Appellee Stan Schiff (Schiff), pursuant to 28 U.S.C. § 1447(c). Section
1447(c) permits a district court that remands a case from federal court for lack of
subject-matter jurisdiction to award attorney’s fees incurred as a result of the
removal. For the reasons set forth below, we reverse the district court’s award.
The parties are familiar with the facts, and we have set out most of the “long
and tortured procedural history” in Chan Healthcare Grp., PS v. Liberty Mut. Fire
Ins. Co., 844 F.3d 1133, 1135–36 (9th Cir. 2017). There is no need to repeat it here.
It is sufficient to understand that Liberty removed Schiff’s state-court complaint to
federal court, and the district court granted Schiff’s motion to remand because it
concluded that federal jurisdiction did not exist. See Schiff v. Liberty Mut. Fire Ins.
Co., No. C17-914 MJP 2017 WL 4838094, at *3 (W.D. Wash. Oct. 26, 2017). It
awarded Schiff “reasonable costs and fees” associated with the removal. Ibid. In a
separate order, the district court explained that, because “[t]his is the third time that
this case has been removed from state court and remanded back,” it found “‘unusual
circumstances’ in the pattern of unsuccessful removals (and sanctions entered
thereupon) . . . .” The district court did not conclude that Liberty’s arguments in
favor of removal were “objectively unreasonable.”
We have jurisdiction under 28 U.S.C. § 1291 and review an award of
attorney’s fees under 28 U.S.C. § 1447(c) for an abuse of discretion. We will
overturn the award “if it is based on clearly erroneous findings of fact, or an

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erroneous determination of law.” Jordan v. Nationstar Mortg. LLC, 781 F.3d 1178,
1181 (9th Cir. 2015).
“[A]bsent unusual circumstances, attorney’s fees should not be awarded
[under 28 U.S.C. § 1447(c)] when the removing party has an objectively reasonable
basis for removal.” Martin v. Franklin Capital Corp., 546 U.S. 132, 136 (2005).
The purpose of such an award is “to deter removals sought for the purpose of
prolonging litigation and imposing costs on the opposing party, while not
undermining Congress’ basic decision to afford defendants a right to remove as a
general matter, when the statutory criteria are satisfied.” Id. at 140. We adhere to
this purpose when assessing whether “unusual circumstances” justify an award
under 28 U.S.C. § 1447(c). See Gardner v. UICI, 508 F.3d 559, 561–63 (9th Cir.
2007). Circumstances that are external to the case before the court do not justify a
fee award under 28 U.S.C. § 1447(c).
The district court was incorrect that the case before it had been removed twice
before. Its award was based on removals in two other cases: Chan, and Kerbs v.
Safeco Ins. Co. of Ill., Inc., No. C11-1642 MJP, 2011 WL 6012497 (W.D. Wash.
Dec. 1, 2011). But the record does not support the district court’s finding that there
is a “pattern and practice” of improper removals of identical state-court class actions
sufficient to justify a fee award under the “unusual circumstances” portion of the
Martin test.

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In Kerbs, the district court awarded fees under 28 U.S.C. § 1447(c) and Fed.
R. Civ. P. 11 because it concluded that Safeco removed the case “on the eve of trial
after a series of adverse rulings” to “caus[e] delay that unnecessarily increased the
costs of litigation.” 2011 WL 6012497, at *5. But Liberty was not a party in Kerbs.
See id. at *1. Other than the facts that Safeco is a subsidiary of Liberty, and they
were both represented by the same attorney in both sets of proceedings, Schiff has
not offered a legal reason why we should impute Safeco’s conduct in Kerbs to
Liberty in this case. Imposing a sanction on Liberty for a potentially improper
removal by Safeco on different grounds in a different case seven years earlier would
not deter improper removals and is inconsistent with the objectives undergirding 28
U.S.C. § 1447(c). See Martin, 546 U.S. at 140–41.
In Chan, this court reversed the fee award the district court imposed on
Liberty. 844 F.3d at 1142. Although the remand order in that case stands, it does
so only because we lacked jurisdiction over the question of whether Chan’s remand
motion was properly granted. Id. at 1140–41. On remand, the district court held
that Liberty’s arguments in favor of federal-court jurisdiction were not objectively
unreasonable. See Chan Healthcare Grp., PS v. Liberty Mut. Fire Ins. Co., No. C15-
1705 RSM, 2018 WL 2387836, at *2 (W.D. Wash. May 25, 2018). Further
undermining Schiff’s claim of a “pattern” of improper removals, other cases
associated with this litigation have been removed to federal court and have not been

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remanded.
The district court did not find that Liberty’s arguments in favor of removal
were objectively unreasonable. Accordingly, we do not reach that issue. On remand,
the district court should consider the objective reasonableness of those arguments,
as well as whether the fact that Schiff’s class is not certified affects the analyses.1
The district court’s award of attorney’s fees under 28 U.S.C. § 1447(c) is
REVERSED and REMANDED for proceedings consistent with this disposition.
1 The district court may wish to reconsider Schiff’s arguments that Liberty
had to show to a “legal certainty” that the amount in controversy would be met by
Schiff’s likely legal fees. See 28 U.S.C. § 1446(c); Singer v. State Farm Mut. Auto
Ins. Co., 116 F.3d 373, 376 (9th Cir. 1997); 14AA Wright & Miller, Federal Practice
& Procedure § 3702.2 (4th ed. 2013, Apr. 2019 update); see also Fritsch v. Swift
Transp. Co., 899 F.3d 785, 794–96 (9th Cir. 2018) (concluding that future attorney’s
fees may be included in the amount in controversy and the defendant may attempt
to prove that amount by a preponderance of the evidence).

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