Supremely Severson: Jan T. Chilton Argued Martin v. Franklin Capital Corp. before U.S. Supreme Court

Believing federal courts are more vigilant in protecting their rights, many defendants seek to remove state court lawsuits to federal court whenever possible. Jan Chilton, head of Severson’s appellate department, presented oral argument on November 8, 2005 before the United States Supreme Court in a case of importance to those defendants.

If a defendant removes a state court case to federal court, but that court later decides it lacks jurisdiction and remands the case back to state court, the remand order “may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal.” 28 U.S.C. § 1447(c).

What legal standard federal courts should follow in exercising their discretion to award attorney fees and costs under this statute? That is the issue before the Supreme Court in Martin v. Franklin Capital Corp., No. 04-1140, the case to be orally argued on November 8.

Plaintiffs in the Martin case argue that fees and costs should be awarded whenever a case is remanded, absent extraordinary circumstances. In particular, they say, fees and costs should be awarded when the defendant invokes a novel or less-than-certain theory to support federal jurisdiction.

Arguing on defendants’ behalf in the case, Mr. Chilton urges the Supreme Court to hold that fees and costs may be awarded only if the defendant lacked reasonably debatable grounds for removal. Most lower federal courts have followed this standard for years. Indeed, the district court and Court of Appeals denied fees and costs in Martin on finding that defendants had objectively reasonable grounds to believe their removal of the case was legally proper—a finding that plaintiffs do not challenge in the Supreme Court.

The Solicitor General has filed an amicus brief on behalf of the United States supporting Franklin Capital’s position as has the Product Liability Advisory Council, Inc.

The parties’ Supreme Court briefs are publicly available at http://www.abanet.org/publiced/preview/briefs/nov05.html#martin. For copies of the amicus briefs or for further information about the case, contact Jan Chilton: (901) 684-1231 or jtc@severson.com.