Shafizadeh v. BellSouth Mobility, LLC , 189 F. App'x 410 ( 2006 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 06a0469n.06
Filed: July 5, 2006
No. 05-5795
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
SAEID SHAFIZADEH, )
)
Plaintiff-Appellant, )
)
v. ) ON APPEAL FROM THE UNITED
) STATES DISTRICT COURT FOR THE
BELLSOUTH MOBILITY, LLC, d/b/a ) WESTERN DISTRICT OF KENTUCKY
CINGULAR WIRELESS, )
)
Defendant-Appellee. )
Before: BOGGS, Chief Judge; KEITH and SUTTON, Circuit Judges.
PER CURIAM. In this appeal, Saeid Shafizadeh primarily argues that the district court erred
in denying his request for attorney fees under 28 U.S.C. § 1447(c). We affirm.
I.
BellSouth Mobility provided Shafizadeh with mobile-telephone service during the summer
of 2003. When Shafizadeh paid his June 2003 invoice, BellSouth applied the payment to a different
customer’s account, prompting the telephone company to place Shafizadeh’s account into past-due
status. Understandably upset, Shafizadeh contacted the company on a number of occasions to
inform it that he had paid the June invoice. Over the course of this billing dispute, BellSouth
suspended Shafizadeh’s account for a total of 80 days.
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Shafizadeh v. BellSouth Mobility
In November 2004, Shafizadeh, an attorney, filed a lawsuit in Kentucky state court seeking
(1) “general, presumed and compensatory damages,” (2) “direct, incidental and consequential
damages,” (3) “attorneys’ fees and costs,” (4) “punitive damages,” and (5) an injunction barring
BellSouth from “using, disclosing, sharing and disseminating” his “private information[,] including
his social security number,” and compelling BellSouth to “redact [his] private information from its
record[s].” JA 27–28.
Shafizadeh’s complaint (in truth, his amended complaint) referred to federal law in the
following manner:
32. On information and belief, [BellSouth] has entered plaintiff’s private
information including his social security number in its computer system that is
accessible by, and has shared the same with a large number of [BellSouth] employees
and other firms, the computer system is susceptible to hacking from any remote
computer terminal.
33. Pursuant to provisions of . . . Title 42 United States Code (U.S.C.)
§ 405(c)(2)(C)(viii)(I), social security account numbers and related records that are
obtained and maintained, shall be confidential and shall not be disclosed. The policy
leading to the enactment of the statute was articulated in Amy Boyer’s Law . . . [and]
it was the Congress’ findings that the inappropriate display, sale or use of social
security number[s] is a significant factor in a growing range of illegal activities . . .
.
34. On information and belief, the simultaneous disclosure of plaintiff’s name
and private information including social security number has exposed plaintiff to a
heightened risk of identity theft and other forms of fraud.
JA 23.
On December 7, 2004, BellSouth removed the case to federal court on diversity and federal-
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question grounds.
On January 5, 2005, Shafizadeh asked the federal court to remand the case to state court.
In the memorandum supporting his remand request, Shafizadeh clarified that his complaint did not
invoke a cause of action under 42 U.S.C. § 405(c) but merely referenced the provision to
demonstrate “the concerns that Congress has expressed for inappropriate display, sale or use of
social security number[s].” JA 271. He also clarified that his complaint alleged only “common law
and state law claims against BellSouth.” Id. He later stipulated that the amount in controversy did
not exceed $75,000. The district court remanded the case to state court, noting that BellSouth “has
not carried its burden of establishing that this action meets the amount-in-controversy requirements
of 28 U.S.C. § 1332.” JA 334.
In addition to asking the court to remand the case, Shafizadeh asked the court to award him
the attorney fees he had incurred in responding to the removal. See 28 U.S.C. § 1447(c). The court
denied Shafizadeh’s fee request because he had “presented no argument persuading th[e] court to
exercise its discretion to impose fees and costs.” JA 386.
II.
After a case has been removed, § 1447(c) provides that “[i]f at any time before final
judgment it appears that the district court lacks subject matter jurisdiction, the case shall be
remanded. An order remanding the case may require payment of just costs and any actual expenses,
including attorney fees, incurred as a result of the removal.” In deciding whether to grant attorney
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fees, courts “focus on the objective propriety of the removal attempt.” Bartholomew v. Town of
Collierville, Tenn., 409 F.3d 684, 687 (6th Cir. 2005) (internal quotation marks omitted). An award
of fees under § 1447(c) thus “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 (internal quotation marks omitted
and emphasis removed). To the same effect, the Supreme Court has held that “absent unusual
circumstances, attorney’s fees should not be awarded when the removing party has an objectively
reasonable basis for removal.” Martin v. Franklin Capital Corp., 126 S. Ct. 704, 708 (2005).
Because the decision to award fees under § 1447(c) lies “within the sound discretion of the
district court,” Bartholomew, 409 F.3d at 686 (internal quotation marks omitted); see also Martin,
126 S. Ct. at 708–09, we review the district court’s attorney-fee decision for an abuse of discretion,
Bartholomew, 409 F.3d at 686. A district court “abuses its discretion . . . where the defendant’s
argument[s] for removal [were] devoid of even fair support.” Id. at 687 (internal quotation marks
omitted).
The district court did not abuse its discretion here. It is well-covered ground that a state-
court defendant may remove a “civil action” to federal court if the plaintiff “original[ly]” could have
filed the action in federal court. 28 U.S.C. § 1441(a). And a claimant may file a complaint in
federal court when it presents a “federal question,” see id. § 1331, or involves diverse parties and
satisfies the amount-in-controversy requirement, see id. § 1332.
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BellSouth had a good-faith basis for concluding that Shafizadeh’s complaint implicated the
court’s federal-question and diversity jurisdiction. As to federal-question jurisdiction, the complaint
said that “[p]ursuant to provisions of [ ] Title 42 United States Code (U.S.C.) § 405(c)(2)(C)(viii)(I),
social security account numbers and related records that are obtained and maintained, shall be
confidential and shall not be disclosed.” JA 23 (emphasis added). The complaint proceeded to
allege that “the simultaneous disclosure of [Shafizadeh’s] name and private information including
social security number has exposed [him] to a heightened risk of identity theft and other forms of
fraud.” Id. The complaint’s reference to § 405, its use of the mandatory term “shall” and the
implication that BellSouth had violated § 405—otherwise, why invoke it in the complaint?—all
provided good-faith support for BellSouth’s decision to remove the case on federal-question
grounds.
Shafizadeh responds that BellSouth knew that § 405 could not provide the basis for a viable
claim against it based on the defenses to such a claim that BellSouth included in its answer. That
Shafizadeh asserted a weak claim (or even a fatally flawed claim) under § 405, however, does not
prove that BellSouth improperly removed the claim. See Cromwell v. Equicor-Equitable HCA
Corp., 944 F.2d 1272, 1277 (6th Cir. 1991) (“That a complaint ultimately fails to state a claim upon
which relief can be granted is of no relevance to the question of subject matter jurisdiction.”).
Shafizadeh next argues that because he did not exhaust his administrative remedies, “there
was no basis for the district court to exercise jurisdiction” over an alleged violation of § 405.
Shafizadeh Br. at 19. This argument again goes to whether the § 405 claim was a strong one, not
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to whether BellSouth could rely on it in good faith to remove the action. That the removal was later
deemed inappropriate (whether due to Shafizadeh’s admissions and stipulations or to some other
factor) does not show that the district court abused its discretion in denying fees and costs. See
Martin, 126 S. Ct. at 709–11 (holding that attorney fees under § 1447(c) are not awarded
automatically when a case is remanded because removal was improper); Valdes v. Wal-Mart Stores,
Inc., 199 F.3d 290, 292 (5th Cir. 2000) (“Although from time to time factual situations may arise
in which the district court is required to award attorney’s fees, the mere determination that removal
was improper is not one of them.”).
In addition to having reasonable grounds for treating the complaint as presenting a well-
pleaded federal question, BellSouth had reasonable grounds for concluding that the complaint
implicated the court’s diversity jurisdiction. Shafizadeh concedes that the parties are “citizens of
different States.” 28 U.S.C. § 1332(a)(1). And BellSouth had ample grounds for construing the
complaint to satisfy the $75,000 amount-in-controversy requirement. See id. § 1332(a). At the time
of removal, Shafizadeh’s complaint sought not only “general, presumed and compensatory
damages,” JA 27, but also “punitive damages against [BellSouth] in such amounts as . . . necessary
to deter and punish [BellSouth] and to ensure that it would not engage in such conduct in the future,”
id. at 28. Not until after removal did Shafizadeh stipulate that he sought less than $75,000. The
request for punitive and compensatory damages plainly made it “objectively reasonable” for
BellSouth to remove the case.
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At oral argument, Shafizadeh attempted to rebut this conclusion by arguing that BellSouth
knew he was seeking less than $75,000 because settlement discussions pre-dating the removal
allegedly concerned an amount that was well below this figure. The proposed settlement, however,
was just that—a proposed settlement. That the settlement was never consummated and that
settlement discussions at any rate are meant to be confidential suffice to defeat this argument.
On appeal, Shafizadeh separately argues that the district court erred in declining to remove
all references to his personal information from the district court record, including information that
the local court rules did not require the judge to remove. We need not address this argument because
the parties have agreed to approach the district court to resolve Shafizadeh’s concern after this
appeal. See BellSouth Br. at 21 (noting that it has no objection to removing the requested
information from the court records); JA 363 (proposed order) (stating that Shafizadeh’s “partially
displayed date of birth and Social Security number” should be fully redacted from various
documents in the record).
III.
For these reasons, we affirm the judgment of the district court, though this affirmance is
without prejudice to the parties requesting that the court replace the documents in the record
containing Shafizadeh’s personal information with fully redacted versions of those documents.
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