Unifund CCR Partners v. Wallis, No. 06-CV-545 2006 WL 908755 (D.S.C. Apr. 7, 2006).
In this procedurally convoluted series of debt collection actions based on breach of credit card agreements, the original plaintiff, Unifund CCR Partners (“CCR”) (and hence, the Editors’ musical references), filed suit against three separate defendants, Wallis, Cohen, and Perry. Each defendant responded identically, denying all allegations and asserting varied counterclaims against the plaintiff. After CCR replied to each separate but identical answer, Wallis filed his “Motion to Amend Complaint and to Certify as a Class and to Consolidate and to Enjoin Plaintiff,” alleging that CCR had violated several state consumer protection statutes and was negligent in its treatment of a class of South Carolina debtors. Perhaps oblivious to the “earthquakes and lightin’ on the way,” CCR removed all three actions to federal court, asserting jurisdiction under CAFA, and concurrently filed a motion to sever and remand all defendants’ counterclaims to state court. Inviting “the rivers overflowing,” the defendants subsequently filed their motion to remand each case back to state court.
At the hearing, District Judge G. Ross Anderson orally remanded the case to state court based on the “well settled authority that Plaintiffs as counter-defendants on counterclaims may not remove cases to federal court.” Judge Anderson, in a “voice of rage and ruin,” then ordered CCR to pay the defendants’ attorneys fees incurred in defending the removal. Relying on 28 U.S.C. §1447(c), the court noted that an award of attorney fees was not contingent on a finding of bad faith or improper motive, and was at the discretion of the court. However, in this case, Judge Anderson found that CCR had acted in bad faith by removing the action under CAFA.
Judge Anderson effectively concluded CCR should have known that it was “in for nasty weather” by removing the case against such well-established authority to the contrary. Further, any argument CCR could have made regarding the possible effect of CAFA on the analysis was lost since they apparently made only conclusory statements regarding CAFA’s applicability in their removal petition. In fact, the court excerpted portions of the defendants’ motion when examining CAFA’s application in his finding the “Plaintiff’s reading of 28 U.S.C. §1453(b) to be strained at best.” Judge Anderson was less than impressed by CCR’s argument that language in §1453 stating “such action may be removed by any defendant” had overturned explicit U.S. Supreme Court precedent regarding removals of counterclaims so as to allow CCR to remove the action. Moreover, the court concluded that CCR’s removal petition did not satisfy CAFA’s jurisdictional prerequisites, and in particular, the amount in controversy. While not quite “hurricanes ablowing,” Judge Anderson did order CCR to pay the defendants’ counsel $500 in attorney’s fees pursuant to 28 U.S.C. §1447(c) for defending the removal – though that sum was presumably far less than the actual attorney’s fees incurred by the defendants.