Ngo v. United Airlines, Inc.

Background

Loi Ngo filed state-law employment-discrimination claims in California state court against United Airlines, Inc., and former supervisors Mohammed Buksh and Yvonne Pierce. United removed the case to federal court based on diversity jurisdiction, arguing that Buksh and Pierce had been fraudulently joined—that is, included only to defeat federal jurisdiction because they and Ngo were all California citizens.

In an earlier order, the court found that Buksh and Pierce were not sham defendants and remanded the case to state court for lack of subject-matter jurisdiction. Ngo then moved for attorney fees and costs under 28 U.S.C. § 1447(c), requesting $75,836 in fees and $64.50 in costs incurred because of the removal. His request also included work on the fee motion and other work performed while the case was in federal court.

Parties’ Positions

Ngo argued that United lacked an objectively reasonable basis for removal. United argued that the original complaint—the pleading in effect when it removed the case—did not assert a harassment claim against Buksh and Pierce and that the alleged conduct arose from necessary personnel-management duties. United also argued that, if fees were awarded, the court should reduce them because some requested fees were unrelated to removal, inadequately documented, improper, or based on excessive hourly rates.

Court’s Analysis

The court explained that fees under § 1447(c) generally may be awarded when the removing party lacked an objectively reasonable basis for removal. A removal is not objectively unreasonable merely because the removing party’s arguments ultimately fail. The court instead considers the clarity of the applicable law and whether that law clearly foreclosed removal.

Although the court had considered Ngo’s First Amended Complaint when deciding whether there was a possibility that his claims against Buksh and Pierce were adequately stated, that amended complaint had not been served when United removed the case. The court therefore evaluated objective reasonableness using Ngo’s original state-court complaint.

The court had previously concluded that Ngo’s allegations met the low standard needed to show a possibility of a viable claim against the nondiverse defendants. It also recognized, however, that California law was not clear about how far official personnel actions could support a hostile-work-environment or harassment claim against a supervisor. Most of the alleged conduct arose from Buksh’s and Pierce’s supervisory roles, although the court identified an allegation that Buksh requested a police welfare check without a basis for doing so, allegedly to harass and intimidate Ngo.

Because the governing law was sufficiently ambiguous, the court concluded that United’s removal was not objectively unreasonable. It therefore declined to award fees under § 1447(c).

Disposition

The court denied Ngo’s motion for attorney fees and costs. It also vacated the scheduled hearing because the motion could be decided without oral argument.