United States District Court, D. Hawaii
ORDER ADOPTING IN PART AND REJECTING IN PART FINDINGS
AND RECOMMENDATION, ECF NO. 16, AND REMANDING ACTION TO STATE
Michael Seabright Chief United States District Judge.
Frederick Nitta, M.D. (“Defendant” or “Dr.
Nitta”) objects, under 28 U.S.C. § 636(b)(1) and
Local Rule 72.4, to Magistrate Judge Kenneth J.
Mansfield's March 27, 2019 Findings and Recommendation to
Grant Plaintiff Hawaii Medical Service Association's
(“Plaintiff” or “HMSA”) Motion for
Remand (the “F&R”). ECF No. 17. The F&R
recommended that the court remand this action to the State of
Hawaii Circuit Court for the Third Circuit (“state
court”) based on its findings that (1) there is no
basis for federal question jurisdiction, and (2) the state
court proceeding was not a “civil action” and
therefore, there was no valid procedural basis to remove the
case. ECF No.16 at PageID #186, 191. The F&R further
found that without a valid procedural basis for removal,
Defendant's removal “teeters on the edge of
violating Federal Rule of Civil Procedure 11(b), ” and
recommended awarding Plaintiff, pursuant to 28 U.S.C. §
1447(c), its “just costs and actual expenses” of
$19, 083.76 in attorneys' fees and costs incurred in
connection with the removal. Id. at PageID # 186,
objects to a portion of the F&R-its findings that (1)
there is no federal question jurisdiction, and (2) an award
of attorneys' fees in excess of $19, 000 is
“just.” ECF No. 17 at PageID #198-201.
novo review, the court agrees that there is no basis for
federal question jurisdiction, but disagrees that an award of
attorneys' fees is warranted. Further, absent objection,
the court declines to decide whether a valid procedural basis
exists to remove this action, but even if no valid procedure
exists, the court disagrees that Defendant's removal
“teeters on the edge of” violating Rule 11(b).
the F&R is ADOPTED in part and REJECTED in part, and this
action is REMANDED to state court.
State Court Proceedings
January 7, 2019, Plaintiff filed a Motion for Order
Confirming Final Award of Arbitrator (“Final
Award”) in state court (“Motion for
Confirmation”). ECF No. 1-1. As alleged in the Motion
for Confirmation, HMSA and Dr. Nitta are parties to a QUEST
Participating Provider Agreement (“QUEST PPA”),
which “governs the services provided by Dr. Nitta to
HMSA's members enrolled in the Medicaid managed care
program implemented by the Med-QUEST division with the
Department of Human Services for the State of Hawai'i,
referred to as “QUEST.” ECF No. 1-1 at PageID #6
n.2; see Id. at PageID #28. Pursuant to the QUEST
PPA and a separate Agreement to Participate in Binding
Arbitration (“APBA”), the parties agreed that
disputes between them would be submitted to arbitration under
the FAA. See ECF No. 1-1 at PageID #7, 30, 38-39. As
provided in section 8.3(a) of the QUEST PPA, the parties also
agreed that “[t]he decision of the arbitrator shall be
final and binding on the parties and judgment shall be
entered thereon upon timely motion by either party in a court
of competent jurisdiction.” Id. at PageID #7,
2018, HMSA and Dr. Nitta participated in an arbitration to
resolve a dispute over Dr. Nitta's billing and HMSA's
payment for medical tests administered by Dr. Nitta to HMSA
members between 2012 and 2014. See id. at PageID #7.
On December 12, 2018, the arbitrator issued his Final Award
in favor of HMSA and against Dr. Nitta, requiring Dr. Nitta
to reimburse HMSA $1, 765, 822.33 that he received as a
result of improper billing. Id. at PageID #13-25.
The Motion for Confirmation asserts that the Final Award
“arises out of Dr. Nitta's billings submitted to
HMSA under [the QUEST PPA].” Id. at PageID #6.
Plaintiff moved for confirmation of the Final Award pursuant
to both the Federal Arbitration Act (“FAA”) and
Hawaii's Uniform Arbitration Act (“HUAA”),
specifically, “9 U.S.C. § 9 and [Hawaii Revised
Statutes (“HRS”)] chapter 658A.”
Id. at PageID #5-7.
Federal Court Proceedings
January 11, 2019, Defendant removed this action pursuant to
28 U.S.C. § 1441, asserting federal question
jurisdiction. ECF No. 1. More specifically, the
Notice of Removal asserts that “the action seeks to
confirm the award of an arbitration proceeding arising from
the interpretation of federal laws and regulations and
conducted in accordance with the rules of the [FAA].”
Id. at PageID #2. On February 4, 2019, Plaintiff
filed a Motion for Remand. ECF No. 4. On February 18, 2019,
Defendant filed an Opposition, ECF No. 9, asserting an
additional basis for federal question jurisdiction-that
“the arbitrator's award in the underlying case was
rendered in manifest disregard of federal law.” ECF No.
9-1 at PageID #71. On February 25, 2019, Plaintiff filed a
Reply ECF No. 10.
February 27, 2019, Magistrate Judge Mansfield issued an
Entering Order recommending that Plaintiff's Motion for
Remand be granted, finding that Plaintiff is entitled to an
award of its just costs and actual expenses, including
attorney fees, incurred as a result of Defendant's
removal, and directing Plaintiff's counsel to submit a
declaration detailing those fees. ECF No. 12. On March 6,
2019, Plaintiff's counsel submitted her declaration, and
on March 15, 2019, Defendant's counsel filed a
declaration in response. ECF Nos. 13, 15. ECF No. 15 ¶
March 27, 2019, Magistrate Judge Mansfield issued the F&R
to Grant Plaintiff's Motion for Remand and, pursuant to
28 U.S.C. § 1447(c), award Plaintiff $19, 083.76 in
attorneys' fees and costs incurred in connection with the
removal. ECF No. 16. On March 29, 2019, Defendant filed
Objections to the F&R and on April 12, 2019, HMSA filed a
Response, which includes a request for additional fees and
costs expended in preparing the Response. ECF Nos. 17-18.
Pursuant to Local Rule 7.2(d), the court finds this matter
suitable for disposition without a hearing.
STANDARD OF REVIEW
party objects to a magistrate judge's findings or
recommendations, the district court must review de novo those
portions to which the objections are made and “may
accept, reject, or modify, in whole or in part, the findings
or recommendations made by the magistrate judge.” 28
U.S.C. § 636(b)(1); see also United States v.
Raddatz, 447 U.S. 667, 673 (1980); United States v.
Reyna-Tapia, 328 F.3d 1114, 1121 (9th Cir. 2003) (en
banc) (“[T]he district judge must review the magistrate
judge's findings and recommendations de novo if
objection is made, but not otherwise.”). That is,
“[t]he district judge may accept the portions of the
findings and recommendation to which the parties have not
objected as long as it is satisfied that there is no clear
error on the face of the record.” Naehu v.
Read, 2017 WL 1162180, at *3 (D. Haw. Mar. 28, 2017)
de novo standard, this court reviews “the matter anew,
the same as if it had not been heard before, and as if no
decision previously had been rendered.” Freeman v.
DirecTV, Inc., 457 F.3d 1001, 1004 (9th Cir. 2006);
United States v. Silverman, 861 F.2d 571, 576 (9th
Cir. 1988). The district court need not hold a de novo
hearing; however, it is the court's obligation to arrive
at its own independent conclusion about those portions of the
magistrate judge's findings or recommendation to which a
party objects. United States v. Remsing, 874 F.2d
614, 618 (9th Cir. 1989).
contends that Magistrate Judge Mansfield erred in determining
that (1) there is no federal question jurisdiction, and (2)
an award of Plaintiff's attorneys' fees and costs in
excess of $19, 000 is “just.” ECF No. 17 at
PageID #199-201. The court first sets forth the legal
standard for removal pursuant to § 1441, and then
addresses Defendant's Objections.
Removal Legal Standard
28 U.S.C. § 1441, a defendant may remove to federal
district court “any civil action brought in a State
court, ” provided the district court to which the
action is removed would have “original
jurisdiction” over that action. See City of Chicago
v. Int'l Coll. of Surgeons, 522 U.S. 156, 163
(1997). Thus, removal jurisdiction generally exists where a
case filed in state court presents claims “arising
under the Constitution, laws, or treaties of the United
States, ” 28 U.S.C. § 1331, ...