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Zibalstar L.C. v. Conte

United States District Court, D. Utah

January 22, 2019

ZIBALSTAR, L.C., et al., Plaintiffs,
v.
ROBERT CONTE, et al., Defendants.

          MEMORANDUM DECISION AND ORDER ORDER GRANTING IN PART AND DENYING IN PART MOTIONS FOR ATTORNEY'S FEES

          JILL N. PARRISH UNITED STATES DISTRICT COURT JUDGE

         This matter comes before the court on motions for attorney's fees filed by defendants Raymond Weller (ECF No. 233) and David Odenath (ECF No. 235). For the reasons below, those motions are granted in part and denied in part.

         I. BACKGROUND

         The instant fee requests emanate from an action asserting RICO claims alongside an array of state law causes of action against more than a dozen individual and corporate defendants, including Messrs. Weller and Odenath. The defendants each moved to dismiss the RICO claims under Rule 12(b)(6) of the Federal Rules of Civil Procedure. The court dismissed the federal RICO claims and, having dismissed the only claim giving rise to subject-matter jurisdiction at a preliminary stage of the case, declined to exercise supplemental jurisdiction over the remaining state law claims. (ECF No. 215).

         Messrs. Weller[1] and Odenath subsequently moved for an award of attorney's fees, relying on Utah's RICO analogue, the Utah Pattern of Unlawful Activity Act (the “UPUAA”), which- contrary to its federal counterpart-contains an exceedingly broad fee-shifting provision. See Utah Code § 76-10-1605.

         II. ANALYSIS

         A. The Court Has Jurisdiction to Award Attorney's Fees Under the UPUAA

          Plaintiffs first argue that, having dismissed the UPUAA claim by declining to exercise supplemental subject-matter jurisdiction thereon, this court has no power to award attorney's fees incurred in defending that claim. But a review of relevant precedent refutes this argument.

         “It is well established that a federal court may consider collateral issues after an action is no longer pending.” Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 395 (1990). Pursuant to this principle, the Tenth Circuit has held that “a district court may still award attorney's fees after dismissing the underlying action for lack of subject-matter jurisdiction . . . because a claim for attorney's fees gives rise to issues separate and distinct from the merits of the original cause of action.” D.A. Osguthorpe Family P'ship v. ASC Utah, Inc., 705 F.3d 1223, 1236 (10th Cir. 2013) (internal citation omitted). And this proposition holds when a state statute forms the basis for attorney's fees. See Lorillard Tobacco Co. v. Engida, 611 F.3d 1209, 1217 (10th Cir. 2010) (“[A] district court need not have subject matter jurisdiction to award attorney's fees pursuant to [Colorado law].”).

         Thus, as part of its jurisdiction to “consider collateral issues after an action is no longer pending, ” the court may award attorney's fees flowing from the dismissal of the UPUAA claim.

         B. Messrs. Weller and Odenath are Entitled to Attorney's Fees under the UPUAA

         The UPUAA contains a sweeping fee-shifting provision:

If an action, claim, or counterclaim brought or asserted by a private party under this section is dismissed prior to trial or disposed of on summary judgment, or if it is determined at trial that there is no liability, the prevailing party shall recover from the party who brought the action or asserted the claim or counterclaim the amount of its reasonable expenses incurred because of the defense against the action, claim, or counterclaim, including a reasonable attorney's fee.

Utah Code § 76-10-1605(8) (emphasis added). Thus, the UPUAA mandates the award of reasonable expenses, including a reasonable attorney's fee, incurred “because of the defense against” a UPUAA claim, when such ...


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