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OCTOBER TERM, 2005 Syllabus

MARTIN et ux. v. FRANKLIN CAPITAL CORP. et al. certiorari to the united states court of appeals for the tenth circuit No. 04–1140. Argued November 8, 2005—Decided December 7, 2005 In removing petitioner Martins’ state-court class action to federal court on diversity grounds, respondents (collectively, Franklin) acknowledged that the amount in controversy was not clear from the face of the state­ court complaint, but argued that this requirement for federal diversity jurisdiction was nonetheless satisﬁed under precedent suggesting that punitive damages and attorney’s fees could be aggregated in making the calculation. The District Court denied the Martins’ motion to remand to state court and eventually dismissed the case with prejudice. Re­ versing and remanding with instructions to remand to state court, the Tenth Circuit agreed with the Martins that their suit failed to satisfy the amount-in-controversy requirement and rejected Franklin’s aggregation theory under decisions issued after the District Court’s remand decision. The latter court then denied the Martins’ motion for attorney’s fees because Franklin had legitimate grounds for believing this case fell within federal-court jurisdiction. Afﬁrming, the Tenth Circuit dis­ agreed with the Martins’ argument that attorney’s fees should be granted on remand as a matter of course under 28 U. S. C. § 1447(c), which provides that a remand order “may require payment of just costs and any actual expenses, including attorney fees,” but provides little guidance on when fees are warranted. The court noted that fee awards are left to the district court’s discretion, subject to review only for abuse of discretion; pointed out that, under Circuit precedent, the key factor in deciding whether to award fees is the propriety of removal; and held that, because Franklin had relied on case law only subsequently held to be unsound, its basis for removal was objectively reasonable, and the fee denial was not an abuse of discretion. Held: Absent unusual circumstances, attorney’s fees should not be awarded under § 1447(c) when the removing party has an objectively reasonable basis for removal. Conversely, where no objectively reason­ able basis exists, fees should be awarded. This Court rejects the Martins’ argument for adopting a strong presumption in favor of award­ ing fees. The reasons for adopting such a presumption in Newman v. Piggie Park Enterprises, Inc., 390 U. S. 400, 402 (per curiam), are ab­ sent here. Also rejected is Franklin’s argument that § 1447(c) simply grants courts jurisdiction to award costs and attorney’s fees when other­