In the case of Gerald T. Martin, et ux. v. Franklin Capital Corporation et al., 2005, the United States Supreme Court ruled on an issue concerning attorney's fees in federal court cases that are remanded to state courts under the Erie doctrine (a legal principle that federal courts sitting in diversity apply state substantive law). The Martins had sued Franklin Capital for alleged violations of New Mexico’s Unfair Trade Practices Act and other claims related to a car purchase contract dispute. After removing the case to Federal District Court, Franklin sought dismissal or summary judgment which was granted by district court but reversed by appeals court due to lack of jurisdiction and ordered it back to state court. The main question before the Supreme Court was whether plaintiffs could recover their attorney's fees incurred during removal proceedings when a case is sent back (remanded) from federal court to state court without being decided on its merits because there was no subject-matter jurisdiction at all over any claim in complaint? The Supreme Court held that such fee awards are not automatic; instead they should be given based on fairness considerations i.e., only where removal was objectively unreasonable.

In the dissenting opinion for Gerald T. Martin, et ux. v. Franklin Capital Corporation et al., Justice Scalia disagreed with the majority's decision to remand the case back to lower courts for further proceedings on whether attorney fees should be awarded under 28 U.S.C §1447(c). He argued that this provision only allows a court to award costs and expenses, including attorney fees, when removing a case from state court was objectively unreasonable. According to him, there is no need for subjective bad faith or improper motive in removal as suggested by the majority’s interpretation of “improperly removed.” Instead, he believed that if a defendant had an objectively reasonable basis for seeking removal then they should not be penalized even if their attempt fails because it encourages defendants to test uncertain legal issues related to jurisdictional boundaries between state and federal courts.