United States District Court, N.D. Indiana, Hammond Division
OPINION AND ORDER
matter is before the Court on the Motion to Remand and For
Costs and Expenses Caused by Improper Removal, filed by
Plaintiff, Countryside Bank, on April 6, 2018 (DE #3). For
the reasons set forth below, the motion to remand (DE #3) is
GRANTED and this case is
REMANDED back to the Lake County Superior
Court, Indiana. Additionally, Plaintiff is
AWARDED its just costs and actual expenses,
including attorneys' fees, as a result of the removal.
Countryside Bank may submit a request for reimbursement for
the costs as a result of the removal on or before June 12,
2018. Sheikh may file a response on or before June 26, 2018.
Countryside Bank, filed this mortgage foreclosure action on
December 27, 2017, in the Lake County Superior Court. (DE
#2.) The loan was guaranteed by the U.S. Small Business
Administration (“SBA”). Defendant, Zafar Sheikh,
is neither a borrower nor a guarantor of the defaulted loan.
The complaint asserts a state law claim against Sheikh for
improperly transferring the bank's collateral. (Compl.
¶¶ 27-29, 63-67.)
filed a notice of removal on April 4, 2018 (DE #1), asserting
federal question jurisdiction due to Countryside Bank's
alleged failure to adhere to standard operating procedures
for SBA-guaranteed loans. He asserts that Countryside Bank
violated Federal Regulations, 13 CFR 101-147 “in
approving, disbursing, servicing and dealing with the
troubled loans [which] gives rise to federal
questions.” (DE #1 at 4.)
Bank now moves to remand, arguing the complaint does not
plead any federal claims, the Federal Regulations do not
create a private right of action, and the case was never
removable. Further, it requests an award of costs and
expenses pursuant to 28 U.S.C. § 1447. To date, no
response has been filed.
may be removed from state court to federal court if it is
based on statutorily permissible grounds and if it is timely.
Boyd v. Phoenix Funding Corp., 366 F.3d 524, 529
(7th Cir. 2004). See also 28 U.S.C. § 1441; 28
U.S.C. § 1446. The Seventh Circuit has directed that,
“[c]ourts should interpret the removal statute narrowly
and presume that the plaintiff may choose his or her forum.
Any doubt regarding jurisdiction should be resolved in favor
of the states, and the burden of establishing federal
jurisdiction falls on the party seeking removal.”
Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th
Cir. 1993)(citations omitted). The party seeking removal must
demonstrate that removal is proper. Boyd, 366 at
529. When challenged, the party seeking federal jurisdiction
bears the burden of proving by a preponderance of the
evidence that a case belongs in federal court. Meridian
Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 540-43 (7th
defendant can remove “any civil action brought in a
State court of which the district courts of the United States
have original jurisdiction.” 28 U.S.C. § 1441(a).
The district court has original jurisdiction over claims
arising under federal law. 28 U.S.C. § 1331.
“[T]he presence or absence of federal-question
jurisdiction is governed by the ‘well-pleaded complaint
rule, ' which provides that federal jurisdiction exists
only when a federal question is presented on the face of the
plaintiff's properly pleaded complaint.”
Citadel Sec., LLC v. Chi. Bd. Options Exch., Inc.,
808 F.3d 694, 701 (7th Cir. 2015)(citations omitted).
considering a motion for remand, the court must examine the
plaintiffs' complaint at the time of the defendant's
removal and assume the truth of all factual allegations
contained within the original complaint.” Scouten
v. MNL-FTS, LLC, 708 F.Supp.2d 729, 731 (N.D. Ill.
2010)(quotations and citation omitted).
Motion to Remand
question jurisdiction arises where the well-pleaded complaint
contains a federal cause of action or, alternatively,
“requires resolution of a substantial question of
federal law in dispute between the parties.” Baker
v. Johnson & Johnson, 709 F.Supp.2d 677, 682 (S.D.
Ill. 2010)(quoting Franchise Ta Bd. Of State of Cal. v.
Construction Laborers Vacation Trust for S. Cal., 463
U.S. 1, 13 (1983)).
the complaint alleges only state law claims arising from
breaches of loan contracts and improper disposition of
collateral that secured the loan. None of the claims in the
complaint implicate the SBA's guaranty or federal
regulations. Sheikh has recently moved for leave to file a
counterclaim (DE ##6, 9) for violations of the SBA, Truth in
Lending Act, and RICO, but the Court looks at the complaint
at the time it was filed in determining whether it has
subject matter jurisdiction. Coffman v. Dutch Farms,
Inc., 2:16-CV-157, 2017 WL 1217238, at *2 (N.D. Ind.
Feb. 24, 2017). “The Court must look to the original
complaint as it existed at the time of removal.”
Brokaw v. Boeing Co., 137 F.Supp.3d 1082, 1107 (N.D.
Ill. 2015); see also Gossmeyer v. McDonald, 128 F.3d
481, 487 (7th Cir. 1997) (“[W]hether subject matter
jurisdiction exists is a question answered by looking at the
complaint as it existed at the time the petition for removal
courts that have considered the question have unanimously
agreed that the Small Business Act does not create a private
right of action for individuals. See, e.g., Crandal v.
Ball, Ball & Brosamer, 99 F.3d 907, 909 (9th Cir.
1996) (collecting cases); Mallett v. Wisconsin Div. of
Vocational Rehabilitation, 130 F.3d 1245, 1250 (7th Cir.
1997). Where there is no private cause of action, an alleged
violation of federal regulations does not create federal