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Jackson County Bank v. Dusablon

United States District Court, S.D. Indiana, Indianapolis Division

December 26, 2019

JACKSON COUNTY BANK, Plaintiff,
v.
MATHEW R DUSABLON, Defendant. MATHEW R DUSABLON, Counter Claimants,
v.
JACKSON COUNTY BANK, Counter Defendants.

          ORDER DENYING DEFENDANT'S MOTION FOR RELIEF

          SARAH EVANS BARKER, JUDGE

         This cause is before the Court on Defendant Mathew R. DuSablon's Verified Motion for Relief, Dkt. 42, from this Court's Order on Plaintiff's Petition for Costs and Fees, Dkt. 25, pursuant to Federal Rule of Civil Procedure 60(b)(3). Defendant requests an evidentiary hearing on this motion. Dkt. 62.

         For the reasons detailed below, we DENY Defendant's Motion for Relief. We conclude that an evidentiary hearing is not necessary in resolving the motion; therefore, this request is also DENIED.

         Background

         On February 28, 2018, Plaintiff Jackson County Bank (“JCB”) initiated this action in Jackson Superior Court I (Indiana), charging Defendant with breach of a covenant not to compete, breach of fiduciary duty, and other business torts created by state and common law. Dkt. 1, Ex. A. As we have previously summarized:

The complaint alleges that Plaintiff, a state-chartered bank, employed Defendant as an “Investor Services Officer.” Dkt. 1 Ex. A, at 8 ¶ 5. Though Plaintiff is not itself a registered securities broker-dealer, it had entered into a third-party arrangement with a registered broker-dealer [INVEST Financial Corporation] to offer such services to its customers. Id. at 7 ¶ 4. By its terms, that arrangement was due to expire on January 16, 2018. Id. at 13 ¶ 32. Beginning in July 2017, one of Defendant's work assignments was to assist Plaintiff in locating a new third-party broker-dealer with which to enter into a similar arrangement, id. at 9 ¶ 15, and in establishing Plaintiff's investment business under the new arrangement. Id. at 13 ¶ 32. Over the ensuing six months, Defendant failed to do much of the work assigned to him and abruptly resigned his position on January 8, 2018. Id. at 13- 14 ¶¶ 35 -36. Plaintiff thereafter learned that Defendant had requested that his customer accounts be transferred from Plaintiff's former third-party broker-dealer into his own name, Id. at 14 ¶ 38, and that he had, in fact, started a new business to compete with Plaintiff. Id. at 15 ¶¶ 41-42.

         On May 2, 2018, Defendant removed this case from the Jackson Superior Court I purportedly invoking our subject matter jurisdiction, pursuant to 28 U.S.C. § 1331. Defendant essentially asserted that Plaintiff's Complaint implied that, in order for Defendant (a registered broker-dealer) to compete in violation of his employment agreement, Plaintiff (not a registered broker-dealer) must be engaged in securities transactions in violation of federal securities law, specifically the Securities Exchange Act. Dkt. 1, Ex. B. According to Defendant, the matter could not be adjudicated without reference to the Securities Exchange Act. He further asserted that “exclusive jurisdiction relating to [sic] the [Exchange] Act” is vested in the federal courts. Id. Finally, he argued that application of the Securities Exchange Act and its related regulations would show that many of his alleged wrongdoings were actually acts required by federal securities rules. Id. Thus, according to Defendant's theory of jurisdiction, we had federal question jurisdiction based on the Securities Exchange Act claims.

         Plaintiff promptly sought to remand this matter on May 11, 2018, based on the obvious: Plaintiff's complaint includes only state law claims. Dkt. 9, 10. We agreed with Plaintiff and rejected Defendant's attempted invocation of federal question jurisdiction because the case indisputably did not arise under federal law. We explained:

This Court has subject matter jurisdiction of all civil actions “arising under” federal law. 28 U.S.C. § 1331. A cases “arises under” federal law if “a well-pleaded complaint establishes either that federal law creates the cause of action or that the plaintiff's right to relief necessarily depends on resolution of a substantial federal question.” Franchise Tax Bd. v. Constr. Laborers Vacation Trust for S. Cal., 463 U.S. 1, 27-28 (1983).

         Dkt. 19, at 4. We reiterated the well-settled principle that “[a] suit arises under the law that creates the cause of action, ” further reminding Defendant:

[T]he federal question must appear on the face of the plaintiff's well pleaded complaint. Franchise Tax Bd., 463 U.S. at 9-10. “[A] plaintiff is [the] master of [its] own complaint and may seek to avoid federal jurisdiction by pleading only state law claims[.]” Bastien v. AT&T Wireless Servs., Inc., 205 F.3d 983, 986 (7th Cir. 2000) (citing Franchise Tax Bd., 463 U.S. at 10). Removal is not defeated by the plaintiff's efforts to “artfully” plead its way around the essentially federal character of its lawsuit. Rivet v. Regions Bank of La., 522 U.S. 470, 475 (1998) (citing Franchise Tax Bd., 463 U.S. at 22).

         Id. In applying the well-pleaded complaint rule, we rejected Defendant's invocation of federal question jurisdiction for the following reasons: Defendant conceded that a federal question was not pled in the Complaint; Plaintiff did not seek to enforce any liability or duty created by the Securities Exchange Act, and thus the exclusive federal jurisdiction contemplated within this act was not implicated; and Defendant's preemption defense, which might ultimately prove successful, did not confer federal question jurisdiction. Id. at 6-9. We also noted that Defendant cited no legal support for his argument that all lawsuits between individuals in the security industry relating to competition must necessarily “arise under” the Securities and Exchange Act, nor did he present any legal analysis to explain the ways in which this case fit into the narrow circumstances established by Grable & Sons Metal Prods., Inc. v. Darue Eng'g & Mfg., 545 U.S. 308, 314 (2005)[1] (finding federal jurisdiction over a state-law action for quiet title to real property, which the federal government had seized from plaintiff and sold to defendant, when the validity of the seizure under federal law was “the only legal or factual issue contested in the case”). Dkt. 19, at 9.

         We reiterated the well-settled legal proposition that, “a cause cannot be removed . . . simply because, in the progress of the litigation, it may become necessary to give a construction to the Constitution or laws of the United States[.]” Id. at 11. Noting that Defendant had ignored long-standing principles of the well-pleaded complaint rule and buried the relevant question of whether Plaintiff's Complaint was a creature of federal law under a “blanketing snowfall” of explanations as to why federal law was relevant, we rejected that theory. Id.

         Our Remand Order held that “clearly established law demonstrated that [Defendant] had no basis for removal, ” thereby rendering the removal “objectively unreasonable.” Id. at 15. We thus deemed it appropriate to award Plaintiff a reimbursement of its costs and fees resulting from the wrongful removal, noting that the impropriety of which “was not a close question” based on Defendant's “obviously deficient arguments.” Id. at 16. We directed Plaintiff to submit a list of its specific costs and fees, which it timely did. Id. at 17, Dkt. 22. Following our review of Defendant's objections to Plaintiff's assessment of its costs as well as a careful review of the reasonableness of Plaintiff's itemized costs, we entered our Order on Plaintiff's Petition for Costs and Fees (“Order on Costs and Fees”) on July 19, 2018, requiring Defendant to pay to Plaintiff the amount of $9035.61, comprised of $8776 in attorney fees and $259.61 in costs. Dkt. 25.

         On August 20, 2018, Defendant filed a Notice of Appeal challenging our Remand Order as well as the Order on Costs and Fees. Dkt. 26. On February 6, 2019, the Seventh Circuit's mandate dismissing the appeal was handed down, stating: “An order remanding a case to the State court from which it was removed is not reviewable on appeal or otherwise.” Dkt. ...


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