forth above, Merrill Lynch “must establish any disputed aspect of diversity jurisdiction
by offering evidence which proves to a reasonable probability that jurisdiction exists.”

Smith v. Am. Gen. Life & Acc. Ins. Co., 337 F.3d 888, 892 (7th Cir. 2003) (quotation

omitted). This requires Merrill Lynch to “come forward with competent proof that [it
has] satisfied the jurisdictional threshold and not simply point to the theoretical
possibility of recovery for certain categories of damages.” McMillian v. Sheraton Chi.
Hotel & Towers, 567 F.3d 839, 845 (7th Cir. 2009). Indeed, a defendant’s “good-faith
estimate of the stakes” is only acceptable if it is “plausible and supported by a

preponderance of the evidence.” Oshana, 472 F.3d at 511 (emphasis added).

In its response to Stratton’s motion to remand, Merrill Lynch attempts to satisfy this

burden by stating that:

Stratton stands to recover attorneys’ fees for both the research and drafting

work that went into filing his state court complaint, as well as the hours

his attorney spent representing him at the Illinois Human Rights

Commission. Assuming a modest rate of $200 an hour, Stratton’s attorney

would only need to have spent 25 hours on those tasks to reach $5,001 in

fees and push the amount in controversy over the threshold.
Def.’s Mem. Opposing Remand to State Court 4. While Merrill Lynch’s assumptions
regarding billing rates and hours worked are plausible, they do not rise to the level of
competent proof. See, e.g., Am. Econ. Ins. Co. v. T.J. Copy Prods., Inc., No. 04 C 107,
2004 WL 842510, at *2-3 (N.D. Ill. Apr. 20, 2004) (“[T]he assertions as to the amount of

attorneys’ fees potentially at issue in the underlying action are vague generalizations

§ 5/8A-104(G) (providing for payment “to the complainant [of] all or a portion of the costs of
maintaining the action, including reasonable attorney fees”), the Seventh Circuit has nevertheless
held that attorney’s fees may be considered in determining the jurisdictional amount even when
the state statute permitting attorney’s fees labels the fees as costs, see Hart v. Schering-Plough
Corp., 253 F.3d 272, 274 (7th Cir. 2001); Ross v. Inter Ocean Ins. Co., 693 F.2d 659, 661 (7th
Cir. 1982), abrogated on other grounds by Hart, 253 F.3d at 274. The Court therefore considers
attorney’s fees in the amount in controversy analysis.



Ill. CONCLUSION
For the foregoing reasons, there is no basis for federal subject matter jurisdiction in
this case. Accordingly, Stratton’s motion to remand is granted. The Clerk is directed to
remand this case to the Circuit Court of Cook County.

IT IS SO ORDERED.

CHARLES RONALD worc tudge
United States District Court

DATED: April 25, 2012

10



Arrest Record.

(A) Unless otherwise authorized by law, it is a civil rights violation for
any employer, employment agency or labor organization to inquire into or
to use the fact of an arrest . . . as a basis to refuse to hire, to segregate, or
to act with respect to recruitment, hiring, promotion, renewal of
employment, selection for training or apprenticeship, discharge, discipline,
tenure or terms, privileges or conditions of employment.

(B) The prohibition against the use of the fact of an arrest contained in this
Section shall not be construed to prohibit an employer, employment
agency, or labor organization from obtaining or using other information
which indicates that a person actually engaged in the conduct for which he
or she was arrested.

(emphasis added).
“Complete preemption ‘confers exclusive federal jurisdiction in certain instances
where Congress intended the scope of a federal law to be so broad as to entirely replace

any state-law claim. In re Repository Techs., Inc., 601 F.3d 710, 722 (7th Cir. 2010)

(quoting Franciscan Skemp Healthcare, Inc. v. Cent. States Joint Bd. Health & Welfare
Trust Fund, 538 F.3d 594, 596 (7th Cir. 2008)). This narrow jurisdictional doctrine
“applies to subjects over which federal law is so pervasive that it is impossible to make
out a state-law claim, no matter how careful the pleading.” Hughes v. United Air Lines,
Inc., 634 F.3d 391, 393 (7th Cir. 2011). Complete preemption is not a defense but rather
“means that the claim itself arises under federal law.” Id. (citing Franchise Tax Bd. v.

Constr. Laborers Vacation Trust, 463 U.S. 1 (1983)); see also Wis. Interscholastic

Athletic _Ass’n_v. Gannett _Co., 658 F.3d 614, 620(7th Cir. 2011) (“[T]he phrase

‘complete preemption’ is a misnomer, having nothing to do with preemption and

everything to do with federal occupation of a field.”).?

? By contrast, ordinary preemption “is a federal defense to a plaintiff's state-law claim and thus
cannot serve as a basis for the federal court’s power under § 1331.” Wisc. Interscholastic
Athletic Ass’n, 658 F.3d at 620; see also Caterpillar Inc. v. Williams, 482 U.S. 386, 393 (1987)
(“[A] case may not be removed to federal court on the basis of a federal defense, including the
defense of pre-emption.”).



which are not supported by any specific facts . . . this type of conclusory assertion is not
competent proof that the amount in controversy exceeds $75,000.”). Furthermore,
although not his burden to disprove jurisdiction, Stratton states in his reply brief that his
attorney’s fees do not exceed $4,300:

Plaintiffs counsel has spent 14.20 hours of time up to the date the action

was removed to federal court and has a billing rate of $300. The time

included reviewing the Human Rights Act, drafting a demand letter to

Merrill Lynch, preparing an 8 paragraph discrimination charge, attending

a 2 1/2 hour fact-finding conference and preparing the Circuit Court

Complaint which essentially mimicked the prior discrimination charge.
Pl.’s Reply in Support of Mot. to Remand 4, n.2. That Stratton may seek close to
$75,000 is not enough for federal jurisdiction; under § 1332(a), the amount in
controversy must exceed $75,000. As set forth above, the Court should interpret the
removal statute narrowly and resolve any doubt in favor of plaintiff's choice of forum in
state court. Schur, 577 F.3d at 758. Simply put, Merrill Lynch has not come forward
with any proof, let alone “competent proof,” to suggest that the fees incurred at the time
of removal would carry the amount in controversy over the jurisdictional hurdle.

2. Complete Preemption
Alternatively, Merrill Lynch contends that there is federal question jurisdiction

because § 1829, part of the FDIA, completely preempts § 5/2-103. Section 1829
provides, in relevant part:

(A) any person who has been convicted of any criminal offense involving

dishonesty or a breach of trust or money laundering, or has agreed to enter

into a pretrial diversion or similar program in connection with a

prosecution for such offense, may not—

(i) become, or continue as, an institution-affiliated party with respect

to any insured depository institution;

(emphasis added). Section 5/2-103 provides, in relevant part:



Moreover, Merrill Lynch fails to satisfy a basic prerequisite to complete
preemption—the identification of “a federal cause of action that includes the same
ingredients as the state claim.” In re Repository Techs., Inc., 601 F.3d at 723 (quotation
omitted). Merrill Lynch contends that § 1829 “clearly conflicts with and overrides” §
5/2-103. Def.’s Mem. Opposing Remand to State Court 7. Merrill Lynch is mixing
apples and oranges. Whereas § 1829 prohibits persons convicted of certain criminal
offenses from institutional affiliation with any insured depository institution, § 5/2-103
prohibits an employer from using “the fact of an arrest” as a basis to refuse to hire or to
discharge an employee. Indeed, the Illinois law states explicitly that it “does not extend

to prior convictions, which may be used ‘in evaluating the qualifications and character of

an employee or a prospective employee.’” Jansen v. Packaging Corp. of Am., 123 F.3d
490, 545 n.35 (7th Cir. 1997) (quoting 775 ILCS 5/2-103); see also Beard v. Sprint
Spectrum, LP, 833 N.E.2d 449, 453 (Ill. App. Ct. 2005) (“In enacting 775 ILCS 5/2-
103(A), the intent of the legislature was to prevent inquiry into mere charges or
allegations of criminal behavior but to allow inquiry where criminal conduct has been
proven.”). These statutes do not involve the “same ingredients” and they are plainly not
in conflict—§ 1829 says nothing about arrest records and § 5/2-103 explicitly allows
inquiry into convictions. There being no basis for complete preemption, the Court does

not have federal question jurisdiction in this case.



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
WILLIAM STRATTON, )
)
Plaintiff, )
) 11C 8011
v. )
)
MERRILL LYNCH PIERCE FENNER & )
SMITH, INC., )
) Hon. Charles R. Norgle
Defendant. )

OPINION AND ORDER
Before the Court is Plaintiff William Stratton’s (“Stratton”) Motion to Remand
Action to State Court. For the following reasons, the motion is granted.
I. BACKGROUND
Stratton brought this action in the Circuit Court of Cook County, alleging that
Defendant Merrill Lynch Pierce Fenner & Smith, Inc. (“Merrill Lynch”) violated the
Illinois Human Rights Act (“IHRA”), 775 ILCS 5/2-103, when it inquired into his arrest
record and used that record as a basis for terminating his employment. Stratton claims to
have suffered $20,000 in lost wages and $50,000 in “compensatory damages, including
embarrassment, humiliation and other emotional distress.” Compl. {J 22-23. Stratton
also seeks reinstatement as well as costs, which include reasonable attorney’s fees under
the IHRA. See 775 ILCS 5/8A-104(G).
Merrill Lynch filed a timely notice of removal on November 10, 2011. Merrill
Lynch contends that there is federal jurisdiction pursuant to 28 U.S.C. §1332 because
there is complete diversity and the amount in controversy exceeds $75,000.

Alternatively, Merrill Lynch contends that there is federal jurisdiction pursuant to 28



To determine whether a claim is subject to complete preemption, the Court asks
whether “Congress clearly intended completely to replace state law with federal law and

create a federal forum.” In re Repository Techs., Inc., 601 F.3d at 723 (quotation

omitted). “A prerequisite to complete preemption is identifying a federal cause of action
that includes the same ingredients as the state claim and provides some recovery.” Id.
(quotation omitted).

Merrill Lynch contends that § 1829 “is part of a wide-ranging federal regulatory
regime [that] . . . clearly conflicts with and overrides contrary state laws such as 775 Ill.
Comp. Stat. 5/2-103.” Def.’s Mem. Opposing Remand to State Court 7. In support,
Merrill Lynch cites to cases holding that the National Bank Act and the FDIA completely
preempt state usury laws. See id. 6-7. From these usury law cases, Merrill Lynch
concludes that “Congress has so occupied the field of national bank regulation that any
claim against a national bank on an issue addressed under federal law, as § 1829 does
here, necessarily arises under federal law.” Id. 7. This argument is entirely without
merit.

Nothing in § 1829 demonstrates a Congressional intent to completely preempt state
civil rights employment laws, and Merrill Lynch fails to offer any analysis in support of
this contention. Instead, Merrill Lynch simply relies upon the above mentioned state
usury law cases—making no effort to explain how such cases might apply to this civil
rights case—and states in conclusory fashion that there is complete preemption. Merrill
Lynch “must do more than offer possible basis for removal and hope that the court will
do its own independent research and support [its] speculative conclusions.” Lawrence v.

Biotronik, Inc., No. 04 C 1876, 2004 WL 1881783, at *3 (N.D. Ill. Aug. 19, 2004).



Cir. 2008). “If punitive damages are available, subject matter jurisdiction exists unless it
is ‘legally certain’ that the plaintiff will be unable to recover the requisite jurisdictional

amount.” Id. (quoting Del Vecchio v. Conseco, Inc., 230 F.3d 974, 978 (7th Cir. 2000)).

Citing 775 ILCS 5/10-102(C)(1), Merril Lynch argues that “punitive damages may
be awarded for any civil rights violation” under the IHRA. Def.’s Mem. Opposing
Remand to State Court 2. Not so. While § 5/10-102(C)(1) provides for punitive
damages, Merrill Lynch fails to note that it applies “solely to civil actions arising under
Article 3 of this Act.” 775 ILCS 5/10-101. Article 3 applies to real estate transactions.
This case arises under Article 2, which applies to employment.

Punitive damages are not available under Article 2. As the Illinois Supreme Court
explained, the remedies available under Article 2 “are extensive” and include, among
other things: actual damages, cease and desist orders, hiring, reinstatement, promotion,
backpay, and fringe benefits. Baker v. Miller, 636 N.E.2d 551, 557 (Ill. 1994) (citing 775
ILCS 5/8A-104). “Noticeably absent is any provision for punitive damages.” Id.; see
also Page v. City of Chi., 701 N.E.2d 218, 228 (Ill. App. Ct. 1998) (noting that “the
Human Rights Act expressly limits its remedies to the relief identified within [§ 5/8A-
104]” and that this section “does not specifically provide a punitive damage remedy”).
Because punitive damages are not available under Article 2, the Court does not consider
them as part of the amount in controversy.

b. Attorney’s Fees

Merrill Lynch next argues that Stratton’s pre-removal attorney’s fees equal at least

$5,001, which brings the amount in controversy above the $75,000 threshold.' As set

' Section 1332(a) provides that the amount in controversy must exceed $75,000 “exclusive of
interests and costs.” While it is true that the IHRA provides attorney’s fees as part of costs, see



really for less than the jurisdictional amount.’” Oshana, 472 F.3d at 511 (quoting St. Paul

Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938)). “The party seeking

removal has the burden of establishing federal jurisdiction, and federal courts should
interpret the removal statute narrowly, resolving any doubt in favor of the plaintiff's

choice of forum in state court.” Schur v. L.A. Weight Loss Ctrs., Inc., 577 F.3d 752, 758

(7th Cir. 2009) (citing Doe v. Allied-Signal, Inc., 985 F.2d 908, 911 (7th Cir. 1993)); see

also St. Paul Mercury Indem. Co., 303 U.S. at 294 (“If [the plaintiff] does not desire to

try his case in the federal court he may resort to the expedient of suing for less than the
jurisdictional amount, and though he would be justly entitled to more, the defendant
cannot remove.”),

The parties agree that the amount in controversy is at least equal to the $70,000 in
actual damages claimed by Stratton. Stratton argues that, because he specifically alleges
only $70,000 in damages, the amount in controversy does not exceed $75,000. Merrill
Lynch argues that punitive damages and attorney’s fees “easily provide the additional
$5,001 needed to satisfy the amount in controversy requirement.” Def.’s Mem. Opposing
Remand to State Court 1. Merrill Lynch does not argue that Stratton’s actual damages
claims may themselves exceed $75,000. There is no dispute that that there is complete
diversity of citizenship.

a. Punitive Damages

Merrill Lynch first argues that punitive damages raise the amount in controversy
above the $75,000 threshold. When punitive damages are relied upon to satisfy the
amount in controversy, the Court must first determine whether they are recoverable under

the state law at issue. LM Ins. Corp. v. Spaulding Enters. Inc., 533 F.3d 542, 551 (7th



U.S.C. § 1331 because Stratton’s IHRA claim is completely preempted by Section 19 of
the Federal Deposit Insurance Act (“FDIA”), 12 U.S.C. § 1829.

Stratton filed the instant motion to remand on November 22, 2011, arguing that the
amount in controversy is less than $75,000 and that § 5/2-103 of the IHRA is not
completely preempted by § 1829. The motion to remand is fully briefed and before the
Court.

II. DISCUSSION
A. Stratton’s Motion to Remand

1. Amount in Controversy

The Court shall have original jurisdiction when there is complete diversity and when
“the matter in controversy exceeds the sum or value of $75,000, exclusive of interests and
costs.” 28 U.S.C. § 1332(a). The amount in controversy “is the amount required to
satisfy the plaintiff's demands in full” and is measured “in the event of removal, on the
day the suit was removed.” Oshana v. Coca-Cola Co., 472 F.3d 506, 510-11 (7th Cir.
2006) (citations omitted). For a defendant, establishing the amount in controversy “is
easier said than done when the plaintiff, the master of the complaint, does not want to be
in federal court and provides little information about the value of her claims.” Id. at 511.
Courts address this problem with a burden-shifting mechanism. A defendant’s “good-
faith estimate of the stakes is acceptable if it is plausible and supported by a
preponderance of the evidence.” Id.; see also Blomberg v. Service Corp. Int’l., 639 F.3d
761, 763 (7th Cir. 2011) (‘A good-faith estimate is acceptable if it is plausible and
adequately supported by the evidence.”). Once a defendant has made such a showing,

“the plaintiff can defeat jurisdiction only if ‘it appears to a legal certainty that the claim is