IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF ILLINOIS 

WILLIAM STRATTON, 

Plaintiff, 

v. 

MERRILL LYNCH PIERCE FENNER & 

SMITH, INC., 

Defendant. 

Case No. 1:11-cv-8011 

DEFENDANT’S MEMORANDUM OPPOSING REMAND TO STATE COURT

Plaintiff William Stratton (“Stratton”) believes this case should be remanded back to state 

court because he only asks for $70,000 in damages. But the Illinois Human Rights Act provides 

for punitive damages and attorneys’ fees, which easily provide the additional $5,001 needed to 

satisfy the amount in controversy requirement. This case is also properly in federal court 

because Stratton’s claim arises under federal law which completely preempts his state law claim. 

Accordingly, Plaintiff’s Motion to Remand should be denied. 

I. THIS COURT HAS DIVERSITY JURISDICTION UNDER 28 U.S.C. § 1332.

Stratton argues that the amount in controversy is below the $75,000 threshold because he 

only asks for $20,000 in back pay and $50,000 in compensatory damages. (Dkt. #9, ¶¶ 4-5.) But 

under Illinois law he is not limited to the amount he seeks in his complaint. Barbers, Hairstyling 

for Men and Women, Inc. v. Bishop, 132 F.3d 1203, 1205 (7th Cir. 1997). Just as the Southern 

District of Illinois recently found a prayer for $74,999 in damages insufficient to prevent 

diversity jurisdiction, this Court easily can and should determine that the amount in controversy 

here well exceeds $75,000. See Hunt v. Davita, Inc., No. 10-602-GPM, 2010 WL 5058372, at 

*2 (S.D. Ill. Dec. 6, 2010). 

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In a removal case, the relevant date for determining the amount in controversy is not the 

filing of the complaint as Stratton suggests (Dkt. #9, ¶ 6), but the date of removal. Oshana v. 

Coca-Cola, Inc., 472 F.3d 506, 510-511 (7th Cir. 2006) (citing BEM I, L.L.C. v. Antrhopologie, 

Inc., 301 F.3d 548, 552 (7th Cir. 2002)). The amount in controversy comprises actual, 

compensatory, and punitive damages, as well as attorneys’ fees if allowable. See Oshana, 472 

F.3d at 512. 

A. Punitive Damages

Punitive damages is a significant key to this case: “[i]f 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.” LM Ins. Corp. v. Spaulding Enterprises, Inc., 533 

F.3d 542, 551 (7th Cir. 2008). 

Under the Illinois Human Rights Act (“IHRA”), punitive damages may be awarded for 

any civil rights violation. 775 Ill. Comp. Stat. 5/10-102(C)(1). A potential punitive damages 

award is considered as part of the amount in controversy even where the complaint is silent on 

punitive damages. Oshana, 472 F.3d at 512 (including punitive damages when calculating the 

amount in controversy, even where “the complaint was silent about punitive damages,” because 

they were available under the relevant Illinois statute); see also Bishop, 132 F.3d at 1205 (like 

Fed. R. Civ. P. 54(c), Illinois law allows “parties to recover more than their pleadings seek”) 

(citing 735 Ill. Comp. Stat. 5/2-604). Accordingly, because punitive damages are available under 

the IHRA, Stratton cannot demonstrate with legal certainty that he will be unable to recover 

more than $75,000. See LM Ins., 533 F.3d at 551. Because he already prays for $70,000 in back 

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pay and compensatory damages, even an unusually small punitive damages award would push 

the total over the threshold.1

The district court in Hunt addressed a situation similar to this case. There Hunt brought 

retaliatory discharge claims and argued that the amount in controversy was under $75,000 

because she only prayed for $74,999 in damages, requiring a remand back to state court. 2010 

WL 5058372, at *1. In order to calculate the amount in controversy, the Court noted that 

punitive damages were available for such a claim and used “an award of punitive damages in a 

ratio of twice [plaintiff’s] actual damages” for its calculation. Id. at *2. A two-to-one ratio of 

punitive to actual damages is certainly well within reason, and if anything might be a 

conservative estimate of the amount of punitive damages Stratton stands to receive if he prevails 

on his IHRA claim. To reach the $75,000 threshold here, punitive damages need be only a small 

fraction—about seven percent—of Stratton’s claimed damages. But realistically any punitive 

damage award will at least equal, and more likely exceed, the amount of actual damages. Under 

that realistic appraisal, Stratton stands to recover total damages in the $140,000 to $210,000 

range.

2

B. Attorneys’ Fees

Even if the availability of punitive damages were not enough on its own—though it 

clearly is—the IHRA also allows attorneys’ fee awards for prevailing parties, 775 Ill. Comp. 

Stat. 5/10-102(C)(2), which easily lifts the amount in controversy over the $75,000 threshold. At 

the time of removal Stratton’s counsel had done the research and other work necessary to draft 

 1

 Merrill Lynch surmises that as this case progresses and potentially proceeds to trial, Stratton will 

obviously assert a damages figure for beyond that which he had initially alleged in what was an obvious effort to 

avoid removal. 

2

 For an Illinois discussion of ratios of punitive damages to actual damages, see Int’l Union of Operating 

Engineers, Local 150 v. Lowe Excavating Co., 870 N.E.2d 303, 320-325 (Ill. 2006) (reducing a 49-to-1 punitive 

damages award to an 11-to-1 ratio where defendant’s conduct was “minimally reprehensible”). 

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and file the state court complaint, which is significant legal work of itself; but counsel had also 

represented Stratton in the underlying administrative action before the Illinois Human Rights 

Commission.3 The IHRA provides for recovery of attorneys’ fees for “maintaining [an] action 

before the Department, the Commission and in any judicial review and judicial enforcement 

proceedings.” 775 Ill. Comp. Stat. 5/8A-104(G). Accordingly, 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.4

C. Summary

Potential punitive damages and attorneys’ fees undoubtedly supply the additional $5,000 

above Stratton’s $70,000 claimed damages needed to reach the jurisdictional threshold. The 

Seventh Circuit has held that “a good faith estimate of the stakes is acceptable [for the defendant 

to show the amount in controversy] if it is plausible and supported by a preponderance of the 

evidence.” Oshana, 472 F.3d at 511. Here, that standard is easily met because the additional 

$5,001 needed to reach $75,001 is amply supplied by potential punitive damages and attorneys’ 

fees. Stratton “can defeat jurisdiction only if it appears to a legal certainty that the claim is really 

for less than the jurisdictional amount.” See id. (internal quotation marks and citation omitted). 

Stratton cannot meet that exacting standard. Nor can Stratton defeat federal jurisdiction by 

 3

An individual may seek relief through an administrative forum by filing a complaint with the Illinois 

Human Rights Commission before filing suit under the IHRA. See 775 ILCS 5/10-102(3). In this case, Stratton 

elected–with the benefit of counsel–to initially file an administrative complaint with the Commission before 

pursuing relief in state court. 

4

 Even if Stratton’s attorney alternatively took this case solely on a contingency fee basis, the additional 

$5,001 he says is lacking would be supplied by a mere seven percent contingency fee; and it is simply not realistic 

that a contingency arrangement would be that minimal. 

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agreeing to limit his recovery to below $75,000 because “it is well settled that post-removal 

disclaimers of a jurisdictionally-sufficient recovery are ineffective to oust federal jurisdiction.” 

Hunt, 2010 WL 5058372, at *2 (citing several Seventh Circuit cases).5

Stratton’s civil rights claim under the Illinois Human Rights Act has put in controversy 

the $70,000 in damages he claims, as well as attorneys’ fees and punitive damages. Those 

amounts added together easily exceed $75,000. That amount in controversy, plus the complete 

diversity of the parties that Stratton acknowledges (Dkt. #9, ¶ 4), gives this Court subject matter 

jurisdiction under 28 U.S.C. § 1332. On this basis alone the Court can—and should—deny 

Stratton’s motion to remand. 

II. BECAUSE THE FEDERAL DEPOSIT INSURANCE ACT COMPLETELY 

PREEMPTS ILLINOIS LAW, THIS COURT HAS FEDERAL QUESTION 

JURISDICTION UNDER 28 U.S.C. § 1331.

Beyond diversity jurisdiction, the Court has federal question jurisdiction because 12 

U.S.C. § 1829, part of the Federal Deposit Insurance Act (“FDIA”), completely preempts 775 Ill. 

Comp. Stat. 5/2-103. Complete preemption provides a basis for federal question jurisdiction 

where “‘Congress clearly intended completely to replace state law with federal law and create a 

federal forum.’” In re Repository Technologies, Inc., 601 F.3d 710, 723 (7th Cir. 2010) (quoting 

Adkins v. Illinois Cent. R. Co., 326 F.3d 825, 835 (7th Cir. 2003)). Here, because Merrill Lynch 

is a subsidiary of Bank of America, N.A., Merrill Lynch is subject to federal banking laws, such 

as the FDIA. Through the FDIA and other acts, Congress has created a federal regulatory regime 

governing national banks that completely preempts state laws in the field. 

 5

 As noted by the court in Hunt, a plaintiff—like Stratton here—who pleads a specific amount under the 

$75,000 threshold must at filing give a binding stipulation or affidavit with his or her complaint that he or she will 

forego a recovery in excess of the jurisdictional minimum. Hunt, 2010 WL 5058372, at *2. Stratton did not do so 

here, nor has Stratton indicated at any point that he would ever forego seeking in excess of the $75,000 minimum 

amount. 

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In Beneficial Nat’l Bank v. Anderson, 539 U.S. 1, 11 (2003), the Supreme Court held that 

§§ 85 and 86 of the National Bank Act completely preempted state usury laws as applied to 

national banks. In doing so, the Court recognized “the special nature of federally chartered 

banks” which fall under a broad scheme of federal supervision because they need “protection 

from ‘possible unfriendly State legislation.’” Id. at 10 (quoting Tiffany v. Nat’l Bank of Mo., 85 

U.S. 409, 412 (1873)). Given that “special nature” and the strong history of federal oversight of 

national banks, the Court also noted that the “same federal interest that protected national banks 

from the state taxation that Chief Justice Marshall characterized as the ‘power to destroy,’ 

[McCulloch v. Maryland, 17 U.S. 316 (1819)], supports the established interpretation of §§ 85 

and 86 that gives those provisions the requisite pre-emptive force to provide removal 

jurisdiction.” Anderson, 539 U.S. at 11. Put another way, part of the reason federal law 

completely preempted state law in Anderson was that national banks are peculiarly federal 

creatures operating under primarily federal oversight. 

In addition to the National Bank Act, courts have also held that the FDIA itself 

completely preempts state law and supports federal question jurisdiction even where the plaintiff 

makes only state claims. In Discover Bank v. Vaden, the Fourth Circuit held that § 27 of the 

FDIA completely preempted conflicted state usury laws. 489 F.3d 594, 606-607 (4th Cir. 2007), 

rev’d on other grounds, 556 U.S. 49 (2009). Like the Supreme Court in Anderson, the Fourth 

Circuit in Vaden relied in part on the special relationship between federal law and national banks, 

noting that with the FDIA “Congress intended to ‘allow[ ] competitive equity among financial 

institutions, and reaffirm[ ] the principle that institutions offering similar products should be 

subject to similar rules.’” Vaden, 489 F.3d at 604 (citing 126 Cong. Rec. 6,908 (1980) 

(Statement of Sen. Bumpers)). In that light, the Fourth Circuit agreed with the Third Circuit, 

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which “compared the [National Bank Act] to the FDIA and found that both statutes completely 

preempt state-law usury claims.” Vaden, 489 F.3d at 605 (citing In re Cmty. Bank of N. Va., 418 

F.3d 277, 295 (3d Cir. 2005)). Although this case concerns a different provision of the FDIA, 

the same result should obtain. 

Section 1829 is part of a wide-ranging federal regulatory regime, and it clearly conflicts 

with and overrides contrary state laws such as 775 Ill. Comp. Stat. 5/2-103. 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. Even if 

the Court is unsatisfied that the amount in controversy supports diversity jurisdiction, Stratton’s 

motion to remand should still be denied because his claim arises under federal law. 

III. CONCLUSION

Stratton’s request for $70,000 in actual damages, coupled with potential punitive 

damages and attorneys’ fees allowed under the IHRA, easily meets the amount in controversy 

requirement; and at this point Stratton cannot show with legal certainty that he is unable to 

recover less than $75,000. But diversity jurisdiction notwithstanding, federal question 

jurisdiction still exists because the FDIA completely preempts the Illinois law under which 

Stratton proceeds. 

WHEREFORE, Defendant Merrill Lynch, Pierce, Fenner & Smith Incorporated 

respectfully requests that the Court deny Stratton’s motion to remand this action to state court. 

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Date: December 15, 2011 Respectfully submitted, 

By: /s/ Angela M. Tsevis 

One of the attorneys for defendant 

Merrill Lynch, Pierce, Fenner & 

 Smith Incorporated 

Jack D. Rowe 

jrowe@lathropgage.com 

Angela M. Tsevis 

atsevis@lathropgage.com 

Lathrop & Gage LLP 

2345 Grand Boulevard, Suite 2200 

Kansas City, Missouri 64108-2684 

Telephone: (816) 292-2000 

Telecopier: (816) 292-2001 

Bryan Clark 

bclark@lathropgage.com 

Lathrop & Gage LLP 

100 N. Riverside Plaza, Suite 2100 

Chicago, Illinois 60606 

Telephone: (312) 920-3300 

Telecopier: (312) 920-3301 

Attorneys for Defendant 

CERTIFICATE OF SERVICE

This is to certify that on this 15th day of December, 2011, a copy of the foregoing 

Defendant’s Memorandum Opposing Remand to State Court was served via U.S. Mail, postage 

prepaid, on the following counsel of record: 

Marshall J. Burt, Esq. 

Andrew J. Cohen, Esq. 

77 West Washington Street, Suite 1900 

Chicago, IL 60602 

Attorney for Plaintiff 

/s/ Angela M. Tsevis 

An Attorney for Defendant 

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