The opinion of the court was delivered by: McMILLEN, District Judge.
DECISION ON PLAINTIFFS' MOTION TO REMAND
Plaintiffs brought this action in the Circuit Court of Cook
County on behalf of themselves and others similarly situated
alleging that certain of defendant's loan charges are in
violation of Illinois law. Defendant removed the action to this
court pursuant to 28 U.S.C. § 1441, on the ground that its
practices are wholly controlled by federal statutory and
regulatory enactments. Plaintiffs have filed a motion to remand
this action to the state court, and for their costs. Defendant
has filed a motion to dismiss this action for failure to state a
claim, based upon the doctrine of federal pre-emption, but we
reach the controlling question of this court's subject-matter
jurisdiction first. See 28 U.S.C. § 1447(c).
Section 1441(a) limits this court's jurisdiction on removal to
cases over which the federal district courts have original
jurisdiction. Defendant relies upon this court's federal question
jurisdiction, under 28 U.S.C. § 1331. To bring a case within this
section, a right or immunity created by the Constitution or laws
of the United States must be an essential element of plaintiff's
cause of action, and the federal controversy must be disclosed on
the face of the complaint, unaided by the answer or the petition
for removal. Gully v. First National Bank in Meridian,
299 U.S. 109, 57 S.Ct. 96, 81 L.Ed. 70 (1936). It is immaterial that
plaintiff could have proceeded on some federal ground. Pan
American Petroleum Corp. v. Superior Court, 366 U.S. 656, 81
S.Ct. 1303, 6 L.Ed.2d 584 (1961).
Defendant nonetheless relies upon cases holding that where the
controversy will be controlled by federal law not appearing on
the face of the complaint, the action falls within an exception
permitting removal because of the doctrine of federal
pre-emption. E.g., Rettig v. Arlington Heights Federal Savings
and Loan Association, 405 F. Supp. 819 (N.D.Ill. 1975); Bailey v.
First Federal Savings & Loan Association of Ottawa, 467 F. Supp. 1139
(C.D.Ill. 1979). Assuming that these cases correctly apply
28 U.S.C. § 1441, they clearly involved Federal questions, in
contrast to the narrow and specific local issues presented by the
complaint in this case.
The approach taken by defendant is inconsistent with the
controlling law of this circuit, Bailey v. Logan Square
Typographers, Inc., 441 F.2d 47 (7th Cir. 1971), as well as the
law of other circuits which have squarely decided this question.
State of Washington v. American League of Professional Baseball
Clubs, 460 F.2d 654 (9th Cir. 1972); Home Federal Savings and
Loan Association of Algona, Iowa v. Insurance Department of Iowa,
571 F.2d 423 (8th Cir. 1978). These cases recognize that, when
the doctrine of federal pre-emption is asserted as a defense,
plaintiff's claim does not arise under federal law. We therefore
resolve the question of this court's jurisdiction against
defendant and will remand it. Defendant's federal pre-emption
claim may be raised in the state court.
Plaintiffs also move for their costs in responding to the
removal petition. While § 1447(c) permits an award of "just
costs" upon remand to the state court, we find that defendant
presented a substantial jurisdictional question, and we therefore
deny that portion of plaintiffs' motion.
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED that plaintiffs'
motion to remand this action to the Circuit Court of Cook County
is granted, pursuant to 28 U.S.C. § 1447(c). Plaintiffs' motion
for costs is denied.
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