6:24-cv-06077
W.D.N.Y.Mar 11, 2025Background
- Plaintiffs Rosemary, Shannon, and Casey McCullough filed suit in New York State Supreme Court against Maximus Education, LLC (d/b/a Aidvantage), alleging improper consolidation of certain student loans.
- Defendant removed the case to federal district court, asserting federal question jurisdiction based on the Higher Education Act (HEA) and later, for the first time in its response to the court, diversity jurisdiction.
- Plaintiffs did not respond to the defendant's pending motion to dismiss.
- The federal court questioned sua sponte whether it had subject matter jurisdiction, particularly since the HEA does not provide a private right of action.
- Defendant argued in its show-cause response that federal question or diversity jurisdiction exists, but the court found these arguments unpersuasive and untimely.
- The court ultimately determined it lacked jurisdiction and remanded the case back to state court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Federal question jurisdiction via HEA | Claims involve student loans | Jurisdiction exists under HEA; relief implicates federal law | No private right of action under HEA; no federal jurisdiction |
| Necessary party (Secretary of Education) | Not addressed | Secretary is necessary party, confers jurisdiction | Secretary is not a party; no jurisdiction conferred |
| Grable/"significant federal issue" exception | State law claim not federal | State law claim implicates significant federal issue | Requirements for Grable exception not met |
| Diversity jurisdiction (timeliness of claim) | Not addressed | Asserted for first time after removal period | Untimely to amend notice to add diversity jurisdiction |
Key Cases Cited
- Blockbuster, Inc. v. Galeno, 472 F.3d 53 (2d Cir. 2006) (the party asserting federal jurisdiction bears the burden of establishing jurisdiction)
- Lupo v. Human Affairs Int’l, Inc., 28 F.3d 269 (2d Cir. 1994) (removal statute interpreted narrowly; jurisdictional grounds cannot be added after 30 days)
- Empire Healthchoice Assurance, Inc. v. McVeigh, 547 U.S. 677 (2006) (Supreme Court is sparing in recognizing state-law claims implicating federal jurisdiction)
- Grable & Sons Metal Prod., Inc. v. Darue Eng’g & Mfg., 545 U.S. 308 (2005) (outlines when state-law claims may implicate significant federal issues for jurisdiction)
- Gunn v. Minton, 568 U.S. 251 (2013) (federal issue in state-law claim must meet four-part test for jurisdiction)