United Citizens Bank of Southern Kentucky v. Hudson, 1:14-cv-00174

United Citizens Bank of Southern Kentucky filed a mortgage foreclosure action in Russell Circuit Court against Jimmy and Patsy (Patty) Hudson.
Defendants, pro se, filed a notice of removal to the U.S. District Court for the Western District of Kentucky, asserting federal jurisdiction under the FDCPA and FCRA.
The complaint is a state-law foreclosure complaint with an appended "Federal Fair Debt Collection Practices Act Notice."
Court reviewed subject-matter jurisdiction sua sponte per Fed. R. Civ. P. 12(h)(3) and 28 U.S.C. § 1441/§ 1447 standards.
No diversity jurisdiction: plaintiff and defendants are all Kentucky citizens.
Defendants also moved for in forma pauperis status; court denied that motion as moot because the case was remanded.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether federal-question jurisdiction exists for removal	Foreclosure is a state-law action; no federal question	FDCPA and FCRA involvement (notice/appended section) establishes federal jurisdiction	No federal-question jurisdiction; appended FDCPA notice does not create federal claim
Whether federal defenses or counterclaims support removal	Federal defenses do not transform a state complaint into federal	Defendants contend they could assert FDCPA/FCRA defenses or counterclaims	Federal defenses or potential counterclaims do not confer jurisdiction; removal improper
Whether diversity jurisdiction exists	Plaintiff and defendants are Kentucky citizens	Defendants did not argue diversity exists	No diversity jurisdiction; parties are not diverse

United States v. Hays, 515 U.S. 737 (court must independently examine jurisdiction)
Long v. Bando Mfg. of Am., Inc., 201 F.3d 754 (burden of proof on removing party)
Conrad v. Robinson, 871 F.2d 612 (removal burden principles)
Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100 (removal narrowly construed)
Palkow v. CSX Transp., Inc., 431 F.3d 543 (federalism concerns in removal)
Coyne v. Am. Tobacco Co., 183 F.3d 488 (doubts resolved in favor of remand)
Franchise Tax Bd. v. Constr. Laborers Vacation Trust, 463 U.S. 1 (look to plaintiff’s well-pleaded complaint)
Gentek Bldg. Prods., Inc. v. Steel Peel Litig. Trust, 491 F.3d 320 (plaintiff is master of the complaint)
Loftis v. United Parcel Serv., Inc., 342 F.3d 509 (state claim not recharacterized as federal for removal)
Caterpillar Inc. v. Williams, 482 U.S. 386 (federal defense does not confer jurisdiction)
Chase Manhattan Mortg. Corp. v. Smith, 507 F.3d 910 (foreclosure actions do not raise federal question)
Fed. Nat’l Mortg. Assoc. v. Le Crone, 868 F.2d 190 (foreclosure raises no federal issues)
Merrell Dow Pharm. Inc. v. Thompson, 478 U.S. 804 (federal-question jurisdiction limits)
Holmes Group, Inc. v. Vornado Air Circulation Sys., Inc., 535 U.S. 826 (federal counterclaim does not create jurisdiction)