SMALL BUSINESS LENDING, LLC v. PACK

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF INDIANA

INDIANAPOLIS DIVISION

SMALL BUSINESS LENDING, LLC, )

)

Plaintiff, )

)

v. ) No. 1:18-cv-02712-JMS-TAB

)

DAVID PACK, )

)

Defendant. )

ORDER

In 1788, Alexander Hamilton wrote that “[t]he great and primary use of a court of equity

is to give relief IN EXTRAORDINARY CASES.” The Federalist No. 83 (Alexander Hamilton)

(emphasis in original). In the context of preliminary injunctions, the notion that such a measure is

in an extraordinary remedy has been reiterated time and time again, most recently by the U.S.

Supreme Court in 2018. See Benisek v. Lamone, __ U.S. __, 138 S. Ct. 1942, 1943 (2018).

By its Motion for Preliminary Injunction, Plaintiff Small Business Lending, LLC (“SBL”)

has asked the Court for this extraordinary remedy by requesting that the Court enjoin Defendant

David Pack from engaging in certain activities related to a 2018 independent contractor agreement

between the two parties. [Filing No. 40.] In addition to SBL’s Motion for Preliminary Injunction,

two other Motions filed by SBL are currently pending before the Court: a Motion for Leave to File

Amended Complaint, [Filing No. 56]; and a Motion to Strike, [Filing No. 65]. All three motions

are fully briefed, and are now ripe for the Court’s review.

The Court will first consider SBL’s Motion to Strike. The Court will then turn to

jurisdictional arguments that are peppered throughout the parties’ briefs. Next, the Court will

consider the Motion for Preliminary Injunction. Lastly, the Court will take up SBL’s Motion for

Leave to File an Amended Complaint.

I.

MOTION TO STRIKE

SBL filed a Motion to Strike Mr. Pack’s proposed findings of fact and related exhibit.

[Filing No. 65.] SBL’s first argument relates to the amount in controversy – SBL argues that Mr.

Pack’s use of the parties’ settlement negotiations should be stricken because it violates Federal

Rule of Evidence 408. [Filing No. 65 at 1.] Next, SBL argues that Mr. Pack’s proposed findings

of fact should be stricken because they “reflect[] a desire to attain summary judgment on a plethora

of issues, when the only motion before the Court is whether or not to grant a measure of

preliminary relief to Plaintiff.” [Filing No. 65 at 2.] SBL gives the following examples in support

if its second argument: Mr. Pack argues in his proposed findings that SBL has abandoned its claim

related to the non-compete clause because “at this stage, comprehensive enforcement of the non-

compete clause is not sought,” [Filing No. 65 at 2]; Mr. Pack illegitimately argues that “he should

not be restrained from holding himself out as an agent of SBL” which is “a finding/ruling that

simply cannot be requested,” [Filing No. 65 at 3]; and Mr. Pack asks “the Court to give him a

blank check” by wanting “the right to use disseminate (sic) prospective borrower[s’] confidential

personally-identifying data, along with proprietary documents,” [Filing No. 65 at 3]. Lastly, SBL

argues that Mr. Pack’s proposed findings of fact should be stricken because his testimony indicates

that the jurisdictional amount is not met. [Filing No. 65 at 3-4.]

In response, Mr. Pack argues that there was “nothing improper at all about providing the

Court with SBL’s $490,000 demand,” because “the Seventh Circuit has explicitly held that Federal

Rule of Evidence 408 would not preclude reference to settlement discussions when deciding

jurisdictional questions,” and because “SBL incorporated its demand into its sworn answers to Mr.

Pack’s interrogatories.” [Filing No. 66 at 1-2.] Regarding SBL’s allegations as to jurisdiction,

Mr. Pack argues that “SBL cannot narrow its claim so as to defeat jurisdiction once removal has

occurred.” [Filing No. 66 at 3.]

The Court begins by observing that SBL’s Motion to Strike contains arguments that go

beyond articulating possible grounds to strike portions of Mr. Pack’s proposed findings of fact and

wades into arguments as to why the Court should remand this case. Any such arguments are

misplaced in a motion to strike and will not be considered in ruling upon the Motion. The Court

will consider jurisdictional allegations in Part II, infra.

Turning to SBL’s arguments in support of its Motion, the Court first considers whether an

email containing a settlement offer from SBL should be stricken as an exhibit. On this point,

SBL’s argument is without merit. It is true that Federal Rule of Evidence 408 provides that

evidence of compromise offers and negotiations are “not admissible. . . either to prove or disprove

the validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a

contradiction.” Fed. R. Evid. 408(a). However, settlement negotiations “can be considered ‘to

show the stakes’ when determining whether the amount in controversy is met.” Grinnell Mut.

Reinsurance Co. v. Haight, 697 F.3d 582, 585 (7th Cir. 2012) (citing Rising–Moore v. Red Roof

Inns, Inc., 435 F.3d 813, 816 (7th Cir. 2006)).

SBL’s other contentions in support of its Motion show that SBL disagrees with Mr. Pack’s

proposed findings of fact, not that such findings are inadmissible.1 Had the Court wished to

consider responses and replies to the proposed findings of fact, it would have ordered the parties

to file such documents. It did not, and will not strike Mr. Pack’s submission on the grounds that

1 The Court also notes that SBL’s failure to cite to the portions of Mr. Pack’s proposed findings of

fact with which it takes issue made the Court’s task in considering such arguments unnecessarily

cumbersome.

SBL disagrees with it. Moreover, SBL misapprehends the legal effect of findings of fact at this

stage of litigation. “[F]indings of fact and conclusions of law made by a court granting a

preliminary injunction are not binding at trial on the merits.” Univ. of Texas v. Camenisch, 451

U.S. 390, 395 (1981). Accordingly, SBL’s argument that Mr. Pack’s findings of fact are an attempt

to attain summary judgment is misplaced.

For the reasons set forth herein, SBL’s Motion to Strike, [Filing No. 65], is DENIED.

II.

JURISDICTION

The Court next addresses the parties’ arguments concerning jurisdiction. Following the

evidentiary hearing in this matter on May 13, 2019, SBL submitted a “Supplementation as to Law,”

in which it contends that after the evidentiary hearing, it became “apparent” that Mr. Pack’s “initial

submissions to this Court were invalid as to satisfaction of the jurisdictional amount at issue.”

[Filing No. 58 at 1.] SBL goes onto argue that “it is apparent that the actual monetary value of the

claim at the time of removal (and, to the present, given the current state of discovery; if discovery

shows otherwise, however, then, at that time, diversity jurisdiction may exist) was approximately

$20,038, far less than [Mr.] Pack’s conjectures.” [Filing No. 58 at 2.]

In response, Mr. Pack alleges that SBL’s Complaint “included a prayer for disgorgement

of all ‘ill-gotten gains,’ which SBL defined as all ‘compensation or consideration Pack received

for Broker Financing services he provided between April 3, 2018 to the conclusion of this action,’

plus other damages.” [Filing No. 64-1 at 1-2.] Mr. Pack further contends that SBL sought

$490,000 as a settlement demand and has represented to the Court that the amount in controversy

exceeds the jurisdictional amount. [Filing No. 64-1 at 2.] Lastly, Mr. Pack contends that the

amount in controversy should include “the estimated cost to him” to comply “with a noncompete

in the business-lending field from the filing of the Complaint until July 2020” – the end of the term

of the alleged non-compete agreement. [Filing No. 64-1 at 2.]

It is well settled that “the requirements for diversity jurisdiction must be satisfied only at

the time a suit is filed.” Grinnell Mut. Reinsurance Co. v. Shierk, 121 F.3d 1114, 1116 (7th Cir.

1997) (citations omitted). For cases that have been removed from state to federal court,

“determination as to whether the $75,000 minimum is actually in controversy is made at the time

of the removal.” Bush v. Roadway Express, Inc., 152 F. Supp. 2d 1123, 1125 (S.D. Ind. 2001).

“[I]f the amount in controversy exceeds the jurisdictional amount when a suit is filed in federal

court, the fact that subsequent events reduce the total amount in controversy will not divest the

court of diversity jurisdiction.” Id. at 1116. Moreover, a party seeking removal “does not need to

establish what damages the plaintiff will recover, but only how much is in controversy between

the parties.” Blomberg v. Serv. Corp. Int’l, 639 F.3d 761, 763 (7th Cir. 2011) (citing Brill v.

Countrywide Home Loans, Inc., 427 F.3d 446, 448 (7th Cir. 2005)). “Whether damages will

exceed $75,000 is not a fact but a prediction, and with respect to that subject the court must decide

whether to a legal certainty . . . the claim is really for less than the jurisdictional amount.” Meridian

Sec. Ins. Co. v. Sadowski, 441 F.3d 536, 541 (7th Cir. 2006) (quotations omitted). The “removing

defendant, as proponent of federal jurisdiction, must establish what the plaintiff stands to recover,”

and may do so . . . . by reference to the plaintiff’s informal estimates or settlement demands.” Id.

at 541-42.

In this case, Mr. Pack removed this matter on the basis of diversity jurisdiction on August

30, 2018. [Filing No. 1.] In response to the Court’s Order noting deficiencies in the initial Notice

of Removal, [Filing No. 5], Mr. Pack filed an Amended Notice of Removal the next month, [Filing

No. 8]. SBL responded to the Amended Notice of Removal and argued that the amount in

controversy had not been satisfied. [Filing No. 13.] Mr. Pack responded in turn, arguing that the

amount in controversy exceeded $75,000 exclusive of interest and costs on the date of removal

because Mr. Pack’s cost of complying with the injunction SBL seeks would exceed the

jurisdictional amount. [Filing No. 13 at 3.] On October 18, 2018, the Court ruled that Mr. Pack

had discharged his obligation to set forth a plausible, good-faith estimate that the amount in

controversy in this matter exceeds the statutory threshold, exclusive of interest and costs, and

stated that SBL should seek remand by November 2, 2018 if it continued to believe that remand

was required. [Filing No. 17.] SBL did not file any such motion.

As a starting point, SBL’s argument that current or subsequent discovery affects or will

affect this Court’s jurisdiction is without merit. Grinnell, 121 F.3d at 1116 (citations omitted)

(“the fact that subsequent events reduce the total amount in controversy will not divest the court

of diversity jurisdiction”). As for SBL’s contention that “after the May 13, 2019 evidentiary

hearing,” it became “apparent” that Mr. Pack’s submissions to the Court regarding jurisdiction

were invalid, [Filing No. 58 at 1], SBL states – without citation to the record or any indication as

to where such a figure was derived – that all that “was sought” was disgorgement in the amount

of $12,429. To the extent that SBL argues that the only damages it sought by its complaint was

disgorgement, the Court notes that its complaint also requested compensatory damages for breach

of contract, breach of fiduciary duties and a violation of Indiana Trade Secrets Acts [Filing No. 1-

1 at 14], along with “all revenues generated from Broker Financing activity by Pack . . . from April

2, 2018 through the conclusion of the instant litigation,” [Filing No. 1-1 at 14].

The Court has already issued an order determining that the amount in controversy was

satisfied at the time of removal. Although SBL asks the Court to revisit its October 24, 2018

finding, nothing in its Supplementation as to Law alters the Court’s earlier finding that Mr. Pack

had met his burden of establishing what SBL stands to recover. To the contrary, Mr. Pack’s recent

submission of SBL’s settlement discussions adds credence to his earlier contention that the amount

in controversy is satisfied in this matter. As such, the Court finds that it continues to have

jurisdiction to hear this case, and now turns to the merits of SBL’s Motion for Preliminary

Injunction.

III.

MOTION FOR PRELIMINARY INJUNCTION

A. Preliminary Injunction Standard

“In the case of the usual preliminary injunction, the plaintiff seeks to enjoin, pending the

outcome of the litigation, action that [it] claims is unlawful.” Grupo Mexicano de Desarrollo S.A.

v. All. Bond Fund, Inc., 527 U.S. 308, 314 (1999). “[A] preliminary injunction is an extraordinary

and drastic remedy, one that should not be granted unless the movant, by a clear showing, carries

the burden of persuasion.” Mazurek v. Armstrong, 520 U.S. 968, 972 (1997) (citation omitted).

“Preliminary relief is properly sought only to avert irreparable harm to the moving party.” Chicago

United Indus., Ltd. v. City of Chicago, 445 F.3d 940, 944 (7th Cir. 2006). Because the merits of

the underlying litigation are not at issue at this stage, “the reluctance to disturb the status quo prior

to trial on the merits is an expression of judicial humility . . . [that] enables the court to stay

relatively neutral in the underlying legal dispute.” Id. at 945-46.

The purpose of a preliminary injunction is “merely to preserve the relative positions of the

parties until a trial on the merits can be held.” Univ. Texas, 451 U.S. at 395. “Given this limited

purpose, and given the haste that is often necessary if those positions are to be preserved, a

preliminary injunction is customarily granted on the basis of procedures that are less formal and

evidence that is less complete than in a trial on the merits.” Id.

“To obtain a preliminary injunction, the moving party must show that [its] case has ‘some

likelihood of success on the merits’ and that [it] has ‘no adequate remedy at law and will suffer

irreparable harm if a preliminary injunction is denied.’” Stuller, Inc. v. Steak N Shake Enters.,

Inc., 695 F.3d 676, 678 (7th Cir. 2012) (quoting Ezell v. City of Chi., 651 F.3d 684, 694 (7th Cir.

2011)). “If the moving party meets these threshold requirements, the district court ‘must consider

the irreparable harm that the nonmoving party will suffer if preliminary relief is granted, balancing

such harm against the irreparable harm the moving party will suffer if relief is denied.’” Stuller,

695 F.3d at 678 (quoting Ty, Inc. v. Jones Grp., Inc., 237 F.3d 891, 895 (7th Cir. 2001)). “The

district court must also consider the public interest in granting or denying an injunction.” Stuller,

695 F.3d at 678.

B. Background

The background of this case was set forth in the Court’s Order dated January 4, 2019, which

the Court incorporates by reference. [Filing No. 26 at 3.] In addition, the Court’s understanding

of the background of this matter was informed by an evidentiary hearing that was held on May 13,

2019, [Filing No. 57], after which the parties submitted proposed findings of fact and conclusions

of law, [Filing No. 59; Filing No. 64]. For the purposes of deciding the Motion for Preliminary

Injunction, the Court summarizes the facts of this case as follows:

1. SBL’s Business Model

SBL is a financial brokerage firm that works with small businesses to assist them with

acquiring loans. SBL is owned by Robin Green2 and conducts business throughout the United

States. In order to identify and reach potential leads, SBL purchases data, including telephone

2 Ms. Green was formerly known as Robin Cano. In the interests of consistency, the Court will

refer to her as Ms. Green throughout this Order.

numbers, and uses an auto-dialer to leave voicemails for business owners. There is nothing secret

about prospective borrowers’ phone numbers or names as they may be purchased on a non-

exclusive basis. The prospective borrowers’ telephone number goes “stale” after 30 to 60 days of

purchase.

Business owners may respond to SBL’s message by leaving their telephone numbers on a

voicemail to SBL. SBL will then refer the telephone number to an independent contractor via

email.

SBL also purchased trigger leads, which are generated when a business’ credit is ran.

Multiple brokers are able to purchase the trigger leads and they are not, therefore, exclusive to

SBL.

SBL also used survey leads, whereby they send business owners a survey and at the end,

the survey would ask the business owner if he or she was interested in working capital. If so, the

business owner could leave his or her contact information, which would be sent to an independent

contractor via email for follow-up.

SBL’s independent contractors then gather the required application information from

business owners seeking to borrow money (“Borrowers”). Borrowers fill out an application that

includes the Borrower’s Social Security number, date of birth, and personal address and the

business’ tax ID number and address. In addition, Borrowers must submit six months of bank

statements and merchant processing statements.

SBL’s independent contractor gathers and screens the required documents and submits

them to Ms. Green. Ms. Green then contacts potential lenders.

SBL provides scripts to independent contractors as part of its training program for their

interactions with Borrowers’ employees. In addition, SBL provides independent contractors with

a step-by-step outline of the process from the time the independent contractor receives a lead.

2. The Agreement between SBL and Mr. Pack

On or about April 4, 2018, Mr. Pack and SBL entered into an independent contractor

agreement (the “Agreement”). [Filing No. 1-1 at 32.] The Agreement provides, in relevant part,

as follows:

This Agreement (the "Agreement") is made 0n04/03/2018, by and betweenSmall Business

Lending LLC, (the "Company"), located at 7206 Franklin Parke Blvd, Indianapolis, Indiana 46259

in the County of Marion, and David W. Pack, (the "Independent Contractor" or “Contractor")

located at of 163 Caroway Ct, Spartanburg, Georgia 29303

[Filing No. 1-1 at 19.] Thereafter, the Agreement states that “[t]he Independent Contractor is

secured to provide the services described below at the Company’s principal place of business as

aforementioned, or from the Contractor’s principal place of business, if applicable, as

aforementioned.” [Filing No. 1-1 at 19.]

The Agreement contains a provision regarding proprietary information, which provides, in

part, as follows:

All rights, title and interest of any and all kind and nature whatsoever in and to the Proprietary

Information made, written, discussed, developed, secured, obtained or learned by the

Independent Contractor during the term of its relationship with the Company or always

immediately following termination of that relationship, shall be the sole and exclusive property of

the Company for any purpose or use whatsoever as it deems necessary or fit, and shall be

disclosed promptly by the Independent Contractor to the Company.

[Filing No. 1-1 at 22.] In the course of Mr. Pack coming on board as an independent contractor,

Ms. Green disclosed this portion of the Agreement with Mr. Pack.

10

The Agreement also contains a non-solicitation clause which provides that the independent

contractor shall not solicit or attempt to solicit customers or clients of the company “throughout

the duration of this Agreement and for a period of (sic) immediately following the termination of

this Agreement.” [Filing No. 1-1 at 23.]

The Agreement contains a non-compete clause which provides as follows:

Non-Compete Clause

The Independent Contractor herein agrees not to participate in any activity or action that may be

deemed of a competitive nature with any activity of the Company during the course of their

relationship and for a period of 2 years after the termination of this Agreement. Therefore, for the

purpose of this paragraph, competitive activity thus encompasses forming and/or making plans to

form a business entity that may be seen as being competitive with any business of the Company.

During and after the Contractor's contract period with the Company, in the State ofNorth

Carolina, and for a period of2 years following termination of employment, however caused, the

Contractor, or his/her Subcontractors, shall not seek or gain employment with any newly formed

business (business formed after termination of this Agreement) that is in competition with the

Company, its subsidiaries or affiliates within All States described as United States or within a All

Businesses Within The United States mile radius of the Company and the aforementioned

business location.

[Filing No. 1-1 at 23-24]

The Agreement also provides that the “Independent Contractor is or shall remain open to

conducting similar tasks or services for the Company, which may not be listed or described below,

or for entities other than the Company and thus holds himself or herself out to the public to be a

separate business entity.” [Filing No. 1-1 at 19.] Further, regarding the scope of work, the

Agreement provides that “the Independent Contractor shall retain sole and absolute discretion in

the manner and means for the carrying out of his/her activities and responsibilities contained herein

this Agreement,” [Filing No. 1-1 at 19], and that the “Independent Contractor shall have full

discretion within the Scope of Work,” [Filing No. 1-1 at 20.]

Regarding documents, the Agreement also provides that:

11

DOCUMENTS, RECORDS OR BOOKS

Any and all documents, records or books which may be related to the Scope of Work, as set forth

herein this Agreement, shall be maintained by the Independent Contractor at the Independent

Contractor's principal place of business and open to inspection by the Company during regular

working business hours. The documents, records and/or books to which the Company shall be

entitled to inspect and receive copies of include, but are not limited to, any and all contract

documents, change/purchase orders and work which has been authorized by the Company on

existing or any potential project that are related to this Agreement.

[Filing No. 1-1 at 20.] The Agreement further provides as follows:

RETURN OF COMPANY PROPERTY

Upon the termination of this Agreement, or as per the request of either party, each party shall

promptly and immediately deliver to the other party any and all property in its possession or under

its care and control belonging to the other party, including but not limited to, proprietary

information, customer names and lists, trade secrets, intellectual property, computers, equipment,

pass keys, company identification, tools, documents, plans, recordings, software, and all related

records and/or accounting/financial information.

[Filing No. 1-1 at 26.]

The Agreement also contains a two paragraph non-recruit clause. The first paragraph

provides that the independent contractor “shall not throughout the duration of this Agreement and

fora period of 2 year (sic) immediately following the termination of this Agreement, either directly

or indirectly, recruit any of the Company’s employees, customers, clients or management for the

purpose of any outside business.” [Filing No. 1-1 at 24.] The second paragraph of the non-recruit

clause mirrors verbatim the second paragraph of the non-compete clause. [Filing No. 1-1] at 24.]

3. Mr. Pack’s Engagement with SBL

Mr. Pack began receiving emails containing Borrower’s telephone numbers on April 11,

2018.

On multiple occasions, Ms. Green discussed Mr. Pack’s job duties and performance with

him and coached him over the phone. He eventually began asking her about how the business

worked. Initially, Mr. Pack aggressively pursued leads, but after a time, Mr. Pack was no longer

addressing his leads or sending loan applications to Borrowers. Mr. Pack asked Ms. Green whether

12

he could generate his own leads to SBL, but he never provided any. During his employment with

SBL, Mr. Pack generated six loans and earned $16,849 in commission, not counting a loan to

Circle Electric.

Mr. Pack generated a loan from ILawn LLC for equipment financing, but ILawn’s initial

payment check to SBL bounced. Mr. Pack generated a loan to Shaam Inc, but something occurred

with the lender and the loan did not go through.

Until March 2019, Mr. Pack’s Linkedin page stated that he started working for Sprout

Lending in May 2018 and Commodo Financial in June 2018. Sprout Lending and Commodo

Financial are both competitors of SBL. Mr. Pack’s Linkedin page also represented that he worked

for SBL until March 2019, which he did not.

Mr. Pack received his last email containing Borrowers’ telephone numbers on July 2, 2018.

The same day, Ms. Green told Mr. Pack to take a week off of work and call her back on July 9,

2018. However, Mr. Pack did not contact Ms. Green on the 9th. As of July 24, 2018, Ms. Green

still had not heard from Mr. Pack and began researching his activities. Ms. Green found that Mr.

Pack was soliciting SBL’s independent contractor Zebulon Pack to leave SBL.

On July 3, 2018, Mr. Pack registered Pack Consulting LLC with the Secretary of State of

South Carolina. On July 13, 2018, Mr. Pack registered Commodo, LLC with the Secretary of State

of South Carolina.

On July 24, 2018, Ms. Green sent Mr. Pack a letter terminating his employment with SBL.

Among other things, the letter noted that Mr. Pack breached the “Non-Partnership or Ownership

and Business Opportunity Clause” of the Agreement by registering Pack Consulting LLC, and

stated that the non-compete clause would be enforced for a period of two years following the

termination of the Agreement. Additionally, the letter requested that Mr. Pack return all company

property and stated that trade secrets, business plans and procedures, client contact lists and other

confidential information could not be used by Mr. Pack in any way. Mr. Pack did not return all

the applications, the lead information, or any prospective client information to Ms. Green.

On July 24, 2018, Ms. Green also cut off Mr. Pack’s access to his SBL email account and

his access to SBL’s lead system.

C. Discussion

In support of its Motion for Preliminary Injunction, SBL argues that the following conduct

by Mr. Pack substantiates the need for preliminary injunctive relief:

• after “obtaining access to the SBL program, Mr. Pack immediately began using it so as to

facilitate leads for a competitor of SBL” – Sprout Lending;

• in June 2018, Mr. Pack started a website to compete with SBL;

• in July 2018, Mr. Pack started two entities to compete with SBL;

• Mr. Pack solicited another SBL representative to quit and work with him; and

• “Mr. Pack has never returned the client applicant/borrower data he acquired while an SBL

representative.” [Filing No. 41 at 6.]

Based upon this conduct, SBL argues that the Court should issue a preliminary injunction

enjoining Mr. Pack from engaging in five categories of activities: (1) “[p]ossessing or using

information provided to him while working for SBL, consisting of proprietary financial or other

data;” (2) “[d]isclosing information provided to him while working for SBL, consisting of

proprietary financial or other data;” (3) “[s]oliciting SBL employees to leave SBL;” (4)

“[e]ngaging in the business of financing business loans so as to be competitive with SBL;” and (5)

“[h]olding himself out as a representative of SBL, including, but not limited to, on his LinkedIn

account.” [Filing No. 41 at 1.]

“A preliminary injunction is an extraordinary remedy.” Whitaker By Whitaker v. Kenosha

Unified Sch. Dist. No. 1 Bd. of Educ., 858 F.3d 1034, 1044 (7th Cir. 2017). It is “an exercise of a

very far-reaching power, never to be indulged in except in a case clearly demanding it.” Girl

Scouts of Manitou Council, Inc. v. Girl Scouts of U.S. of Am., Inc., 549 F.3d 1079, 1085 (7th Cir.

2008) (citations and quotations omitted). “[A] party requesting a preliminary injunction must

generally show reasonable diligence.” Benisek, __ U.S. __, 138 S. Ct. at 1944 (holding that

“plaintiffs’ unnecessary, years-long delay in asking for preliminary injunctive relief weighed

against their request”).

The purpose of a preliminary injunction is merely to preserve the relative positions of the

parties until a trial on the merits can be held. Univ. Texas, 451 U.S. at 395. “To determine whether

a situation warrants such a remedy, a district court engages in an analysis that proceeds in two

distinct phases: a threshold phase and a balancing phase.” Valencia v. City of Springfield, Illinois,

883 F.3d 959, 965 (7th Cir. 2018) (quoting Manitou, 549 F.3d at 1085-86).

In the “threshold phase” a party seeking a preliminary injunction must satisfy three

requirements by showing that “(1) it will suffer irreparable harm in the period before the resolution

of its claim; (2) traditional legal remedies are inadequate; and (3) there is some likelihood of

success on the merits of the claim.” HH-Indianapolis, LLC v. Consol. City of Indianapolis & Cty.

of Marion, Indiana, 889 F.3d 432, 437 (7th Cir. 2018) (quoting Girl Scouts, 549 F.3d at 1086). “If

the plaintiff fails to meet any of these threshold requirements, the court must deny the injunction.”

GEFT Outdoors, LLC v. City of Westfield, 922 F.3d 357, 364 (7th Cir. 2019) (citation and quotation

omitted). “However, if the plaintiff passes that threshold, ‘the court must weigh the harm that the

plaintiff will suffer absent an injunction against the harm to the defendant from an injunction, and

consider whether an injunction is in the public interest.’” Id. at 364 (quoting Planned Parenthood

of Ind. & Ky., Inc. v. Comm’r of Ind. State Dep’t of Health, 896 F.3d 809, 816 (7th Cir. 2018)).

SBL moves for preliminary injunction, arguing that it meets all of the requirements for its

issuance. [Filing No. 40.] Mr. Pack opposes that motion. [Filing No. 51]. The Court considers

each element in turn.

1. Likelihood of Suffering Irreparable Harm

SBL contends that it has suffered the following instances of irreparable harm: (1) “clients

have left SBL along with the prospect for subsequent loans that an ongoing client offers,” [Filing

No. 41 at 9]; (2) SBL “is exposed to vast liability arising from further impermissible disclosure”

of Borrowers’ “personally-identifying and financial data,” [Filing No. 41 at 10]; (3) Mr. Pack

would take “unfair advantage of SBL and its president, Robin Green, who, good faith, permitted

Mr. Pack unfettered access to the treasure trove of data concerning SBL’s small business client

data and SBL loan generation processes,” [Filing No. 41 at 12]; and (4) “SBL has suffered the

irreparable harm of people thinking him connected to SBL from July 24, 2018 through March 15,

2019, and will suffer more irreparable harm if he does something like this in the future,” [Filing

No. 41 at 12].

In response, Mr. Pack argues that (1) SBL has failed to show that it will suffer irreparable

harm, pointing out that SBL waited seven months to seek a preliminary injunction, indicating a

reduced need for such a drastic action, [Filing No. 51 at 3], (2) the reference to SBL has been

removed from his LinkedIn page, [Filing No. 51 at 4], and (3) SBL has not pointed to any attempts

by Mr. Pack to solicit employees since the lawsuit was filed, [Filing No. 51 at 4].

The moving party must demonstrate that it “will likely suffer irreparable harm absent

obtaining preliminary injunctive relief.” Whitaker, 858 F.3d at 1044-45 (7th Cir. 2017) (citing

Michigan v. U.S. Army Corps of Eng’rs, 667 F.3d 765, 787 (7th Cir. 2011)). Regarding whether

a harm is “likely,” the Seventh Circuit has explained that a showing of likelihood “requires more

than a mere possibility of harm. It does not, however, require that the harm actually occur before

injunctive relief is warranted. Nor does it require that the harm be certain to occur before a court

may grant relief on the merits.” Id. at 1045 (citations and quotations omitted). The Supreme Court

has cautioned that issuing a preliminary injunction “based only on a possibility of irreparable harm

is inconsistent with our characterization of injunctive relief as an extraordinary remedy that may

only be awarded upon a clear showing that the plaintiff is entitled to such relief.” Winter v. Nat.

Res. Def. Council, Inc., 555 U.S. 7, 22, (2008). With regard to whether the harm is “irreparable,”

the Seventh Circuit has explained that “harm is considered irreparable if it cannot be prevented or

fully rectified by the final judgment after trial.” Whitaker, 858 F.3d at 1045.

The key problem with most of the categories of harm set forth by SBL is that SBL has

failed to show that they are likely. For example, SBL’s suggestion that it “is exposed to vast

liability” arising from “impermissible disclosure” of personally identifying information is the type

of speculative and remote future injury that the Seventh Circuit has found to be insufficient to

justify a preliminary injunction. See Michigan, 667 F.3d at 788 (quoting 11A Charles Alan Wright,

et al., Federal Practice and Procedure § 2948.1, at 154–55 (2d ed.1995)) (“[A] preliminary

injunction will not be issued simply to prevent the possibility of some remote future injury. A

presently existing actual threat must be shown”). SBL has failed to demonstrate that such suits

are an existing actual threat. Similarly, SBL’s suggestion that it has suffered irreparable harm

from Mr. Pack listing it as an employer on Linkedin until earlier this year is without any support

that such a harm is an existing actual threat.

With regard to SBL’s contention that it has “suffered irreparable harm as . . . clients have

left SBL along with the prospect for subsequent loans that an ongoing client offers,” [Filing No.

41 at 9], the Court notes that threats to an organization’s goodwill can constitute irreparable harm.

In Girl Scouts, for example, the Seventh Circuit held that a threat to the goodwill enjoyed by a Girl

Scout council if it lost some of its territory was a harm that was both real and irreparable. 549

F.3d at 1089 (holding that a “serious risk to the organization's significant goodwill,” “can

constitute irreparable harm”). But Girl Scouts is distinguishable from the situation faced by SBL.

In that case, the Seventh Circuit found that the organization relied heavily upon donations – “tens

of millions of dollars in donations” – and that removing 60 percent of the organization’s

jurisdiction would damage the organization’s ability to fundraise and, indeed, had already done

so. Id. at 1089. By contrast, at the hearing, SBL offered evidence that a handful of loans with

which Mr. Pack had been involved had failed and, in her affidavit accompanying SBL’s Motion,

Ms. Green asserted that four clients had been diverted elsewhere. This harm is a far cry from

constituting a serious risk to SBL’s goodwill, both in terms of scope and character. For starters,

any loss is significantly more minor than that described in Girl Scouts. Second, SBL has not

presented any evidence that diverted business resulted in customer confusion or the intangible loss

of goodwill. Instead it has presented evidence of four specific and relatively minor economic

losses which do not portend the collapse of SBL and are therefore not enough to justify an

injunctive relief. Gateway E. Ry. Co. v. Terminal R.R. Ass’n of St. Louis, 35 F.3d 1134, 1140 (7th

Cir. 1994) (“economic loss generally will not sustain an injunction,” but “a damages remedy may

be inadequate if it comes ‘too late to save plaintiff's business’”). Lastly, the Court notes that SBL

has failed to show that any harm cannot be rectified by a final judgment after trial.

For the foregoing reasons, the Court holds that SBL has not shown that it will suffer

irreparable harm in the period before the resolution of its claim. This conclusion compels the

denial of SBL’s Motion, as one of the threshold requirements for the issuance of a preliminary

injunction has not been established. The Court is mindful, however, of the Seventh Circuit’s

encouragement to provide analysis as to each element of the threshold inquiry, so it addresses those

in turn. Girl Scouts, 549 F.3d at 1087 (“Where, as here, a district court decides that a party moving

for a preliminary injunction has not satisfied one of the threshold requirements, we have

encouraged the court to conduct at least a cursory examination of all the aforementioned

preliminary injunction considerations . . . . Doing so expedites our review and helps to protect the

interests of the parties”) (citations omitted). As such, the Court will discuss the two remaining

elements below.

2. Adequacy of Traditional Legal Remedies

SBL argues that “there is no adequate remedy at law,” for its claim related to Mr. Pack’s

disclosure of “SBL-derived data,” as “Mr. Pack has suggested he is of limited means.” [Filing No.

41 at 10.]

In his response, Mr. Pack argues that an adequate remedy at law exists, contending that

SBL’s claim that he lacks adequate means “must fail” given his military benefits, self-employment,

and spouse who works full time. [Filing No. 51 at 4.]

“[A] party seeking a preliminary injunction must demonstrate, among other things, that

traditional legal remedies, such as money damages, would be inadequate.” D.U. v. Rhoades, 825

F.3d 331, 339 (7th Cir. 2016). “The absence of an adequate remedy at law is a precondition to any

form of equitable relief.” Roland Mach. Co. v. Dresser Indus., Inc., 749 F.2d 380, 386 (7th Cir.

1984). To demonstrate that it has no adequate remedy at law, the moving party need not

“demonstrate that the remedy be wholly ineffectual,” but “must demonstrate that any award would

be “seriously deficient as compared to the harm suffered.” Whitaker, 858 F.3d at 1046 (citations

omitted). “The normal remedy for breach of contract is an award of damages.” Miller v. LeSea

Broad., Inc., 87 F.3d 224, 230 (7th Cir. 1996). However, the Seventh Circuit has held that “there

are cases in which the normal remedy for a breach of contract, namely damages, is inadequate, and

those are cases in which the victim of an alleged breach can seek preliminary relief.” Chicago

United Indus., 445 F.3d at 945. Damages “are an inadequate remedy” in cases involving a

“defendant’s lack of solvency” and in cases where “quantifying the injury to the victim of the

breach” is difficult. Miller, 87 F.3d at 230.

The only argument SBL sets forth as to why there is no adequate remedy at law in this case

is because Mr. Pack “has suggested he is of limited means.” [Filing No. 41 at 10.] It is true that

damages may be “unobtainable” from a defendant who becomes “insolvent before a final judgment

can be entered and collected,” Roland Mach., 749 F.2d at 386, but SBL’s vague conjecture on this

point does not establish any likelihood of insolvency. Indeed, SBL does not even argue that Mr.

Pack is or is likely to become insolvent, but only that he is of limited means. Nor did any testimony

or evidence from the evidentiary hearing point to a conclusion that Mr. Pack is insolvent. Seaga

Mfg., Inc. v. Intermatic Mfg., Ltd., 2013 WL 773037, at *6 (N.D. Ill. Feb. 28, 2013) (finding that

“no testimony” at an evidentiary hearing “addressed any capital assets which [the defendant] may

hold which could be attached to satisfy a future judgment in this case or the existence, or lack

thereof, of some form of liability insurance”). Accordingly, SBL has not carried its burden to

show that it has no adequate remedy at law based on insolvency.

Moreover, it is clear that in this case, the damages allegedly suffered by SBL are pecuniary

in nature and, therefore, the law could provide a remedy in the form of monetary damages. For

example, as set forth at the hearing, SBL purchases the sources of its leads and multiple other

brokers are able to purchase the same data. Despite SBL’s argument that such data constitutes

trade secrets, [See Filing No. 60 at 81 (Q – “You say it is a trade secret for the software programs

and the data that you purchase from third parties, right?” A – from Ms. Green – “Yes)], Ms.

Green’s testimony shows that the data at issue in this case was purchased from third parties. There

is no evidence to suggest that Mr. Pack could not have purchased the data himself had he paid the

appropriate subscription fees. Accordingly, to the extent that Mr. Pack misused or misappropriated

data he received from SBL, SBL can be compensated in the form of damages after trial.

3. Likelihood of Success on the Merits

SBL argues that it is “SBL is reasonably likely to succeed” on its claims against Mr. Pack

relating to his “continued retention, possession and use of SBL-derived data,” [Filing No. 41 at 9];

SBL is “reasonably likely to prevail” on its claim related to Mr. Pack’s disclosure of “SBL-derived

data,” [Filing No. 41 at 10]; “SBL is reasonably likely to prevail” on its claims related to Mr. Pack

“engaging in the business of financing loans so as to be competitive with SBL” “in light of Mr.

Pack actively undermining SBL, including with respect to four financing transactions SBL had in

place,” [Filing No. 41 at 11]; and that SBL “is reasonably likely to prevail” on its claim related to

Mr. Pack holding himself out as an SBL representative because “the equities are all” in its favor,

[Filing No. 41 at 12].

In response, Mr. Pack argues that SBL is unlikely to succeed on the merits of its claims

because it cannot show a fiduciary relationship given the Agreement, [Filing No. 51 at 5], the

Agreement is too inconsistent and full of errors to allow SBL to prevail on its contract claims

against Mr. Pack, [Filing No. 51 at 5-6], SBL has failed to show that the “non-competition, non-

solicitation, and non-recruitment provisions” are reasonable in scope, [Filing No. 51 at 6-7], SBL

does not have a protectible interest to begin with because SBL “seeks to prohibit contact with SBL

customers that Mr. Pack did not even work with during his brief tenure,” [Filing No. 51 at 7], and

SBL’s claim under the Indiana Uniform Trade Secrets Act fails because SBL has not shown that

he disclosed or used a trade secret and SBL’s customer lists are derived from public data and are

not, therefore, a trade secret, [Filing No. 51 at 9-10].

“The likelihood of success on the merits is an early measurement of the quality of the

underlying lawsuit.” Michigan, 667 F.3d at 788. “The likelihood of success requirement is a low

threshold” under which the movant “must only show that its claim’s chance of success is ‘better

than negligible.’” HH-Indianapolis, 889 F.3d at 437; see also AM Gen. Corp. v. DaimlerChrysler

Corp., 311 F.3d 796, 804 (7th Cir. 2002) (“In the first phase of the analysis, the court decides only

whether the plaintiff has any likelihood of success—in other words, a greater than negligible

chance of winning”).

Excluding its requests for injunctive relief, SBL brought three claims against Mr. Pack:

breach of contract, breach of fiduciary duties/violation of the Indiana Trade Secrets Act, and unjust

enrichment. [Filing No. 1-1 at 13-16.]

i. SBL’s Breach of Contract Claim

Turning first to Mr. Pack’s breach of contract claim, under Indiana law such a claim

requires: “(1) the existence of a contract, (2) the defendant's breach thereof, and (3) damages.”

Allen v. Clarian Health Partners, Inc., 955 N.E.2d 804, 808 (Ind. Ct. App. 2011). The Court noted

in its January 2019 Order at the Motion to Dismiss stage that the “non-compete clause of the

Agreement discusses non-competition in the state of North Carolina – a curious provision

considering that Mr. Pack resided in South Carolina at time the Agreement was signed.” [Filing

No. 26 at 11.] SBL did not present any evidence at the hearing or in support of its pending Motion

indicating that Mr. Pack engaged in competition with SBL in North Carolina. As such, the Court

maintains grave doubts about Mr. Pack’s ability to prevail on this major component of his breach

of contract claim.

ii. SBL’s Breach of Fiduciary Duty/Violation of the Indiana Trade Secrets Act

Claim

The Court next examines Mr. Pack’s alleged breach of the Indiana Trade Secrets Act, (the

“Act”). The Court identifies two problems with SBL’s allegations concerning the Act. First, the

Court is not persuaded that the data Mr. Pack is alleged to have used qualifies as a trade secret.

The Act defines a “trade secret” as

information, including a formula, pattern, compilation, program, device, method,

technique, or process, that: (1) derives independent economic value, actual or

potential, from not being generally known to, and not being readily ascertainable

by proper means by, other persons who can obtain economic value from its

disclosure or use; and (2) is the subject of efforts that are reasonable under the

circumstances to maintain its secrecy.

Ind. Code Ann. § 24-2-3-2. A protectable trade secret has four characteristics: “(1) information,

(2) which derives independent economic value, (3) is not generally known, or readily ascertainable

by proper means by other persons who can obtain economic value from its disclosure or use, and

(4) is the subject of efforts reasonable under the circumstances to maintain its secrecy.” Bodemer

v. Swanel Beverage, Inc., 884 F. Supp. 2d 717, 723 (N.D. Ind. 2012) (quoting Steve Silveus Ins.,

Inc. v. Goshert, 873 N.E.2d 165, 179 (Ind. Ct. App. 2007)). Indiana courts have considered the

issue of whether “customer information constitutes a trade secret” and have held that such a

determination “depends upon the facts of each individual case.” Harvest Life Ins. Co. v. Getche,

701 N.E.2d 871, 876 (Ind. Ct. App. 1998) (holding that a “policyholder list of an insurance

company, that information, which can include names of customers, policy coverage, premium

amounts, and expiration dates, is not a trade secret”); see also U.S. Land Servs., Inc. v. U.S.

Surveyor, Inc., 826 N.E.2d 49, 64 (Ind. Ct. App. 2005) (holding that information in a surveyor

database, some of which was “readily available over the Internet and through other sources in the

public domain,” and some of which “such as the surveyor ratings, client histories, and prospect

response ratings, are not readily available” was a trade secret under the Act); N. Elec. Co. v. Torma,

819 N.E.2d 417, 426 (Ind. Ct. App. 2004) (holding that information “already within the public

domain” was a trade secret under the Act where an individual “invested considerable time and

effort in the data compilation; specifically, he stated that he gathered the data over a period of more

than seven years and devoted at least 1,892 hours to organizing the data”). The testimony elicited

at the hearing reveals that the bulk of the trade secrets alleged by SBL are telephone numbers.

Given the ready availability of such information, the Court is not persuaded that there is even a

low threshold of success on the merits. Similarly, the Court is not persuaded that Ms. Green’s

scripts would constitute a trade secret, because as soon as a script is read to a Borrower, the

information in the script could be obtained by the Borrower. Harvest Life, 701 N.E.2d at 876

(noting that the “rationale which has been followed” in cases holding that policyholder lists are

not trade secrets “is that the information could be obtained from the policyholder himself, from

the policy, or from other materials provided to the policyholder by the insurance company”).

Lastly, the Court finds no basis in Indiana law for SBL’s proposition, suggested at the evidentiary

hearing, that honesty and integrity are a trade secret.

Even if SBL had identified a trade secret – which it has not – Indiana Courts have held that

the Act is an “improper vehicle” to restrain competition. In Steenhoven v. College Life Insurance

Company of America, the Indiana Court of Appeals observed that “[t]he real thrust” of an insurance

company’s argument against its former agent was not that he disclosed a customer list, but rather

that the former agent “used such list to benefit economically.” 460 N.E.2d 973, 975 n.7 (Ind. Ct.

App. 1984). As such, the court observed that the insurance company “seemingly seeks not to

protect a trade secret, but rather, to prevent competition by its former agent.” Id. at 975 n.7.

Insofar as that was the case, the Indiana Court of Appeals concluded that the Act was “an improper

vehicle therefor.’ Id. Fourteen years later, the Court of Appeals cited to Steenhoven and repeated

its observation – finding that a company sought “to prevent competition by its former agent more

than it [sought] to protect a trade secret.” Harvest Life, 701 N.E.2d at 876. Here too, the Court

observes that SBL appears far more concerned with competition from Mr. Pack than with

protecting any sort of trade secret. As such, the Act is an improper vehicle for SBL’s claim.

For the foregoing reasons, the Court determines that SBL does not have a reasonable

likelihood of success on its Indiana Trade Secrets Act claims.

iii. SBL’s Unjust Enrichment Claim

The Indiana Supreme Court has stated that unjust enrichment is “also referred to as

quantum meruit, contract implied-in-law, constructive contract, or quasi-contract,” which is a

“legal fiction invented by the common-law courts in order to permit a recovery . . . where, in fact,

there is no contract, but where the circumstances are such that under the law of natural and

immutable justice there should be a recovery as though there had been a promise.” Bayh v.

Sonnenburg, 573 N.E.2d 398, 408 (Ind. 1991) (citation and quotations omitted). In addition,

Indiana courts have held that the “existence of an express contract precludes a claim for unjust

enrichment because: (1) a contract provides a remedy at law; and (2) as a remnant of chancery

procedure, a plaintiff may not pursue an equitable remedy when there is a remedy at law.”

Coppolillo v. Cort, 947 N.E.2d 994, 998 (Ind. Ct. App. 2011) (citing King v. Terry, 805 N.E.2d

397, 400 (Ind. Ct. App. 2004)). Although Indiana recognizes an exception to this rule in instances

“when an express contract does not fully address a subject,” id. at 998, SBL does not argue in

support of its Motion that such an exception applies here. As such, the Court determines that SBL

does not have a reasonable likelihood of success on its unjust enrichment claims.

The Court only proceeds to the balancing step of the analysis if a plaintiff satisfies all

requirements of the “threshold phase” for obtaining a preliminary injunction. Girl Scouts, 549

F.3d at 1086; see also GEFT, 922 F.3d at 368 (quoting Valencia, 883 F.3d at 966 (“If it is plain

that the party seeking the preliminary injunction has no case on the merits, the injunction should

be refused regardless of the balance of harms”)). Because the Court has concluded that SBL has

failed to carry its burden on all of the threshold requirements for obtaining injunctive relief, any

balancing inquiry would be futile. SBL’s Motion for Preliminary Injunction, [Filing No. 40], is

DENIED.

IV.

MOTION TO FILE AMENDED COMPLAINT

On March 4, 2019, SBL filed a Motion for Leave to Amend its Complaint to add Resolve

Holdings Corporation and Commodo, LLC as defendants. [Filing No. 37.] In opposition to SBL’s

first request to amend the complaint, Mr. Pack argued that he would be prejudiced by the late

addition of the parties, [Filing No. 38 at 2], and that amendment would be futile because the

proposed amended complaint did not allege the new parties’ citizenship and personal jurisdiction

is lacking, [Filing No. 38 at 3]. In reply, SBL argued that two new parties would “scarcely add to

the complexity of the case” and that “Mr. Pack’s diversion of SBL clients on behalf of Resolve

Holdings/Sprout, which impacted SBL in this jurisdiction, certainly seems to bring that firm within

the reach of Indiana’s long-arm law and rule.” [Filing No. 43 at 2-3.]

On April 18, 2019, the Court denied SBL’s Motion because its “proposed amended

complaint fails to properly allege the citizenship of the two new proposed Defendants.” [Filing

No. 52 at 1.] The Court further noted that Mr. Pack’s contentions regarding personal jurisdiction

were for the newly added defendants to raise at the appropriate time.

On May 1, 2019, SBL timely filed its Renewed Motion for Leave to Amend Complaint to

Add Resolve Holdings Corporation, d/b/a Sprout Lending and Commodo, LLC as Parties

Defendant. [Filing No. 56.] However, the Court notes the following issues with the jurisdictional

allegations in SBL’s proposed Amended Complaint:

• SBL does not properly allege the citizenship of a corporation. A corporation is

deemed a citizen of any state where it is incorporated and a citizen of the state

where it has its principal place of business. 28 U.S.C. § 1332(c)(1); see also

Smoot v. Mazda Motors of Am., Inc., 469 F.3d 675, 676 (7th Cir. 2006) (a

corporation has two places of citizenship: where it is incorporated and where it

has its principal place of business). All courts “agree that corporations have

one ‘principal’ place of business for purposes of 28 U.S.C. § 1332(c)(1),”

Metro. Life Ins. Co. v. Estate of Cammon, 929 F.2d 1220, 1223 (7th Cir. 1991),

and SBL cannot allege two, as it has done.

• SBL does not properly allege the citizenship of an unincorporated association.

The citizenship of an unincorporated association, such as a limited liability

company or “LLC,” is “the citizenship of all the limited partners, as well as of

the general partner.” Hart v. Terminix Int’l, 336 F.3d 541, 542 (7th Cir. 2003).

“[T]he citizenship of unincorporated associations must be traced through

however many layers of partners or members there may be.” Id. at 543.

Asserting that all partners are citizens of “X” or that no partners are citizens of

“X” is insufficient. See Peters v. Astrazeneca LP, 224 Fed. Appx. 503, 505 (7th

Cir. 2007) (noting the insufficiency of a limited partnership asserting that none

of its partners were citizens destroying diversity “rather than furnishing the

citizenship of all of its partners so that [the court] could determine its

citizenship”).

• SBL does not properly allege the amount in controversy. The amount in

controversy must exceed “$75,000, exclusive of interest and costs.” 28 U.S.C.

§ 1332. The “exclusive of interest and costs” language must be included in the

amount in controversy allegation.

• SBL has alleged the “residence” of an individual, rather than the individual’s

“citizenship.” An allegation of residence is inadequate to establish diversity

jurisdiction. McMahon v. Bunn-O-Matic Corp., 150 F.3d 651, 653 (7th Cir.

1998). Residency and citizenship are not the same, and it is the latter that

matters for purposes of diversity. Meyerson v. Harrah’s East Chicago Casino,

299 F.3d 616, 617 (7th Cir. 2002). An individual’s citizenship for purposes of

diversity jurisdiction “is the place one intends to remain.” Dakuras v. Edwards,

312 F.3d 256, 258 (7th Cir. 2002).

• SBL makes several of its jurisdictional allegations based on Mr. Pack’s

representations. But jurisdictional allegations must be made on personal

knowledge, not on information and belief, to invoke the subject matter

jurisdiction of a federal court. See America’s Best Inns, Inc. v. Best Inns of

Abilene, L.P., 980 F.2d 1072, 1074 (7th Cir. 1992) (only a statement about

jurisdiction “made on personal knowledge has any value” and a statement made

“‘to the best of my knowledge and belief’ is insufficient” to engage diversity

jurisdiction “because it says nothing about citizenship”). “Conclusional

allegations are insufficient. A court needs to know details, such as the state of

incorporation and principal place of business of each corporate party.” State St.

Bank & Trust Co. v. Morderosian, 234 F.3d 1274 (7th Cir. 2000).

In holding SBL to the standards the Court expects from all litigants, the Court is not being

hyper-technical: Counsel has a professional obligation to analyze subject-matter jurisdiction,

Heinen v. Northrop Grumman Corp., 671 F.3d 669, 670 (7th Cir. 2012), and a federal court always

has a responsibility to ensure that it has jurisdiction, Hukic v. Aurora Loan Servs., 588 F.3d 420,

427 (7th Cir. 2009). The Court must know the details of the underlying jurisdictional allegations

because parties cannot confer jurisdiction on the Court simply by stipulating that it exists. See

Evergreen Square of Cudahy v. Wisconsin Hous. and Econ. Dev. Auth., 776 F.3d 463, 465 (7th

Cir. 2015) (“the parties’ united front is irrelevant since the parties cannot confer subject-matter

jurisdiction by agreement…and federal courts are obligated to inquire into the existence of

jurisdiction sua sponte”).

Federal Rule of Civil Procedure 15(a) notes that leave to amend a complaint should be

freely given “when justice so requires.” The Seventh Circuit has recognized, however, that “such

leave can be legitimately denied where there has been undue delay, dilatory motive on the part of

the movant, repeated failure to cure previous deficiencies, and where amendment would be futile.”

McGee v. Kerr-Hickman Chrysler Plymouth, Inc., 93 F.3d 380, 385 (7th Cir. 1996). “An

amendment is considered futile if, for example, it could not defeat a motion to dismiss for failure

to state a claim or for lack of jurisdiction.” Boulet v. Nat’l Presto Indus., Inc., 2013 WL 4014982,

at *3 (W.D. Wis. Aug. 6, 2013). Moreover, “the right to amend as a matter of course is not

absolute, and a district court may deny a motion to amend if the proposed amendment fails to cure

the deficiencies in the original pleading.” Foster v. DeLuca, 545 F.3d 582, 584 (7th Cir. 2008)

(citation and quotation omitted).

Not only has SBL failed to correct previous deficiencies by failing to properly allege the

citizenship of the two new proposed Defendants, SBL has failed to do so in a number of different

ways, as set forth above. Although courts in this circuit have given pro se litigants numerous

opportunities to correct previous deficiencies, Ali v. Robinson, 2014 WL 805915, at *1 (E.D. Wis.

Feb. 28, 2014) (granting a pro se plaintiff an additional opportunity to “file a complaint showing

that federal jurisdiction exists,” but noting that dismissal with prejudice would occur if plaintiff’s

“next amended complaint fails to demonstrate that federal jurisdiction exists”), SBL is represented

by counsel and, therefore, the Court will not give SBL any additional opportunities to correct

jurisdictional deficiencies that were identified in the Court’s April 18, 2019 order. [Filing No. 52.]

Given the plethora of deficiencies the Court has identified in SBL’s Proposed Amended

Complaint, SBL’s Second Motion for Leave to File Amended Complaint, [Filing No. 56], is

DENIED.

V.

CONCLUSION

The Seventh Circuit has emphasized that “a preliminary injunction is an exercise of a very

far-reaching power, never to be indulged in except in a case clearly demanding it.” Girl Scouts,

549 F.3d at 1085. SBL has not met its burden to show that this is such a case. For the reasons

detailed herein, the Court DENIES SBL’s Motion for Preliminary Injunction. [40]

In addition, the Court DENIES SBL’s Motion to Strike, [65], and DENIES SBL’s Motion

to File an Amended Complaint, [56].

As a final matter, the Court requests that the Magistrate Judge set a settlement conference

with the parties at his earliest convenience.

Date: 7/30/2019

Hon. Jane Magnhus-Stinson, Chief Judge

‘United States District Court

Southern District of Indiana

Distribution via ECF only to all counsel of record.

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