State of Nevada v. Bank of America Corp.

Summarized by Thomas Phinney , Felderstein Fitzgerald Willoughby Pascuzzi & Rios LLP
13 years 12 months ago

Citation:

Case No. 12-15005; D.C. No. 3:11-cv-00135 (March 2, 2012, 9th Circuit)

Tag(s):

Ruling:

The Ninth Circuit ordered the remand back to Nevada state court of a "parens patriae" lawsuit brought by the State of Nevada, alleging that (1) Bank of America misled Nevada consumers about the terms and operation of its home mortgage modification and foreclosure processes, in violation of the Nevada Deceptive Trade Practices Act, and (2) that Bank of America violated an existing consent judgment (“Consent Judgment”) in a prior case entered in Nevada state court.

Procedural context:

The Ninth Circuit granted Nevada’s request for leave to appeal the district court’s denial of its motion to remand pursuant to 28 U.S.C. § 1453(c)(1). The court accepted the appeal after ruling in Washington v.Chimei Innolux Corp., 659 F.3d 843 (9th Cir. 2011) that a state Attorney General parens patriae action is not a “class action” as defined by the Class Action Fairness Act ("CAFA"). The Ninth Circuit concluded that because parens patriae actions are not removable under Class Action Fairness Act ("CAFA"), and the action did not otherwise satisfy CAFA’s “mass action” requirements, the district court lacked jurisdiction under CAFA. The Ninth Circuit also exercised its interlocutory appellate jurisdiction under 28 U.S.C. § 1453(c) and reversed the district court’s determination that it had federal question jurisdiction.

Facts:

The State of Nevada sued Bank of America in Nevada state court, alleging that Bank of America misled Nevada consumers about the terms and operation of its home mortgage modification and foreclosure processes, in violation of the Nevada state law (Nevada Deceptive Trade Practices Act, Nev. Rev. Stat. §§ 598.0903-.0999), and that Bank of America violated an existing Consent judgment in a prior case between Nevada and several of Bank of America’s subsidiaries, entered in Nevada state court. Bank of America removed this action to federal district court, asserting federal subject matter jurisdiction as either a “class action” or “mass action” under the Class Action Fairness Act (“CAFA”), 28 U.S.C. § 1332(d), and as a case arising under federal law, 28 U.S.C. § 1331. Denying Nevada’s motion to remand, the federal district court concluded that it had jurisdiction over the action as a CAFA “class action,” but not as a “mass action,” and that it also had federal question jurisdiction because resolving the state claims would require an interpretation of federal law (the complaint referenced the federal Home Affordable Mortgage Program and the Fair Debt Collection Practices Act) The Ninth Circuit ruled that the state of Nevada was the party in interest in the lawsuit, and that the action did not qualify as a "class action" or a "mass action," and that the federal questions in the lawsuit were incidental to the state law claims, and thus did not provided a basis for federal jurisdiction. The Ninth Circuit had jursidiction over the appeal under § 1453(c)(1), which confers jurisdiction over “an order of a district court granting or denying a motion to remand a class action.” The Ninth Circuit held that this jurisdiction extended to the entire order denying remand, including issues relating to federal question jurisdiction.

Judge(s):

REINHARDT, WARDLAW, and CALLAHAN, Circuit Judges. Opinion by Judge WARDLAW

ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!