Friday, March 9, 2012

Ninth Circuit Holds Parens Patriae Suit Not Removable Under CAFA

In State of Nevada v. Bank of America, No. 12-15005 (Mar. 2, 2012), the Ninth Circuit held that the district court did not have subject matter jurisdiction under either the Class Action Fairness Act or Section 1331 (under Grable & Sons):

The State of Nevada . . .filed this parens patriae lawsuit against Bank of America . . . in Clark County [Nevada] District Court. Nevada alleges 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 Deceptive Trade Practices Act, Nev. Rev. Stat. §§ 598.0903-.0999. Nevada also alleges that Bank of America violated an existing consent judgment (“Consent Judgment”) in a prior case between Nevada and several of Bank of America’s subsidiaries, entered in Clark County District 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 arising under federal law, 28 U.S.C. § 1331. Denying Nevada’s motion to remand, the federal district court concluded that it has jurisdiction over this action as a CAFA “class action,” but not as a “mass action,” and that it also has federal question jurisdiction because resolving the state claims will require an interpretation of federal law.

We 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). We conclude that because parens patriae actions are not removable under CAFA, and the action does not otherwise satisfy CAFA’s “mass action” requirements, the district court lacks jurisdiction under CAFA. We also exercise our interlocutory appellate jurisdiction under 28 U.S.C. § 1453(c) to review the district court’s determination that it has federal question jurisdiction because the complaint references the federal Home Affordable Mortgage Program and the Fair Debt Collection Practices Act. We conclude that the district court lacks federal question jurisdiction [citing Grable & Sons]. Because there is no basis for federal subject matter jurisdiction, this case must be remanded to Nevada state court.


Class Actions, Recent Decisions, Subject Matter Jurisdiction | Permalink


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