Eminence Investors, L.L.L.P. v. Bank of New York Mellon
782 F.3d 504
9th Cir.2015Background
- Eminence Investors sued Bank of New York Mellon in California state court in 2011; amended complaint added class allegations for 100+ members and damages >$10 million across four claims; Bonds issued by Jensen Ranch Public Finance Authority governed by an Indenture; Bank is successor indenture trustee.
- Eminence removed to federal court within 30 days; remand motion argued removal untimely and CAFA securities exception applying.
- District court remanded for untimeliness and did not decide securities exception issue.
- CAFA permits appeals of remand orders in class actions; Bank relies on CAFA removal jurisdiction; securities exception is pivotal.
- Court concludes securities exception applies, meaning CAFA removal was improper and dismisses appeal for lack of jurisdiction.
- Eminence and Bank were holders/administrators under the Bonds; all claims arise from the Bonds/Indenture relationship and related fiduciary duties.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CAFA securities exception applies to this case | Eminence: claims relate to rights/duties under the Bonds. | BNYM: arguments not explicitly stated here; argues limitations/exception not clearly met. | Yes; securities exception applies. |
| Whether the appeals court has jurisdiction given CAFA framework | CAFA remand orders are appealable when removal was under CAFA. | If securities exception applies, no jurisdiction to review. | Appellate jurisdiction exists; dismissal follows from securities exception. |
Key Cases Cited
- Cardarelli, 527 F.3d 25 (2d Cir. 2008) (distinguishes whether plaintiff sues as purchaser vs. holder; securities exception hinges on holder status)
- Greenwich Fin. Servs. Distressed Mortg. Fund 3 LLC v. Countrywide Fin. Corp., 603 F.3d 23 (2d Cir. 2010) (securities exception applies when rights to enforce deals arise from security instruments)
- BlackRock Fin. Mgmt. Inc. v. Segregated Account of Ambac Assurance Corp., 673 F.3d 169 (2d Cir. 2012) (duties imposed by state law arising from the relationship created by or underlying the security fall within the exception)