Mireles v. Wells Fargo Bank, N.A.
845 F. Supp. 2d 1034
C.D. Cal.2012Background
- Plaintiffs filed suit in CA state court on Aug 16, 2011, asserting 6 state-law claims on behalf of 108 Calif. plaintiffs against Wells Fargo entities, Wachovia/Golden West-related defendants, and Cal-Western Reconveyance.
- Defendants removed to federal court on Sept 16, 2011 asserting CAFA mass-action jurisdiction and diversity jurisdiction.
- Complaint alleges a nationwide mortgage-fraud scheme involving inflated valuations, predatory loans, and deceptive loan-modification practices, with substantial foreclosure and REO activity.
- Plaintiffs reside in California; the action seeks multiple remedies including damages, injunctive relief, and attorneys’ fees; several claims concern wrongful foreclosure and breach of Pick-A-Pay contracts.
- CAFA mass-action requires >$5,000,000 aggregate controversy and minimal diversity; defendants contend the requirement is met and invoke additional diversity grounds; plaintiffs argue the opposite.
- Court ultimately remanded, holding defendants failed to prove CAFA mass-action jurisdiction and failed to establish diversity/jurisdiction for each plaintiff; Cal-Western not fraudulently joined; ongoing state court remedies favored.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CAFA mass-action jurisdiction exists? | CAFA met numerosity and diversity; aggregate >$5M. | 108 plaintiffs with common questions; >$5M; minimal diversity satisfied. | CAFA mass-action jurisdiction not proven; remand granted. |
| Amount in controversy for CAFA? | Complaint lacks explicit aggregate amount; some plaintiffs exceed $75k. | Dolan declaration shows >$5M aggregate. | Defendants failed to prove amount in controversy by preponderance of the evidence. |
| Cal-Western fraudulently joined? | Cal-Western could be liable under conspiracy; not merely a trustee. | Cal-Western immunized as trustee; lack of substantive allegations. | Cal-Western not fraudulently joined; diversity not complete without it. |
| Wells Fargo citizenship for diversity? | Wells Fargo may be California citizen due to main-office location. | Wells Fargo is South Dakota citizen; principal place of business location favors SD. | Wells Fargo is a California citizen for some analyses but court resolves overall diversity entitlement with others; ultimately diversity not satisfied given other defects. |
| Court should exercise supplemental jurisdiction over state-law claims? | All claims arise from related wrongdoing and could be heard together. | State claims predominate; concerns of judicial economy. | Court declines to exercise supplemental jurisdiction if federal jurisdiction lacking. |
Key Cases Cited
- Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676 (9th Cir. 2006) (burden on removal when amount ambiguous; master of complaint doctrine)
- Guglielmino v. McKee Foods Corp., 506 F.3d 696 (9th Cir. 2007) (preponderance standard for amount in controversy when not pled; legal certainty standard when necessary)
- Tanoh v. Dow Chemical Co., 561 F.3d 945 (9th Cir. 2009) (CAFA mass-action interpretation and burden guidance)
- Libhart v. Santa Monica Dairy Co., 592 F.2d 1062 (9th Cir. 1979) (removal jurisdiction strict construction; burden on removal)
- Gaus v. Miles, Inc., 980 F.2d 564 (9th Cir. 1992) (strong presumption against removal; doubt favors remand)
- Wachovia Bank v. Schmidt, 546 U.S. 303 (U.S. 2006) (national banks’ citizenship limited to main office location under 1348)