Nevada v. Bank of America Corp.
2012 U.S. App. LEXIS 4377
| 9th Cir. | 2012Background
- Nevada AG filed a parens patriae action under DTPA against Bank of America and related entities in state court.
- Action alleges deceptive mortgage modification/foreclosure practices and compliance with a Consent Judgment.
- Bank of America removed to federal district court asserting CAFA class/mass action and federal-question jurisdiction.
- District court denied remand, concluding CAFA class action exists but not mass action; also found federal-question jurisdiction.
- Ninth Circuit granted permission to appeal and reviewed CAFA removal and federal-question bases sua sponte.
- Court held: parens patriae not removable under CAFA, action not a mass action, no federal-question jurisdiction; remanded to Nevada state court.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| CAFA class action removal viability | Nevada—parens patriae action not removable as class action. | Bank of America—action fits CAFA class action as mass action potential. | Not removable as CAFA class action. |
| CAFA mass action applicability | Mass action should cover many consumers seeking restitution. | Action qualifies as mass action if real parties in interest are consumers. | Not a mass action; minimal diversity and numerosity not met. |
| Event or occurrence exclusion in mass actions | N/A or not applicable since not a mass action. | Event/occurrence exclusion may apply to local single-event cases. | Exclusion does not apply; case involves widespread fraud, not a single event. |
| Federal question jurisdiction | Complaint references federal laws/programs (HAMP, FDCPA) implying federal issue. | References do not make federal question jurisdiction; claims are predominantly state-law. | No federal question jurisdiction. |
| Interlocutory review under § 1453(c) | Review limited to CAFA issues; other grounds may be reviewed. | Limitations on review constrain consideration of non-CAFA issues. | Court exercised jurisdiction to review non-CAFA federal-question issue; remand affirmed. |
Key Cases Cited
- Washington v. Chimei Innolux Corp., 659 F.3d 842 (9th Cir. 2011) (parens patriae actions are not CAFA class actions)
- Madigan v. LCD Partners, 665 F.3d 768 (7th Cir. 2011) (parens patriae not a mass action; real-party-in-interest analysis)
- Caldwell v. Allstate Ins. Co., 536 F.3d 418 (5th Cir. 2008) (claim-by-claim approach for real party in interest in parens patriae actions)
- Lucent Technologies, Inc. v. Dept. of Fair Employment & Housing, 642 F.3d 728 (9th Cir. 2011) (state real-party-in-interest analysis; whole-case approach)
- City of San Francisco v. PG&E Corp., 433 F.3d 1115 (9th Cir. 2006) (restitution actions and public-interest enforcement)
- Grable & Sons Metal Prods. v. Darue Eng'g & Mfg., 545 U.S. 308 (Supreme Court 2005) (federal-question jurisdiction requires substantial federal issue)
- Merrell Dow Pharms., Inc. v. Thompson, 478 U.S. 804 (Supreme Court 1986) (federal-question jurisdiction not created by novelty alone)
- Franchise Tax Bd. of Cal. v. Constr. Laborers Vacation Trust for California, 463 U.S. 1 (Supreme Court 1983) (federal-state balance in jurisdiction disputes)
- McGraw v. CVS Pharmacy, Inc., 646 F.3d 169 (9th Cir. 2011) (sovereign interest and removal considerations in CAFA contexts)
- Empire Healthchoice Assurance, Inc. v.McVeigh, 547 U.S. 677 (Supreme Court 2006) (federal question jurisdiction requires substantial federal issue)
- Lippitt v. Raymond James Financial Servs., Inc., 340 F.3d 1033 (9th Cir. 2003) (novel federal issues not alone confer jurisdiction)
- Washington v. Chimei Innolux Corp., 659 F.3d 842 (9th Cir. 2011) (parens patriae actions not CAFA class actions)