RICHARD DUTCHER; GWEN DUTCHER; RICHARD FERGUSON; MICHELLE FERGUSON; CATHERINE RICHARDS AHLERS, on their own behalf and on behalf of a class of similarly situated persons v. STUART T. MATHESON; MATHESON, MORTENSEN, OLSEN & JEPPSON, P.C.; RECONTRUST COMPANY, N.A.; B.A.C. HOME LOANS SERVICING, LP; BANK OF AMERICA, N.A.
No. 14-4085
United States Court of Appeals, Tenth Circuit
November 2, 2016
PUBLISH
Elisabeth A. Shumaker, Clerk of Court
v.
Defendants-Appellees.
STATE OF UTAH,
Amicus Curiae.
Appeal from the United States District Court for the District of Utah (D.C. No. 2:11-CV-00666-TS)
Marcus R. Mumford, Mumford PC, Salt Lake City, Utah, for Plaintiffs-Appellants.
Amy Miller, McGuireWoods LLP, Washington, D.C., (Brian Emory Pumphrey,
Thom D. Roberts, Assistant Utah Attorney General (Sean D. Reyes, Attorney General, with him on the brief), Salt Lake City, Utah, for Amicus Curiae.
Before LUCERO, HARTZ, and HOLMES, Circuit Judges.
HOLMES, Circuit Judge.
Richard and Gwen Dutcher and their co-plaintiffs (collectively, “the plaintiffs“) brought suit in Utah state court on behalf of a putative plaintiff class against ReconTrust, a national bank that serves as the substitute trustee for class members’ deeds of trust over properties located in Utah. The suit alleges that ReconTrust illegally non-judicially foreclosed on the plaintiffs’ properties because depository institutions like ReconTrust do not have the power of sale over properties secured by trust deed. The plaintiffs also sued B.A.C. Home Loans Servicing (“BAC“) and Bank of America, N.A. (“BOA“), as the former trustees who transferred trusteeship to ReconTrust, as well as Stuart Matheson and his law firm, as the agents who conducted the foreclosure sale on behalf of ReconTrust. ReconTrust and the other defendants (collectively, “the defendants“) removed the case to federal court. They maintained that ReconTrust‘s acts were lawful. The district court denied a motion by the plaintiffs to remand the case to
The plaintiffs ask us to reverse the court‘s order denying remand and to reverse the order granting dismissal of the case. We conclude, however, that the district court properly decided that it had jurisdiction under the Class Action Fairness Act (“CAFA“); accordingly, it correctly denied the plaintiffs’ motion for remand. On the merits, we conclude that ReconTrust was authorized to conduct the challenged foreclosures under federal law, and the plaintiffs have relatedly failed to state a claim on which relief could be granted. We therefore affirm the district court‘s judgment as to both issues.
I
The plaintiffs are representatives of a putative class of former purchasers of Utah properties who financed their purchases by executing deeds of trust with various banks. In Utah, which permits the financing of the purchase of real estate through deeds of trust, the purchaser of the real estate becomes the trustor of a deed of trust under which the purchased property is the trust property and the financier is the beneficiary of the trust. If the purchaser defaults, the beneficiary may commence non-judicial foreclosure of the secured property. This is usually accomplished by selecting a substitute trustee to conduct the foreclosure.
In this case, the plaintiffs defaulted and were subject to non-judicial
properties, and ReconTrust proceeded to conduct the foreclosures that the
The plaintiffs filed this putative class action in Utah state court against Mr. Matheson, MMOJ, BAC, ReconTrust, and BOA, claiming that the defendants had conducted illegal non-judicial foreclosures in violation of Utah Law. The complaint presented six claims for relief: (1) violations of
The plaintiffs defined the class to contain “[a]ll persons subjected to the actions of Matheson, MMOJ and other defendants in non-judicial foreclosure proceedings instituted by ReconTrust, BAC, or Bank of America, as the purported trustee” since January 1, 2001. Aplts.’ App. at 25 (Compl., filed June 24, 2011). The defendants removed the action to federal court under the Class Action
Following these rulings, another judge in the District of Utah issued an order ruling on the same question at issue here—whether ReconTrust was permitted to conduct non-judicial foreclosures in Utah under
The plaintiffs then appealed to our court. We asked for and received an amicus brief from the OCC, which administers
On remand, the district court denied the plaintiffs’ requests for jurisdictional discovery, concluded based on additional briefing that it did have jurisdiction under CAFA, and again closed the case. The plaintiffs filed a new motion to alter or amend the judgment, claiming that the district court disobeyed our court‘s mandate by closing the case without reconsidering the merits issues anew, and again asked for a Chevron analysis of
II
This case presents two principal issues for our review.2 First, we must determine whether the district court correctly concluded that it had jurisdiction under CAFA. We conclude that it did, and we therefore proceed to consider the merits. On the merits, we uphold the district court‘s ruling that ReconTrust was permitted to conduct the challenged foreclosures under federal law. We thus affirm as to both issues.
A
We begin, as we must, by considering the propriety of the district court‘s
exercise of subject-matter jurisdiction over this case. “Federal courts are courts
The plaintiffs challenge the district court‘s denial of their motion to remand the case to state court. We first note that we have authority to address the denial of a motion to remand as part of our review of the final judgment of the district court under
The defendants argue that the district court had jurisdiction under CAFA. Under CAFA, a federal district court has subject matter jurisdiction “over class actions involving [1] at least 100 members and [2] over $5 million in controversy when [3] minimal diversity is met (between at least one defendant and one plaintiff-class member).” Coffey v. Freeport McMoran Copper & Gold, 581 F.3d 1240, 1243 (10th Cir. 2009) (per curiam). The defendants allege that those three elements are met, and the plaintiffs have not argued otherwise in their briefs to this court or before the district court. Instead, the plaintiffs argue that at least one of three CAFA exceptions applies here. Because the defendants have effectively established that the CAFA elements are met, the burden shifts to the plaintiffs to
i
The plaintiffs first argue that the “local controversy” exception, as defined in
The local controversy exception provides that a federal court “shall decline” jurisdiction where: (1) more than two-thirds of the class members are citizens of the state where the action is filed; (2) plaintiffs seek “significant relief” from at least one local defendant who is a citizen of the state and whose alleged conduct forms a “significant basis” for the claims asserted; (3) the “principal injuries” were incurred in the state; and (4) no other class action “has been filed asserting the same or similar factual allegations against any of the defendants on behalf of the same or other persons” in the three years prior.
The district court found that the case of Coleman v. ReconTrust Co., No. 2:10-CV-1099, 2012 WL 1302567 (D. Utah Apr. 16, 2012), filed approximately eight months before this action, was the type of class action that prevented the plaintiffs from making the requisite showing on the fourth prong. We agree: the Coleman complaint not only raises similar factual allegations, but also asserts the same basis of wrongdoing—viz., that ReconTrust exercised the power of sale on deeds of trust in Utah without being authorized to do so under Utah law. The Coleman complaint alleged that plaintiffs have been “foreclosed upon and some times [sic] dispossessed from their homes by defendants acting through an entity, ReconTrust, which lacks authority to foreclose non-judicially because it lacks the power of sale under Utah law.” Aplees.’ Supp. App. at 27–28 (Compl., Coleman
Likewise, both complaints allege wrongful foreclosures based on ReconTrust‘s lack of authority under Utah law. The Coleman complaint alleges that defendants “with knowledge that such proceedings were beyond the authority of defendant ReconTrust, chose to initiate and carry out non-judicial foreclosures.” Aplees.’ Supp. App. at 32. Likewise, the Dutcher complaint alleges that defendants “have conducted wrongful non-judicial foreclosures . . . knowing that Defendants were not authorized by Utah law to initiate or conduct such foreclosure sales.” Aplts.’ App. at 34. We are struck by the similarity of the factual allegations between the two complaints, which allege, in nearly identical language, the same acts of wrongdoing by the same defendant.
Nevertheless, the plaintiffs attempt to distinguish Coleman in two ways. First, they argue that Coleman was primarily a case about violations of the Fair Debt Collection Practices Act and the Utah Pattern of Unlawful Activity Act, while the present case is about the violation of state statutes governing the power of sale on deeds of trust. However, differences in the causes of action pleaded are
Even if we were to adopt Rasberry‘s reasoning, however, it would not work to benefit the plaintiffs. Unlike the actions at issue in Rasberry, the causes of action in Coleman and the causes of action at issue in this case fundamentally rely on demonstrating the same facts: viz., that ReconTrust foreclosed on Utah properties held in deed of trust without holding the power of sale. The plaintiffs attempt to distinguish Coleman by claiming that the plaintiffs in that case were required to show “(1) the ‘initiation of foreclosure to coerce payment of the debt‘;
As a second defense, the plaintiffs argue that Coleman was not a class action, despite the case being filed as a putative class action, because the district court ultimately denied class certification. Thus, they argue, there was no true prior class action to preempt their suit under the local controversy exception.
The text of the local controversy exception states that it applies only when “no other class action has been filed” within the three year period.
Moreover, the rationale underlying the no-prior-class-action provision of the CAFA exception confirms our understanding of the statute‘s terms—viz., that the statute refers to cases filed as class actions, rather than exclusively to those that are later certified as class actions. The legislative history evinces one especially salient observation regarding the provision: the filing of multiple actions is a strong signal that the cases do not truly constitute “primarily local, intrastate matters,” which state courts have a substantial interest in adjudicating. Coffey, 581 F.3d at 1243; see S. Rep. No. 109–14 at *40–41. For that reason, we are convinced that CAFA meant what it said when it referenced cases that are “filed” as class actions.
Accordingly, we agree with the district court that Coleman was a class action that raised similar factual claims as the present case; therefore, the court‘s denial of remand under the local controversy exception was proper.
ii
Nor are the plaintiffs entitled to a remand to state court under the “home state” exception. CAFA provides that courts “shall decline” jurisdiction where (1) more than two-thirds of the members are citizens of the state where the action
In determining the applicability of the home state exception, we must decide the following dispute between the parties: Must the plaintiffs requesting remand show that all of the primary defendants are citizens of the state, or is it sufficient for them to show that any primary defendant is a citizen of the state? Unsurprisingly, the defendants urge the former view—viz., they argue that the plaintiffs cannot make the necessary showing because all of the primary defendants are not Utah citizens; specifically, ReconTrust, BAC, and BOA are not. The plaintiffs argue for the latter view, asserting that they have satisfied this criterion because Mr. Matheson and his law firm, MMOJ, are Utah citizens.
We recently had the opportunity to address a very similar question in Woods v. Standard Insurance Co. In that case, we were required to determine whether the “state action” exception—which excludes CAFA jurisdiction when “the primary defendants are States, State officials, or other governmental entities against whom the district court may be foreclosed from ordering relief“—required
In our view, the reasoning of Woods applies with full force to the home state exception. Like the state action exception, the home state exception uses “the definite article, ‘the,’ before the plural noun, ‘primary defendants,’ and the . . . plural verb, ‘are.‘” Woods, 771 F.3d at 1263; see
iii
Finally, the plaintiffs urge us to hold that CAFA‘s discretionary exception applies. This exception allows a federal court to decline to exercise jurisdiction over a class action that is otherwise covered by CAFA based on six enumerated factors. See
The plaintiffs also argue that “principles of comity” suggest that we should decline to exercise federal jurisdiction. Aplts.’ Opening Br. at 33. They base this argument on Levin v. Commerce Energy, Inc., 560 U.S. 413 (2010), a case in which the Supreme Court said that a federal constitutional challenge to a state tax exemption should proceed in state court to permit the state to rule on its own tax administration scheme. See Levin, 560 U.S. at 417, 421. The Court specifically noted that Levin invoked “the comity doctrine applicable in state taxation cases [which] restrains federal courts from entertaining claims for relief that risk disrupting state tax administration.” Id. at 417 (emphases added). This case does not present similar concerns: it presents litigation against multiple parties from multiple states and implicates the federal banking regulatory regime. There is presented here neither a state tax administrative scheme nor a risk to Utah‘s ability to collect taxation. We conclude that the comity doctrine is inapplicable.
In addition, the plaintiffs argue that this case should be in state court because Utah‘s supreme court has already ruled on the merits question before us, but “[i]t is beyond cavil that we are not bound by a state court interpretation of federal law.” Wilder v. Turner, 490 F.3d 810, 814 (10th Cir. 2007) (quoting Grantham v. Avondale Indus., Inc., 964 F.2d 471, 473 (5th Cir. 1992)). Accordingly, we do not perceive the foregoing reasons to be sufficient to deprive the federal courts of jurisdiction.
In their final argument addressed to jurisdictional concerns, the plaintiffs argue that the district court abused its discretion when, on remand, it ruled on the CAFA jurisdictional question without first granting the plaintiffs’ request for jurisdictional discovery. We review a denial of jurisdictional discovery for an abuse of discretion, asking whether the court‘s denial prejudiced a litigant because “pertinent facts bearing on the question of jurisdiction are controverted . . . or . . . a more satisfactory showing of the facts is necessary.” Sizova v. Nat‘l Inst. of Standards & Tech., 282 F.3d 1320, 1326 (10th Cir. 2002) (first omission in original) (quoting Wells Fargo & Co. v. Wells Fargo Express Co., 556 F.2d 406, 430 n.24 (9th Cir. 1977)). It is not enough for the plaintiffs to show that denial of discovery deprived them of discovering some fact; they must show that they were prejudiced by the absence of that fact. See Breakthrough Mgmt. Grp., Inc. v. Chukchansi Gold Casino & Resort, 629 F.3d 1173, 1189-90 (10th Cir. 2010). The burden is on the party that sought jurisdictional discovery to demonstrate that it was prejudiced by the denial. Id. at 1189 n.11.
In their request for “limited jurisdictional discovery,” the plaintiffs sought: (1) to demonstrate the “role as primary defendants in this case” of the Matheson and MMOJ defendants, and (2) “to establish that Plaintiffs have exceeded the one-third or two-thirds threshold of Utah citizens as class members for purposes of applying the Local Controversy, Home State and discretionary exceptions to
Even assuming that discovery had shed significant light on these areas, we still could not divine a basis to remand the case under the CAFA exceptions at issue: indeed, our analysis above assumed that Mr. Matheson and MMOJ were primary defendants and did not address the citizenship of members of the putative plaintiff class. Instead, we rejected the local controversy exception requirement because of a prior class action raising substantially similar factual issues, and we rejected the home state and discretionary exceptions because it was undisputed that not all primary defendants are Utah citizens. Jurisdictional discovery would have been futile because the development of facts regarding the two identified areas would not have changed our jurisdictional analysis. Therefore, the district court did not abuse its discretion in denying the plaintiffs’ jurisdictional discovery request.
B
Assured that our jurisdiction over this case is proper, we now review the merits of the district court‘s grant of the defendants’ motion to dismiss. “We review the district court‘s dismissal under Rule 12(b)(6) de novo,” and, in doing so, “we review for plausibility, specifically whether enough facts have been pled to state a plausible claim.” United States ex rel. Lemmon v. Envirocare of Utah, Inc., 614 F.3d 1163, 1167 (10th Cir. 2010).
1
The parties center their analysis on the same place in determining whether ReconTrust was authorized to conduct trustee sales in Utah: specifically,
authorized and empowered to grant by special permit to national banks applying therefor, when not in contravention of State or local law, the right to act as trustee . . . or in any other fiduciary
capacity in which State banks, trust companies, or other corporations which come into competition with national banks are permitted to act under the laws of the State in which the national bank is located.
The parties’ arguments (albeit for different reasons) proceed on the premise that
The present dispute turns on the question of which state‘s law does
words, there is no question here about a critical, foundational point: federal law is controlling. However, the federal banking provision at issue,
Acting pursuant to its regulatory authority, see
[f]or each fiduciary relationship, the state referred to in section 92a is the state in which the bank acts in a fiduciary capacity for that relationship. A national bank acts in a fiduciary capacity in the state in which it accepts the fiduciary appointment, executes the documents that create the fiduciary relationship, and makes discretionary decisions regarding the investment or distribution of fiduciary assets. If these activities take place in more than one state, then the state in which the bank acts in a fiduciary capacity for section 92a purposes is the state that the bank designates from among those states.
The district court concluded that all three factors point to Texas, noting that the relevant facts were “uncontested” and that the plaintiffs had “alleged no contrary facts bearing on where the relevant events took place.” Aplts.’ App. at 147. Because it was undisputed that Texas law would permit the foreclosures at issue, the district court found that the plaintiffs had failed to state any claim on which relief could be granted.
On appeal, the plaintiffs argue that (1) the plain language of
We begin with the plaintiffs’ first argument—concerning the plain language of
2
To determine whether ReconTrust was authorized to foreclose on the plaintiffs’ properties under
when not in contravention of State or local law, the right to act as trustee . . . or in any other fiduciary capacity in which State banks, trust companies, or other corporations which come into competition with national banks are permitted to act under the laws of the State in which the national bank is located.
In an (unpublished) opinion that we deem persuasive here, a panel of our court has already concluded that the statute‘s use of the term “located” is ambiguous. See Garrett v. ReconTrust Co., N.A., 546 F. App‘x 736, 738-39 (10th Cir. 2013). In Garrett, the panel reasoned that “Section 92a provides no direction as to the critical question: in which ‘State’ is the national bank ‘located’ where, as here, activities related to the foreclosure sale occur in more than one state?” Id. at 738 (citing Citizens & S. Nat‘l Bank v. Bougas, 434 U.S. 35, 44 (1977) (“There is no enduring rigidity about the word ‘located.‘“)). We agree with this reasoning: the statute simply does not provide any indication of where a bank is “located” in situations like this one, where a bank operates out of one state but conducts foreclosures in another. Following the Garrett decision, we conclude that the plain terms of the statute do not resolve our inquiry; therefore, we cannot stop there.
In resisting this conclusion, the plaintiffs contend that the language of
We respectfully disagree with both decisions and find them unpersuasive.
We are constrained to observe that both decisions offer only a conclusory analysis of
Relying heavily on Bell‘s reasoning, the Utah Supreme Court‘s analysis in Sundquist is similarly unpersuasive. The Sundquist court explained that
The key inquiry under the statute is determining where a national bank is “located.” Locate is a commonly used term. Webster‘s dictionary defines “locate” as “to determine or indicate the place, site, or limits of” something. “Locate,” Merriam-Webster Online Dictionary, 2013, http://www.merriam-webster.com (last visited July 8, 2013). This suggests that a national bank is located in the place or places where it acts or conducts business.
Id. at 1009 (capitalization altered). The court deemed this definition to be consistent with Bell. Id. (noting its agreement with Bell that, under the plain terms of
In sum, we reject the plaintiffs’ plain-meaning argument. We conclude that
3
Having concluded that the plain language of
[f]or each fiduciary relationship, the state referred to in section 92a is the state in which the bank acts in a fiduciary capacity for that relationship. A national bank acts in a fiduciary capacity in the state in which it accepts the fiduciary appointment, executes the documents that create the fiduciary relationship, and makes discretionary decisions regarding the investment or distribution of fiduciary assets. If these activities take place in more than one state, then the state in which the bank acts in a fiduciary capacity for section 92a purposes is the state that the bank designates from among those states.
Applying these factors, the district court concluded that all three point to Texas. The court explained that
[s]everal documents submitted by Recon are helpful [in applying the § 9.7(d) factors]. The substitution of trustee documents as to these properties were signed by the beneficiary bank in Texas, and Recon lists a Texas address for return mail. Furthermore, the notices of default executed by Recon were signed and notarized in Texas and had Texas return addresses. These facts are uncontested and tend to establish that Recon was making its foreclosure decisions, as well as accepting its appointments, in Texas. Considering the same facts, Garrett reached the same conclusion.
In response, Plaintiffs have alleged no contrary facts bearing on where the relevant events took place. Rather, they have placed their faith in fervent repetitions of the conclusion that Recon was acting as a fiduciary in Utah.
Aplts.’ App. at 146-47 (footnotes omitted) (discussing Garrett, 546 F. App‘x at 741-42). Because it was undisputed that Texas law would permit the foreclosures at issue, the district court found that the plaintiffs had failed to state any claim on which relief could be granted.
The plaintiffs raise no attack on appeal to the district court‘s conclusion that the
Instead, the plaintiffs now attempt to argue on appeal, by reference to the Supreme Court‘s Chevron decision, that
The plaintiffs have not preserved their Chevron-based unreasonableness argument for review. They acknowledge that they first challenged the regulation‘s reasonableness under Chevron in a motion to reconsider that they filed following the grant of the defendants’ motion to dismiss. The district court denied the motion and, in doing so, it declined to reach the merits of this late-blooming argument. The court expressly recognized that “Plaintiffs did not make a Chevron review argument previously,” and it deemed the plaintiffs’ conduct regarding this argument to be impermissible in the reconsideration context—viz., “an [impermissible] attempt to ‘advance arguments that could have been raised in prior briefing.‘” Aplts.’ App. at 245 (quoting Broad. Music, Inc. v. Creation Club, Inc., No. 2:06cv504, 2007 WL 752177, at *1 (D. Utah Mar. 6, 2007)).
We generally decline to consider the merits of arguments that a party raises for the first time in a motion to reconsider, where the district court refrained from reaching the merits of such arguments in denying the motion. See Kleinsmith v. Shurtleff, 571 F.3d 1033, 1038-39 (10th Cir. 2009) (declining to reach the merits of appellant‘s vagueness claim where the district court had declined to do so after it was first raised in a motion to reconsider); Burnette v. Dresser Indus., Inc., 849 F.2d 1277, 1285 (10th Cir. 1988) (same); cf. Oyler v. Allenbrand, 23 F.3d 292, 299-300 (10th Cir. 1994) (considering arguments first raised in motion to reconsider only because “the district court considered . . . and ruled on them“). And the plaintiffs have offered us no reason to deviate from this decisional path.11 We thus decline to consider under the rubric of Chevron whether
Notably, in its amicus brief, the State has sought to fill the lucuna left by the plaintiffs regarding the application of the
In sum, we reject the plaintiffs’ argument that the plain text of
III
For the foregoing reasons, we AFFIRM the district court‘s judgment.
LUCERO, J., concurring.
I agree with my colleagues in the majority that the district court properly decided it had jurisdiction under the Class Action Fairness Act. And I reluctantly concur with my colleagues on the merits, solely on the basis of waiver. I write separately to express my view that
By statute, national banks may act as trustees in the same manner that state banks “are permitted to act under the laws of the State in which the national bank is located.”
I
As the majority opinion correctly notes, the plaintiffs properly preserved only a single argument regarding
Although I concur with the majority that the plaintiffs’ plain text contention fails, the arguments the plaintiffs attempt to raise for the first time on appeal carry some force. The OCC defines a bank‘s location as the state in which it “acts in a fiduciary capacity.”
Nothing in the statute compels the OCC‘s conclusion that a bank‘s location is so limited. See Sundquist, 311 P.3d at 1013 (“[T]here is nothing in the statute itself that ascribes any particular significance of these three particular acts, while rendering other acts undertaken by the bank irrelevant.“). In drafting
In promulgating
In addition to arbitrarily limiting the circumstances in which a national bank will be deemed to have acted in a fiduciary capacity, the OCC‘s interpretation suffers from two other shortcomings. First, the interpretation cuts against a central policy of the statute: ensuring competitive equality between state and national banks. A national bank can choose to perform at least some of the listed activities from any location. See
By allowing national banks to select which state‘s law it will follow regardless of the state in which it acts,
I would not construe the ambiguity in the term “located” as a delegation of authority to a federal agency to decide that Texas law applies to Utah foreclosures. The legislative history of the statute counsels strongly against such a conclusion. In a Senate Report accompanying the National Banking Act of 1962, the Senate Committee on Banking and Currency stated that “this bill will result in no change in the present distribution of power between Federal and State Governments.” Bell, 860 F. Supp. 2d at 1303 (quoting S. Rep. No. 87-2039 (1962), as reprinted in 1962 U.S.C.C.A.N. 2736). Yet
Unfortunately, the plaintiffs in this case have waived any arguments regarding Chevron or the interpretive canons noted above.3 (See Majority Op. 41-43.) In the absence of such a waiver, however, I would hold for the above reasons that
HOLMES, Circuit Judge, concurring.
I write separately to offer some clarifying remarks regarding the not infrequent use of the term “preemption” (or derivatives thereof) in the context of
Rooting this conceptual observation in the soil of this case, I observe that the defendants in their briefing occasionally suggest that this dispute involves a question of conflict preemption. See Aplees.’ Br. at 30 n.12 (“This case pertains to preemption of that portion of the Utah statute which conflicts with
As the plaintiffs recognize, however, this case does not involve “typical” conflict preemption, Aplts.’ Reply Br. at 3, where federal law—especially in the context of national banks—entirely supplants and renders inoperative conflicting state-law provisions. See Barnett Bank of Marion Cty., N.A. v. Nelson, 517 U.S. 25, 32 (1996) (stating that the “history is one of interpreting grants of both enumerated and incidental ‘powers’ to national banks as grants of authority not normally limited by, but rather ordinarily pre-empting, contrary state law“); id. at 33 (“In defining the pre-emptive scope of statutes and regulations granting a power to national banks, these cases take the view that normally Congress would not want States to forbid, or to impair significantly, the exercise of a power that Congress explicitly granted.“); see also Hughes v. Talen Energy Mktg., LLC, 136 S. Ct. 1288, 1297 (2016) (“Put simply, federal law preempts contrary state law.“). In other words, the inquiry in the classic conflict-preemption scenario focuses on whether federal law conflicts with state law such that the force of the latter is nullified; if so, purely federal law will control the contested terrain. That is not so in this setting pertaining to the fiduciary powers of national banks. More specifically, a role for state law is expressly built into the federal regulatory scheme: that is, the federal banking provision at issue,
Yet, it could be argued that the outcome of this state-law competition does give rise, in a very limited sense, to a unique form of preemption, in that the law of a state—the loser in the competition—is displaced through force of federal law and rendered null. Of course, because state law is built into the federal scheme, the law of the loser state in the competition is replaced by the law of another state (i.e., the winner). So, it is not classic conflict preemption, as discussed above. However, the term “preemption” (as well as derivatives thereof) has been used in this very limited sense by some courts in describing the effect of
Notes
Although the current regulation is unreasonable, the OCC has previously set forth a permissible interpretation of
the effect of section 92a is that in any specific state, the availability of fiduciary powers is the same for out-of-state national banks or for in-state national banks and is dependent upon what the state permits for its own state institutions. . . . Therefore, a national bank with its main office in one state . . . may conduct fiduciary business in that state and other states, depending upon—with respect to each state—whether each state allows its own institutions to engage in fiduciary business.
Office of the Comptroller of the Currency, Authority of a National Bank to Conduct Fiduciary Activities Nationwide Through Trust Offices in Various States, Interpretive Letter No. 695, 1996 WL 187825, at *4 (Dec. 8, 1995) (emphasis added). This reading of the statute provided a “level playing field” between state-chartered banks, in-state national banks, and out-of-state national banks. Id. at *14. Two later interpretative letters from the OCC, however, reversed this position. See Fiduciary Activities of National Banks, 66 Fed. Reg. 34,792, 34,795 (July 2, 2001) (describing interpretive letters rejecting the prior view).
[w]henever the laws of such State authorize or permit the exercise of any or all of the foregoing powers by State banks, trust companies, or other corporations which compete with national banks, the granting to and the exercise of such powers by national banks shall not be deemed to be in contravention of State or local law within the meaning of this section.
Nonetheless, we exercise our discretion to consider the substance of the plaintiffs’ specific argument regarding the plain meaning of the statutory terms because they raised essentially the same plain-meaning argument before the district court without relying on the Chevron framework. Cf. Abernathy v. Wandes, 713 F.3d 538, 552 (10th Cir. 2013) (noting that “the decision regarding what issues are appropriate to entertain on appeal in instances of lack of preservation is discretionary“). More specifically, the plaintiffs’ response to the defendants’ motion to dismiss before the district court asserted that the plain language of the statute supports the plaintiffs’ position that Utah law is the relevant state law for purposes of
We do not, however, consider the remaining arguments that plaintiffs now assert as part of their Chevron step-one analysis. While recognizing that we generally “employ[] traditional tools of statutory construction,” Chevron, 467 U.S. at 843 n.9, at the first stage of the Chevron analysis, we limit our present analysis to the plaintiffs’ plain-meaning argument because it is the only argument (continued...)
(...continued) concerning the interpretation ofThough generally following Bell‘s lead, even the Utah Supreme Court in Sundquist did not go so far as to incorporate legislative history into its plain-meaning analysis. However, it nevertheless determined that its plain-meaning “conclusion“—viz., “the plain meaning of the statute is clear” and indicates that “[a] national bank is located in those places where it acts or conducts business“—“[was] bolstered by the legislative history.” 311 P.3d at 1010. Under our precedent, given Sundquist‘s conclusion, ordinarily this latter step is “both unnecessary and improper.” Valdez, 789 F.2d at 1481.
(...continued) of a statute it construes in any case implicating an interpretive agency regulation—even where the parties never contested the reasonableness of the regulation‘s interpretation. This stance is misguided. Cf. Garrett, 546 F. App‘x at 739 n.1 (declining to consider argument that
Because we uphold the district court‘s conclusion that ReconTrust was located, for purposes of