Summary
holding that Wells Fargo Bank, NA is a citizen of California
Summary of this case from Dutton v. Wells Fargo Bank, N.A.Opinion
Case No. CV 11-2685-JFW (RZx)
06-01-2011
Coby Goodman v. Wells Fargo Bank, NA, et al.
LASC , Northwest District
Case No.: LC090605 CIVIL MINUTES -- GENERAL
PRIORITY SEND
PRESENT: HONORABLE JOHN F. WALTER, UNITED STATES DISTRICT JUDGE S. Eagle
Courtroom Deputy None Present
Court Reporter ATTORNEYS PRESENT FOR PLAINTIFFS:
None ATTORNEYS PRESENT FOR DEFENDANTS:
None
PROCEEDINGS (IN CHAMBERS): ORDER GRANTING PLAINTIFF'S MOTION FOR ORDER REMANDING ACTION [filed 5/4/11; Docket No. 27]; and
ORDER DENYING AS MOOT DEFENDANT WELLS FARGO BANK, N.A.'S MOTION TO DISMISS CLASS ACTION COMPLAINT [5/3/11; Docket No. 24]
On May 3, 2011, Defendant Wells Fargo Bank, N.A. ("Wells Fargo") filed a Motion to Dismiss Class Action Complaint ("Motion to Dismiss"). On May 16, 2011, Plaintiff Coby Goodman ("Plaintiff") filed his Opposition. On May 23, 2011, Wells Fargo filed a Reply. On May 4, 2011, Plaintiff filed a Motion for Order Remanding Action ("Motion for Remand"). On May 16, 2011, Defendant filed its Opposition. On May 23, 2011, Plaintiff filed a Reply. Pursuant to Rule 78 of the Federal Rules of Civil Procedure and Local Rule 7-15, the Court finds that these matters are appropriate for decision without oral argument. The hearing calendared for June 6, 2011 is hereby vacated and the matters taken off calendar. After considering the moving, opposing, and reply papers and the arguments therein, the Court rules as follows:
I. Factual and Procedural Background
On July 26, 2010, Plaintiff filed a Complaint against Wells Fargo, Cal-Western Reconveyance Corporation ("Cal-Western"), and Fidelity National Title Insurance Company ("Fidelity"). On January 7, 2011, Plaintiff filed a motion to amend the Complaint to add class allegations against Wells Fargo. On February 25, 2011, the Los Angeles Superior Court granted Plaintiff's motion to amend and deemed the First Amended Complaint filed on that same date. In his First Amended Complaint, Plaintiff alleges claims for breach of contract; breach of the implied covenant of good faith and fair dealing; promissory estoppel; and unlawful, unfair, or fraudulent business practices pursuant to California Business & Professions Code §§ 17200, et seq.
It is not clear if Plaintiff intended Cal-Western and Fidelity to remain parties in the First Amended Complaint because while they are identified in the caption, there are no charging allegations against them in the First Amended Complaint. However, as Wells Fargo acknowledges in its Notice of Removal, Cal-Western and Fidelity are both citizens of California and, thus, to the extent they are parties to the First Amended Complaint, their presence destroys diversity.
On March 30, 2011, Wells Fargo filed a Notice of Removal, removing this action to this Court. In its Notice of Removal, Wells Fargo claimed that this Court had subject matter jurisdiction pursuant to the Class Action Fairness Act, 28 U.S.C. § 1332(d) ("CAFA"), and diversity jurisdiction pursuant to 28 U.S.C. § 1332(a).
II. Legal Standard
A motion to remand is the proper procedure for challenging removal. See, N. Cal. Dist. Council of Laborers v. Pittsburgh-Des Moines Steel Co., 69 F.3d 1034, 1038 (9th Cir.1995). The removal statute is strictly construed, and any doubt about the right of removal is resolved in favor of remand. See, Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir.1992); see, also, Prize Frize, Inc. v. Matrix, Inc., 167 F.3d 1261, 1265 (9th Cir.1999). Consequently, if a plaintiff challenges the defendant's removal of a case, the defendant bears the burden of establishing the propriety of the removal. See, Gaus, 980 F.2d at 566; see, also, Duncan v. Stuetzle, 76 F.3d 1480, 1485 (9th Cir.1996) (citations and quotations omitted) ("Because of the Congressional purpose to restrict the jurisdiction of the federal courts on removal, the statute is strictly construed, and federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first instance.").
III. Discussion
Under CAFA, a federal district court has subject matter jurisdiction over a class action in which: (1) there are 100 or more proposed class members; (2) at least some of the members of the proposed class have a different citizenship from the defendant; and (3) the aggregated claims of the proposed class members exceed the sum or value of $5,000,000. See 28 U.S.C. § 1332(d). Federal jurisdiction founded on diversity jurisdiction under Section 1332(a) requires that the parties be in complete diversity and the amount in controversy exceed $75,000. See 28 U.S.C. § 1332(a).
In this case, it is undisputed that Plaintiff and all the putative class members are citizens of California. Wells Fargo is a national banking association, and claims that it is a citizen of only South Dakota, where it has designated its main office. Plaintiff does not contest that Wells Fargo is a citizen of South Dakota. However, Plaintiff argues that Wells Fargo is also a citizen of California, which Plaintiff claims, and Wells Fargo does not contest, is its principal place of business.
Thus, the question is whether, for purposes of diversity jurisdiction, Wells Fargo is a citizen of the state where its principal place of business is located. As the Court in Mount v. Wells Fargo Bank, N.A., 2008 WL 5046286 (C.D. Cal. Nov. 24, 2008), explained, the Supreme Court avoided answering this question in Wachovia Bank, N.A. v. Schmidt, 546 U.S. 303 (2006). In Schmidt, the Fourth Circuit held that a national banking association is a citizen of every state in which it has a branch. The Supreme Court reversed that determination and held that, under 28 U.S.C. § 1348, a national banking association is a citizen of the state in which it is "located," which is the state where its main office is located as specified in its articles of association. Schmidt, 546 U.S. at 318. However, "because this issue [was] not presented by the parties or necessary to [the] decision," the Supreme Court declined to state whether a national banking association is also a citizen of the state of its principal place of business, noting that the location of the bank's "main office" and its principal place of business will normally coincide. Id. at 315 n. 8 and 317 n. 9.
Because the Ninth Circuit has not addressed this question, the Court turns to the decisions of the Fifth and Seventh Circuit on this issue. See Horton v. Bank One, N.A., 387 F.3d 426, 436 (5th Cir. 2004); Firstar Bank, N.A. v. Faul, 253 F.3d 982, 994 (7th Cir. 2001). Both Horton and Firstar rejected the contention that a national bank is located wherever it has branches, because that would greatly reduce its access to the federal courts, and both concluded a national bank is citizen of the state of its principal place of business and the state listed in its organization certificate or articles of association. Horton, 387 F.3d at 436; Firstar Bank, 253 F.3d at 994. As those cases noted, this would place national banks on the same footing as any other corporation. The Court finds these opinions persuasive and follows them in this case. See, also, Saberi v. Wells Fargo Home Mortgage, 2011 WL 197860 (S.D. Cal. Jan. 20, 2011) (remanding action to state court and holding that Wells Fargo is a citizen of both South Dakota and California where Wells Fargo had alleged diversity jurisdiction pursuant to Section 1332(a) in its Notice of Removal); Mount, 2008 WL 5046286 (remanding action to state court and holding that Wells Fargo is a citizen of both South Dakota and California where Wells Fargo had alleged jurisdiction pursuant to CAFA in its Notice of Removal).
Because both Plaintiff and Wells Fargo are citizens of California, no diversity jurisdiction exists and the case is remanded to Los Angeles Superior Court. Saberi, 2011 WL 197860; Mount, 2008 WL 5046286.
IV. Conclusion
For all the foregoing reasons, Plaintiff's Motion for Remand is GRANTED. This action is hereby REMANDED to Los Angeles Superior Court. See 28 U.S.C. § 1447(c). In light of the Court's Order remanding this action to Los Angeles Superior Court, Wells Fargo's Motion to Dismiss is DENIED as moot.
IT IS SO ORDERED.