No CAFA Issue – No Interlocutory Appeal.

By McGlinchey Stafford
McGlinchey Stafford PLLC
Aug 12, 2010

Peralta v. Countrywide Home Loans, Inc., Slip Copy, 2010 WL 1500047, (9th Cir. (Cal.), Apr. 15, 2010) (No. 10-15413).

The Ninth Circuit recently vacated the permission it granted to appeal the remand order and dismissed the appeal holding that a non-CAFA issue, although important, does not warrant interlocutory appellate review of a remand order.

The plaintiffs brought a putative class action in California state court against Countrywide Home Loans, Inc., f/k/a America’s Wholesale Lender, and Countrywide Bank, FSB.

The defendants removed the action to the federal court under CAFA’s diversity jurisdiction. Subsequently, the district court denied the plaintiffs’ motion to remand on the ground that minimal diversity was established because the plaintiffs are California citizens, and Countrywide Bank is a Colorado citizen, the state of its main office. While doing so, the district court ruled that under 28 U.S.C. §1348, national banks are citizens of the states in which they are “located.”

The plaintiffs filed an application to appeal, which the Ninth Circuit initially granted. The only issue the plaintiffs raised in the appeal was whether Countywide Bank was also a citizen of California, allegedly the state of its principal place of business. The plaintiffs argued that under 28 U.S.C. §1332(c)(1), corporations are citizens of their state of incorporation and principal place of business.

The Ninth Circuit noted that 28 U.S.C. §1453(c)(1) provides discretionary appellate review of orders granting or denying motions to remand a class action to the state court from which it was removed. This provision is intended to create a body of appellate law to guide interpretation of CAFA without undue delay of class action litigation. Absent an extension of time, the court must render judgment within 60 days of granting an application to appeal. Under this framework, the presence of an important, but non-CAFA issue, does not warrant interlocutory appellate review of a remand order. To support this finding, the Ninth Circuit referred to decisions of other circuit courts, Alvarez v. Midland Credit Mgmt., Inc., 585 F.3d 890, 894 (5th Cir. 2009) and Coffey v. Freeport McMoran Copper & Gold, 581 F.3d 1240, 1247-48 (10th Cir. 2009). (Editors’ Note: See the CAFA Law Blog analysis of Alvarez posted on February 15, 2010 and the CAFA Law Blog analysis of Coffey posted on April 15, 2010).

The Ninth Circuit found that the resolution of Countrywide Bank’s citizenship did not implicate an interpretation of CAFA. The issues involved interpretation were–the term “located” in §1348, consideration of §1348’s extensive legislative history, and analysis of the Supreme Court’s interpretation of §1348 in Wachovia Bank, N.A. v. Schmidt, 546 U.S. 303 (2006). Thus, the Ninth Circuit declined to resolve the complex jurisdictional issue of a national bank’s citizenship on a limited record, with abbreviated briefing, and a decisional deadline.