Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-14-35943/USCOURTS-ca9-14-35943-0/pdf.json

Parties Involved:
Laura Zamora Jordan
Appellee
Nationstar Mortgage LLC
Appellant

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

LAURA ZAMORA JORDAN, as her

separate estate, and on behalf of

others similarly situated,

Plaintiff-Appellee,

v.

NATIONSTAR MORTGAGE LLC,

Defendant-Appellant.

No. 14-35943

D.C. No.

2:14-cv-00175-

TOR

LAURA ZAMORA JORDAN, as her

separate estate, and on behalf of

others similarly situated,

Plaintiff-Appellee,

v.

NATIONSTAR MORTGAGE LLC,

Defendant-Appellant.

No. 15-35113

D.C. No.

2:14-cv-00175-

TOR

OPINION

Appeal from the United States District Court

for the Eastern District of Washington

Thomas O. Rice, District Judge, Presiding

Argued and Submitted

March 9, 2015—San Francisco, California

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2 JORDAN V. NATIONSTAR MORTGAGE

Filed April 1, 2015

Before: J. Clifford Wallace, Milan D. Smith, Jr.,

and Paul J. Watford, Circuit Judges

Opinion by Judge Milan D. Smith, Jr.

SUMMARY*

Class Action Fairness Act / Removal

The panel reversed the district court’s order remanding

the class action proceeding to state court on the basis that the

removal was untimely under 28 U.S.C. § 1446(b).

Defendant Nationstar Mortgage LLC removed the case

within thirty days of ascertaining removability under the

Class Action Fairness Act (“CAFA”), but more than two

years after the case became removable on federal question

grounds pursuant to 28 U.S.C. § 1331.

The panel held that a case becomes removable for

purposes of 28 U.S.C. § 1446 when the CAFA ground for

removal is first disclosed. The panel held that a defendant

may remove a case from state court within thirty days of

ascertaining that the action is removable under CAFA, even

if an earlier pleading, document, motion, order, or other paper

revealed an alternative basis for federal jurisdiction. The

panel concluded that Nationstar’s removal under CAFA was

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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JORDAN V. NATIONSTAR MORTGAGE 3

timely, and that the action therefore properly belonged in

federal court. Finally, because the removal under CAFA was

timely, the panel reversed the district court’s award of

attorneys’ fees to the plaintiff that was premised on improper

removal under 28 U.S.C. § 1447(c).

COUNSEL

Jan T. Chilton (argued), Severson & Werson PC, San

Francisco, California; John A. Knox, Williams, Kastner &

Gibbs PLLC, Seattle, Washington, for Defendant-Appellant.

Clay M. Gatens (argued), Jeffers, Danielson, Sonn &

Aylward, P.S., Wenatchee, Washington; Michael D. Daudt,

Terrell Marshall Daudt & Willie PLLC, Seattle, Washington,

for Plaintiff-Appellee.

OPINION

M. SMITH, Circuit Judge:

Defendant-Appellant Nationstar Mortgage LLC

(Nationstar) appeals from the district court’s order granting

Plaintiff-Appellee Laura Zamora Jordan’s (Jordan) motion to

remand this class action proceeding to state court because its

removal was untimely under 28 U.S.C. § 1446(b). Section

1446(b)(1) permits defendants to remove state-court actions

to federal court within thirty days of receiving an initial

pleading or other document that reveals a basis for removal.

However, if the initial pleading does not provide a basis for

removal, a defendant may remove an action within thirty days

of receiving “an amended pleading, motion, order, or other

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4 JORDAN V. NATIONSTAR MORTGAGE

paper” from which it may first be ascertained that the case is

removable. 28 U.S.C. § 1446(b)(3). Nationstar removed the

case within thirty days of ascertaining removability under the

Class Action Fairness Act (CAFA), 28 U.S.C. §§ 1332, 1453,

but more than two years after the case became removable on

federal question grounds pursuant to 28 U.S.C. § 1331.

Nationstar urges us to extend to the CAFA context the

logic of our decision in Durham v. Lockheed Martin Corp.,

445 F.3d 1247, 1253 (9th Cir. 2006), which held that the

thirty-day removal clock is reset when a defendant discovers

that a case is removable on federal officer grounds under

28 U.S.C. § 1442(a)(1), even if the defendant was previously

aware of a different basis for federal jurisdiction. In light of

the Supreme Court’s recent opinion in Dart Cherokee Basin

Operating Co., LLC v. Owens, 135 S. Ct. 547 (2014), and

mindful of Congress’s intent to “strongly favor the exercise

of federal diversity jurisdiction of class actions with interstate

ramifications,” S. Rep. No. 109–14, at 35 (2005), reprinted

in 2005 U.S.C.C.A.N. 3, at 34 (2005), we agree that the

approach to “federal officer” removal taken in Durham must

now be extended to CAFA claims. We hold that a defendant

may remove a case from state court within thirty days of

ascertaining that the action is removable under CAFA, even

if an earlier pleading, document, motion, order, or other paper

revealed an alternative basis for federal jurisdiction.

FACTUAL AND PROCEDURAL BACKGROUND

Laura Zamora Jordan obtained a loan to purchase a house

in Washington state. To secure the loan, Jordan executed a

deed of trust encumbering the house. Nationstar is the

beneficiary of the deed of trust secured by Jordan’s home.

The deed of trust contains provisions permitting the

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JORDAN V. NATIONSTAR MORTGAGE 5

beneficiary to enter the house and change the locks if the

borrower fails to perform the covenants and agreements

contained in the deed of trust, or if the borrower abandons the

property. In April 2011, after Jordan defaulted on her loan,

Nationstar’s agents entered Jordan’s home without notice,

removed the existing locks, and installed a lockbox. Jordan

was later permitted to re-enter the house to gather her

personal belongings. Jordan claims that, “Nationstar still has

not commenced foreclosure proceedings against Jordan’s

home, which she still owns,” and that she “has been deprived

of the use and fair rental value of her home for over three

years.”

On April 3, 2012, Jordan, “as her separate estate, and on

behalf of others similarly situated,” sued Nationstar in

Washington state court, alleging six causes of action,

including violations of the Fair Debt Collection Practices Act

(FDCPA), 15 U.S.C. § 1692, et seq. On January 3, 2013,

Jordan filed her Second Amended Complaint (SAC), adding

additional allegations and defining the proposed class. Jordan

did not specify an amount in controversy in the complaint,

but requested “damages in an amount to be proven at trial,

including treble damages . . . .” The state court certified the

proposed class on May 9, 2014. On June 3, 2014, Jordan

submitted responses to Nationstar’s Fifth Interrogatories,

stating that “the total amount of monetary damages is

expected to exceed $25,000,000.00.”1 On June 5, 2014,

1 We note that Jordan’s answers to Nationstar’s Fifth Interrogatories are

dated June 6, 2014, but the record indicates that they were filed in the

district court as an exhibit to Nationstar’s Notice of Removal on June 5,

2014. The district court stated that Jordan served her responses to the

interrogatories on June 3, 2014, and Jordan confirms this date in her brief

on appeal. Accordingly, we consider that the case first became removable

under CAFA on June 3, 2014.

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6 JORDAN V. NATIONSTAR MORTGAGE

Nationstar filed a notice of removal to federal court pursuant

to CAFA.

Jordan moved to remand the case to state court, arguing

that Nationstar’s notice of removal was untimely because it

was filed more than two years after Jordan’s initial complaint

triggered federal jurisdiction under the FDCPA. See

28 U.S.C. § 1331. Nationstar countered that removal was

timely because Jordan’s answers to Nationstar’s fifth set of

interrogatories were the first “other paper from which it could

be ascertained that the matter in controversy exceed[ed]

$5,000,000,” one of the three necessary elements for

triggering removal under CAFA. Nationstar urged the district

court to extend the logic of our opinion in Durham v.

Lockheed Martin Corp., 445 F.3d 1247 (9th Cir. 2006), and

recognize “a second and separate ground for removal, even if

the initial complaint provided some other ground for

removal,” thereby “reopen[ing]” the thirty-day removal

window.

The district court, conscientiously seeking to follow our

circuit’s case law, remanded the case to state court because it

was “not persuaded by Defendant’s policy argument not

supported by the wording of the statute or case law.” The

court found that “the general principles of removal

jurisdiction apply in CAFA cases,” and “the relevant removal

date is the date on which the case itself becomes removable,

rather than the date on which the case first becomes

removable under CAFA.” Because Jordan’s First Amended

Complaint “included a federal cause of action, violation of

the FDCPA,” this “rendered the action removable based on

federal question jurisdiction,” within thirty days of that filing.

The district court awarded Jordan her attorney fees and costs

in the amount of $16,886.76 because it found that Nationstar

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JORDAN V. NATIONSTAR MORTGAGE 7

“did not have an objectively reasonable basis for removal.”

See Martin v. Franklin Capital Corp., 546 U.S. 132, 140

(2005); 28 U.S.C. § 1447(c).

Nationstar filed this appeal.

JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction to review the district court’s remand

order under 28 U.S.C. § 1453(c)(1), and jurisdiction to review

the court’s award of attorney fees pursuant to 28 U.S.C.

§ 1291. We review whether an action was properly remanded

to the state court from which it was removed de novo.

“Similarly, we review the ‘construction, interpretation, or

applicability’ of CAFA de novo.” Washington v. Chimei

Innolux Corp., 659 F.3d 842, 846–47 (9th Cir. 2011) (quoting

Bush v. Cheaptickets, Inc., 425 F.3d 683, 686 (9th Cir.

2005)). The district court’s decision to award attorney fees

under 28 U.S.C. § 1447(c) is reviewed for an abuse of

discretion, and will be overturned if it is based on clearly

erroneous findings of fact, or an erroneous determination of

law. Patel v. Del Taco, Inc., 446 F.3d 996, 999 (9th Cir.

2006).

DISCUSSION

Nationstar argues that “[t]he same three reasons Durham

cited for applying the broad interpretation of ‘removable’ to

federal officer removals apply with equal force to CAFA

removals.” First, Congress and the Supreme Court have

instructed that section 1453, like section 1442 in Durham,

should be interpreted broadly in favor of removal. Second,

both section 1442 and section 1453 permit a single defendant

to remove without the consent of other defendants, and a

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8 JORDAN V. NATIONSTAR MORTGAGE

strict interpretation of “removable” would effectively

eliminate single-defendant removals. Durham, 445 F.3d at

1253. Finally, as with section 1442, interpreting “removable”

strictly would “encourage gamesmanship and defeat the

policies underlying” CAFA. Id.

A defendant who is sued in state court may remove the

action to federal court on various grounds, such as if the case

presents a federal question under 28 U.S.C. § 1331, or if the

requirements for diversity of citizenship are met under

28 U.S.C. § 1332. 28 U.S.C. § 1441(a), (b). Section

1446(b)(1) requires the defendant to file a notice of removal

“within 30 days after the receipt by the defendant, through

service or otherwise, of a copy of the initial pleading setting

forth the claim for relief upon which such action or

proceeding is based.” 28 U.S.C. § 1446(b)(1). However,

if the case stated by the initial pleading is not

removable, a notice of removal may be filed

within 30 days after receipt by the defendant,

through service or otherwise, of a copy of an

amended pleading, motion, order or other

paper from which it may first be ascertained

that the case is one which is or has become

removable.

28 U.S.C. § 1446(b)(3). The removal of class actions is also

governed by section 1446. 28 U.S.C. §1453(b).

In 2005, Congress passed CAFA to permit defendants to

remove class actions to federal court if they meet three

requirements: there must be minimal diversity of citizenship

between the parties; the proposed class must have at least 100

members; and the aggregated amount in controversy must

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JORDAN V. NATIONSTAR MORTGAGE 9

equal or exceed the sum or value of $5 million. 28 U.S.C.

§ 1332(d); Class Action Fairness Act of 2005, Pub. L. No.

109–2, § 4, 119 Stat. 4, 12 (2005). The Senate Report on

CAFA explains that “[b]ecause interstate class actions

typically involve more people, more money, and more

interstate commerce ramifications than any other type of

lawsuit, the Committee firmly believes that such cases

properly belong in federal court.” S. Rep. No. 109–14, at 5;

see Dart Cherokee, 135 S. Ct. at 554.

In Durham, we recognized that “there are two plausible

ways to construe” the term “removable” in section 1446. The

first way to interpret “removable” is as “binary—either

there’s some basis for removal, or there’s not. . . . The second

way to interpret ‘removable’ is to look to each ground for

removal separately. Under this reading, a case does not

become removable until the particular basis on which

removal is sought becomes apparent from the record.” Id.

The plaintiff in Durham sued Lockheed Martin in state

court. Id. at 1249. The initial complaint made the case eligible

for removal on federal enclave grounds, but Lockheed Martin

chose not to remove the case at that time. Id. Durham’s

answers to the defendant’s subsequent interrogatories,

however, revealed that the case was also removable on

federal officer grounds under section 1442(a)(1). Id.

Lockheed Martin removed the case to federal court within

thirty days of discovering this new basis for removal, but

more than thirty days after the initial basis for removal had

been disclosed. Id. We therefore addressed whether Lockheed

was “entitled to a new thirty-day period to remove” the case

when it discovered a basis for federal jurisdiction under

section 1442(a)(1), or whether removal was untimely based

on the date of the initial complaint. Id. at 1250.

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10 JORDAN V. NATIONSTAR MORTGAGE

We held that “a federal officer defendant’s thirty days to

remove commence when the plaintiff discloses sufficient

facts for federal officer removal, even if the officer was

previously aware of a different basis for removal.” Id. at

1253. In doing so, we noted that Congress passed section

1442 in order “to protect the federal government from South

Carolina’s attempt to nullify federal tariff laws in the 1830s.”

Id. at 1252. We also noted that “the Supreme Court has

mandated a generous interpretation of the federal officer

removal statute ever since: ‘It scarcely need be said that such

measures are to be liberally construed to give full effect to the

purposes for which they were enacted.’” Id. (quoting

Colorado v. Symes, 286 U.S. 510, 517 (1932)). “We t[ook]

from this history a clear command from both Congress and

the Supreme Court that when federal officers and their agents

are seeking a federal forum, we are to interpret section 1442

broadly in favor of removal.” Id. at 1252.

We recognize that we have generally “strictly construed”

the requirements of removal, Washington v. Chimei Innolux

Corp., 659 F.3d 842, 847 (9th Cir. 2011), and that in the past,

“[w]e have declined to construe CAFA more broadly than its

plain language indicates,” Progressive W. Ins. Co. v.

Preciado, 479 F.3d 1014, 1018 (9th Cir. 2007). See also

Nevada v. Bank of Am. Corp., 672 F.3d 661, 667 (9th Cir.

2012) (“Removal statutes are to be ‘strictly construed’ against

removal jurisdiction.”); Luther v. Countrywide Home Loans

Servicing LP, 533 F.3d 1031, 1034 (9th Cir. 2008) (“In

general, removal statutes are strictly construed against

removal.”). However, we are persuaded that the Supreme

Court’s recent decision in Dart Cherokee makes clear that the

“federal officer” category we identified in Durham as an

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JORDAN V. NATIONSTAR MORTGAGE 11

exception to the strict construction of removal statutes must

now be expanded to include CAFA claims.2

In Dart Cherokee, the Supreme Court addressed

“[w]hether a defendant seeking removal to federal court is

required to include evidence supporting federal jurisdiction

in the notice removal, or [whether] alleging the required

‘short and plain statement of the grounds for removal’ [is]

enough.” 135 S. Ct. at 552–53. There, the defendant removed

a case from state to federal court under CAFA, alleging that

the three elements triggeringCAFA jurisdiction were present.

Id. at 552–53. The plaintiff argued, and the district court

agreed, that the notice of removal was “deficient as a matter

of law” because it included “no evidence” proving that the

amount in controversyexceeded $5 million. The district court

remanded the action to state court, and the Tenth Circuit

denied review. Id. at 552. The Supreme Court reversed,

noting that,

In remanding the case to state court, the

District Court relied, in part, on a purported

‘presumption’ against removal. . . . We need

not here decide whether such a presumption is

proper in mine-run diversity cases. It suffices

to point out that no antiremoval presumption

attends cases invoking CAFA, which

Congress enacted to facilitate adjudication of

2 We are not bound by our court’s prior rulings on this issue because the

Supreme Court’s decision in Dart Cherokee “undercut[s] the theory or

reasoning underlying the prior circuit precedent in such a way that the

cases are clearly irreconcilable.” Miller v. Gammie, 335 F.3d 889, 900

(9th Cir. 2003) (en banc). This obviates the need for en banc

reconsideration that would otherwise be required in our circuit. See id.

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12 JORDAN V. NATIONSTAR MORTGAGE

certain class actions in federal court. See

Standard Fire Ins. Co., 568 U.S.[ —, —],

133 S. Ct.[ 1345,] 1350 [(2013)] (“CAFA’s

primary objective” is to “ensur[e] ‘Federal

court consideration of interstate cases of

national importance.’” (quoting § 2(b)(2), 119

Stat. 5)); S. Rep. No. 109-14, p. 43 (2005)

(CAFA’s “provisions should be read broadly,

with a strong preference that interstate class

actions should be heard in a federal court if

properly removed by any defendant.”).

Id. at 554. Jordan urges us to ignore this statement as mere

“dicta” incapable of “negat[ing] the Ninth Circuit’s longapplied general rule of strict construction against removal” of

class actions. Jordan further argues that “the passage quoted

from the Senate Report in Dart Cherokee specifically

referenced§ 1332(d) subject matter jurisdiction,” not removal

procedure under section 1446, and therefore cannot serve as

a basis for extending the Durham presumption in favor of

removal to the CAFA context.

We disagree. Even though Dart Cherokee focused

primarily on how specifically the “amount in controversy”

requirement must be asserted in a defendant’s removal notice

under CAFA, the Supreme Court left no doubt “that no

antiremoval presumption attends cases involving CAFA.”

135 S. Ct. at 554. This declaration is bolstered by the Court’s

reference to Congress’s “overall intent . . . to strongly favor

the exercise of federal diversity jurisdiction over class actions

with interstate ramifications.” S. Rep. No. 109–14, at 35.

Jordan’s alternative argument that any presumption in favor

of removal expressed in Dart Cherokee and the Senate Report

on CAFA applies only to section 1332, and not to removal

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JORDAN V. NATIONSTAR MORTGAGE 13

procedure under section 1446, is also unavailing. In Durham,

we specifically addressed the “clear command from both

Congress and the Supreme Court . . . to interpret section 1442

broadly in favor of removal,” and then recognized the need to

“extend section 1442's liberal interpretation to section 1446.”

Durham, 445 F.3d at 1253. Similarly, Congress and the

Supreme Court have instructed us to interpret CAFA’s

provisions under section 1332 broadly in favor of removal,

and we extend that liberal construction to section 1446. A

case becomes “removable” for purposes of section 1446 when

the CAFA ground for removal is disclosed.

Applying our holding to the facts of this case, we

conclude that Nationstar’s removal under CAFA was timely,

and that the action therefore properly belongs in federal court.

Jordan filed her initial complaint on April 3, 2012. The only

basis for removal at that time was under section 1331 for

alleged violations of the FDCPA. On May 9, 2014, the state

court certified Jordan’s proposed class. Not until June 3,

2014, when Jordan specified in her answers to Nationstar’s

interrogatories that the total amount in controversy exceeded

$25 million, did the case become removable under CAFA.

Two days later on June 5, 2014, Nationstar removed the case

to federal court. Nationstar’s removal was timely.

We turn, finally, to the district court’s award of attorney’s

fees and costs to Jordan. A district court may, in its

discretion, “require payment of just costs and any actual

expenses, including attorney fees, incurred as a result of

[improper] removal.” 28 U.S.C. § 1447(c). “Absent unusual

circumstances, courts may award attorney’s fees under

§ 1447(c) only where the removing party lacked an

objectively reasonable basis for seeking removal.” Martin,

546 U.S. at 141. At the time the district court entered its

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14 JORDAN V. NATIONSTAR MORTGAGE

order, Dart Cherokee had not yet been decided, and our case

law still suggested that removal procedure under CAFA

should be strictly construed. Understandably, the district

court concluded that Nationstar did not have a reasonable

basis for seeking removal. However, because we now hold

that Nationstar’s removal under CAFA was timely, the

district court’s award of attorney fees to Jordan must be

reversed.

CONCLUSION

In light of the Supreme Court’s clear statement in Dart

Cherokee that Congress intended for no antiremoval

presumption to attend CAFA cases, we hold that a case

becomes “removable” for purposes of section 1446 when the

CAFA ground for removal is first disclosed. Nationstar’s

notice of removal was therefore timely. The judgment of the

district court is REVERSED, and the case is REMANDED

to the district court for proceedings consistent with the views

expressed in this opinion. The pending motion is denied as

moot. Each party shall bear its own costs on appeal.

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