Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-14-04085/USCOURTS-ca10-14-04085-0/pdf.json

Parties Involved:
Catherine Richards Ahlers
Appellant
B.A.C. Home Loans Servicing, LP
Appellee
Bank of America, N.A.
Appellee
Gwen Dutcher
Appellant
Richard Dutcher
Appellant
Michelle Ferguson
Appellant
Richard Ferguson
Appellant
Stuart T. Matheson
Appellee
Matheson, Mortensen, Olsen & Jeppson, P.C.
Appellee
ReconTrust Company, N.A.
Appellee
State of Utah
Amicus Curiae

Document Text:

FILED

United States Court of Appeals

Tenth Circuit

November 2, 2016

Elisabeth A. Shumaker

Clerk of Court

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

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,

Plaintiffs-Appellants,

v. No. 14-4085

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.,

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 PlaintiffsAppellants.

Amy Miller, McGuireWoods LLP, Washington, D.C., (Brian Emory Pumphrey,

Appellate Case: 14-4085 Document: 01019714558 Date Filed: 11/02/2016 Page: 1 
McGuire Woods LLP, Richmond, Virginia, and Craig Robert Mariger, Jones

Waldo Holbrook & McDonough, PC, Salt Lake City, Utah, with her on the brief)

for Defendants-Appellees. 

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

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state court and agreed with ReconTrust on the merits, which led the court to grant

the defendants’ pending motion to dismiss. 

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

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foreclosures instituted by BOA and its subsidiaries, including ReconTrust.1

ReconTrust—a wholly owned subsidiary of BOA that maintains offices in

Richardson, Texas—is a national bank by right of its charter with the Office of

the Comptroller of the Currency (“OCC”). Pursuant to this charter, ReconTrust’s

functions are limited to foreclosing on deeds of trust. To that end, defendants

BAC and BOA designated ReconTrust as the substitute trustee for the plaintiffs’

1 In their complaint, the plaintiffs indicate that ReconTrust is BOA’s

wholly owned subsidiary. However, in their required corporate disclosure

statement, see Fed. R. App. P. 26.1, the defendants represent that ReconTrust is

actually a wholly owned subsidiary of Bank of America Corporation

(“BOACorp”), and that BOA is itself a wholly owned subsidiary of BOACorp. 

Whether ReconTrust is in fact, as alleged in the complaint, a wholly owned

subsidiary of BOA (which is supposedly BOACorp’s wholly owned subsidiary) or

just a wholly owned subsidiary of BOACorp itself, is immaterial for our purposes

in deciding the issues presented in this appeal. Under the circumstances of this

case, we see no reason to deviate from the factual averments of the plaintiffs’

complaint and the contents of documents that we may properly consider in this

procedural setting. See, e.g., Firstenberg v. City of Santa Fe, 696 F.3d 1018,

1023 (10th Cir. 2012) (looking to the well-pleaded averments of plaintiff’s

complaint in determining subject-matter jurisdiction); Utah Gospel Mission v.

Salt Lake City Corp., 425 F.3d 1249, 1253–54 (10th Cir. 2005) (“We have

recognized however, that a document central to the plaintiff’s claim and referred

to in the complaint may be considered in resolving a motion to dismiss, at least

where the document’s authenticity is not in dispute.”); Hall v. Bellmon, 935 F.2d

1106, 1109 (10th Cir. 1991) (“A court reviewing the sufficiency of a complaint

presumes all of plaintiff’s factual allegations are true and construes them in the

light most favorable to the plaintiff.”); see also Charles Alan Wright, et al., 5B

FEDERAL PRACTICE & PROCEDURE § 1357 (3d ed. database updated Apr. 2016)

(“Numerous cases . . . have allowed consideration of matters incorporated by

reference or integral to the claim, items subject to judicial notice, matters of

public record, orders, items appearing in the record of the case, and exhibits

attached to the complaint whose authenticity is unquestioned; these items may be

considered by the district judge without converting the motion into one for

summary judgment.”). 

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properties, and ReconTrust proceeded to conduct the foreclosures that the

plaintiffs now assert were unlawful. In doing so, ReconTrust notarized and

executed—from Texas—three documents pertaining to each foreclosed property: a

Substitution of Trustee, a Notice of Default and Election to Sell, and the Trustee’s

Deed. In each case, ReconTrust—acting through its agent Stuart Matheson, who

is a member of the Utah Bar, and his law firm of Matheson, Mortensen, Olsen &

Jeppson, P.C. (“MMOJ”)—commenced non-judicial foreclosure proceedings on

the property on the same day that it became the designated substitute trustee.

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 Utah Code § 57-1-23.5

(providing damages for the unauthorized sale of property held in deed of trust);

(2) violations of Utah Code § 57-1-21 (relating to the exercise of the power of

sale on deeds of trust without authority); (3) conversion; (4) wrongful lien; (5)

wrongful foreclosure; and (6) intentional infliction of emotional distress. 

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

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Fairness Act (“CAFA”), 28 U.S.C. § 1332(d), and diversity jurisdiction. They

then filed a motion to dismiss, arguing that ReconTrust, as a federally-chartered

national bank, was permitted to conduct the challenged foreclosures under federal

law—specifically, 12 U.S.C. § 92a(a), as interpreted by the OCC in 12 C.F.R.

§ 9.7. The plaintiffs argued that this federal statute did not in fact permit

ReconTrust to conduct the challenged foreclosures; they also moved to remand

the case to state court. The district court granted the defendants’ motion and

denied that of the plaintiffs, dismissing all of the plaintiffs’ claims and closing

the case. 

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 12 U.S.C.

§ 92a(a)—and found that the challenged foreclosures were not lawful. See Bell v.

Countrywide Bank, N.A., 860 F. Supp. 2d 1290 (D. Utah 2012). Relying on this

decision, and arguing for the first time that the OCC’s regulatory interpretation of

§ 92a—embodied in 12 C.F.R. § 9.7—was “invalid under Chevron,” the plaintiffs

filed a Motion For Reconsideration, Or, In The Alternative, To Alter Or Amend

Judgment. Aplts.’ App. at 245 (Mem. Decision & Order Den. All Pending Mots.,

filed July 23, 2012); see Chevron, U.S.A., Inc. v. Nat’l Res. Def. Council, Inc.,

467 U.S. 837, 842 (1984). The district court denied the motion. It declined to

consider the plaintiffs’ late-blooming Chevron argument and concluded that they

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had not shown that “the court ha[d] misapprehended the facts, a party’s position,

or the controlling law.” Id. at 244. 

The plaintiffs then appealed to our court. We asked for and received an

amicus brief from the OCC, which administers 12 U.S.C. § 92a, on the

applicability of 12 C.F.R. § 9.7 to this fact situation. See Dutcher v. Matheson

(Dutcher I), 733 F.3d 980, 984 (10th Cir. 2013). We also requested and received

supplemental briefing by the parties on the question of jurisdiction. Id. at 985. 

Following oral argument, we issued an opinion that concluded that “the district

court erred in determining it had jurisdiction to hear this case” under federal

question or diversity jurisdiction, but remanded the case “with instructions for the

district court to determine whether it has jurisdiction to act and, relatedly, to rule

in the first instance whether [CAFA] provides jurisdiction.” Id. at 983, 990. 

Because we concluded that the district court had erred in finding that it had

jurisdiction, we did not address the merits of the dispute. Id. at 983.

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 § 9.7. The district court rejected

the motion but clarified that it was re-adopting its previous dismissal ruling. The

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plaintiffs now appeal to our court.

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

2 The plaintiffs also allege that the district court erred—subsequent to

the Dutcher I remand and its resolution of the CAFA jurisdictional issue—by

refusing to revisit its merits rulings and, instead, closing the case. We need not

spill much ink on this claim. In addressing this matter, the district court reasoned

that our “focus was on jurisdiction” in Dutcher I and that our directions

circumscribing the court’s actions on remand were “limited to” that issue, and

therefore, the court was not obliged to “readdress the merits of Plaintiffs’ claims.”

Aplts.’ App. at 366 (Mem. Decision & Order on Pending Mots., dated July 3,

2014). In our view, the district court’s interpretation of our mandate in Dutcher I

was patently sound. Compare Dutcher I, 733 F.3d at 982 (noting that the court’s

“focus is upon a more fundamental question” of subject-matter jurisdiction, rather

than the “significant questions regarding the interaction of federal banking and

state foreclosure laws” that “this case presents”), with id. at 990 (“We REMAND

with instructions for the district court to determine whether it has jurisdiction to

act and, relatedly, to rule in the first instance whether [CAFA] provides

jurisdiction.”). And the court did not abuse its discretion in declining to re-visit

its prior merits rulings. See, e.g., United States v. West, 646 F.3d 745, 749 (10th

Cir. 2011) (“[T]he scope of the mandate on remand in the Tenth Circuit is carved

out by exclusion: unless the district court’s discretion is specifically cabined, it

may exercise discretion on what may be heard.”); accord Dish Network Corp. v.

Arrowood Indem. Co., 772 F.3d 856, 864 (10th Cir. 2014). 

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exercise of subject-matter jurisdiction over this case. “Federal courts are courts

of limited jurisdiction” and “must have a statutory basis for their jurisdiction.” 

Dutcher I, 733 F.3d at 984 (quoting Rural Water Dist. No. 2 v. City of Glenpool,

698 F.3d 1270, 1274 (10th Cir. 2012)). We must “presume no jurisdiction exists

absent an adequate showing by the party invoking federal jurisdiction” that

jurisdiction exists; that showing must be made by a preponderance of the

evidence. Id. at 985 (quoting United States ex rel. Hafter v. Spectrum Emergency

Care, Inc., 190 F.3d 1156, 1160 (10th Cir. 1999)). “We review de novo whether

the district court had jurisdiction to act.” Id. 

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 28 U.S.C. § 1291. See Reece v. AES Corp., 638 F. App’x 755,

763–67 (10th Cir. 2016). In Reece, which we deem persuasive here, a panel of

our court (in an unpublished decision) reasoned that although 28 U.S.C.

§ 1453(c)(1) provides for only a ten-day window in which a party may file an

interlocutory appeal from an order granting or denying a motion to remand a class

action to state court, this provision does not prevent us from reviewing the denial

of such a motion as part of our review of the court’s final judgment. Id. at 764. 

The panel further noted that a number of “[o]ther circuit courts, and panels

thereof, have identified no jurisdictional defect in the review after final judgment

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of denials of motions to remand in CAFA cases.” Id. at 765 (citing Berera v.

Mesa Med. Grp., PLLC, 779 F.3d 352 (6th Cir. 2015); Hoffman v. Nutraceutical

Corp., 563 F. App’x 183, 184–85 & n.2 (3d Cir. 2014); Lemy v. Direct Gen. Fin.

Co., 559 F. App’x 796, 798 (11th Cir. 2014) (per curiam); Brown v. Mortg. Elec.

Registration Sys., Inc., 738 F.3d 926, 930–34 (8th Cir. 2013); Hargis v. Access

Capital Funding, LLC, 674 F.3d 783, 789–90 (8th Cir. 2012); Law Offices of K.C.

Okoli, P.C. v. BNB Bank, N.A., 481 F. App’x 622, 624–26 (2d Cir. 2012); Roe v.

Michelin N. Am., Inc., 613 F.3d 1058 (11th Cir. 2010)). Adopting the analysis

laid out in Reece, we are satisfied that we may properly review the propriety of

the district court’s denial of the plaintiffs’ motion to remand at this stage of the

litigation.

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

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show that jurisdiction is improper because one of CAFA’s jurisdictional

exceptions is applicable. Woods v. Standard Ins. Co., 771 F.3d 1257, 1262 (10th

Cir. 2014). The three exceptions to CAFA jurisdiction claimed by the plaintiffs

are the local controversy exception, 28 U.S.C. § 1332(d)(4)(A); the home state

exception, 28 U.S.C. § 1332(d)(4)(B); and the discretionary exception, 28 U.S.C.

§ 1332(d)(3). We evaluate each in turn and conclude that the plaintiffs have not

met their burden of showing that any of the three applies in this case. We

therefore affirm the district court’s denial of the plaintiffs’ motion to remand.

i

The plaintiffs first argue that the “local controversy” exception, as defined

in 28 U.S.C. § 1332(d)(4)(A), required that the district court grant their motion to

remand. Rather than divesting a court of jurisdiction, the local controversy

exception “operates as an abstention doctrine.” See Graphics Commc’ns Local 1B

Health & Welfare Fund v. CVS Caremark Corp., 636 F.3d 971, 973 (8th Cir.

2011). The local controversy provision “is a narrow exception that was carefully

drafted to ensure that it does not become a jurisdictional loophole” and “all

doubts [are] resolved ‘in favor of exercising jurisdiction over the case.’” Evans v.

Walter Indus., Inc., 449 F.3d 1159, 1163–64 (11th Cir. 2006) (quoting S. Rep.

No. 109–14, at *42 (2005)); see also Woods, 771 F.3d at 1262 (“[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.”

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(quoting S. Rep. No. 109–14, at *43 (2005))). Nevertheless, remand is mandatory

if the plaintiffs can show that they meet the requirements of the local controversy

exception. See 28 U.S.C. § 1332(d)(4) (“A district court shall decline to exercise

jurisdiction . . . .” (emphasis added)); Coffey, 581 F.3d at 1243 (“A district court

must decline to exercise jurisdiction if the plaintiffs can satisfy the requirements

for this exception . . . .”).

 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. 28

U.S.C. § 1332(d)(4)(A). All four prongs must be satisfied. The defendants argue

that the plaintiffs cannot meet the first, second, and fourth prongs. Because we

agree that the plaintiffs cannot meet the fourth prong, we do not address the

defendants’ other arguments.3

3 The district court concluded that the local controversy exception did

not apply because it found that the plaintiffs had failed to meet three of the four

necessary requirements for the local controversy exception. Because we are at

liberty to “affirm on any basis supported by the record,” Jordan v. U.S. Dep’t of

(continued...)

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The fourth prong states that there can be no other class action filed

asserting similar factual allegations against any of the defendants in the three

years prior to the filing of this case. The defendants urge that our focus should be

on “whether similar factual allegations have been made against the defendant in

multiple class actions, regardless of whether the same causes of action were

asserted.” S. Rep. No. 109–14 at *41; accord Rasberry v. Capitol Cty. Mut. Fire

Ins. Co., 609 F. Supp. 2d 594, 604–05 (E.D. Tex. 2009) (quoting same). 

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

3

(...continued)

Justice, 668 F.3d 1188, 1200 (10th Cir. 2011), we address only the fourth prong

of the local controversy exception and determine that this ground is sufficient to

affirm the district court without addressing the remainder of the court’s analysis.

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v. ReconTrust Co., No. 2:10-CV-1099 (D. Utah, filed Nov. 5, 2010)). Similarly,

the Dutcher complaint here states that plaintiffs have been “foreclosed upon and

in most instances dispossessed from their homes by Defendants acting through or

on behalf of ReconTrust, which lacks authority to foreclose non-judicially

because it lacks the power of sale under Utah statutory law.” Aplts.’ App. at

25–26. 

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

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not enough to distinguish cases under the demands of CAFA: the local

controversy exception looks exclusively to whether the other case has asserted

“the same or similar factual allegations,” 28 U.S.C. § 1332(d)(4)(A)(ii) (emphasis

added), not the same or similar causes of action. Nevertheless, the plaintiffs urge

us to follow the approach of Rasberry. In Rasberry, the Eastern District of Texas

held that one class action complaining of a county’s “failure to pay contractor

overhead and profit” and seeking “money damages” did not operate to bar another

class action against the same county complaining of the “use of unlicensed

adjusters” and seeking “declaratory and injunctive relief.” Rasberry, 609 F.

Supp. 2d at 605. The court found that even though the cases “ar[o]se from a

common event,” namely the county’s response to Hurricane Rita, “the factual

basis giving rise to both actions differ[ed] dramatically,” and “[t]he proof

necessary to prevail” in one class action “differ[ed] in all crucial respects from

the proof necessary to prevail” in the other. Id. 

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’;

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(2) ‘threats to take action that cannot legally be taken’; (3) ‘false representations

that documents filed are legal process’; [and] (4) ‘threatening and taking

nonjudicial action to effect dispossession.’” Aplts.’ Opening Br. at 27 (quoting

Aplts.’ App. at 290–91 (Pls.’ Supp. Br. on Jurisdiction) (summarizing the

Coleman complaint)). In order to make all of the foregoing showings the

Coleman plaintiffs had to establish that ReconTrust lacked the power to nonjudicially foreclose on Utah properties held in deed of trust; that is precisely the

matter at issue here. Thus we cannot say, as the Rasberry court could, that the

proof necessary “differs in all crucial respects” between the two cases. Rasberry,

609 F. Supp. 2d at 605 (emphasis added). In at least one crucial respect, the need

to demonstrate absence of authority to foreclose, both cases required identical

factual showings.4

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. 

4 Nor are we persuaded by the plaintiffs’ claim that the unlawful

practices alleged in Coleman “do not include violations of Utah Code Ann. §§ 57-

1-21 or -23, the gravamen of Appellants’ Complaint.” Aplts.’ Reply Br. at 23;

accord Aplts.’ Opening Br. at 28. A brief review of the Coleman complaint

shows that the plaintiffs did allege violations of Utah Code Ann. § 57-1-21 and

made those violations the basis of its claim that ReconTrust illegally foreclosed

on the plaintiffs’ houses. See Aplees.’ Supp. App. at 27–28 (stating that

“ReconTrust . . . lacks authority to foreclose non-judicially because it lacks the

power of sale under Utah law ([Utah Code] §57-1-21(3)”). 

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There is no dispute that the plaintiffs in Coleman attempted to bring a class

action: the complaint was filed under the heading “CLASS ACTION,” Aplees.’

Supp. App. at 22, and was brought “on behalf of Plaintiffs and others similarly

situated” while defining two proposed classes of plaintiffs, id. at 26–27. 

Nevertheless, the plaintiffs argue that when the district court refused to certify the

class, it had a retroactive effect such that Coleman was never a class action from

its inception. This apparently novel interpretation accords with neither the text

nor the rationale underlying the no-prior-class-action provision of CAFA. 

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. 28 U.S.C.

§ 1332(d)(4)(A)(ii) (emphasis added). The statute does not address whether any

class action was certified over that time frame, and we do not agree with the

plaintiffs that a court’s eventual denial of class certification works retroactively

to negate the fact that a case was actually filed as a class action. Cf. Levine v.

Entrust Grp., Inc., No. C 12–03959 WHA, 2013 WL 1120695, at *4 (N.D. Cal.

Mar. 18, 2013) (holding that a prior class action would still defeat this exception

because it was “filed,” even though plaintiffs voluntarily dismissed the suit soon

thereafter). Because the statute speaks of a case “filed” as a class action, we

think the relevant temporal point to determine whether a case is a class action is

when the complaint seeking class-wide relief is filed, rather than when the court

makes a decision regarding class certification. Cf. Puerto Rico v. Franklin Cal.

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Tax-Free Trust, --- U.S. ----, 136 S. Ct. 1938, 1946 (2016) (questions of statutory

interpretation “begin[] ‘with the language of the statute itself,’ and that ‘is also

where the inquiry should end,’ [where] ‘the statute’s language is plain.’” (quoting

United States v. Ron Pair Enters., Inc., 489 U.S. 235, 241 (1989))). 

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

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is filed, and (2) “the primary defendants[] are citizens of the State where the

action was originally filed.” 28 U.S.C. § 1332(d)(4)(B). Like the local

controversy exception, the home state exception requires remand if the plaintiffs

can meet all of the statutory requirements. See id. (stating that the court “shall

decline to exercise jurisdiction” where the all of the requirements are met

(emphasis added)). Unfortunately for the plaintiffs, they cannot show that the

“primary defendants” are citizens of Utah.

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

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a showing that all primary defendants were governmental entities, or merely a

showing that any primary defendant was such an entity. Woods, 771 F.3d at 1263

(quoting 28 U.S.C. § 1332(d)(5)). We held that the phrase “the primary

defendants” required plaintiffs requesting remand to show that all of the primary

defendants were governmental entities. Id. Our opinion succinctly summarized

our reasoning, which was grounded in the text of the exception itself: “The use of

the definite article, ‘the,’ before the plural noun, ‘primary defendants,’ and the

use of the plural verb, ‘are,’ leaves no doubt that Congress intended the state

action provision to preclude CAFA jurisdiction only when all of the primary

defendants are states, state officials, or state entities.” Id. (emphasis added);

accord Frazier v. Pioneer Ams. LLC, 455 F.3d 542, 545 (5th Cir. 2006) (holding

that the state action exception requires all primary defendants to be states, state

officials, or state entities). 

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 28 U.S.C.

§ 1332(d)(4)(B) (permitting remand when “the primary defendants[] are citizens

of the State where the action was originally filed” (emphases added)). We see no

reason to distinguish Woods, and the plaintiffs do not suggest one. Accordingly,

we conclude that the phrase “the primary defendants[] are” requires that all

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primary defendants be citizens of Utah in order for the case to qualify for remand. 

Because the plaintiffs do not contest that some primary defendants are not Utah

citizens, we conclude that the case cannot be remanded under the home state

exception.

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 28 U.S.C. § 1332(d)(3). However, to qualify for consideration of

these factors, the plaintiffs must first establish two prerequisites: “[1] greater than

one-third but less than two-thirds of the members of all proposed plaintiff classes

in the aggregate and [2] the primary defendants are citizens of the State in which

the action was originally filed.” Id.; see also Preston v. Tenet Healthsystem

Mem’l Med. Ctr., Inc., 485 F.3d 804, 811 (5th Cir. 2007) (“The movants must

satisfy the citizenship requirement as a prerequisite to the district court weighing

the additional statutory factors enumerated to guide the court’s remand

determination.”). As just discussed, the phrase “the primary defendants are

citizens of the State” in the CAFA setting requires a showing that all primary

defendants are citizens of the relevant state, and the plaintiffs cannot make that

showing. Therefore, we may not remand the case under the discretionary

exception.

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iv

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)). 

Acordingly, we do not perceive the foregoing reasons to be sufficient to deprive

the federal courts of jurisdiction.

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v

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

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CAFA.” Aplts.’ App. at 298–99. The plaintiffs have not shown how the failure

to develop either fact has prejudiced them in the ultimate determination of

jurisdiction, and we likewise cannot discern any prejudice. 

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,

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Inc., 614 F.3d 1163, 1167 (10th Cir. 2010). In its order granting the defendants’

motion, the district court noted that each of the causes of action that the plaintiffs

assert is based on the claim “that Recon[Trust] did not have authority to conduct a

trustee sale because it was not an authorized trustee under Utah law.” Aplts.’

App. at 137 (Mem. Decision & Order on Pending Mots., dated Feb. 8, 2012). The

court, however, found that ReconTrust did have such authority under federal

law—specifically, under 12 U.S.C. § 92a(a), a statutory provision concerning the

trust powers of national banks, and 12 C.F.R. § 9.7(d), an OCC regulation

interpreting that statutory provision—because federal law dictated that

ReconTrust’s foreclosure authority was circumscribed by the law of Texas (not

Utah) and Texas law authorized national banks like ReconTrust to perform nonjudicial foreclosures. This holding thus “dispense[d] of all . . . of [the]

[p]laintiffs’ claims.” Id. at 151. The plaintiffs now object to this analysis, but, as

explained below, we conclude that all of the plaintiffs’ appellate arguments either

fail on the merits or are waived. We thus uphold the district court’s judgment. 

1

The parties center their analysis on the same place in determining whether

ReconTrust was authorized to conduct trustee sales in Utah: specifically, 12

U.S.C. § 92a(a). Under that statute, the OCC is 

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

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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.

12 U.S.C. § 92a(a) (emphases added). Thus, ReconTrust—as a national

bank—was permitted to act, “when not in contravention of State or local law,” as

a trustee or “in any other fiduciary capacity” in which certain competing entities

“are permitted to act under the laws of the State in which [ReconTrust] is

located.” Id. More specifically, under § 92a(a), a national bank, like ReconTrust,

is authorized to act as a trustee, including conducting trustee sales, so long as the

grant of authority is “not in contravention of State or local law” of “the State in

which the national bank is located.” 12 U.S.C. § 92a(a), (b) (emphases added). 

The parties’ arguments (albeit for different reasons) proceed on the premise

that § 92a(a)’s language envisions that national banks will be “located” in only

one state with respect to the non-judicial foreclosures at issue here. And the

statute’s use of the definite article “the” supports the idea of focusing the inquiry

on the identification of one state. See Colorado v. Sunoco, Inc., 337 F.3d 1233,

1241 (10th Cir. 2003) (“If Congress intended to allow multiple actions for

separate components of recovery or remedy, it surely would have used the

indefinite article ‘a’ rather than the definite article ‘the’ to modify the phrases

‘removal action’ and ‘remedial action.’”); id. (noting that “use of this definite

article suggests there will be but a single ‘removal action’ and a single ‘remedial

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action’ per site”); Am. Bus Ass’n v. Slater, 231 F.3d 1, 4–5 (D.C. Cir. 2000)

(“Indeed, ‘[i]t is a rule of law well established that the definite article “the”

particularizes the subject which it precedes. It is a word of limitation as opposed

to the indefinite or generalizing force of “a” or “an.”’” (alteration in original)

(quoting Brooks v. Zabka, 168 Colo. 265, 450 P.2d 653, 655 (1969) (en banc)));

see also United States v. Figueroa-Labrada, 780 F.3d 1294, 1305 (10th Cir. 2015)

(Phillips, J., dissenting) (“The singular ‘the’ lends support to an interpretation

that ‘the sentencing hearing’ refers to one sentencing hearing—which, because it

is the first one, must be the original sentencing hearing.”); Aplee.’s Br.,

Addendum at A-49, A-71 (Amicus Br. of U.S. Solicitor General, Sup. Ct. No. 13-

852, Fed. Nat’l Mortg. Assoc. v. Sundquist) (“Because Section 92a refers to ‘the

State in which the national bank is located’ the most natural inference is that the

laws of a single State will apply to the management of a particular trust.”). 

The present dispute turns on the question of which state’s law does 12

U.S.C. § 92a(a) incorporate—that is, whether it is the law of Utah or Texas. 

More specifically, the identification of the state where ReconTrust is “located”

for purposes of § 92a(a) is the bone of contention. The plaintiffs argue that 

§ 92a(a) requires us to look to Utah law, which would prohibit ReconTrust from

conducting the foreclosures at issue; on the other hand, the defendants contend

that Texas law, which would permit ReconTrust to conduct the challenged

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foreclosures, applies.5

 Notably, the plaintiffs do not contend that Utah law

independently defines the boundaries of ReconTrust’s foreclosure authority, apart

from its alleged incorporation into § 92a(a)’s federal regulatory scheme.6

 In other

5 The parties do not dispute these conclusions regarding the

consequences of applying, respectively, Utah and Texas law to ReconTrust’s

foreclosure activities. By way of background, ReconTrust was not authorized to

conduct the challenged foreclosure sales under Utah law because: though Utah 

does permit six classes of entities to serve as trustees of real estate trust deeds,

including “depository institutions,” such as ReconTrust, Utah Code § 57-1-

21(1)(a)—of these six categories, only title insurance companies and members of

the Utah State Bar are permitted to exercise the “power of sale” as trustee of a

trust deed, id. at §§ 57-1-21(3), 57-1-23. ReconTrust is obviously not a member

of the Utah State Bar, nor is it a title insurance company; thus it is prohibited by

Utah law from foreclosing on a trust deed. Texas law, however, permits a

depository institution to engage in a non-judicial foreclosure. See Tex. Fin. Code

Ann. § 32.001 (giving banks the power to “act in a fiduciary capacity . . . as . . .

trustee, including a mortgage or indenture trustee”); id. at § 182.001 (permitting

the organization of a state trust company in Texas and permitting such companies

to exercise the power of a trustee); see also Tex. Prop. Code Ann. § 51.0001

(defining a “Trustee” as the person authorized to exercise the power of sale); id.

at § 51.0074 (defining the power of a trustee to exercise the power of sale).

6 Indeed, even the two principal decisions on which the plaintiffs

rely—decisions that conclude that Utah law marks the metes and bounds of

Recontrust’s foreclosure authority—center the analysis on § 92a, that is, federal

law, and seek to determine whether Utah law may be enforced against ReconTrust

through (i.e., as a function of) federal law. See Bell, 860 F. Supp. 2d at 1298

(“Congress has spoken directly to this issue: the ‘State’ referenced in § 92a refers,

inter alia, to the State where the trust activity occurs—Utah in this case. The

statute is clear.”); id. at 1299–1300 (“The precise question at issue is this: to

which ‘State(s)’ does 12 U.S.C. § 92a(a) refer?”); Fed. Nat’l Mortg. Ass’n v.

Sundquist, 311 P.3d 1004, 1007 (Utah 2013) (“Whether ReconTrust is subject to

the laws of Utah or Texas depends on where it is ‘located.’ As a national bank,

ReconTrust operates under the National Banking Act and is regulated by the

Office of the Comptroller of Currency (Comptroller).” (citation omitted)); id. at

1009 (“[O]ur task is clear. We must first examine the language of § 92a of the

NBA to see if it unambiguously addresses the question of where a national bank

(continued...)

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words, there is no question here about a critical, foundational point: federal law is

controlling. However, the federal banking provision at issue, § 92a(a), expressly

envisions that “the exercise of that [federal banking] power is subject to state

law.” Barnett Bank of Marion Cty., N.A. v. Nelson, 517 U.S. 25, 34 (1996). 

Accordingly, what the parties vigorously dispute is which state’s law—as between

the two competing states, Utah and Texas—helps to define the boundaries of the

federal banking power that § 92a(a) confers. 

Acting pursuant to its regulatory authority, see 12 U.S.C. § 93a, the OCC

has issued 12 C.F.R. § 9.7 in an effort to provide clarity to the question of which

state’s laws are referenced in § 92a(a). The regulation, in relevant part, provides

that, 

[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.

12 C.F.R. § 9.7(d). Thus, under the OCC’s interpretation of § 92a, we are

directed to consider (1) where ReconTrust accepted the fiduciary appointment at

issue here, (2) where it executed the documents that created the fiduciary

6

(...continued)

is located.”). 

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relationship, and (3) where it made discretionary decisions regarding the

investment or distribution of fiduciary assets. 

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 12 U.S.C.

§ 92a(a) requires that we look to Utah law, not Texas law, in applying the statute;

and (2) even if we look beyond the statute’s plain language, 12 C.F.R. § 9.7(d) is

an unreasonable interpretation of § 92a(a), and we should thus afford it no

deference. In an amicus brief, the State of Utah (“State”) also makes this latter

unreasonable-interpretation argument, and further asserts that even if we were to

apply 12 C.F.R. § 9.7(d), it would direct us to apply the law of Utah, not Texas. 

We begin with the plaintiffs’ first argument—concerning the plain language

of § 92a(a)—and conclude that it is unpersuasive. We cannot discern from the

plain terms of § 92a(a) what state law is implicated; more specifically, those

terms are ambiguous. Accordingly, we turn for guidance to the OCC’s

interpretive regulation. Furthermore, for the reasons noted below, we adopt for

purposes of this case the district court’s conclusion that this regulation calls for

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the application of Texas law. And we decline to reach the merits of the remainder

of the arguments presented by plaintiffs and (as amicus) the State. 

2

To determine whether ReconTrust was authorized to foreclose on the

plaintiffs’ properties under 12 U.S.C. § 92a(a), we begin, as always, with the

plain language of the statute. See, e.g., Woods, 771 F.3d at 1265 (“We begin our

analysis by examining the statute’s plain language and if the meaning of that

language is clear, our inquiry is at an end.”); United States v. Manning, 526 F.3d

611, 614 (10th Cir. 2008) (“We begin by examining the statute’s plain

language.”). The language at issue here states that the OCC may permit national

banks, 

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.

12 U.S.C. § 92a(a).7

 The key question is where is a bank “located” for purposes

7 The following statutory provision further clarifies that:

[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.

12 U.S.C. § 92a(b).

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of the statute; if a national bank complies with the laws of the state in which it is

located, then its acts are lawful under § 92a(a). The statute, however, offers no

further clarification on where a 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

§ 92a(a) is “unambiguous and dictates that [ReconTrust is located in] Utah,”

Aplts.’ Opening Br. at 42, relying largely on two key decisions: one from the

Utah federal district court, Bell v. Countrywide Bank, and the other from the Utah

Supreme Court, Federal National Mortgage Association v. Sundquist, in which

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the court noted its agreement with Bell that, under the plain terms of § 92a(a), a

national bank like ReconTrust is “located” in “each state in which it carries on

activities as trustee,” 311 P.3d at 1009 (quoting Bell, 860 F. Supp. 2d at 1300).8

8 The plaintiffs’ briefs include this argument as part of their overall

Chevron step-one argument—viz., as an assertion that the statute unambiguously

answers the precise question at issue here and points to Utah law. See Chevron,

467 U.S. at 842 (“First, always, is the question whether Congress has directly

spoken to the precise question at issue.”). The defendants maintain that the

plaintiffs have waived any such argument—based on Chevron—by failing to raise

it before the district court prior to their motion for reconsideration. As discussed

in more detail infra, we agree with the defendants insofar as they contend that the

plaintiffs have waived any reliance on the Chevron analytical framework. 

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 § 92a. See Aplts.’ App. at 101 (citing Cox v.

ReconTrust Co., N.A., No. 2:10-CV-492 CW, 2011 WL 835893, at *6 (D. Utah

Mar. 3, 2011) (“Under a straight forward reading of § 92a(b), this court must look

to Utah law in its analysis of whether ReconTrust’s activities in Utah exceed

ReconTrust’s trustee powers.”)). Thus, although on appeal the plaintiffs make a

plain-meaning argument only in the context of the Chevron rubric—and they have

waived any reliance on that analytical framework—we exercise our discretion to

consider the substance of the plaintiffs’ argument here, recognizing that they did

advance a plain-meaning argument in their response before the district court. 

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...)

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We respectfully disagree with both decisions and find them unpersuasive. 

We are constrained to observe that both decisions offer only a conclusory

analysis of § 92a(a)’s terms, which does not answer as to ReconTrust “the critical

question” of where the national bank is “located.” Garrett, 546 F. App’x at 738. 

In Bell, the court concluded that “[t]he statute’s plain meaning indicates that the

national bank is ‘located’ in each state in which it carries on activities as trustee,”

and further reasoned that “[w]hen acting as a trustee of a trust deed, one

necessarily acts in the capacity as trustee in the State where the real property is

located, where notice of default is filed, and where the sale is conducted.” 860 F.

Supp. 2d at 1300. However, even if we accept Bell’s premise that a national

bank, when operating as a trustee, is located in the place where it engages in

certain trustee activities, there is nothing in the statute that indicates what

activities are the relevant ones. More specifically, the statute is silent as to

whether the activities that Bell identifies are the relevant ones. On this barren

8

(...continued)

concerning the interpretation of § 92a that the plaintiffs presented to the district

court. In particular, we do not consider the plaintiffs’ arguments that (1) the

“policy of competitive equality” underlying our national banking laws supports

their preferred reading of the statute, Aplts.’ Opening Br. at 43; and (2) canons of

statutory interpretation “reveal congressional intent to apply Utah law” under §

92a(a), id. at 47 (capitalization altered). Neither of these two arguments was

presented to the district court (and the plaintiffs do not make a plain-error

argument as to either on appeal), and we thus decline to entertain them now. See

Richison v. Ernest Grp., Inc., 634 F.3d 1123, 1131 (10th Cir. 2011) (“[T]he

failure to . . . argue for plain error and its application on appeal . . . surely marks

the end of the road for an argument for reversal not first presented to the district

court.”). 

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statutory terrain one might just as well build a case that the relevant activities are

the ones that the OCC identifies in 12 U.S.C. § 9.7(d), such as, executing

documents that create the fiduciary relationship or making discretionary decisions

regarding the distribution of fiduciary assets. The bottom line is that, based on

the plain terms of § 92a(a), we just cannot answer the location question.9

Relying heavily on Bell’s reasoning, the Utah Supreme Court’s analysis in

Sundquist is similarly unpersuasive. The Sundquist court explained that

9 Bell’s reasoning is also misguided because the court incorporates an

inquiry into legislative history into its ostensible plain-meaning analysis. See

Bell, 860 F. Supp. 2d at 1299–1300 (“The precise question at issue is this: to

which ‘State(s)’ does 12 U.S.C. § 92a(a) refer? After carefully examining the

statute’s plain meaning, together with the legislative history of the statute, the

court has determined that Congress has directly addressed this precise question.”

(emphasis added)). Ordinarily, legislative history should be referenced only when

the statutory language is ambiguous. See, e.g., Edwards v. Valdez, 789 F.2d

1477, 1481 (10th Cir. 1986) (“When the meaning of the statute is clear, it is both

unnecessary and improper to resort to legislative history to divine congressional

intent.”); see also Levorsen v. Octapharma Plasma, Inc., 828 F.3d 1227, 1228

(10th Cir. 2016) (noting that sometimes statutes “are so ambiguous that we must

comb the annals of legislative history to divine Congress’ intent”). In other

words, legislative history is not a proper tool in an inquiry aimed at determining

whether the terms of a statute speak clearly to the matter at hand. 

Though 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 plainmeaning “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. 

35

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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 § 92a(a), a national bank like ReconTrust is “located” in “each state in

which it carries on activities as trustee” (quoting Bell, 860 F. Supp. 2d at 1300)). 

It wrapped up its analysis succinctly: “In short, the plain meaning of the statute is

clear. A national bank is located in those places where it acts or conducts

business. And it certainly acts as a trustee in the state in which it liquidates trust

assets.” Id. at 1010. However, even assuming arguendo that Sundquist is correct

in saying that a national bank’s location equates to where it “acts or conducts

business” the court does not identify in § 92a(a)’s text any basis for concluding

what acts or indicia of conducting business are the relevant ones. As Utah

Supreme Court Justice Lee observed in a thoughtful concurring opinion, the

analysis of the Sundquist majority involves “question-begging.” Sundquist, 311

P.3d at 1015 (Lee, J., concurring). In that regard, we deem Sundquist to be

marching to the beat of the same drummer as Bell; both are unpersuasive. 

In sum, we reject the plaintiffs’ plain-meaning argument. We conclude that

§ 92a does not on its face make clear where a bank is “located.” Thus, we must

36

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look beyond the terms of the statute to discern where ReconTrust is “located” for

our present purposes.

3

Having concluded that the plain language of § 92a(a) does not answer the

question of where ReconTrust is located, and having declined to consider the

plaintiffs’ unpreserved other arguments that the statutory language is

unambiguous under Chevron step one, see supra note 8, we now turn to the

OCC’s implementing regulation. The regulation, in relevant part, provides that 

[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.

12 C.F.R. § 9.7(d). Thus, under the OCC’s interpretation of § 92a(a), we are

directed to consider (1) where ReconTrust accepted the fiduciary appointment at

issue here, (2) where it executed the documents that created the fiduciary

relationship, and (3) where it made discretionary decisions regarding the

investment or distribution of fiduciary assets. 

Applying these factors, the district court concluded that all three point to

Texas. The court explained that 

37

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[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 is 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 § 9.7(d) factors ineluctably point to Texas as the operative state. Indeed,

they have never presented an argument in this litigation applying the § 9.7(d)

factors to these facts—not in their response to the defendants’ motion to dismiss,

not in their motion to reconsider, and (as noted) not in their appellate briefs.10

10 The only even arguable mentions of how the § 9.7(d) factors should

be applied to the present facts in these filings are found in (1) the opening brief’s

argument that the district court erred in dismissing the case with prejudice

because the plaintiffs could have submitted additional evidence to show that

ReconTrust was located in Utah, and (2) the reply brief’s assertion that

ReconTrust acted in a fiduciary capacity in Utah. However, in neither instance do

(continued...)

38

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Instead, the plaintiffs now attempt to argue on appeal, by reference to the

Supreme Court’s Chevron decision, that 12 C.F.R. § 9.7(d) is an unreasonable

interpretation of 12 U.S.C. § 92a(a). See Chevron, 467 U.S. at 843 & n.11 (“[I]f

the statute is silent or ambiguous with respect to the specific issue, the question

for the court is whether the agency’s answer is based on a permissible

construction of the statute.”). For the reasons noted below, however, we decline

to reach the merits of this argument. 

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 lateblooming 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

10(...continued)

the plaintiffs even cite the regulation, and both arguments are skeletal at best and,

thus, not cognizable here. See United States v. Cooper, 654 F.3d 1104, 1128

(10th Cir. 2011) (“It is well-settled that ‘[a]rguments inadequately briefed in the

opening brief are waived.’” (quoting Adler v. Wal-Mart Stores, Inc., 144 F.3d

664, 679 (10th Cir. 1998) (alteration in original))). 

39

Appellate Case: 14-4085 Document: 01019714558 Date Filed: 11/02/2016 Page: 39 
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 12 C.F.R. §

9.7(d) is an unreasonable interpretation of 12 U.S.C. § 92a(a).12

11 Apparently in an abundance of caution and as a prophylactic

measure, in the event that we “conclude[d] that [a Chevron analysis] is required

despite [the plaintiffs’] failure to argue Chevron in a timely manner,” Aplees.’ Br.

at 36–37, the defendants conducted an extensive Chevron analysis. However, the

defendants never deviated from their explicit stance that the plaintiffs’ Chevron

“arguments cannot be revived on appeal.” Id. at 35. Accordingly, we would be

hard-pressed to conclude that, by their extensive Chevron briefing, the defendants

have effectively “waived the [plaintiffs’] waiver.” United States v. Heckenliable,

446 F.3d 1048, 1049–50 n.3 (10th Cir. 2006); accord United States v. McGehee,

672 F.3d 860, 873 n.5 (10th Cir. 2012). In any event, the plaintiffs have made no

such argument. 

12 The plaintiffs also appear to contend that courts are required to

conduct a Chevron analysis of whether a regulation is a reasonable interpretation

(continued...)

40

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Notably, in its amicus brief, the State has sought to fill the lucuna left by

the plaintiffs regarding the application of the § 9.7(d) factors. Specifically, it

argues that, when those factors are applied to these facts, the correct conclusion is

that ReconTrust is located in Utah. We, however, eschew in this case reaching

the merits of this argument. As noted, the plaintiffs (i.e., the parties opposing

ReconTrust’s position) have nowhere presented an argument applying the § 9.7(d)

factors to the facts of this case. While we appreciate the State’s thoughtful

12(...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 12 C.F.R. § 9.7(d) is an

unreasonable interpretation of 12 U.S.C. § 92a(a) where plaintiff failed to raise

argument before the district court). Indeed, both the majority and the dissent in a

recent decision intimated that ordinarily we should receive an “invitation” to

employ the Chevron rubric, Transam Trucking, Inc. v. Admin. Review Bd., U.S.

Dep’t of Labor, 833 F.3d 1206, 1212 n.4 (10th Cir. 2016), lest we “make a wholly

uninvited foray into step two of Chevronland,” id. at 1216 (Gorsuch, J.,

dissenting). Moreover, the plaintiffs’ briefing on this point, which relies

primarily on the Supreme Court’s decision in National Cable &

Telecommunications Association v. Brand X Internet Services, 545 U.S. 967

(2005), misses the mark. Their brief points to the Court’s statement in Brand X

that, in reviewing a Federal Communications Commission regulation, the Ninth

Circuit had “erred in refusing to apply Chevron.” 545 U.S. at 984. However, in

Brand X, a number of the involved parties had pursued a Chevron-based argument

from the outset. Here, in contrast, the plaintiffs simply did not raise in a timely

fashion any argument challenging the reasonableness of the OCC’s regulation

(i.e., § 9.7(d)); they were silent on this point in response to the defendants’

motion to dismiss. In sum, the plaintiffs have provided no authority for their

assertion that courts—including the district court here—are required to sua sponte

undertake a Chevron reasonableness analysis any time an agency interpretive

regulation is implicated in a decision, and the legal touchstones that we have

uncovered indicate that this argument is misguided. 

41

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attempt to do so, we must “keep our primary focus on the parties’ arguments.” 

Rosenfield v. HSBC Bank, USA, 681 F.3d 1172, 1178–79 n.4 (10th Cir. 2012); see

United States v. Ackerman, 831 F.3d 1292, 1299 (10th Cir. 2016) (“[O]urs is a

party-directed adversarial system and we normally limit ourselves to the

arguments the parties before us choose to present. Amici briefs often serve

valuable functions, but those functions don’t include presenting arguments

forgone by the parties themselves . . . . [T]his court has routinely declined to

consider arguments presented only in an amicus brief . . . .”). We do not discern

any “exceptional circumstances” here that would cause us to exercise our

discretion to stray from the parties’ properly-preserved arguments, and the State

has not identified any. See Tyler v. City of Manhattan, 118 F.3d 1400, 1404 (10th

Cir. 1997) (“Although this circuit has yet to address the issue, it is clear that this

panel has the discretion to reach arguments raised only in an amicus curiae brief. 

It is equally clear, however, that we should exercise that discretion only in

exceptional circumstances.” (emphasis added) (citation omitted)); see Ackerman,

831 F.3d at 1299 (in following this court’s approach of ordinarily declining to

consider arguments made only in an amicus brief, observing that “no one even

attempts to offer us a reason to depart from that practice here”). Accordingly, we

deem it prudent and appropriate to decline to reach the State’s contention (as

amicus) that application of the § 9.7(d) factors supports the conclusion that

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ReconTrust is located in Utah. We leave this argument for another day.13 

In sum, we reject the plaintiffs’ argument that the plain text of 12 U.S.C.

§ 92a(a) requires us to find that ReconTrust is located in Utah for purposes of the

statute. Instead, we conclude that the statute is ambiguous on this point. Because

the plaintiffs have failed to properly preserve any argument that 12 C.F.R. 

§ 9.7(d) is an unreasonable interpretation of the statute, as well as any argument

that the § 9.7(d) factors point to Utah rather than Texas, we decline to consider

these points in the present case. We accordingly adopt for purposes of this action

the district court’s conclusion—left without a properly preserved challenge—that

application of the § 9.7(d) factors indicates that ReconTrust was located in

Texas.14 Because it is undisputed that Texas law would permit the foreclosures at

13 Like the plaintiffs, the State also made a Chevron-based

unreasonableness argument, asking us to conclude that “the OCC Rule is not

entitled to deference.” Amicus State’s Br. at 5. Because we have determined that

this argument—as advanced by a party to this action (i.e., the plaintiffs)—is not

preserved for review, we decline to resuscitate it simply because amicus State

wishes to ride the same horse; their arguments cannot serve to “illuminate the

contours” of plaintiffs’ waived argument. See Rosenfield, 681 F.3d at 1178–79

n.4. 

14 Because we uphold the district court’s conclusion that ReconTrust

was located, for purposes of 12 U.S.C. § 92a(a), in Texas, and it is undisputed

that under Texas law ReconTrust possessed the power of sale as the trustee, we

need not reach the alternative argument advanced by the defendants that

ReconTrust would still have the power of sale under § 92a even if the state where

it was located under the statute was Utah. More specifically, section 92a(b) gives

the power to act as trustee to national banks whenever state law grants the powers

to “State banks, trust companies, or other corporations which compete with

national banks.” Utah law gives the power of sale to title insurance companies,

(continued...)

43

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issue, we conclude that the district court correctly ruled that the plaintiffs had

failed to state any claim on which relief could be granted.

III

For the foregoing reasons, we AFFIRM the district court’s judgment.

14(...continued)

see Utah Code §§ 57-1-21(3), 57-1-23, and the defendants have argued that title

insurance companies are “other corporations which compete with national banks”

thus triggering the grant of power to national banks under § 92a(b), Aplees.’ Br.

at 52. We need not and do not reach this argument in this case. Furthermore,

following oral argument, we issued an order directing the parties to submit letters

under Federal Rule of Appellate Procedure 28(j), “addressing the question of

whether, under Utah law, it is permissible for a lending bank to designate a

wholly-owned subsidiary title company as a trustee in a non-judicial foreclosure.” 

Order, No. 14-4085, at 1 (10th Cir., filed May 7, 2015) (emphasis added). The

parties and the State responded. However, because we have concluded that, under

12 U.S.C. § 92a(a)—as interpreted in 12 C.F.R. § 9.7(d)—Texas supplies the

operative law, we need not (and do not) pursue this line of inquiry regarding the

requirements of Utah law. 

44

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14-4085, Dutcher v. Matheson 

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 12 C.F.R. § 9.7(d) should not be entitled to deference. 

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.” 

12 U.S.C. § 92a(a). The Office of the Comptroller of the Currency (“OCC”) has 

concluded that a national bank is located in “the state in which the bank acts in a 

fiduciary capacity” as to each of its fiduciary relationships. § 9.7(d). In this case, 

ReconTrust Company, N.A. (“Recon”), a national bank, acted in a fiduciary capacity in 

Utah by engaging in a non-judicial foreclosure in the state. Therefore, Recon should 

have been subject to Utah law regarding such foreclosures. But the OCC has 

unreasonably concluded that a national bank “acts in a fiduciary capacity” only “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.” Id. Because Recon conducted these three activities in 

Texas, the regulation permits it to transpose Texas law for Utah law with respect to a 

foreclosure sale in Utah and thereby obtain a material competitive advantage over Utah 

state banks. Such a serious degradation of state sovereignty ought not to be the result of a 

patently unreasonable regulatory decision. 

Appellate Case: 14-4085 Document: 01019714558 Date Filed: 11/02/2016 Page: 45 
2 

I 

 As the majority opinion correctly notes, the plaintiffs properly preserved only a 

single argument regarding § 92a(a): the plain language of the statute compels the 

conclusion that Recon was “located” in Utah when it engaged in the non-judicial 

foreclosures at issue. (Majority Op. 35 n.9.) But the Supreme Court has previously 

described the word “located” as a “chameleon” whose “meaning depends on the context 

in and purpose for which it is used.” Wachovia Bank, N.A. v. Schmidt, 546 U.S. 303, 

318 (2006); see also Garrett v. ReconTrust Co., N.A., 546 F. App’x 736, 738-39 (10th 

Cir. 2013) (unpublished) (rejecting argument that the plain text of § 92a(a) is clear). I 

will not repeat here the majority’s thorough consideration of the plain text. (Majority Op. 

35-39.) I simply note my agreement that § 92a(a) does not tell us the state in which 

Recon was located. 

II 

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.” 

§ 9.7(d). This portion of the regulation is well-founded. Section 92a itself gives the 

OCC authority to grant national banks the power to “act as trustee.” § 92a(a). And the 

essence of acting as a trustee is acting in a fiduciary capacity. But the OCC has limited 

the locations in which a bank “acts in a fiduciary capacity” to only three: where the bank 

“accepts the fiduciary appointment, executes the documents that create the fiduciary 

relationship, and makes discretionary decisions regarding the investment or distribution 

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3 

of fiduciary assets.” § 9.7(d). I would hold that this limitation is unreasonable, joining at 

least two courts that have declined to grant § 9.7(d) deference. See Bell v. Countrywide 

Bank, N.A., 860 F. Supp. 2d 1290, 1298-1308 (D. Utah 2012); Fed. Nat’l Mortg. Ass’n v. 

Sundquist, 311 P.3d 1004, 1009-13 (Utah 2013). 

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 § 9.7(d), the OCC apparently 

attempted to identify “key fiduciary functions.” Fiduciary Activities of National Banks, 

65 Fed. Reg. 75,872, 75,874 (Dec. 5, 2000). Yet the agency “failed to include as a core 

fiduciary function engaging in an act which liquidates the trust assets, e.g., engaging in a 

non-judicial foreclosure of real property where the trust asset is located. This makes no 

sense.” Bell, 860 F. Supp. 2d at 1300. 

In promulgating § 9.7(d), the OCC likely had in mind traditional express trusts 

rather than trust deeds. But the “similarities between a trustee of an express trust and a 

trustee under a deed of trust end with the name.” Monterey S. P. P’ship v. W. L. 

Bangham, 777 P.2d 623, 628 (Cal. 1989). In the deed of trust context, a non-judicial 

foreclosure sale is not an ancillary act; it is the core responsibility undertaken by the 

trustee. See Russell v. Lundberg, 120 P.3d 541, 545 (Utah Ct. App. 2005) (“A trustee’s 

primary obligation is to assure the payment of the debt secured by the trust deed.”). 

Whether because of an oversight or confusion regarding the differences between express 

trusts and trust deeds, the OCC’s decision to omit non-judicial foreclosures from its list 

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4 

of a trustee’s key fiduciary duties cannot be countenanced. It seems nonsensical to 

exclude from this list a trustee’s liquidation of trust assets—a trustee’s principal duty 

under a deed of trust. 

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 

§ 9.7(d) (listing the state in which a bank accepts its appointment and executes trust 

documents). And the regulation provides that if the listed 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.” Id. This 

regulation permits national banks to “dictate the applicable law.” Sundquist, 311 P.3d at 

1013. Put another way, the OCC’s regulation creates a race to the bottom in which 

national banks can choose to be governed by the state with the most bank-friendly rules 

simply by assuming the delineated fiduciary responsibilities there. National banks can 

then act according to those rules in every state.

By allowing national banks to select which state’s law it will follow regardless of 

the state in which it acts, § 9.7(d) grants them a material competitive advantage over state 

banks, which may not so choose. This result undermines the principle of “competitive 

equality” that Congress “firmly embedded in the statutes governing the national banking 

system.” First Nat’l Bank in Plant City v. Dickinson, 396 U.S. 122, 133 (1969); see also 

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5 

St. Louis Cty. Nat’l Bank v. Mercantile Tr. Co. Nat’l Ass’n, 548 F.2d 716, 720 (8th Cir. 

1976) (“The policy of competitive equality was incorporated into section 92a.”); Blaney 

v. Fla. Nat’l Bank at Orlando, 357 F.2d 27, 30 (5th Cir. 1966) (“[N]ational banks [should 

be] on an equal competitive basis with state banks and trust companies in the state where 

the national bank is situated.”); Bell, 860 F. Supp. 2d. at 1303 (analyzing the legislative 

history of § 92a(a) and concluding that “Congress thus intended to create an equal 

playing field for national banks”). Section 9.7(d) contravenes the statute’s overriding 

purpose. It grants Recon, a national bank based in Texas, a substantial competitive 

advantage over Utah-chartered banks, as well as national banks based in Utah. Under 

Utah law, the latter two types of banks cannot exercise the power of sale in non-judicial 

foreclosures in Utah, whereas an out-of-state national bank like Recon can. This 

consequence turns the principle of competitive equity on its head.1

 

 1

 Although the current regulation is unreasonable, the OCC has previously set 

forth a permissible interpretation of § 92a(a). The OCC previously advised that 

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 

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6 

 The OCC’s regulation should also not be granted deference because it intrudes 

into a realm of traditional state authority. As the Utah Supreme Court explained in 

Sundquist, courts should not lightly assume a congressional purpose to dominate “a field 

of traditional state sovereignty.” 311 P.3d at 1010. Because “the security of the titles to 

real estate and the power to ensure that security inheres in the very nature of state 

government,” we should require “a clear statement of an intent to permit the laws of a 

foreign state to regulate the manner and mode of a foreclosure sale in another state.” Id. 

at 1012 (quotation and alteration omitted).2 

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). 

 

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). 

2

 Some have taken this argument one step further, asserting that “when an agency 

purports to decide the scope of federal pre-emption, a healthy respect for state 

sovereignty calls for something less than Chevron deference.” Watters v. Wachovia 

Bank, N.A., 550 U.S. 1, 41 (2007) (Stevens, J., dissenting). “Unlike Congress, 

administrative agencies are clearly not designed to represent the interests of States, yet 

with relative ease they can promulgate comprehensive and detailed regulations that have 

broad pre-emption ramifications for state law.” Geier v. Am. Honda Motor Co., 529 U.S. 

861, 908 (2000) (Stevens, J., dissenting). 

Appellate Case: 14-4085 Document: 01019714558 Date Filed: 11/02/2016 Page: 50 
7 

Yet § 9.7(d) greatly upsets states’ traditional authority over real property located within 

their borders. 

III

 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 § 9.7(d) is an 

unreasonable interpretation of § 92a(a) and thus unworthy of deference. Under a more 

logical construction of the statute, the applicable law would be that of the state where a 

trustee exercises its power of sale. As the court in Bell explained, “[w]hen acting as a 

trustee of a trust deed, one necessarily acts in the capacity as a trustee in the State where 

the real property is located, where notice of default is filed, and where the sale is 

conducted.” 860 F. Supp. 2d at 1300. And because Utah law grants the authority to 

conduct non-judicial foreclosures only to members of the Utah State Bar or title 

insurance companies with an office in Utah, Utah Code § 57-1-21(3), I would conclude 

 3

 I admit to some confusion as to precisely where in the Chevron framework the 

foregoing analysis fits. See Chevron, U.S.A., Inc. v. Nat. Res. Def. Council, Inc., 467 

U.S. 837, 842-43 (1984). Certain of my colleagues have noted that the Supreme Court 

has been inconsistent in describing “just how rigorous Chevron step one is supposed to 

be.” Gutierrez-Brizuela v. Lynch, ___ F.3d ___, 2016 WL 4436309, at *11 (10th Cir. 

Aug. 23, 2016) (Gorsuch, J., concurring). Our circuit precedent indicates that “courts 

may use statutory language and legislative history at the first step of the Chevron 

analysis.” Ron Peterson Firearms, LLC v. Jones, 760 F.3d 1147, 1157 n.10 (10th Cir. 

2014). But this instruction seems to stand in some tension with the rule that “we do not 

resort to legislative history to cloud a statutory text that is clear.” Ratzlaf v. United 

States, 510 U.S. 135, 147-48 (1994). Regardless of whether the foregoing is properly 

considered a Chevron step one or step two argument, it was not preserved below. 

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8 

that Recon does not have the power to conduct non-judicial foreclosures of trust deeds in 

Utah. 

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No. 14-4085, Dutcher v. Matheson

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

12 U.S.C. § 92a(a). Specifically, I hope to underscore that—insofar as one can

rightly call § 92a(a)’s effect on state law “preemption”—it is not ordinary conflict

preemption. 

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 § 92a.”); id.

at 28 (contending that the plaintiffs’ argument that Utah law applies in the present

circumstances is “fundamentally flawed because ReconTrust, a national bank, was

authorized to conduct the sales by federal law, and any Utah law purporting to

deny that authority must give way”). However, though there is arguably a limited

and unique form of preemption at issue here, it is not typical conflict preemption. 

The doctrine of conflict preemption is well-established: “In that species of

preemption, a state-law provision will be preempted if it conflicts with federal

law.” United States v. Sup. Ct. of N.M., --- F.3d ----, 2016 WL 5946021, at *22

(10th Cir. June 7, 2016); see Richard H. Fallon, Jr., et al., HART AND WECHSLER’S

THE FEDERAL COURTS AND THE FEDERAL SYSTEM 646 (6th ed. 2009) (“Conflict

preemption . . . embraces two distinct situations. In the easier but far rarer case,

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compliance with both federal and state duties is simply impossible. In the second

and more common situation, compliance with both laws is possible, yet state law

poses an obstacle to the achievement of federal purposes.” (citation omitted)). 

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, ---

U.S. ----, 136 S. Ct. 1288, 1297 (2016) (“Put simply, federal law preempts

contrary state law.”). In other words, the inquiry in the classic conflictpreemption 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, 

-2-

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§ 92a(a), explicitly provides that “the exercise of [federal banking] power is

subject to state law.” Barnett Bank, 517 U.S. at 34. Consequently, state law is

never entirely out of the equation in this setting. The bone of contention between

the parties simply relates to the identification of which state’s law—as between

the two competing states, Utah and Texas—conditions the exercise of the federal

banking power that § 92a(a) confers. 

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 § 92a(a)

on the (losing) state’s law. See Bell v. Countrywide Bank, N.A., 860 F. Supp. 2d

1290, 1302 (D. Utah 2012) (“A contrary interpretation [of allegedly relevant

legislative history of § 92a] . . . effectively preempts the laws of the local State

(presumably the State where the foreclosed property is located and the trustee

executes the power of sale) in favor of the laws of another State (the State where

the national bank performs its ‘core fiduciary functions’) . . . .” (emphases

added)); Fed. Nat’l Mortg. Ass’n v. Sundquist, 311 P.3d 1004, 1008 (Utah 2013)

-3-

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(“The issue of whether the NBA preempts Utah law governing the qualification of

trustees has been addressed by the Utah federal district courts, with differing

results. In three cases, the federal district courts have found that federal law

preempts Utah law and have therefore concluded that the laws of Texas apply.”

(emphasis added)); id. at 1007 (“Section 92a of the National Banking Act Does

Not Preempt Sections 57-1-21 and 57-1-23 of the Utah Code . . . .” (capitalization

altered)); see also Dutcher I, 733 F.3d at 986 (observing that “the district court

held that federal law preempted state law”). The parties likewise have primarily

used the term “preempts” or “preemption” in this narrow sense: viz., they use the

term relative to the inquiry into whether Utah law is displaced by Texas law

through the force of federal law—namely, by § 92a(a). Not surprisingly, the

parties adopt opposite views on this unique preemption question. Compare

Aplees.’ Br. at 2 (framing the issue as “Did the District Court correctly hold that

12 U.S.C. § 92a(a) authorizes ReconTrust, a national bank, [under Texas law] to

exercise the power of sale in Utah and preempts those provisions of a Utah statute

which purport to deny ReconTrust that authority?”), and 49 (resolving the issue

by noting that “Texas law does not prohibit ReconTrust from exercising the

power of sale in Utah,” and thus “ReconTrust’s exercise of the power of sale with

respect to Plaintiffs’ properties was permissible under federal law” (underlining

omitted and emphasis added)), with Aplts.’ Reply Br. at 3 (“Appellees have it

exactly backward: § 92a expressly allows Utah law to limit the fiduciary powers

-4-

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of national banks as long as it applies the same limits to state institutions.”

(emphasis added)); id. at 2 (“Where does Utah law conflict with federal law and

what federal law preempts Utah’s nonjudicial foreclosure regime? Appellees

gloss over this issue.”); see also Aplts.’ Opening Br. at 38 (“Appellees moved for

dismissal based on preemption. But there is no federal law that supplants Utah’s

non-judicial foreclosure law.”). For clarity’s sake, however, it is worth

highlighting that at issue in the parties’ arguments is not typical conflict

preemption. 

-5-

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