FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

DAVID H. LUTHER, Individually and 

On Behalf of All Others Similarly

Situated,

Plaintiff-Appellee,

v.

COUNTRYWIDE HOME LOANS

SERVICING LP; COUNTRYWIDE HOME

LOANS, INC.; COUNTRYWIDE

SECURITIES CORPORATION; MORGAN

STANLEY & CO., INC.; UBS

SECURITIES LLC; DEUTSCHE BANK No. 08-55865

SECURITIES, INC.; CITIGROUP GLOBAL

M D.C. No. ARKETS INC.; LEHMAN BROTHERS,

 2:07-cv-08165- INC.; GREENWICH CAPITAL MARKETS,

MRP-MAN INC.; EDWARD D. JONES & CO.,

L.P.; J.P. MORGAN SECURITIES, INC.; OPINION

CREDIT SUISSE FIRST BOSTON;

GOLDMAN SACHS & CO.; BANC OF

AMERICA SECURITIES, LLC;

BARCLAYS CAPITAL INC.; BEAR

STEARNS AND COMPANY, INC.;

STANFORD L. KURLAND; ERIC P.

SIERACKI; DAVID A SPECTOR; N.

JOSHUA ADLER; JENNIFER S.

SANDEFUR; RANJIT KRIPALANI;

CWALT, INC.,

Defendants-Appellants. 

Appeal from the United States District Court

for the Central District of California

Mariana R. Pfaelzer, District Judge, Presiding

9115
Argued and Submitted

July 14, 2008—Pasadena, California

Filed July 16, 2008

Before: Barry G. Silverman, Johnnie B. Rawlinson, and

Milan D. Smith, Jr., Circuit Judges.

Opinion by Judge Silverman

9116 LUTHER v. COUNTRYWIDE HOME LOANS
COUNSEL

Dean J. Kitchens, Gibson Dunn & Crutcher LLP, Los Angeles, California; Brian E. Pastuszenski, Goodwin Procter LLP,

Boston, Massachusetts, for the defendants-appellants. 

Joseph D. Daley, Coughlin Stoia Geller Rudman & Robbins

LLP, San Diego, California, for the plaintiff-appellee. 

OPINION

SILVERMAN, Circuit Judge: 

Section 22(a) of the Securities Act of 1933 creates concurrent jurisdiction in state and federal courts over claims arising

LUTHER v. COUNTRYWIDE HOME LOANS 9117
under the Act. It also specifically provides that such claims

brought in state court are not subject to removal to federal

court. We hold today that the Class Action Fairness Act of

2005, which permits in general the removal to federal court

of high-dollar class actions involving diverse parties, does not

supersede § 22(a)’s specific bar against removal of cases arising under the ’33 Act. 

I. Facts

Alleging various violations of the Securities Act of 1933,

David H. Luther filed a class action in Los Angeles County

Superior Court against Countrywide Home Loans Servicing

LP, CWALT, Inc., several of Countrywide’s subsidiaries and

affiliated individuals, multiple alternative loan trusts, and various underwriters. The action was brought on behalf of all

persons and entities who acquired hundreds of billions of dollars worth of mortgage pass-through certificates from

CWALT, Inc. between January 2005 and June 2007. 

Luther alleges that the defendants violated sections 11,

12(a)(2), and 15 of the Securities Act of 1933, 15 U.S.C.

§§ 77k, 77l(a)(2) and 77o, by issuing false and misleading

registration statements and prospectus supplements for the

mortgage pass-through certificates. In particular, Luther

alleges that the risk of the investments was much greater than

represented by the registration statements and prospectus supplements, which omitted and misstated the credit worthiness

of the underlying mortgage borrowers. Luther alleges that the

value of the certificates has substantially declined since many

of the underlying mortgage loans became uncollectible and he

now seeks compensatory damages. The complaint expressly

“excludes and disclaims” allegations of fraud or intentional or

reckless misconduct. 

The Countrywide defendants removed the action to federal

court under the Class Action Fairness Act of 2005, Pub. L.

No. 109-2, §§ 4(a) & 5(a), 119 Stat. 4, 9-13 (codified at 28

9118 LUTHER v. COUNTRYWIDE HOME LOANS
U.S.C. §§ 1332(d) & 1453(b)). Once in federal court, Luther

brought a motion to remand the case back to state court under

§ 22(a) of the Securities Act of 1933, 15 U.S.C. § 77v(a),

which prohibits removal of claims filed in state court and arising under the Act. In opposition to that motion, the Countrywide defendants argued that the § 22(a) removal bar does not

prevent removal under CAFA and that none of CAFA’s

exceptions applies. The district court granted Luther’s motion

to remand the case to state court, holding that CAFA and

§ 22(a) cannot mutually coexist and that the specific bar

against removal in the Securities Act of 1933 trumps CAFA’s

general grant of diversity and removal jurisdiction. 

Generally, a district court’s order remanding a removed

case back to state court is not appealable. See 28 U.S.C.

§ 1447(d). However, permission to appeal can be sought and

granted in certain class action cases. See 28 U.S.C.

§ 1453(c)(2). We granted the Countrywide defendants’ petition to appeal the district court’s order remanding the case to

state court, and we review de novo. See Lowdermilk v. U.S.

Bank Nat’l Ass’n, 479 F.3d 994, 997 n.3 (9th Cir. 2007).

II. Discussion

[1] The Securities Act of 1933, which imposes liability for

omissions and misstatements in various securities-related

communications, provides concurrent jurisdiction in state and

federal courts over alleged violations of the Act. Pub. L. No.

73-22, ch. 38, § 22(a), 48 Stat. 74, 86-87 (codified at 15

U.S.C. § 77v(a)). However, § 22(a) strictly forbids the

removal of cases brought in state court and asserting claims

under the Act.1 Luther’s class action falls within § 22(a)’s

1

15 U.S.C. § 77v(a) provides in relevant part: 

Except as provided in section 77p(c) of this title, no case arising

under this subchapter and brought in any State court of competent

jurisdiction shall be removed to any court of the United States.

Section 77p(c)’s exception to the removal bar does not apply because it

is limited to cases involving “covered securities.” The parties agree that

the pass-through certificates are not of that type. 

LUTHER v. COUNTRYWIDE HOME LOANS 9119
removal bar because it was brought in state court and asserts

only claims arising under the Securities Act of 1933. However, Countrywide argues that this long-standing bar to

removal was superseded in 2005 by CAFA. 

The Class Action Fairness Act of 2005 § 4(a), 28 U.S.C.

§ 1332(d)(2),2 amended the requirements for diversity jurisdiction by granting district courts original jurisdiction over

class actions exceeding $5,000,000 in controversy where at

least one plaintiff is diverse from at least one defendant. In

other words, complete diversity is not required. CAFA also

provided for such class actions to be removable to federal

court. See 28 U.S.C. § 1453(b). CAFA was enacted, in part,

to “restore the intent of the framers of the United States Constitution by providing for Federal court consideration of interstate cases of national importance under diversity

jurisdiction.” Pub. L. No. 109-2, § 2(b)(2), 119 Stat. 4, 5 (codified as a note to 28 U.S.C. § 1711). 

In general, removal statutes are strictly construed against

removal. See Shamrock Oil & Gas Corp. v. Sheets, 313 U.S.

100, 108-09 (1941); Gaus v. Miles, Inc., 980 F.2d 564, 566

(9th Cir. 1992). A defendant seeking removal has the burden

to establish that removal is proper and any doubt is resolved

2

28 U.S.C. § 1332(d)(2) provides: 

The district courts shall have original jurisdiction of any civil

action in which the matter in controversy exceeds the sum or

value of $5,000,000, exclusive of interest and costs, and is a class

action in which— 

(A) any member of a class of plaintiffs is a citizen of a

State different from any defendant; 

(B) any member of a class of plaintiffs is a foreign state or

a citizen or subject of a foreign state and any defendant is a

citizen of a State; or 

(C) any member of a class of plaintiffs is a citizen of a

State and any defendant is a foreign state or a citizen or subject of a foreign state. 

9120 LUTHER v. COUNTRYWIDE HOME LOANS
against removability. Gaus, 980 F.2d at 566. However, a

plaintiff seeking remand has the burden to prove that an

express exception to removal exists. See Breuer v. Jim’s Concrete of Brevard, Inc., 538 U.S. 691, 698 (2003); Serrano v.

180 Connect, Inc., 478 F.3d 1018, 1023-24 (9th Cir. 2007). 

[2] Section 22(a) of the Securities Act of 1933 provides

such an express exception to removal: “Except as provided in

section 77p(c) of this title, no case arising under this subchapter and brought in any State court of competent jurisdiction

shall be removed to any court of the United States.” 15 U.S.C.

§ 77v(a). CAFA’s general grant of the right of removal of

high-dollar class actions does not trump § 22(a)’s specific bar

to removal of cases arising under the Securities Act of 1933.

“It is a basic principle of statutory construction that a statute

dealing with a narrow, precise, and specific subject is not submerged by a later enacted statute covering a more generalized

spectrum.” Radzanower v. Touche Ross & Co., 426 U.S. 148,

153 (1976). Here, the Securities Act of 1933 is the more specific statute; it applies to the narrow subject of securities cases

and § 22(a) more precisely applies only to claims arising

under the Securities Act of 1933. CAFA, on the other hand,

applies to a “generalized spectrum” of class actions. Id. 

The defendants put much reliance on Estate of Pew v. Cardarelli, 527 F.3d 25 (2d Cir. 2008), which held that 28 U.S.C.

§ 1332(d)(9)(C)’s exception to original diversity jurisdiction

under CAFA did not cover an action alleging violations of a

state consumer-fraud statute. We do not find the case to be

controlling. The Pew court did not address the interplay

between CAFA and § 22(a). Because the claim proceeded

under state law rather than the 1933 Act, § 22(a) did not apply

on its terms. 

[3] In summary, by virtue of § 22(a) of the Securities Act

of 1933, Luther’s state court class action alleging only violations of the Securities Act of 1933 was not removable. The

LUTHER v. COUNTRYWIDE HOME LOANS 9121
motion to remand was properly granted. 

AFFIRMED.

9122 LUTHER v. COUNTRYWIDE HOME LOANS