Jordan v. Nationstar Mortg. LLC

• Decision Date: 01 April 2015
• Docket Number: Nos. 14–35943,15–35113.,s. 14–35943
• Citation: 781 F.3d 1178
• Parties: Laura Zamora JORDAN, as her separate estate, and on behalf of others similarly situated, Plaintiff–Appellee, v. NATIONSTAR MORTGAGE LLC, Defendant–Appellant. Laura Zamora Jordan, as her separate estate, and on behalf of others similarly situated, Plaintiff–Appellee, v. Nationstar Mortgage LLC, Defendant–Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

781 F.3d 1178

Laura Zamora JORDAN, as her separate estate, and on behalf of others similarly situated, Plaintiff–Appellee

v.NATIONSTAR MORTGAGE LLC, Defendant–Appellant.

Laura Zamora Jordan, as her separate estate, and on behalf of others similarly situated, Plaintiff–Appellee

v.Nationstar Mortgage LLC, Defendant–Appellant.

Nos. 14–35943

15–35113.

United States Court of Appeals, Ninth Circuit.

Argued and Submitted March 9, 2015.

Filed April 1, 2015.

Jan T. Chilton (argued), Severson & Werson PC, San Francisco, CA; John A. Knox, Williams, Kastner & Gibbs PLLC, Seattle, WA, for Defendant–Appellant.

Clay M. Gatens (argued), Jeffers, Danielson, Sonn & Aylward, P.S., Wenatchee, WA; Michael D. Daudt, Terrell Marshall Daudt & Willie PLLC, Seattle, WA, for Plaintiff–Appellee.

Appeal from the United States District Court for the Eastern District of Washington, Thomas O. Rice, District Judge, Presiding. D.C. No. 2:14–cv–00175–TOR.

Before: J. CLIFFORD WALLACE, MILAN D. SMITH, JR., and PAUL J. WATFORD, Circuit Judges.

OPINION

M. SMITH, Circuit Judge:

Defendant–Appellant Nationstar Mortgage LLC (Nationstar) appeals from the district court's order granting Plaintiff–Appellee Laura Zamora Jordan's (Jordan) motion to remand this class action proceeding to state court because its removal was untimely under 28 U.S.C. § 1446(b). Section 1446(b)(1) permits defendants to remove state-court actions to federal court within thirty days of receiving an initial pleading or other document that reveals a basis for removal. However, if the initial pleading does not provide a basis for removal, a defendant may remove an action within thirty days of receiving “an amended pleading, motion, order, or other paper” from which it may first be ascertained that the case is removable. 28 U.S.C. § 1446(b)(3). Nationstar removed the case within thirty days of ascertaining removability under the Class Action Fairness Act (CAFA), 28 U.S.C. §§ 1332, 1453, but more than two years after the case became removable on federal question grounds pursuant to 28 U.S.C. § 1331.

Nationstar urges us to extend to the CAFA context the logic of our decision in Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1253 (9th Cir.2006), which held that the thirty-day removal clock is reset when a defendant discovers that a case is removable on federal officer grounds under 28 U.S.C. § 1442(a)(1), even if the defendant was previously aware of a different basis for federal jurisdiction. In light of the Supreme Court's recent opinion in Dart Cherokee Basin Operating Co., LLC v. Owens, ––– U.S. ––––, 135 S.Ct. 547, 190 L.Ed.2d 495 (2014), and mindful of Congress's intent to “strongly favor the exercise of federal diversity jurisdiction of class actions with interstate ramifications,” S.Rep. No. 109–14, at 35 (2005), reprinted in 2005 U.S.C.C.A.N. 3, at 34 (2005), we agree that the approach to “federal officer” removal taken in Durham must now be extended to CAFA claims. We hold that a defendant may remove a case from state court within thirty days of ascertaining that the action is removable under CAFA, even if an earlier pleading, document, motion, order, or other paper revealed an alternative basis for federal jurisdiction.

FACTUAL AND PROCEDURAL BACKGROUND

Laura Zamora Jordan obtained a loan to purchase a house in Washington state. To secure the loan, Jordan executed a deed of trust encumbering the house. Nationstar is the beneficiary of the deed of trust secured by Jordan's home. The deed of trust contains provisions permitting the beneficiary to enter the house and change the locks if the borrower fails to perform the covenants and agreements contained in the deed of trust, or if the borrower abandons the property. In April 2011, after Jordan defaulted on her loan, Nationstar's agents entered Jordan's home without notice, removed the existing locks, and installed a lockbox. Jordan was later permitted to re-enter the house to gather her personal belongings. Jordan claims that, “Nationstar still has not commenced foreclosure proceedings against Jordan's home, which she still owns,” and that she “has been deprived of the use and fair rental value of her home for over three years.”

On April 3, 2012, Jordan, “as her separate estate, and on behalf of others similarly situated,” sued Nationstar in Washington state court, alleging six causes of action, including violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, et seq. On January 3, 2013, Jordan filed her Second Amended Complaint (SAC), adding additional allegations and defining the proposed class. Jordan did not specify an amount in controversy in the complaint, but requested “damages in an amount to be proven at trial, including treble damages....” The state court certified the proposed class on May 9, 2014. On June 3, 2014, Jordan submitted responses to Nationstar's Fifth Interrogatories, stating that “the total amount of monetary damages is expected to exceed $25,000,000.00.”¹ On June 5, 2014, Nationstar filed a notice of removal to federal court pursuant to CAFA.

Jordan moved to remand the case to state court, arguing that Nationstar's notice of removal was untimely because it was filed more than two years after Jordan's initial complaint triggered federal jurisdiction under the FDCPA. See 28 U.S.C. § 1331. Nationstar countered that removal was timely because Jordan's answers to Nationstar's fifth set of interrogatories were the first “other paper from which it could be ascertained that the matter in controversy exceed[ed] $5,000,000,” one of the three necessary elements for triggering removal under CAFA. Nationstar urged the district court to extend the logic of our opinion in Durham v. Lockheed Martin Corp., 445 F.3d 1247 (9th Cir.2006), and recognize “a second and separate ground for removal, even if the initial complaint provided some other ground for removal,” thereby “reopen [ing]” the thirty-day removal window.

The district court, conscientiously seeking to follow our circuit's case law, remanded the case to state court because it was “not persuaded by Defendant's policy argument not supported by the wording of the statute or case law.” The court found that “the general principles of removal jurisdiction apply in CAFA cases,” and “the relevant removal date is the date on which the case itself becomes removable, rather than the date on which the case first becomes removable under CAFA.” Because Jordan's First Amended Complaint “included a federal cause of action, violation of the FDCPA,” this “rendered the action removable based on federal question jurisdiction,” within thirty days of that filing. The district court awarded Jordan her attorney fees and costs in the amount of $16,886.76 because it found that Nationstar “did not have an objectively reasonable basis for removal.” See Martin v. Franklin Capital Corp., 546 U.S. 132, 140, 126 S.Ct. 704, 163 L.Ed.2d 547 (2005) ; 28 U.S.C. § 1447(c).

Nationstar filed this appeal.

JURISDICTION AND STANDARD OF REVIEW

We have jurisdiction to review the district court's remand order under 28 U.S.C. § 1453(c)(1), and jurisdiction to review the court's award of attorney fees pursuant to 28 U.S.C. § 1291. We review whether an action was properly remanded to the state court from which it was removed de novo. “Similarly, we review the ‘construction, interpretation, or applicability’ of CAFA de novo. ” Washington v. Chimei Innolux Corp., 659 F.3d 842, 846–47 (9th Cir.2011) (quoting Bush v. Cheaptickets, Inc., 425 F.3d 683, 686 (9th Cir.2005) ). The district court's decision to award attorney fees under 28 U.S.C. § 1447(c) is reviewed for an abuse of discretion, and will be overturned if it is based on clearly erroneous findings of fact, or an erroneous determination of law. Patel v. Del Taco, Inc., 446 F.3d 996, 999 (9th Cir.2006).

DISCUSSION

Nationstar argues that “[t]he same three reasons Durham cited for applying the broad interpretation of ‘removable’ to federal officer removals apply with equal force to CAFA removals.” First, Congress and the Supreme Court have instructed that section 1453, like section 1442 in Durham, should be interpreted broadly in favor of removal. Second, both section 1442 and section 1453 permit a single defendant to remove without the consent of other defendants, and a strict interpretation of “removable” would effectively eliminate single-defendant removals. Durham, 445 F.3d at 1253. Finally, as with section 1442, interpreting “removable” strictly would “encourage gamesmanship and defeat the policies underlying” CAFA. Id.

A defendant who is sued in state court may remove the action to federal court on various grounds, such as if the case presents a federal question under 28 U.S.C. § 1331, or if the requirements for diversity of citizenship are met under 28 U.S.C. § 1332. 28 U.S.C. § 1441(a), (b). Section 1446(b)(1) requires the defendant to file a notice of removal “within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based.” 28 U.S.C. § 1446(b)(1). However,

if the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.

28 U.S.C. § 1446(b)(3). The removal of class actions is also governed by section 1446. 28 U.S.C. § 1453(b).

In 2005, Congress passed CAFA to permit defendants to remove class actions to federal court if they meet three requirements: there must be minimal diversity of citizenship between the parties; the proposed class must have at least 100 members; and the aggregated amount in controversy must equal or exceed the sum or value of $5 million. 28 U.S.C. § 1332(d) ; Class Action Fairness Act of 2005, Pub.L. No. 109–2, § 4, 119 Stat. 4, 12 (2005)....