99 Problems (But A 'Mass Action' Ain't One)

Nevada v. Bank of America Corp., et al, 2012 WL 688552 (9th Cir. March 2, 2012).

Nevada AG's parens patriae suit fell 99 persons short of a 100 person "mass action" under CAFA and was remanded back to state court.

Nevada's Attorney General filed suit on behalf of all Nevada consumers (a parens patriae suit) alleging that the defendants, a group of mortgage lenders and servicers, misled Nevada consumers about the terms and operation of their home mortgage modification and foreclosure processes, in violation of the Nevada Deceptive Trade Practices Act ("DTPA"). Nevada also alleged that the defendants violated an existing consent judgment in a prior case.

This action was based on complaints Nevada had reviewed and investigated from more than 150 consumers, housing counselors, and other industry sources. The Complaint sought declaratory and injunctive relief, civil penalties, restitution for allegedly defrauded Nevada consumers, attorney's fees, and the costs of investigation.

Nevada initially filed its suit action in Nevada state court, and the defendants removed the litigation to the U.S. District Court for the District of Nevada, asserting subject matter jurisdiction as either a class action or "mass action" under the CAFA.

Nevada moved to remand the case for lack of jurisdiction under CAFA, which the District Court denied.

On appeal, the Ninth Circuit reversed the District Court's order, and remanded the case to state court.

The Ninth Circuit began its analysis by noting that since the District Court issued its order holding that Nevada's parens patriae suit was a CAFA class action, the Ninth Circuit had issued Washington v. Chimei Innolux Corp., 659 F.3d 842 (9th Cir. 2011), wherein it held that attorney general enforcement actions were not removable class actions under CAFA. In Chimei, the attorneys general of Washington and California brought parens patriae suits under their states' antitrust laws, alleging that a group of manufacturers and distributors engaged in a conspiracy to fix the prices of certain liquid crystal display panels. The Chimei court held that parens patriae suits lacked the defining attributes of true class actions, and as such, they only resembled class actions in the sense that they were representative suits.

Although the defendants conceded that Chimei defeated any finding that Nevada's suit was a class action under CAFA, they argued that this action was nevertheless removable as a mass action under 28 U.S.C....