Jeffrey Benko v. Quality Loan Service Corp.

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

JEFFREY BENKO; CAMILO No. 13-15185

MARTINEZ; ANA MARTINEZ; FRANK

SCINTA; JACQUELINE SCINTA; SUSAN D.C. No.

HJORTH; SANDRA KUHN; JESUS 2:12-CV-0024-

GOMEZ; SILVIA GOMEZ; DONNA MMD-GWF

HERRERA; ANTOINETTE GILL; JESSE

HENNIGAN; KIM MOORE; THOMAS

MOORE, Nevada residents; OPINION

RAYMOND SANSOTA; FRANCINE

SANSOTA, Ohio residents, Plaintiffs-Appellants,

v.

QUALITY LOAN SERVICE

CORPORATION, a California corporation; MTC FINANCIAL, INC., DBA Trustee Corps.; MERIDIAN

FORECLOSURE SERVICE, DBA

Meridian Trust Deed Service, DBA MTDS, Inc.; NATIONAL DEFAULT

SERVICING CORPORATION;

CALIFORNIA RECONVEYANCE

COMPANY,

Defendants-Appellees.

Appeal from the United States District Court for the District of Nevada Miranda Du, District Judge, Presiding Argued and Submitted March 13, 2015—San Francisco, California

Filed June 18, 2015

Before: J. Clifford Wallace, Milan D. Smith, Jr., and Paul J. Watford, Circuit Judges.

Opinion by Judge Milan D. Smith, Jr.; Dissent by Judge Wallace

SUMMARY*

Jurisdiction / Class Action…

dissenting:

I dissent from the majority’s holding in Part A that “plaintiffs should be permitted to amend a complaint after removal to clarify issues pertaining to federal jurisdiction under CAFA.” Opinion p. 11. In considering whether subsections (aa) and (bb) of CAFA’s local controversy exception are satisfied, we should not depart from the bright-line rule that “jurisdiction must be analyzed on the basis of the pleadings filed at the time of removal without reference to subsequent amendments.” Sparta Surgical Corp. v. NASD, 159 F.3d 1209 , 1213 (9th Cir.1998); see also Pullman Co. v. *1120 Jenkins, 305 U.S. 534, 537 , 59 S.Ct. 347 , 83 L.Ed. 334 (1939). The majority errs in carving out an inappropriate exception to that rule, based solely on non-binding dicta from Coleman v. Estes Express Lines, Inc., 631 F.3d 1010, 1020-21 (9th Cir.2011), which merely speculates that it “may” be wise, in the district court’s discretion, to “permit the plaintiff to file an amendment to the complaint that addresses any relevant CAFA criteria.” The majority’s rule departs from controlling precedent and will frustrate Congress’s intent that the local controversy exception be a narrow one,…

Opinion by Judge MILAN D. SMITH, JR.; Dissent by Judge WALLACE.

OPINION

In this diversity class action, Jeffrey Benko and several others (collectively the *1115 Plaintiffs) sued the Defendant companies, alleging that they engaged in illegal debt collection practices in the course of carrying out non-judicial foreclosures. The Plaintiffs initially filed the action in the Eighth Judicial Court of the State of Nevada, but the Defendants removed the action to federal district court under the Class Action Fairness Act (CAFA), 28 U.S.C. §§ 1332 (d), 1453, 1711. The district court held that it had jurisdiction over the class action, but then dismissed the Plaintiffs’ claims under Federal Rule of Civil Procedure 12(b)(6).

We reverse the district court, vacate the district court’s judgment, and remand with instructions to the district court to remand this case to the Eighth Judicial District Court of Nevada for further proceedings. Because Meridian Foreclosure Services (Meridian), a Nevada corporation, is a “significant” defendant for purposes of CAFA’s local controversy exception, 28 U.S.C. § 1332 (d)(4)(A), we lack jurisdiction over this action. The district court abused its…