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Visendi v. Bank of America, N.A.

United States Court of Appeals, Ninth Circuit

October 23, 2013

Carla VISENDI; 159 Other Named Individuals, Plaintiffs-Appellees,
v.
BANK OF AMERICA, N.A.; Countrywide Financial Corporation; Bank of New YorkMellon Corporation; Countrywide Home Loans, Inc.; BAC Home Loans Servicing; Recontrust Company, NA; Aurora Loan Services LLC; Bank of The West, a California State Banking Corporation; Federal Home Loan Mortgage Corporation; Federal National Mortgage Association; Greentree Servicing, LLC; HSBC Bank USA, N.A.; UBS Real Estate Securities, Inc; U.S. Bank, NA; Wells Fargo Bank, N.A., Defendants-Appellants.

Argued and Submitted Oct. 7, 2013.

Page 864

[Copyrighted Material Omitted]

Page 865

Douglas E. Winter (argued), Bryan Cave LLP, Washington, D.C.; Robert E. Boone III, Nafiz Cekirge, and Brian J. Recor, Bryan Cave LLP, Santa Monica, CA, for Defendants-Appellants.

Kristin Day (argued) and Jamie Edwards Quadra (argued), Quadra Day, PC, Roseville, CA, for Plaintiffs-Appellees.

Appeal from the United States District Court for the Eastern District of California, Morrison C. England, Jr., Chief District Judge, Presiding. D.C. No. 2:11-cv-02413-MCE-GGH.

Before: DOROTHY W. NELSON, MILAN D. SMITH, JR., and SANDRA S. IKUTA, Circuit Judges.

Page 866

OPINION

M. SMITH, Circuit Judge:

In this appeal, we address whether Defendants-Appellants (Defendants) properly removed a 137-plaintiff action from state court to federal court under the Class Action Fairness Act of 2005 (CAFA), Pub.L. No. 109-2, 119 Stat. 4 (2005). We also consider whether Plaintiffs-Appellees (Plaintiffs) are misjoined under Federal Rule of Civil Procedure 20(a). We answer both questions in the affirmative. Accordingly, we reverse the order of the district court, and remand with instructions to dismiss without prejudice the claims of all Plaintiffs but the first named Plaintiff, Carla Visendi.

FACTUAL AND PROCEDURAL BACKGROUND

On August 17, 2011, 137 named plaintiffs sued 25 financial institutions in the Sacramento County Superior Court. Plaintiffs alleged, among other things, that the institutions' deceptive mortgage lending and securitization practices decreased the value of their homes, impaired their credit scores, and compromised their privacy. They asserted eight state law causes of action: rescission, fraudulent concealment, intentional and negligent misrepresentation, invasion of privacy, and violation of California Civil Code §§ 2923.5, 1798.82, and 2924.

On September 12, 2011, Bank of America Corporation and Bank of America, N.A. (together, Bank of America) removed this case to the United States District Court for the Eastern District of California. Relying on CAFA, Bank of America argued that this action was a removable " mass action" because it was a " civil action ... in which monetary relief claims of 100 or more persons are proposed to be tried jointly on the ground that the plaintiffs' claims involve common questions of law or fact...." 28 U.S.C. § 1332(d)(11)(B)(i).

After removal, Plaintiffs obtained leave from the district court to file a First Amended Complaint.[1] The First Amended Complaint added and dropped multiple parties, resulting in a total of 160 named plaintiffs asserting claims against 15 defendants. Further, Plaintiffs abandoned their original causes of action and asserted three new state-law claims: invalid assignment, mistake, and negligence. In the First Amended Complaint, Plaintiffs alleged that Defendants engaged in deceptive and unscrupulous mortgage lending and securitization practices, and that Bank of America mismanaged their applications for loan modifications. As was true of the allegations in the original complaint, the named plaintiffs resided in or owned many unrelated properties throughout the country, and obtained loans from many different financial institutions.

Defendants moved to dismiss the First Amended Complaint, asserting misjoinder and failure to state a claim. Plaintiffs opposed the motion, arguing that Defendants waived their right to contest joinder when they removed the case to federal court under CAFA. Plaintiffs argued in the alternative that the district court should remand this case to state court because " jurisdiction is doubtful."

On October 17, 2012, the district court directed Defendants to " explain to the Court what common question of law or fact existed when the case was removed ...


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