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Jordan v. Nationstar Mortgage, LLC

United States District Court, E.D. Washington

April 28, 2017

LAURA ZAMORA JORDAN, as her separate estate, and on behalf of others similarly situated, Plaintiff,
v.
NATIONSTAR MORTGAGE, LLC, a Delaware limited liability company, Defendant, and FEDERAL HOUSING FINANCE AGENCY, Intervenor.

          ORDER DENYING FEDERAL HOUSING FINANCE AGENCY'S MOTION FOR CERTIFICATION OF INTERLOCUTORY APPEAL

          THOMAS O. RICE Chief United States District Judge.

         BEFORE THE COURT is the Federal Housing Finance Agency's Motion for Certification for Interlocutory Appeal Pursuant to 28 U.S.C. § 1292(b). ECF No. 152. This matter was submitted for consideration without oral argument. The Court has reviewed the briefing and the record and files herein, and is fully informed.

         BACKGROUND

         Plaintiff challenges Defendant Nationstar Mortgage, LLC's policy of taking possession of homes in default by entering and changing locks prior to foreclosure. See ECF No. 1-2. On November 15, 2016, Federal Housing Finance Agency moved for partial summary judgment, see ECF No. 118, on the ground that the Housing and Economic Recovery Act of 2008 (“HERA”)[1] preempts RCW 7.28.230, a Washington state law prohibiting lenders from pre-foreclosure property possession. On March 9, 2017, this Court issued its Order Denying FHFA's Motion for Partial Summary Judgment (the “Order”). ECF No. 147.

         FHFA now seeks final resolution from the Ninth Circuit on whether HERA broadly “prohibit[s] the application of Washington state law to claims involving Enterprise-owned deeds of trust under any theory of preemption-express, field, or conflict.” See ECF No. 152 at 7. In its Order, however, the Court narrowly held that HERA does not preempt RCW 7.28.230 because (1) 12 U.S.C. § 4617(a)(7) does not expressly preempt the state statute; (2) Congress left room for state law compliance with RCW 7.28.230 as it does not conflict with the FHFA's powers; and (3) there is no conflict between HERA and RCW 7.28.230. ECF No. 147.

         FHFA moves the Court to certify an order for interlocutory appeal on this issue pursuant to 28 U.S.C. § 1292(b). ECF No. 152. For the reasons discussed below, the Court DENIES the motion.

         DISCUSSION

         A. Standard of Review

         Pursuant to 28 U.S.C. § 1292(b), an otherwise non-final order may be subject to interlocutory appeal if the district court certifies, in writing, the following: (1) the order involves a “controlling issue of law, ” (2) the controlling issue of law is one to which there is a “substantial ground for difference of opinion, ” and (3) “an immediate appeal from the order may materially advance the ultimate termination of the litigation.” 28 U.S.C. § 1292(b). The Ninth Circuit has observed that the “the legislative history of 1292(b) indicates that this section was to be used only in exceptional situations in which allowing an interlocutory appeal would avoid protracted and expensive litigation.” In re Cement Antitrust Litig., 673 F.2d 1020, 1026 (9th Cir. 1982) (emphasis added) (citations omitted).

         Here, the Court declines to certify an order for interlocutory appeal because, although the first factor is arguably satisfied, FHFA has not shown a substantial ground for a difference of opinion or that an immediate appeal may materially advance the ultimate termination of this action. Moreover, there are no “exceptional circumstances” warranting immediate appeal. See id.

         A. Substantial Ground for Difference of Opinion

         There is substantial ground for a difference of opinion when “reasonable judges might differ.” Reese v. BP Exploration (Alaska), Inc., 643 F.3d 681, 688 (9th Cir. 2011) (citing In re Cement, 673 F.2d at 1029). However, a movant's “strong disagreement with the Court's ruling is not sufficient for there to be a substantial ground for difference.” Couch v. Telescope Inc., 611 F.3d 629, 633 (9th Cir. 2010) (internal quotation marks omitted). “[T]he mere presence of a disputed issue that is a question of first impression, standing alone, is insufficient to demonstrate a substantial ground for difference of opinion.” Id. (internal quotation marks and citations omitted). Importantly, “interlocutory appellate jurisdiction does not turn on a prior court's having reached a conclusion adverse to that from which appellants seek relief.” Reese, 643 F.3d at 688.

         As a preliminary matter, FHFA mischaracterizes the issue as “whether HERA protects FHFA from any state law that infringes upon the exercise of its rights, powers, and privileges, . . . or whether it protects FHFA only from infringements by state agencies, as the Court held.” ECF No. 152 at 5 (emphasis added). FHFA's portrayal is inaccurate. The issue is narrowly confined to whether HERA preempts RCW 7.28.230, specifically. See ECF No. 147 at 2. Likewise, the Court did not hold that HERA “protects FHFA only from infringements by state agencies.” See ECF No. 147 (merely finding, inter alia, that “12 U.S.C. § 4617(a)(7) does not evince a clear and manifest congressional intent to expressly preempt state law” and “Congress left room in HERA for state law compliance, provided that such laws do not conflict with FHFA's power[s]”).

         FHFA maintains that HERA preempts RCW 7.28.230 and there are actual and substantial grounds for a difference of opinion. The Court disagrees. FHFA argues that City of Chicago is a decision concerning an “identical” issue, see ECF No. 152 at 9, despite that it concerns FHFA's refusal to comply with a local building ordinance (rather than impairing real property rights). Fed. Hous. Fin. Agency v. City of Chicago, 962 F.Supp.2d 1044 (N.D. Ill. 2013). This Court comprehensibly explained why the facts in City of Chicago are distinguishable and the district court's reasoning was unpersuasive. Id.; see also ECF No. 147 at 15-22. FHFA next argues that a smattering of other cases are in “significant tension” with the Court's decision, but each is unpersuasive for many of the same reasons the Court previously articulated in its Order. See ECF No. 147 at 11 (renouncing dicta in Robinson v. FHFA, No. 7:15-cv-109-KKC, 2016 WL 4726555, at *6 (E.D. Ky. 2016), appeal docketed, No. 16-6680 (6th Cir. ...


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