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Mary Patterson Brian Battiste Thomas Thibodeaux Alex Hartley Edna B. Taylor Edward Carter Helen Carter Demeturie Simmons Melvin Franklin Ronald Singleton Helen Ratcliff Willie Brown Charles K. Battiste Leonard Acklin Jawana Acklin Debra Ellzey-Herron v. Dean Morris, L.L.P., Dean Morris, L.L.P. Leader Mortgage Company, L.L.C. Long Beach Mortgage Company Mortgage Electronics Registration Systems, Inc. Countrywide Home Loans, Inc. John C. Morris, III George B. Dean, Jr. Candice A. Courteau Charles H. Heck, Jr. Washington Mutual Bank Chase Home Finance, L.L.C. As Successor by Merger to Chase Manhattan Mortgage Corporation National City Bank, as Successor by Merger to the Provident Bank U.S. Bank, National Association, Robert Bauer Salome Lucineo Boyd Jim T. Bright Debra Bright Lionell J. Coleman Lynn L. Coleman Keenan Duckworth Karen Duckworth Mercedes Dutton Matthew David Dyer Terry Hardy, Sr. Terese La-Beaud Alton Pierce Willie Lee Rauls Rosalyn Veleary-Dodge v. Dean Morris, L.L.P. Banker's Trust of California

Citation: 448 F.3d 736Docket: 06-30215

Court: Court of Appeals for the Fifth Circuit; May 3, 2006; Federal Appellate Court

Narrative Opinion Summary

This appeal concerns several consolidated class actions brought by a group of plaintiffs against multiple mortgage and banking institutions, alleging misconduct in mortgage lending and foreclosure practices. The defendants sought to remove the cases to federal court under the Class Action Fairness Act of 2005 (CAFA) and alternatively invoked bankruptcy jurisdiction under 28 U.S.C. § 1452. Disputes arose regarding whether the actions commenced before or after CAFA’s effective date, hinging on the proper interpretation of Louisiana fax-filing and fee statutes. The district court found that the plaintiffs’ timely payment of requisite fees rendered their filings effective prior to CAFA’s applicability, thereby precluding federal jurisdiction on that ground. For claims involving bankruptcy, the court distinguished between the Patterson and Bauer actions: finding no bankruptcy jurisdiction in Bauer and granting an equitable remand in Patterson under § 1452(b). On appeal, the Fifth Circuit affirmed the remand order as to CAFA, holding that the burden of proof for removal remains with the defendants and that any reliance on documentation to establish commencement rendered burden-related arguments moot. The court dismissed the appeals regarding the equitable remand orders, reaffirming the statutory bar against appellate review of such decisions and declining to exercise discretionary appellate jurisdiction under CAFA. The ruling clarifies the limitations on federal removal jurisdiction for class actions initiated prior to CAFA and underscores the primacy of statutory text in resolving conflicts between removal and remand statutes. The outcome leaves the plaintiffs’ claims to proceed in state court, with federal review foreclosed.

Legal Issues Addressed

Burden of Proof for Removal under CAFA

Application: The court confirmed that the burden of proof for establishing federal jurisdiction under CAFA lies with the party seeking removal, and the district court’s reliance on undisputed documentation rendered burden allocation arguments moot.

Reasoning: Defendants contend that the district court improperly placed the burden of proof on them regarding removal appropriateness; however, the court's reliance on undisputed documentation (fee schedules, fax confirmations, etc.) to establish the lawsuit's commencement date renders the burden of proof allocation irrelevant.

Commencement of Class Actions under the Class Action Fairness Act (CAFA)

Application: The court determined that the plaintiffs' class actions commenced prior to CAFA’s effective date, based on Louisiana law governing fax-filing and fee payment, thereby precluding removal under CAFA.

Reasoning: The court noted that the plaintiffs' claims began just before CAFA's enactment on February 18, 2005, and thus CAFA cannot serve as a basis for appellate review of the remand, ensuring consistent treatment of bankrupt class actions prior to CAFA's introduction.

Effect of Amended Complaints on Commencement Date and Waiver on Appeal

Application: The argument that amended complaints recommenced the action was deemed waived on appeal due to the defendants’ failure to present evidence at the district court level.

Reasoning: Defendants’ argument regarding the recommencement of actions through amended complaints is considered waived on appeal due to lack of evidence presented to the district court.

Equitable Remand under 28 U.S.C. § 1452(b) and Appellate Review

Application: The court dismissed appeals of equitable remand orders under § 1452(b), holding that such orders are non-reviewable, and CAFA does not provide an independent basis for appellate jurisdiction in these circumstances.

Reasoning: Notably, orders remanding claims under this statute are not subject to appeal (28 U.S.C. § 1452(b)). Despite the lack of appellate jurisdiction over equitable remand orders, the court examined whether CAFA could provide an independent basis for review and concluded it does not.

Federal Jurisdiction over Class Actions Involving Bankruptcy Claims

Application: The court distinguished between class actions with members in bankruptcy and those without, affirming remand where bankruptcy jurisdiction was lacking and equitably remanding where only equitable grounds remained under § 1452(b).

Reasoning: The court determined it lacked bankruptcy jurisdiction over Bauer, as there were no members in bankruptcy and only state law claims present. While bankruptcy jurisdiction for Patterson was acknowledged, the court opted to equitably remand the case based on precedent from Browning v. Navarro, allowing remand on any equitable grounds.

Interpretation of Louisiana Law on Fax Filing and Filing Fees

Application: The court found that timely payment of the petition and transmission fees was sufficient to commence the action, and that subsequent assessments of additional fees due to clerical error did not delay the effective filing date.

Reasoning: The breakdown of fees indicated that the plaintiffs' February 22 payment covered the petition and transmission fees, aligning with Hall's precedent. The plaintiffs contend that their timely payment of $3,039.00 was adequate for the required fees, and their failure to pay for additional parties should not affect the suit's commencement date under Louisiana law.

Permissive Nature of Appellate Review under 28 U.S.C. § 1453(c)(1)

Application: The appellate court declined to exercise its discretionary authority to review the remand order under CAFA, emphasizing adherence to statutory text limiting appellate jurisdiction.

Reasoning: Lastly, the permissive language of 28 U.S.C. 1453(c)(1) allows appellate courts discretion in accepting appeals, which the court chooses not to exercise in this case to adhere to statutory text.