Patterson v. Dean Morris LLP

United States Court of Appeals

Fifth Circuit

REVISED MAY 23, 2006 In the F I L E D May 3, 2006 United States Court of Appeals for the Fifth Circuit _______________ Charles R. Fulbruge III Clerk m 06-30215 _______________

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,

Plaintiffs-Appellees,

VERSUS

DEAN MORRIS, L.L.P., ET AL.,

Defendants,

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 SUSSESSOR BY MERGER TO CHASE MANHATTAN MORTGAGE CORPORATION; NATIONAL CITY BANK, AS SUCCESSOR BY MERGER TO THE PROVIDENT BANK; U.S. BANK, NATIONAL ASSOCIATION,

Defendants-Appellants. ***************

***************

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 LABEAUD; ALTON PIERCE; WILLIE LEE RAULS; ROSALYN VELEARY-DODGE,

Plaintiffs-Appellees,

VERSUS

DEAN MORRIS, L.L.P.; BANKER’S TRUST OF CALIFORNIA; CHASE MANHATTAN MORTGAGE CORPORATION; WASHINGTON MUTUAL; MORTGAGE ELECTRONICS REGISTRATION SYSTEMS, INC.; COUNTRYWIDE HOME LOANS, INC.; BANK ONE CORPORATION; SUN FINANCE COMPANY, L.L.C.; OCWEN LOAN SERVICING, L.L.C., SUCCESSOR IN INTEREST TO OCWEN FEDERAL BANK, F.S.B.; JOHN C. MORRIS, III; GEORGE B. DEAN, JR.; CANDICE A. COURTEAU; CHARLES H. HECK, JR.; CHASE HOME FINANCE, L.L.C., AS SUCCESSOR BY MERGER TO CHASE MANHATTAN MORTGAGE CORPORATION AND BANK ONE CORPORATION; DEUTSCHE BANK TRUST COMPANY AMERICAS, FORMERLY KNOWN AS BANKERS TRUST COMPANY,

Defendants-Appellants.

***************

***************

MARY PATTERSON; LARRY PATTERSON; BRIAN BATTISTE; DEBRA ELLZEY-HERRON; THOMAS THIBODEAUX; ALEX HARTLEY; EDNA B. TAYLOR; EDWARD CARTER; HELEN CARTER; DEMETURIC SIMMONS; MELVIN FRANKLIN; RONALD SINGLETON; HELEN RATCLIFF; WILLIE BROWN; CHARLES K. BATTISTE; LEONARD ACKLIN; JAWANA ACKLIN,

Plaintiffs-Appellees,

VERSUS

DEAN MORRIS, L.L.P., ET AL.,

Defendants,

DEAN MORRIS, L.L.P.; LEADER MORTGAGE COMPANY, L.L.C.; LONG BEACH MORTGAGE COMPANY; CHASE HOME FINANCE, L.L.C., AS SUCCESSOR BY MERGER TO CHASE MANHATTAN MORTGAGE CORPORATION; WASHINGTON MUTUAL BANK; MORTGAGE ELECTRONICS REGISTRATION SYSTEMS, INC.; COUNTRYWIDE HOME LOANS, INC.; JOHN C. MORRIS, III; GEORGE B. DEAN, JR.; CANDICE CORTEAU; CHARLES H. HECK, JR.; U.S. BANK, NATIONAL ASSOCIATION; NATIONAL CITY BANK, N.A., SUCCESSOR BY MERGER TO PROVIDENT BANK,

Defendants-Appellants.

***************

***************

MARY PATTERSON; LARRY PATTERSON; BRIAN BATTISTE; DEBRA ELLZEY-HERRON; THOMAS THIBODEAUX; ALEX HARTLEY; EDNA B. TAYLOR; EDWARD CARTER; HELEN CARTER; DEMETURIC SIMMONS; MELVIN FRANKLIN; RONALD SINGLETON; HELEN RATCLIFF; WILLIE BROWN; CHARLES BATTISTE; LEONARD ACKLIN; JAWANA ACKLIN,

Plaintiffs-Appellees,

VERSUS

DEAN MORRIS, L.L.P., ET AL.,

Defendants,

DEAN MORRIS, L.L.P.; LEADER MORTGAGE COMPANY, L.L.C.; LONG BEACH MORTGAGE COMPANY; CHASE HOME FINANCE, L.L.C., AS SUCCESSOR BY MERGER TO CHASE MANHATTAN MORTGAGE CORPORATION; WASHINGTON MUTUAL BANK; U.S. BANK, NATIONAL ASSOCIATION; MORTGAGE ELECTRONICS REGISTRATION SYSTEM, INC.; COUNTRYWIDE HOME LOANS, INC.; JOHN MORRIS, III; GEORGE B. DEAN, JR.; CANDICE A. COURTEAU; CHARLES H. HECK, JR.; NATIONAL CITY BANK, N.A., SUCCESSOR BY MERGER TO PROVIDENT BANK,

Defendants-Appellants.

_________________________

Appeal from the United States District Court for the Eastern District of Louisiana m 2:05-CV-2191 m 2:05-CV-2189 m 2:05-CV-2178 m 2:05-CV-2177 _________________________

Before SMITH, GARZA , and PRADO, priate.2 It is uncertain from the court’s opin- Circuit Judges. ion, however, how it assigned the burden of proof. It relied primarily on undisputed doc- JERRY E. SMITH, Circuit Judge: uments in the record, such as a fee schedule, fax confirmations, receipts, and a written Defendants appeal an order remanding these notice, to determine the commencement date class actions to state court for want of jurisdic- of the suit, and hence, the applicability of tion under the Class Action Fairness Act of CAFA. Because this evidence suffices to an- 2005 (“CAFA”), Pub. L. No. 109-2, 119 swer the jurisdictional question, the allocation Stat. 4 (2005), and on the ground of equitable of the burden of proof is not relevant to the remand in bankruptcy. Finding the remand resolution of this case. order proper in all respects, we affirm it in regard to CAFA, and we dismiss, for want of CAFA provides for original jurisdiction in jurisdiction, the remand order in the Bauer federal court of certain class actions “com- matter and the equitable remand order in the menced on or after the date of enactment,” Patterson matter. which is February 18, 2005. Id. Plaintiffs al- lege that their actions commenced on February I. 17, 2005, the date they fax-filed their com- We may review orders of remand for as- plaints. Defendants allege plaintiffs failed to serted errors in the application of CAFA.1 As pay required fees at the time of filing, and an initial matter, defendants allege that the dis- trict court erred by assigning the burden of proof to them to show that removal was appro- 2 1 But see Brill v. Countrywide Home Loans, 2 Inc., 427 F.3d 446, 447-48 (7th Cir. 2005) (apply- 3 ing the “well established” rule that the proponent of 4 removal bears the burden of persuasion, noting that 5 none of CAFA’s language “is even arguably 6 relevant” to the question, and refusing to give the 1 1 See 28 U.S.C. § 1453(c)(1); Wallace v. La. 7 force of law to legislative history purporting to 2 Citizens Prop. Ins. Corp., 2006 WL 848585, at *2 8 shift the burden to the proponent of remand). 3 (5th Cir. Mar. 31, 2006).

therefore the actions did not commence until the relevant time, i.e., the amount requested by May 6, when plaintiffs amended their com- the clerk on February 22. plaints, or June 14, when they paid the balance of the fees. It is undisputed that, if plaintiffs’ Based on the record, plaintiffs timely paid actions commenced on or after February 18, the “applicable filing fee” as defined in Hall v. CAFA would apply, and remand would be Reber, 870 So. 2d 424 (La. App. 3d Cir.), writ inappropriate. denied, 876 So.2d 809 (La. 2004). There, the plaintiff paid $175.00 within five days of fax- Louisiana law provides that a party may file filing to cover the filing fee and transmission an action by fax provided that, within five days fee. The clerk’s office later sent a notice that of filing, it forwards “[t]he applicable filing fee, an additional $125.00 was required to com- if any[, and a] transmission fee of five dollars” plete processing of the suit, and plaintiff did to the clerk of court. LA. R.S. 13:850 § B(2), not pay the additional amount until after the (3). If the filing party fails to comply, the fax suit had prescribed. The breakdown of fees transmission “shall have no force or effect.” Id. was as follows: § C. Base Deposit of Suit (one service Plaintiffs received a fax confirmation of their included): $ 200.00 filing on February 18, which listed the fees for Additional Service (at $50.00 each): the Patterson suit as $5,127.00 and the fees for $100.00 . . . . the Bauer suit as $4,689.00. On February 22, Total amount required for filing of suit: plaintiffs paid the clerk of court $3,039.00 for $300.00 each of these cases. On May 12, 2005, they Total amount already paid by your office: received a letter indicating they owed an addi- $175.00 tional $2,145.50, which they tendered on June TOTAL AMOUNT STILL OWED BY 14. Defendants conclude from this late pay- YOUR OFFICE: $125.00 ment that plaintiffs did not comply with the five-day deadline of LA. R.S. 13:850, so the Id. at 427. The court reasoned that because effective date of their suit’s commencement the total filing fee was $150.00 (the $200.00 was postponed until after February 18. base deposit minus $50.00 for one service), the plaintiff had tendered enough money to Plaintiffs, by contrast, argue that they paid cover both the filing and transmission fees all the fees requested by the clerk when they ($175.00 > $150.00 + $5.00) as required by arrived at court on February 22, and became LA. R.S. 13:850. Therefore, the suit com- aware they owed additional money only when menced as of the filing date despite plaintiff’s the court notified them on May 12 of the failure immediately to provide funds to effect clerk’s error. Plaintiffs aver that they could not service. See id. at 427-28. have paid the clerk additional fees earlier, even if they were so inclined, because all money paid When plaintiffs received notice on May 12 to the court is non-refundable, and the court is that they owed additional fees, the breakdown not authorized to hold money on account. read as follows: Therefore, plaintiffs contend they paid the “applicable filing fee” as required by statute at Extra Plaintiffs (12 V $84.00): $1,008.00

Extra Defendants (13 V $90.00): federal jurisdiction.5 $1,170.00 Petition Fee: $3,006.50 II. Total Fee Due: $5,184.50 A. Payment Received: $3,039.00 The underlying claim is that defendants Balance Due: $2,145.50 overcharged plaintiffs in connection with col- lection and foreclosure proceedings initiated Plaintiffs’ initial payment on February 22 was by defendants. Plaintiffs filed two class action sufficient to cover the petition fee and transmis- lawsuits, Patterson and Bauer, which were sion fee ($3,039.00 > $3,006.50 + $5.00); later consolidated. The Patterson class con- therefore, Hall is precisely on point. Plaintiffs’ sists of “only those persons whose bankruptcy failure to pay fees to cover the costs of addi- filing would or might support removal to fed- tional parties does not affect the commence- eral court and or federal jurisdiction for their ment date of the suit under Louisiana law. In claim.” The Bauer class represents all other fact, though Hall provides no explanation of Louisiana residents. the plaintiff’s failure to pay in full, plaintiffs here provide the valid excuse that they timely Defendants maintain that, even if CAFA paid all money requested on February 22.3 does not provide the district court with juris- diction, it would still have power to hear this The cases cited by defendants deal with situ- case under the general bankruptcy removal ations in which the plaintiff failed to provide statute. See 28 U.S.C. § 1452. The court sufficient funds to cover the statutorily required found that it lacked bankruptcy jurisdiction filing and transmission fees,4 so those decisions over Bauer, because the class had no members are inapplicable to the facts of this case. CAFA in bankruptcy and therefore had only state law does not apply and cannot serve as a basis for claims.6 Although bankruptcy jurisdiction over

5 1 Defendants also argue that their May 6 2 amended complaints recommenced their actions, 3 making CAFA jurisdiction appropriate. Because 3 1 That the $3,006.50 “petition fee” represents the 4 they offer no evidence that they presented this 2 “applicable filing fee” in this case becomes more 5 specific claim to the district court, we consider it 3 evident when one examines plaintiffs’ receipt of 6 waived on appeal. See Little v. Liquid Air Corp., 4 February 22, which lists a charge of $2,996.50 for 7 37 F.3d 1069, 1071 n.1 (5th Cir. 1994) (en banc). 5 “class action lawsuits” and a $10.00 “indig[ent] 6 6 leg[al] fee.” The receipt also includes $32.50 for 1 The Bauer class originally included two 7 “miscellaneous” charges, which would suffice to 2 named plaintiffs, Keenan and Karen Duckworth, 8 cover the cost of transmission. 3 who sought bankruptcy protection. Plaintiffs 4 moved to dismiss their claims, without prejudice, 4 1 See, e.g., Brown v. Am. Nat’l Prop. & Cas. 5 from the Bauer class, but lender defendant 2 Co., 720 So. 2d 1278, 1289 (La. App. 4th Cir. 6 Deutsche Bank Trust Company opposed the mo- 3 1998); Antoine v. McDonald’s Restaurant, 734 So. 7 tion based on a previous motion to compel arbitra- 4 2d 1257, 1260 (La. App. 3d Cir. 1999); Tenney v. 8 tion with respect to the Duckworths. The court 5 Burlington N. & Santa Fe Ry., 863 So. 2d 526, 529 9 granted Deutsche Bank’s motion and remanded 6 (La. 2004). (continued...)

Patterson was conceded, the court equitably a district court granting or denying a motion to remanded the action, applying Browning v. remand a class action,” this precatory language Navarro, 743 F.2d 1069, 1077 n.21 (5th Cir. cannot serve as a mandate for us to reach 1984). A court may remand a cause of action otherwise non-reviewable remand decisions in bankruptcy on any equitable ground, and once we determine that CAFA is inapplicable. “[a]n order entered under [the relevant section] remanding a claim or cause of action, or a de- Ordinarily, “once a matter related to a cision to not remand, is not reviewable by ap- bankruptcy case is equitably remanded, it is peal or otherwise by the court of appeals under not subject to federal appellate review on any section 158(d), 1291, or 1292 of this title.” 28 basis.” Arnold v. Garlock, Inc., 278 F.3d 426, U.S.C. § 1452(b). 438 (5th Cir. 2001). CAFA provides only for review of a remand order premised on the B. prerequisites of § 1453 or on claims with an Despite the fact that the plain language of adequate nexus to CAFA. See Wallace, 2006 this section divests us of appellate jurisdiction WL 848585, at *2. There is no such nexus over the equitable remand order, we must de- here. cide whether CAFA provides an independent basis for review. It does not. We do not need to consider the Browning equitable factors to determine whether juris- CAFA explicitly limits the power of removal diction under CAFA obtains; we need only of class actions to “case[s] under this section,” consider the commencement date of plaintiffs’ i.e., § 1453. 28 U.S.C. § 1453(c)(1). “The claims. Furthermore, nothing in the text of application of § 1453(c)(1) is therefore limited CAFA suggests that Congress intended to sup- to the context of CAFA.” Wallace, 2006 WL plant its policy of prohibiting appellate review 848585, at *2. Though CAFA also provides of equitable remand orders in bankruptcy for that we “may accept an appeal from an order of class actions that do not satisfy CAFA’s re- quirements.

6 (...continued) Because these actions commenced on Feb- 10 Bauer, concluding that no federal questions re- ruary 17, 2005 (one day before CAFA took ef- 11 mained following the dismissal of the Duckworths fect), CAFA cannot provide the basis for our 12 from the suit. Defendants argue that the Duck- review of the equitable remand. To hold oth- 13 worths’ claims were merely stayed, not dismissed, erwise would be to treat plaintiffs differently 14 pending arbitration, and that a post-removal event from every other bankrupt class subject to 15 cannot defeat jurisdiction. equitable remand before the enactment of CAFA. 16 “Jurisdictional remands premised on post-re- 17 moval events are not reviewable.” Linton v. Airbus 18 Indus., 30 F.3d 592, 599 (5th Cir. 1994); see also Defendants urge that we apply the rule of 19 Tillman v. CSX Transp., Inc., 929 F.2d 1023, 1028- Yamaha Motor Corp., U.S.A. v. Calhoun, 516 20 29 (5th Cir. 1991); In re Merrimack Mut. Fire Ins. U.S. 199, 205 (1996), which stated, in the 21 Co., 587 F.2d 642, 647-49 (5th Cir. 1978). As we context of the interlocutory appeal statute, 28 22 have explained, because CAFA does not apply to U.S.C. § 1292(b), that “appellate jurisdiction 23 Bauer, it cannot provide the basis for review of the applies to the order certified to the court of 24 order of remand.

appeals, and is not tied to the particular ques- reconciled.7 Thus, the best way to harmonize tion formulated by the district court.” The Ya- these commands is to heed the text of maha Court also stated, however, that “[t]he § 1452(b), depriving us of jurisdiction over the court of appeals may not reach beyond the cer- equitable remand order, at least where CAFA tified order to address other orders made in the does not provide an independent basis for case.” Id. jurisdiction.8

The judgment entered by the district court In summary, the remand order with respect states in full as follows: to CAFA is AFFIRMED, and the appeals of the remand order in Bauer and the equitable IT IS ORDERED THAT plaintiffs’ Mo- remand order in Patterson are DISMISSED tion to Remand is hereby GRANTED pur- for want of jurisdiction. The mandate shall suant to 28 U.S.C. § 1452(b), and Civil Ac- issue forthwith. tion No. 05-2177, consolidated with Civil Action Nos. 05-2189 and 05-2191, are all hereby equitably REMANDED to the Civil District Court for the Parish of Orleans. IT IS FURTHER ORDERED THAT Civil Ac- tion No. 05-2178 is likewise equitably RE- MANDED.

Because jurisdiction under CAFA is improper, this is not a “case under . . . section” § 1453 for purposes of further appellate review. All that remains is an order equitably remanding these actions under § 1452(b), which we cannot reach without contravening a plain statutory 1 7 The court in Brill did reason that it was “free command. 2 to consider any potential error in the district court’s 3 decision, not just a mistake in application of the In Brill, 427 F.3d at 451-52, the court re- 4 Class Action Fairness Act.” Brill, 427 F.3d at viewed a remand order under the Telephone 5 451. To the extent that the reasoning in Brill is in Consumer Protection Act because the district 6 tension with today’s opinion, we decline to adopt it, court had also rejected removal under CAFA. 7 because it conflicts with the reasoning of Williams, The Brill court, however, did not confront stat- 8 which limits our jurisdiction over remand orders to utory text proscribing appellate jurisdiction 9 the context of CAFA. See Williams, 2006 WL over remand orders other than the general lan- 10 848585, at *2. guage of 28 U.S.C. § 1447(d), which CAFA 8 1 We also note that § 1453(c)(1) uses permis- explicitly amended. Neither Yamaha nor Brill 2 sive language to define the scope of our authority dealt with competing statutory provisions, one 3 on appeal: “[A] court of appeals may accept an purporting to grant jurisdiction over a remand 4 appeal from an order of a district court granting or order and one purporting to take it away, 5 denying a motion to remand a class action.” It is without any indication how they ought to be 6 appropriate to decline to exercise this discretion 7 where, as here, granting the appeal would contra- 8 vene specific statutory text.