Another recent federal decision: Cortazar v. Wells Fargo & Co.
In Cortazar v. Wells Fargo & Co., 2004 WL 1774219 (N.D. Cal. Aug. 9, 2004), the court remanded a UCL claim that had been improperly removed to federal court. The "unlawful" prong theory of the plaintiff's UCL claim sought to remedy alleged violations of federal law, including TILA and RESPA. However, that alone did not transform it into a federal claim: "[W]hile certain of the federal statutes that the [plaintiffs] have 'borrowed' as part of their Section 17200 claims do provide for a private right of action, and thus would 'create' a federal cause of action, a fair read of the allegations supports a conclusion that [plaintiffs] have not sought relief under these statutes." Id. at *2. The court also concluded that federal jurisdiction did not attach under the "artful pleading doctrine." It reasoned that the "unfair" and "fraudulent" prong claims, as well as the "unlawful" prong claim to the extent predicated on "borrowed" California law, created an "independent state law basis for the claim." Id. at *3-*4. Finally, the court held that the complete preemption doctrine formed no basis for removal because the UCL claim did not amount to a state-law claim for usury (which would have been preempted if asserted against the defendant national bank). Id. at *4-*6. The August issue of Capitol Assets, a newsletter of the Mortgage Bankers Association of America, has more on the decision.
- posted by Kim Kralowec @ 8:36 AM