1 UNITED STATES DISTRICT COURT

2 DISTRICT OF NEVADA

3 U.S. BANK NATIONAL ASSOCIATION, AS ) 4 TRUSTEE FOR STRUCTURED ASSET ) INVESTMENT LOAN TRUST ) Case No.: 2:21-cv-00127-GMN-EJY 5 MORTGAGE PASS-THROUGH ) CERTIFICATES, SERIES 2005-10, ) ORDER 6 ) 7 Plaintiff, ) vs. ) 8 ) FIDELITY NATIONAL TITLE GROUP, ) 9 INC., et al., ) 10 ) Defendants. ) 11 ) 12 Pending before the Court is the Motion to Remand, (ECF No. 9), filed by U.S. Bank 13 National Association, as Trustee for Structured Asset Investment Loan Trust Mortgage Pass- 14 Through Certificates, Series 2005-10 (“Plaintiff”). Defendants Fidelity National Title Group, 15 Inc. (“FNTG”), Fidelity National Title Insurance Company (“FNTIC”), and Fidelity National 16 Title Agency of Nevada, Inc. (“Fidelity Agency”) (collectively “Defendants”) filed a Response, 17 (ECF No. 23), and Plaintiff filed a Reply, (ECF No. 26). 18 Also pending before the Court is Plaintiff’s Motion for Costs and Fees, (ECF No. 10). 19 Defendants filed a Response, (ECF No. 23), to which Plaintiff filed a Reply, (ECF No. 26). 20 Also pending before the Court is Defendants’ Motion to Stay Case, (ECF No. 33). 21 Plaintiff filed a Response, (ECF No. 40), to which Defendants filed a Reply, (ECF No. 42). 22 For the reasons discussed below, the Court DENIES Plaintiff’s Motion to Remand, 23 DENIES Plaintiff’s Motion for Costs and Fees, and GRANTS Defendants’ Motion to Stay the 24 Case. 25 // 1 I. BACKGROUND 2 This case arises from the non-judicial foreclosure sale of the real property located at 3621 3 Wild Willow Street, Las Vegas, Nevada 89129 (the “Property”).1 (Deed of Trust (“DOT”), Ex. 4 9 to Pet. Removal, ECF No. 1-1). On July 5, 2005, Gregory Wickensimer (“Borrower”) 5 financed his purchase of the Property by way of a $192,000.00 loan secured by a DOT 6 identifying Mortgage Electronic Registration Systems, Inc. (“MERS”) as the beneficiary. (Id. at 7 2). The DOT was recorded on July 11, 2005. (Id.). In February 2009, the DOT was assigned to 8 Plaintiff. (See Assignment of DOT, Ex. 10 to Pet. Removal, ECF No. 1-1). 9 In December 2009, upon Borrower’s failure to stay current on his loan obligations, 10 Copperhead Hills Homeowners Association (“HOA”) initiated foreclosure proceedings on the 11 Property through its agent, Alessi & Koenig. (Notice of Delinquent Assessment Lien, Ex. 13 to 12 Pet. Removal, ECF No. 1-1). On February 18, 2010, HOA via Alessi & Koenig recorded a 13 Notice of Default and Election to Sell. (Notice of Default and Election to Sell, Ex. 14 to Pet. 14 Removal, ECF No. 1-1). On February 8, 2012, HOA, through Alessi & Koenig, proceeded 15 with the foreclosure sale, selling the Property to Wild Willow St. Trust for $4,890.00. 16 (Trustee’s Deed Upon Sale, Ex. 16 to Pet. Removal, ECF No. 1-1). The Property was 17 subsequently conveyed to Resources Group LLC (“Resources Group”). (Compl. ¶ 94). 18 On January 8, 2013, Resources Group filed a Complaint against Plaintiff U.S. Bank in 19 Case No. A-13-674582-C, alleging a quiet title/declaratory action. (See Compl., Resources 20 21

22 1 The Court takes judicial notice of the following documents: (A) a copy of FNTIC’s license from the 23 Department of Insurance’s website; (2) a copy of FNTG’s license from the Department of Insurance’s website; and (3) a copy of Fidelity Agency’s license from the Department of Insurance’s website. (See Request for 24 Judicial Notice, ECF No. 24). These documents are appropriate for judicial notice. See 1209 Vill. Walk Tr., LLC v. Broussard, No. 2:15-cv-01903-MMD-PAL,

, at *5 (D. Nev. Feb. 4, 2019) 25 (taking judicial notice of Federal Housing Finance Agency’s statement available on the federal government’s website); see also Disabled Rights Action Comm. v. Las Vegas Events, Inc.,

, 866 n.1 (9th Cir. 2004). 1 Group, LLC v. U.S. Bank, Case No. A-13-674582-C, ECF No. 1-1). The case ultimately 2 settled. (Compl. ¶ 96). 3 On January 10, 2017, Plaintiff submitted a claim under the Title Insurance Policy (the 4 “Policy”). (Id. ¶ 102). In the claim, Plaintiff identified the Policy provisions that provided 5 coverage for losses caused by the HOA’s foreclosure of its purportedly senior lien and 6 requested that Defendants fulfill their obligations to defend U.S. Bank in litigation. (Id. ¶ 102). 7 On January 25, 2017, Defendant FNTIC denied coverage under the Policy on the basis that 8 there was no current litigation pending and that Plaintiff failed to comply with Condition 3 9 under the Policy. (Id. ¶ 103). On April 16, 2018, Plaintiff requested reconsideration of 10 FNTIC’s denial. (Id. ¶ 104). About a year later, FNTIC affirmed its denial for the same reasons 11 set forth in the initial denial. (Id. ¶ 105). 12 In January 2021, Plaintiff thereafter filed the instant suit in the Eighth Judicial District 13 Court, asserting the following claims: (1) declaratory judgment that the Policy provided full 14 coverage; (2) breach of contract; (3) bad faith and breach of the covenant of good faith and fair 15 dealing; (4) deceptive trade practices in violation of NRS § 41.600 and NRS § 598.0915; and 16 (5) violation of NRS 686A.310. (See Compl. ¶¶ 15–196). The next day, Defendants removed 17 the case based on diversity jurisdiction before any Defendants were served.2 (See Pet. Removal 18 ¶¶ 4:4–5:6, ECF No. 1). Plaintiff subsequently filed the instant Motion for Remand and Motion 19 for Costs and Fees pursuant to

(c). (See generally Mot. Remand, ECF No. 9); 20 (see generally Mot. Costs and Fees, ECF No. 10). Defendants thereafter filed a Motion to Stay 21 the Case pending the Ninth Circuit’s decision in Wells Fargo Bank, N.A. v. Fidelity National 22 Title Ins. Co., Ninth Cir. Case No. 19-17332 (District Court Case No. 3:19-cv-00241-MMD-

23 WGC) (the “Wells Fargo II Appeal”). (See Mot. Stay, ECF No. 33). 24

25 2 Defendant FNTG is a citizen of Delaware and Florida. (Id. ¶ 3). Defendant FNTIC is a citizen of Florida. (Id.). Defendant Fidelity Agency, however, is a citizen of Nevada. (Id.). 1 II. LEGAL STANDARD 2 Federal courts are courts of limited jurisdiction, possessing only those powers granted by 3 the Constitution and by statute. See United States v. Marks,

(9th Cir. 2008). 4 “If at any time before final judgment it appears that the district court lacks subject matter 5 jurisdiction, the case shall be remanded.”

(c). Generally, district courts have 6 subject matter jurisdiction over civil actions in which: (1) the claims arise under federal law; or 7 (2) where no plaintiff is a citizen of the same state as a defendant and the amount in 8 controversy exceeds $75,000.00. See

, 1332(a). 9 A civil action brought in state court may be removed to a federal district court if the 10 district court has original jurisdiction over the matter.

(a). The defendant 11 asserting the removal must prove it is proper, and there is a strong presumption against removal 12 jurisdiction. Gaus v. Miles, Inc.,

(9th Cir. 1992). “Federal jurisdiction must 13 be rejected if there is any doubt as to the right of removal in the first instance.”

(quoting 14 Libhart v. Santa Monica Dairy Co.,

(9th Cir. 1979)). 15 III. DISCUSSION 16 In its Motion to Remand, Plaintiff argues that: (1) Defendants improperly removed the 17 case in violation of the forum defendant rule; and (2) Defendant Fidelity Agency was 18 fraudulently joined. (Mot. Remand 5:4–14:16, ECF No. 9). Because removal was improper, 19 Plaintiff accordingly requests payment of attorneys’ fees and costs under

(c). 20 (Id. 14:17–15:5). The Court first addresses Plaintiff’s Motion to Remand. 21 A. Motion to Remand, (ECF No. 9) 22 Plaintiff contends that Defendants improperly removed the case because they removed

23 before Plaintiff properly served any of the Defendants under

. (Mot. Remand 24 5:17–6:5). Defendants, in rebuttal, assert that the plain language of the statute allows 25 Defendants to remove the case before any defendant is properly joined and served. (Resp. to 1 Mot. Remand 4:19–6:19, ECF No. 23). Because no defendants were served prior to removal, 2 Defendants argue that removal was proper. (Id.). 3

(b) prohibits removal “if any of the parties in interest properly joined 4 and served as defendants is a citizen of the State in which such action is brought.” See 28

(b). To avoid the so-called forum defendant rule under § 1441(b), parties in 6 recent years have removed cases before a forum defendant has been “properly joined as 7 served.” This tactic, also known as snap removal, has not been explicitly endorsed by the Ninth 8 Circuit, although multiple other circuits have. See, e.g., Gibbons v. Bristol-Myers Squibb Co., 9

(2d Cir. 2019); Encompass Ins. Co. v. Stone Mansion Rest. Inc.,

(3d Cir. 2018); Texas Brine Co., L.L.C. v. Am. Arbitration Ass’n, Inc.,

, 11 487 (5th Cir. 2020); McCall v. Scott,

(6th Cir. 2001); Goodwin v. 12 Reynolds,

(11th Cir. 2014). Because the Court is without guidance from 13 the Ninth Circuit, the Court starts its analysis by reviewing the language of the operative 14 statute—28 U.S.C. § 1441. 15 When interpreting a federal statute, the Ninth Circuit “begin[s], as always, with the 16 language of the statute.” Navajo Nation v. Dep’t of Health & Human Servs.,

, 17 1136 (9th Cir. 2003) (en banc) (quoting Duncan v. Walker,

,

251,

(2001)). “Where [a statute’s] language is plain and admits of no more 19 than one meaning the duty of interpretation does not arise, and the rules which are to aid 20 doubtful meanings need no discussion.” Carson Harbor Vill., Ltd. v. Unocal Corp.,

(9th Cir. 2001) (en banc) (quoting Caminetti v. United States,

, 37

,

(1917)). However, if the language of a statute is ambiguous, the

23 Court may then “use canons of construction, legislative history, and the statute’s overall 24 purpose to illuminate Congress’s intent.” Ileto v. Glock, Inc.,

(9th Cir. 25 2009) (quoting Jonah R. v. Carmona,

(9th Cir. 2006)). “In ascertaining 1 the plain meaning of [a] statute, the court must look to the particular statutory language at issue, 2 as well as the language and design of the statute as a whole.” K Mart Corp. v. Cartier, Inc., 486

,

,

(1988); see also United States v. Lewis, 67

(9th Cir. 1995) (“Particular phrases must be construed in light of the overall 5 purpose and structure of the whole statutory scheme.”). 6 Here, the language and meaning of

is both plain and unambiguous. 7 Section 1441(a) permits removal “by the defendant or the defendants, to the district court of the 8 United States for the district and division embracing the place where such action is pending.” 9 See

(a). An exception to removal, however, applies “if any of the parties in 10 interest properly joined and served as defendants is a citizen of the State in which such action is 11 brought.” See

(b)(2). Like the Second, Third, and Fifth Circuits held, the 12 statute’s “plain meaning precludes removal on the basis of in-state citizenship only when the 13 defendant has been properly joined and served.” Encompass Ins. Co.,

; see also

F.3d at 705; see also Texas Brine Co., ,

. Reading Section 1441 as 15 a whole, removal is generally allowed; however, prohibited when a forum defendant, who has 16 been properly joined and served, seeks to remove the case. See Carpenters Health & Welfare 17 Tr. Funds v. Robertson (In re Rufener Constr.),

(9th Cir. 1995) (The Ninth 18 Circuit “derive[s] meaning from context, and this requires reading the relevant statutory 19 provisions as a whole.”). In the present case, Defendants removed before any defendant was 20 served. (See Pet. Removal ¶ 4). Under a plain reading of the statute, the exception under 21 Section 1441(b)(2) does not apply in the present case. Defendants, therefore, properly removed 22 to federal court.

23 Plaintiff argues that the word “any” in Section 1441(b) means that “the statute assumes 24 [that] at least one party has been served.” (Mot. Remand 7:23–8:4). Though multiple courts in 25 1 this District agree with Plaintiff,3 the Court finds Plaintiff’s reasoning unpersuasive. Heavily 2 relying on Gentile v. Biogen Idec, Inc, other courts in this District have read the statute to 3 assume that at least one party has been served because “any” means “one or more 4 indiscriminately from all those of a kind.”

Specifically, the Massachusetts District Court in 5 Gentile v. BioGen IDEC, Inc.,

(D. Mass. 2013), reasoned: 6 The amendments to section 1441(b) do not change the statute’s plain meaning in this respect. In its current form, section 1441(b)(2) precludes removal “if any of the 7 parties in interest properly joined and served as defendants” is a forum defendant. True, the statute as amended places this language in an exception to removal, rather 8 than a requirement for removal. But that does not change the fact that the statute 9 assumes at least one party has been served; ignoring that assumption would render a court’s analysis under the exception nonsensical and the statute’s use of “any” 10 superfluous. This would be contrary to the cardinal rule of statutory construction that “[a]ll words and provisions of statutes are intended to have meaning and are to 11 be given effect, and no construction should be adopted which would render statutory 12 words or phrases meaningless, redundant or superfluous.” 13 Gentile v. BioGen IDEC, Inc., 934 F. Supp. 2d at 318–19 (citations omitted). 14 The Court in Gentile reads an additional assumption into the entire removal statute under 15 Section 1441 such that the Gentile Court rewrites the removal statute to require that at least one 16 defendant be properly served. See Xi v. INS,

(9th Cir. 2002) (“[A] decision to 17 rearrange or rewrite [a] statute falls within the legislative, not the judicial, prerogative.”). The 18 2011 amendment materially altered section 1441(b) from a requirement for removal to an 19 exception to removal. The pre-2011 statute allowed removal “only if none of the parties in 20 interest properly joined and served as defendants [was] a citizen of the State in which such 21 22 23 3 These cases include the following: Carrington Mortg. Servs. v. Ticor Title of Nev., No. 2:20-cv-699 JCM (NJK),

, at *6 (D. Nev. July 10, 2020); Sparks v. Mamer, No. 2:20-cv-0661-KJD- 24 VCF,

, at *5 (D. Nev. Nov. 20, 2020); United States Bank Nat’l Ass’n v. Fid. Nat’l Title Group, No. 2:20-cv-01367-APG-DJA,

(D. Nev. Dec. 14, 2020); Hsbc 25 Bank United States v. Fid. Nat’l Title Group, No. 2:20-cv-01515-JAD-BNW,

(D. Nev. Dec. 22, 2020); and Deutsche Bank Nat’l Tr. Co. v. Old Republic Title Ins. Grp., No. 3:20-cv-00535- MMD-CLB,

(D. Nev. Apr. 2, 2021). 1 action is brought.” See Gentile,

. The current statute, however, prohibits 2 removal “if any of the parties in interest properly joined and served as defendants is a citizen of 3 the State in which such action is brought.” See

(b). In its current form, a 4 defendant may remove a case unless a forum defendant has been properly joined and served. 5 Even assuming that the Gentile Court’s interpretation of “any” is correct, such interpretation 6 applies to the exception. If no defendant has been properly joined and served, the exception is 7 not triggered, and removal is thus proper under Section 1441. Reading such assumption into 8 the entire removal statute, absent legislative history and intent as discussed infra, rewrites the 9 entire removal statute to require that at least one forum defendant be properly joined and served 10 prior to removal. 11 Given the plain language of the statute, the Court need not consider the legislative 12 history of

. Carson Harbor Village, Ltd. v. Unocal Corp.,

, 877 13 (9th Cir. 2001) (quoting Perlman v. Catapult Entm’t, Inc. (In re Catapult Entm’t, Inc.), 165

(9th Cir. 1999)) (“We resort to legislative history, even where the plain language 15 is unambiguous, ‘where the legislative history clearly indicates that Congress meant something 16 other than what it said.’”). The Supreme Court cautions that “[g]oing behind the plain language 17 of a statute in search of a possibly contrary congressional intent is a ‘step to be taken 18 cautiously’ even under the best circumstances.” Am. Tobacco Co. v. Patterson,

, 19

(1982) (citing Piper v. Chris-Craft Industries, Inc.,

, 26 20 (1977)). The Court already concluded that the plain language of the statute allows snap 21 removal. Nevertheless, even if the Court were to consider legislative intent, there is no 22 legislative history to interpret. Congress added the language, “properly joined and served” in

23 1948. See

(b)(2) (1948). However, “the legislative history of 1948 revision 24 provides no explanation for the inclusion of the ‘properly joined and served’ language.” 25 Gentile,

; see also Wells Fargo Bank v. Fid. Nat’l Title Grp., No. 2:20- 1 cv-01849-APG-NJK,

, at *9 (D. Nev. Dec. 15, 2020). “Without 2 additional evidence regarding Congress’ intent in drafting section 1441(b)(2), the Court ‘cannot 3 conclude that strict adherence to the language of [section] 1441(b) would be plainly at variance 4 with the policy behind the statute.’” Loewen v. McDonnell, No. 19-cv-00467-YGR,

Dist. LEXIS 94613, at *20 (N.D. Cal. June 5, 2019) (citing City of Ann Arbor Emples. Ret. Sys. 6 v. Gecht, No. C-06-7453 EMC,

, at *26 (N.D. Cal. Mar. 9, 7 2007)). 8 Lastly, Plaintiff argues that the Ninth Circuit’s decision in Preaseau v. Prudential 9 Insurance Co.,

(9th Cir. 1979), suggests that Chicago Title was prohibited from 10 removing in the presence of a forum defendant, regardless of whether the forum defendant was 11 served. (Mot. Remand 6:6–7:17). The Court disagrees. In Preaseau, the Ninth Circuit 12 analyzed whether “§1441(b) implies that service is the key factor in determining diversity.” 13 Preaseau v. Prudential Ins. Co.,

(9th Cir. 1979). Citing to another Ninth 14 Circuit case, Clarence E. Morris, Inc. v. Vitek,

(9th Cir. 1969), the Ninth Circuit 15 reaffirmed that diversity of citizenship is determined solely based on citizenship of the parties 16 named in the complaint “regardless of service or nonservice upon the codefendant.” See 17 Clarence E. Morris,

. Unlike the Ninth Circuit decisions in Clarence E. 18 Morris and Preaseau, the instant case concerns whether removal is proper in light of the 19 service, or lack of service, of the defendants. The reasoning in Preaseau is thus inapplicable to 20 the present case. 21 For the foregoing reasons, the Court finds that Defendants properly removed the instant 22 case. A plain reading of the statute prohibits removal if a forum defendant has been properly

23 joined and served. Because no defendant has been properly joined and served, removal is thus 24 proper. While the Court appreciates that technological advancements have furthered new forms 25 of potential “gamesmanship” in the form of snap removal, Congress is better suited to amend 1 the statute. See Carreon v. Alza Corp., No. C 09-5623 RS,

, at *5 2 (N.D. Cal. Feb. 9, 2010). The Court accordingly denies Plaintiff’s Motion to Remand.4 3 B. Motion for Fees and Costs, (ECF No. 10) 4 Plaintiff additionally requests fees and costs pursuant to

(c). (See Mot. 5 Fees and Costs, ECF No. 8). Given that the Court finds that removal was proper, Plaintiff’s 6 Motion for Fees and Costs is denied. 7 C. Motion to Stay, (ECF No. 33) 8 Defendants request the Court stay the litigation pending the Ninth Circuit’s decision in 9 Wells Fargo Bank, N.A. v. Fidelity National Title Ins. Co., Ninth Cir. Case No. 19-17332 10 (District Court Case No. 3:19-cv-00241-MMD-WGC) (the “Wells Fargo II Appeal”). (See Mot. 11 to Stay Case, ECF No. 33). Plaintiff agrees so long as the Court rule on the Motion to Remand. 12 (See Pl.’s Resp. to Mot. to Stay Case 7:5–6, ECF No. 40). Given that the Court addressed 13 Plaintiff’s Motion to Remand, the Court accordingly grants Defendants’ Motion to Stay. 14 IV. CONCLUSION 15 IT IS HEREBY ORDERED that Plaintiff’s Motion to Remand, (ECF No. 7), is 16 DENIED. 17 IT IS FURTHER ORDERED that Plaintiff’s Motion for Costs and Fees, (ECF No. 8), 18 is DENIED. 19 IT IS FURTHER ORDERED that Defendants’ Motion to Stay Case, (ECF No. 33), is 20 GRANTED. Plaintiff and Defendant shall jointly file a status report every ninety (90) days, 21 beginning December 13, 2021, addressing the status of Wells Fargo Bank, N.A. v. Fidelity 22

23 24

25 4 Because the Court finds that removal is proper, the Court need not consider Defendants’ additional argument on fraudulent joinder. 1 National Title Ins. Co., Ninth Cir. Case No. 19-17332, and the need for the case to remain 2 stayed. 3 IT IS FURTHER ORDERED that all other motions currently pending before the Court 4 are DENIED, without prejudice, as moot, with leave to refile and amend thirty (30) days after 5 the stay if lifted. 6 DATED this __1_3__ day of September, 2021. 7 8 ___________________________________ Gloria M. Navarro, District Judge 9 UNITED STATES DISTRICT COURT 10

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