A federal appeals court on Friday granted Nevada's request to send its lawsuit alleging mortgage modification and foreclosure abuses against Bank of America Corp back to Nevada state court. The 9th US Circuit Court of Appeals reversed a decision by a lower court, which had concluded that the lawsuit belonged in federal court.
Nevada's complaint, filed in Clark County, Nevada, in January 2011, alleges that Bank of America misled consumers about the terms of its home mortgage modification and foreclosure processes. Nevada also accused the bank of violating terms of a consent judgement it and several of its subsidiaries had entered into with the state in February 2009.
After Bank of America removed the lawsuit to federal court, Nevada's request to send it back to state court was denied. Chief Judge Robert Clive Jones of the District of Nevada ruled that the lawsuit belonged in his court because the lawsuit was a class action, which gives federal courts jurisdiction. But the three-judge panel for appeals court disagreed, finding that a case filed by a state's attorney general did not qualify as a class action. It also ruled that Nevada had an interest in keeping the lawsuit in its own state.
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