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Arizona Keeps BofA Suit Out of Federal Court

(CN) - Bank of America must fight claims that it shirked its duty to help distressed Arizona homeowners in state court, the 9th Circuit ruled.

Former state Attorney General Terry Goddard sued the lender and its subsidiaries in 2010, alleging that they had violated a 2009 consent judgment to provide loan modifications and help relocate victims of the housing crash.

Claiming that Bank of America "ha[d] shown callous disregard for the devastating effects its servicing practices have had on individual borrowers and on the economy as a whole," Goddard said in his original complaint that the bank continued to mislead clients and foreclose on homes.

Bank of America later removed the case from a state court, but a federal judge in Phoenix sent the case back, finding that it lacked jurisdiction under the Class Action Fairness Act.

The 9th Circuit refused to let Bank of America appeal that ruling, so the lender filed a request for reconsideration, arguing that the District Court had reached "the opposite legal conclusion" in an identical case filed by Nevada's attorney general.

But the San Francisco-based federal appeals panel declined Tuesday to reconsider granting an appeal, with a lone dissent from Judge Ronald Gould, who said the opposite finding on the Nevada case does present an concern.

"We have decisions in different district courts in Nevada and Arizona going in opposite directions on the same or very similar issues," Gould wrote. "Although we have permitted appeal in Nevada v. Bank of America Corp. ... there are ways in which that decision might be resolved without clarifying the legal points concerning application of the Class Action Fairness Act to parens patriae actions in which an attorney general seeks restitution for state citizens, on which our district courts are divided. In my view, if there is one thing we should readily do as a circuit, it is to take steps to eliminate intra-circuit conflicts in our district courts. A state attorney general should face the same law and orientation of a district court in each of the states within our circuit. To my thinking, it just doesn't make sense to leave the attorney generals of the various states at sea when we could easily simplify and clarify matters by permitting appeal in both this decision coming from Arizona and the related case in Nevada on which we are allowing an appeal. A panel hearing both appeals on an expedited basis could provide an opinion that would set uniform law within our circuit. I regret that our panel here passes on that opportunity."

EDITOR'S NOTE: This article has been edited to remove inaccuracies about the underlying court orders and past proceedings of Arizona's dispute with Bank of America.

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