(CN) – The 9th Circuit ruled that a class action against HSBC Bank and Best Buy should continue in federal court, not California state court, because Best Buy is not a citizen of California.
Gary Davis sued HSBC Bank of Nevada, claiming the bank defrauded its customers by failing to provide adequate disclosure of a credit card fee.
The district court granted Davis’ motion to remand the case to state court, but Judge Bea of the San Francisco-based federal appeals court ruled that the case must remain at the federal level.
Bea ruled that even though Best Buy does big business in California, it’s not enough to constitute citizenship.
“The substantial predominance test (to determine citizenship) does not require that the majority of corporate operations occur in a single state,” Bea wrote. “But the test required a substantial predominance, not a mere predominance.”
Therefore, Bea wrote, federal jurisdiction exists under the Class Action Fairness Act.
Judge Kleinfeld wrote a concurring opinion.