Defending Class Action Claims Alleging RESPA Violations
Part II Federal Court versus State Court Jurisdiction
Even though RESPA is a federal statute, many class action lawsuits against lenders alleging RESPA violations are filed in state court. Defending class action RESPA claims requires a careful analysis of the specific statute(s) at issue, as this will dictate whether the action may be removed to federal court. While RESPA grants concurrent jurisdiction to state courts as to certain matters, Congress expressly limited concurrent jurisdiction to those sections of RESPA governed only by sections 2605, 2607 and 2608. 12 U.S.C. § 2614. Otherwise, federal jurisdiction is exclusive.
That Congress afforded state courts concurrent jurisdiction only over certain portions of RESPA and retained exclusive federal court jurisdiction over the balance of RESPA is not unique. For example, as the Ninth Circuit has held, “Bankruptcy courts have exclusive jurisdiction over nondischargeability actions brought pursuant to 11 U.S.C. § 523(a)(2), (4), (6) and (15),” Rein v. Providian Fin. Corp., 270 F.3d 895, 904 (9th Cir. 2001) (citations omitted) (italics added), but “Bankruptcy courts and state courts have concurrent jurisdiction over all [other] nondischargeability actions,” id., at n.15 (italics added). “For example, there is concurrent state and federal jurisdiction over § 523(a)(5) nondischargeability actions,” id., at 904 n.15 (citations omitted) (italics added), but a creditor could not seek relief from stay and pursue in state court a nondischargeability claim “with regard to its § 523(a)(2) claims because state courts lack jurisdiction to adjudicate § 523(a)(2) actions,” id., at 904 (italics added).
Plaintiffs’ alleged violations of 12 U.S.C. sections 2603 and 2604 must be heard in federal court because state courts lack jurisdiction to consider them. To hold otherwise would be to conclude that Congress idly specified limitations in 12 U.S.C. § 2614 on the scope of concurrent jurisdiction when it intended that no such limitations exist.
It is a fundamental principal of statutory construction that a statute should not be interpreted so as to render language within it “mere surplusage.” “It is our duty to give effect, if possible, to every clause and word of a statute. We are thus reluctant to treat statutory terms as surplusage in any setting.” Duncan v. Walker, 533 U.S. 167, 174 (2001) (internal citations and quotations omitted). As United States v. Wenner, 351 F.3d 969, 975 (9th Cir. 2003), held:
It is a fundamental canon of statutory construction that a statute should not be construed so as to render any of its provisions mere surplusage. See, e.g., Ratzlaf v. United States, 510 U.S. 135, 140-41, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994) (noting that statutory language should not be construed so as to render certain words or phrases mere surplusage); Bowsher v. Merck & Co., 460 U.S. 824, 833, 103 S.Ct. 1587, 75 L.Ed.2d 580 (1983) (restating “the settled principle of statutory construction that we must give effect . . . to every word of the statute”).
Accord, United States v. Cabaccang, 332 F.3d 622, 628 (9th Cir. 2003).
The Ninth Circuit’s holding in American Vantage Companies, Inc. v. Table Mountain Rancheria, 292 F.3d 1091, 1097-1098 (9th Cir. 2002), is directly applicable:
We also find instructive the Maine Indian Claims Settlement Act of 1980. The Settlement Act expressly subjects Maine Indian tribes to diversity jurisdiction. Akins v. Penobscot Nation, 130 F.3d 482, 485 (1st Cir. 1997). Had Congress believed the diversity statute covered Indian tribes, the explicit command of the Settlement Act, providing that Maine tribes “may sue and be sued in the courts of the … United States to the same extent as any other entity or person residing in the State of Maine may sue and be sued in those courts,” 25 U.S.C. § 1725(d)(1), would have been superfluous. It is a well-established principle of statutory construction that “legislative enactments should not be construed to render their provisions mere surplusage.” Dunn v. Commodity Futures Trading Comm’n, 519 U.S. 465, 472, 117 S.Ct. 913, 137 L.Ed.2d 93 (1997). We will not, therefore, read § 1725(d)(1) as a redundant enactment of §1332(a)(1). (Italics added.)
Similarly, under RESPA, had Congress intended or believed that state courts had concurrent jurisdiction over all alleged violations of RESPA, then it would have been superfluous for Congress to have enacted 12 U.S.C. § 2614, expressly providing state courts with concurrent jurisdiction for alleged violations of sections 2605, 2607 and 2608. In order to “give effect to every word of the statute” and to avoid treating section 2614 as “redundant” or as “mere surplusage,” alleged violations of section 2603 and 2604 must be deemed to fall within the exclusive jurisdiction of the federal courts. Indeed, as originally enacted, Congress granted concurrent jurisdiction solely as to alleged violations of section 2607 and 2608; in 1996, Congress amended 12 U.S.C. § 2614 to include alleged violations of section 2605. If Congress intended to grant state courts concurrent jurisdiction over alleged violations of section 2603 or 2604, it would have included those provisions within the scope of section 2614. See Bodell v. Walbrook Ins. Co., 119 F.3d 1411, 1417 (9th Cir. 1997) (holding that where legislature failed to include certain types of action within scope of statute, “It is not our role to ‘fill in the gaps’ when the legislature had so clear an opportunity to do so. We are judges, not legislators.”); Cramer v. C.I.R., 64 F.3d 1406, 1412-13 (9th Cir. 1995) (court will not amend statute by implication to include language that Congress had an opportunity to include but did not). To paraphrase Seminole Tribe of Florida v. Florida, 517 U.S. 44, 116 n.12 (1996), because section 2614 and its amendment in 1996 underscores Congresses’ recognition of the availability of concurrent jurisdiction, the silence of the 1996 amendment as to alleged violations of section 2603 or 2604 “is all the more deafening.”
When defending against a complaint alleging RESPA violations, then, a defendant must carefully analyze the specific statutory provisions at issue and determine whether the federal court has exclusive jurisdiction. For example, in one action, the plaintiff sought a state court interpretation of RESPA and Regulation X, and a determination of whether the defendant acted in contravention of the state court’s interpretation. However, Congress has given the Secretary of Housing and Urban Development exclusive authority to interpret RESPA, see 12 U.S.C. §2602(6). The question, for example, of what constitutes a good faith estimate of items in a settlement statement is a matter of interpretation and enforcement by the Secretary. To hold otherwise would be to subject lenders to varied and inconsistent interpretations state by state, county by county, and even judge by judge. This would defeat the Congressional purpose of establishing a “uniform settlement statement.” 12 U.S.C. § 2603.
In sum, for over a century it has been settled that “Congress may, if it see[s] fit, give to the federal courts exclusive jurisdiction.” Claflin v. Houseman, 93 U.S. 130, 137 (1876).
In considering the propriety of state-court jurisdiction over any particular federal claim, the Court begins with the presumption that state courts enjoy concurrent jurisdiction. Congress, however, may confine jurisdiction to the federal courts either explicitly or implicitly. Thus, the presumption of concurrent jurisdiction can be rebutted by an explicit statutory directive, by unmistakable implication from legislative history, or by a clear incompatibility between state-court jurisdiction and federal interests.
Gulf Offshore Co. v. Mobil Oil Corp., 453 U.S. 473, 478 (1981) (citations omitted). Because federal court has exclusive jurisdiction over certain alleged RESPA violations, the lawsuit may be properly removed to federal court.