Mayme BROWN, Individually and in her Official Capacity as Circuit Clerk of Hot Spring County, Arkansas, and on behalf of all Circuit Clerks in the State of Arkansas, Plaintiff-Appellant
MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., A Delaware Corporation; Merscorp, Inc.; Bank of America, N.A.; Countrywide Home Loans, Inc., Now known as Bank of America, N.A.; Citimortgage, Inc.; Deutsche Bank National Trust Company; PHH Mortgage Corporation; HSBC Mortgage Services, Inc.; Novastar Mortgage, Inc.; National City Bank; J.P. Morgan Chase Bank; Bank of England; Wells Fargo, N.A.; John Does 1-100; Citifinancial Mortgage Company; National City Mortgage and National City Corp.; PNC Financial Services Group, Inc., Defendants-Appellees.
Submitted: Sept. 24, 2013.
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Luther Oneal Sutter, Benton, AR, for Plaintiff-Appellant.
James M. Simpson, Charles Turner Coleman, David L. Williams, Geoffrey B. Treece, Kimberly Wood Tucker, David Michael Donovan, Kathryn Bennett Perkins, Joseph Russell Falasco, Jack Walls Allen, Little Rock, AR, David H. Pittinsky, Philadelphia, PA, Thomas Hefferon, Joseph Yenouskas, Washington, DC, Philip Montgomery, Hot Springs, AR, Brandon Bradshaw Cate, Springdale, AR, Lucia Nale, Thomas V. Panoff, Chicago, IL, Marisa Fortunati, Robert M. Brochin, Miami, FL, Gregory J. Marshall, Phoenix, AZ, David S. Mitchell, Memphis, TN, Elizabeth Frohlich, Los Angeles, CA, for Defendants-Appellees.
Before MURPHY, MELLOY, and SHEPHERD, Circuit Judges.
SHEPHERD, Circuit Judge.
Mayme Brown, the Hot Spring County, Arkansas Circuit Clerk, filed suit in Arkansas state court against the appellees, various originators and servicers of loans (Lenders). Brown alleged tat the Lenders used the Mortgage Electronic Registration System (MERS) to avoid paying recording fees on mortgage assignments and, thus, deprived Arkansas counties of revenue. The Lenders removed the case to federal court pursuant to the Class Action Fairness Act of 2005 (CAFA), codified at 28 U.S.C. § 1332(d). The district court  denied two Motions to Remand and then dismissed Brown's Complaint with prejudice. Brown appeals, asserting that the district court erred in exercising jurisdiction under CAFA, exercising supplemental jurisdiction over the state-law claims, refusing to abstain from deciding the state-law claims, and dismissing the Complaint on the merits. We affirm.
Generally, in Arkansas, a mortgage on real property is recorded in the county circuit clerk's office. Any subsequent assignments are also recorded in the same office. Mortgagees pay fees for the original recording and all subsequent recordings. The MERS system changed this normal practice. With MERS, initial mortgage loans are recorded with the circuit clerk, fees are paid, and MERS is listed as the mortgagee of record. When an interest in the mortgage is transferred among MERS members, the MERS system tracks the assignments for priority purposes. MERS at all times remains the mortgagee of record in the county property records. The subsequent assignments are not recorded, and no recording fees are paid. Brown filed suit in Arkansas state court and argued that this use of the MERS system violated the Arkansas Deceptive Trade Practices Act (ADTPA), unjustly enriched the Lenders, and was an illegal exaction under the Arkansas Constitution.
The Lenders removed the action under CAFA. In denying ...