On August 1, 2014, in State of Hawaii v. HSBC Bank Nevada, the US Court of Appeals for the Ninth Circuit held that there was no federal jurisdiction under CAFA where the Hawaii Attorney General brought parens patriae suits, rather than class actions, and the complaints disclaimed class status (No. 13-15611, (9th Cir. Aug. 1, 2014)).

The Hawaii Attorney General filed complaints in state court against six credit card providers, alleging that they violated state law by deceptively marketing and improperly enrolling cardholders in various debt protection products without the cardholders' consent. The complaints stated that the actions were brought by the State of Hawaii in its sovereign capacity and also under the state's parens patriae authority. In each complaint, the Attorney General explicitly disavowed that he filed a class action and disclaimed any claims that would support removal on the basis of CAFA. The defendants filed notices of removal in the US District Court for the District of Hawaii, invoking 28 U.S.C. §§ 1331, 1332(d)(2) and 1367 as the bases for federal jurisdiction. The Attorney General moved to remand each case.

The district court denied the motions to remand. It held that the complaints did not come within CAFA jurisdiction because they expressly disclaimed class status and CAFA requires the plaintiff to actually invoke or label the case as a class action. However, the district court found that it had federal question jurisdiction because the National Bank Act completely preempted some of the state claims and elected to exercise supplemental jurisdiction over the remaining claims.

The Ninth Circuit reversed and remanded the actions to state court. The court held that the National Bank Act did not preempt any of the state claims and therefore is not a basis for federal question jurisdicition. Similarly, the Ninth Circuit held that there is no jurisdiction under CAFA.

The court joined the US Courts of Appeals for the Second, Third and Fourth Circuits in finding that because the complaints did not invoke a class action rule, the actions cannot be removed under CAFA. The Ninth Circuit first noted that to remove a case under CAFA, a class action must be filed under FRCP 23 or a similar state rule or statute. The court concluded that the state procedural devices in this case and a parens patriae suit are not similar to a Rule 23 action. According to the Ninth Circuit, the appropriate inquiry to determine whether there is jurisdiction under CAFA is whether a complaint seeks class status regardless of whether the putative class will ultimately be certified. Failure to seek class status is "fatal" to CAFA jurisdiction. The court further found that because CAFA does not completely preempt state law, it cannot disregard the unambiguous class action disclaimers in the complaints.

Practitioners in the Ninth Circuit should be aware that the court will likely deny removal under CAFA where the complaint is not filed under FRCP 23 or a similar state law and explicitly disclaims class action status.