This case has all the trappings of a civil procedure thriller — appellate jurisdiction, Article III standing, diversity jurisdiction, amount in controversy, and Buford abstention are all discussed at length.  But the end result is that entities trying to hold banks responsible for problems associated with foreclosed homes experienced yet another set-back in Cleveland Housing Renewal Project v. Deutsche Bank Trust Co., Case No. 09-3571/3648 (Sept. 20, 2010) (pdf).

In July, the Sixth Circuit in City of Cleveland v. Ameriquest Mortgage Securities (pdf) found that indirect injuries asserted by the City of Cleveland were not enough to allow the City to assert public nuisance claims against banks that provided financing to subprime mortgage lenders and created mortgage-backed securities.  Read our post on Cleveland v. Ameriquest Mortgage for more details on the decision.

Most recently in CHRP v. Deutsche Bank, the Court reversed the district court’s decision to rely on Buford abstention to remand a public nuisance case against Deutsche Bank based on its business practice of selling foreclosed homes back to state court. The Sixth Circuit held that the district court had “undervalued” the strong federal interest of providing a “neutral” forum for these foreclosure/public nuisance claims where (1) the issues “are of intense local concern,” (2) the defendants are international companies, and (3) the state-court judge sits by virtue of a local election. This case presents an important roadmap to how the Circuit will address Buford abstention issues, which admittedly surface rarely, but when they do, they pose critical jurisdictional questions.