Deutsche Bank’s Removal of State Suit to Federal Court Invalid

Deutsche Bank National Trust Co. must continue to litigate a foreclosure challenge in California state court because it wasn’t named as a defendant and therefore didn’t have authority to remove the suit to federal court, the Ninth Circuit said Tuesday.

The federal removal statute allows a “defendant or the defendants” to remove a state lawsuit to federal court, the opinion by Judge Lawrence VanDyke said. There is no exception in the statute for a “real party defendant in interest,” it said, creating a circuit split with the Second Circuit.

Vinod and Vijay Sharma owned property that was foreclosed on and ...