UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT

U.S. BANK, N.A., Trustee for the No. 19-15918 Holders of the J.P. Morgan Mortgage Trust 2007-S3, D.C. No. Plaintiff-Counter- 2:15-cv-01484-KJD- Defendant-Appellant, GWF

v. ORDER SOUTHERN HIGHLANDS CERTIFYING COMMUNITY ASSOCIATION, QUESTION TO Defendant-Appellee, THE NEVADA SUPREME COURT SFR INVESTMENTS POOL 1, LLC, Defendant-Counter-Claimant- Cross-Claimant-Appellee,

v. NATIONSTAR MORTGAGE LLC; BANK OF AMERICA, NA, Cross-Claim- Defendants-Appellants.

Filed June 3, 2021 2 U.S. BANK V. SOUTHERN HIGHLANDS CMTY. ASS’N

Before: Eugene E. Siler,* Sandra S. Ikuta, and Jacqueline H. Nguyen, Circuit Judges.

Order

SUMMARY**

Nevada Foreclosure Law

The panel certified to the Nevada Supreme Court the following question:

Whether, under Nevada law, an HOA’s misrepresentation that its superpriority lien would not extinguish a first deed of trust, made both in the mortgage protection clause in its CC&Rs and in statements by its agent in contemporaneous arbitration proceedings, constitute slight evidence of fraud, unfairness, or oppression affecting the foreclosure sale that would justify setting it aside.

The panel also asked the Nevada Supreme Court to consider the related issue of what evidence a first deed of

* The Honorable Eugene E. Siler, United States Circuit Judge for the U.S. Court of Appeals for the Sixth Circuit, sitting by designation. ** This summary constitutes no part of the opinion of the court. It has been prepared by court staff for the convenience of the reader. U.S. BANK V. SOUTHERN HIGHLANDS CMTY. ASS’N 3 trust holder must show to establish a causal relationship between a misrepresentation that constitutes unfairness under Nationstar Mortg., LLC v. Saticoy Bay LLC Series 2227 Shadow Canyon, 133 Nev. 740 (2017), and a low sales price.

ORDER

We ask the Nevada Supreme Court to resolve an important and open question of state law: what evidence constitutes “slight evidence of fraud, unfairness, or oppression” affecting a foreclosure sale that may be “sufficient to authorize the granting” of equitable relief, Nationstar Mortg., LLC v. Saticoy Bay LLC Series 2227 Shadow Canyon, 133 Nev. 740, 741, 749 (2017) (quoting Golden v. Tomiyasu, 79 Nev. 503, 515 (1963)), when a homeowner’s association (HOA) forecloses its superpriority lien on a residence and sells the residence at a foreclosure sale for a grossly inadequate sales price. Specifically in this case, does a mortgage protection clause in the HOA’s covenants, conditions, and restrictions (CC&Rs), along with misrepresentations about the HOA’s superpriority lien made to the lender in a separate proceeding, constitute such evidence?

The answer to that question is determinative here, and the decisions of the Nevada Supreme Court do not provide controlling precedent. See Nev. R. App. P. 5(a).

“We invoke the certification process only after careful consideration and do not do so lightly.” Kremen v. Cohen, 325 F.3d 1035, 1037 (9th Cir. 2003). In deciding whether to certify this question to the Nevada Supreme Court, we consider: “(1) whether the question presents ‘important public 4 U.S. BANK V. SOUTHERN HIGHLANDS CMTY. ASS’N policy ramifications’ yet unresolved by the state court; (2) whether the issue is new, substantial, and of broad application; (3) the state court’s caseload; and (4) ‘the spirit of comity and federalism.’” Murray v. BEJ Mins., LLC, 924 F.3d 1070, 107