Although a Texas bankruptcy court had the authority to certify a class action against Wells Fargo Bank, it stumbled in doing so, a federal appeals court has ruled.

The 5th U.S. Circuit Court of Appeals ruled (PDF) on Friday that the bankruptcy court in Houston had jurisdiction to certify a class of about 1,236 individuals who had filed for Chapter 13 bankruptcy and had mortgages held or serviced by Wells Fargo Bank N.A. Noting a disagreement among courts as to whether bankruptcy judges can certify classes of debtors, the three-judge panel ruled that the bankruptcy court’s interest in “efficiency and economy in litigation” that result from class actions is just as compelling as a district court’s interest.

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