ARTICLE
13 January 2016

RMBS Claims Against Bank Of New York Mellon Remain In Federal Court

O
Orrick

Contributor

Orrick logo
Orrick is a global law firm focused on serving the technology & innovation, energy & infrastructure and finance sectors. Founded over 150 years ago, Orrick has offices in 25+ markets worldwide. Financial Times selected Orrick as the Most Innovative Law Firm in North America for three years in a row.
On December 18, Judge William Pauley III of the U.S. District Court for the Southern District of New York denied Bank of New York Mellon's motion to dismiss RMBS claims...
United States Finance and Banking

On December 18, Judge William Pauley III of the U.S. District Court for the Southern District of New York denied Bank of New York Mellon's motion to dismiss RMBS claims regarding fourteen trusts and one indenture trust for lack of subject matter jurisdiction.  With respect to the indenture trust, the Court held that it did have original jurisdiction over that claim because the federal Trust Indenture Act ("TIA") implicitly creates a private right of action.  Judge Pauley exercised supplemental jurisdiction over plaintiffs' Pooling and Servicing Agreement ("PSA") claims for the remaining fourteen trusts.  Citing Judge Shira Scheindlin's March 31, 2015 decision in BlackRock v. HSBC, Judge Pauley held that both the TIA and PSA claims share a common nucleus of operative fact because all of the trusts at issue in the case were sponsored by Countrywide affiliates and serviced by Countrywide Home Loan Servicing.  Judge Pauley dismissed any concern that allowing a single TIA claim to create jurisdiction over fourteen state law claims would "allow a federal tail to wag a state dog," noting Countrywide's imprint on every transaction as sponsor and servicer.  Judge Pauley also highlighted that the case has been pending in the S.D.N.Y. for over four years and to create parallel proceedings would be both inconvenient and against the interests of judicial economy. Decision.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More