The Federal Deposit Insurance Corporation (FDIC) as receiver for Guaranty Bank brought claims against The Bank of New York Mellon, U.S. National Bank Association, and Citibank, N.A. alleging breach of contract, violation of the Streit Act, and violation of the Trust Indenture Act for allegedly failing to carry out their duties as trustees. Judge Carter dismissed the same claims in September of 2016 for lack of subject matter jurisdiction, holding that the FDIC lacked standing to sue because the FDIC had sold its ownership of the certificates at issue in 2010 to Wilmington Trust Co., as owner trustee, with Citibank acting in as indenture trustee. The Court had held that after that sale, the plaintiff's claims had travelled with the securities to the resecuritized trust and thus the plaintiff no longer had standing to bring the claims it asserted. The Court had granted leave to amend the complaint to permit FDIC to resolve the standing issues by seeking ratification of the claims by the trust pursuant to FRCP 17(a)(3). After the 2016 dismissal, Wilmington Trust ratified the claims, but Citibank refused to ratify the claims without indemnity from FDIC. As a result, the standing issues remained unresolved, and the court dismissed the claims once again for lack of subject matter jurisdiction without prejudice. Decision.
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