Justia Banking Opinion Summaries

These consolidated cases, on appeal from a judgment of the district court, present competing claims to a blocked electronic funds transfer. The parties are the United States, which blocked the transaction because terrorists initiated it. On the other side are victims of Iran-sponsored terrorism who have obtained multimillion-dollar judgments against the Iranian government.   After learning of the government’s forfeiture action, attorneys for two groups of victims of Iranian terrorism and their relatives, holding judgments against Iran, filed separate writs of attachment. Plaintiffs sought to attach the funds at Wells Fargo pursuant to two federal statutes. The first, 28 U.S.C. Section 1610(g) of the Foreign Sovereign Immunities Act (“FSIA”). The second is Section 201(a) of the Terrorism Risk Insurance Act of 2002 (“TRIA”).   The district court ruled that Iran lacked any property interest in the blocked funds held by Wells Fargo. The court, therefore, quashed Plaintiffs’ writs of attachment. The DC Circuit court reversed and remanded. The court explained that tracing resolves this case in Plaintiffs’ favor. The government admits that the $9.98 million blocked funds at Wells Fargo “are traceable to Taif” and thus to Iran. The premise of the government’s forfeiture action is that the funds are traceable to Iran. The district court, therefore, erred in concluding that Plaintiffs had failed to show that the blocked funds were, under Section 201(a) of the TRIA, the blocked assets of [a] terrorist party. View "Estate of Jeremy I. Levin v. Wells Fargo Bank, N.A." on Justia Law

The government seeks the forfeiture of a trust established by Pavel Lazarenko, a former Prime Minister of Ukraine, located abroad on the island of Guernsey. Since 2004, a Guernsey court order has prohibited Lazarenko from accessing the trust, and a federal district court order has prohibited him from challenging the Guernsey order abroad. Lazarenko contends that the district court lacked statutory authority to issue the latter order and that, in any event, the order violated principles of international comity.   The DC Circuit rejected both challenges on procedural grounds. The daughters claim an interest in being able to litigate in Guernsey themselves, which might be impaired by a decision in favor of the government in this appeal. But Lazarenko himself adequately represents that interest. A would-be intervenor is adequately represented when she “offer[s] no argument not also pressed by” an existing party. Here, the daughters seek to raise precisely the same arguments as their father. Moreover, the daughters have revealed by their conduct that they find his representation adequate. In their cross-motion below, they adopted his arguments wholesale. And in this appeal, they declined the court’s invitation to appear at oral argument. The court, therefore, denied the daughters’ motion to intervene.   Further, the court wrote that Lazarenko could have pressed his current objections more than a decade and a half ago, and excusing his delay would risk wasting the considerable time and resources that the parties have invested in the district court proceedings. Under these circumstances, the district court reasonably denied his motion to modify the restraining order. View "USA v. All Assets Held at Credit Suisse" on Justia Law

Hurst sought a loan modification in 2018. Caliber notified Hurst that her application was complete as of April 5, 2018, that it would evaluate her eligibility within 30 days, that it would not commence foreclosure during that period, and that it might need additional documents for second-stage review. On May 1, Caliber requested additional documents within 30 days. Although Hurst responded, she did not meet all of Caliber’s requirements. On May 31, Caliber informed Hurst that it could not review her application. Hurst sent some outstanding documents on June 7, but her application remained incomplete. Caliber filed a foreclosure action on June 18. Hurst spent $13,922 in litigating the foreclosure but continued working with Caliber. Caliber again denied the application as incomplete on August 31 but eventually approved her loan modification and dismissed the foreclosure action.Hurst filed suit under the Real Estate Settlement Procedures Act (RESPA), alleging that Caliber violated Regulation X’s prohibition on “dual tracking,” which prevents a servicer from initiating foreclosure while a facially complete loan-modification application is pending, 12 C.F.R. 1024.41(f)(2); failed to exercise reasonable diligence in obtaining documents and information necessary to complete her application, section 1024.41(b)(1); and failed to provide adequate notice of the information needed to complete its review (1024.41(b)(2)). The district court granted Caliber summary judgment. The Sixth Circuit reversed with respect to the “reasonable diligence” claim. Hurst identified communications where Caliber employees provided conflicting information and had trouble identifying deficiencies. View "Hurst v. Caliber Home Loans, Inc." on Justia Law

In this bankruptcy action, the First Circuit vacated the judgment of the district court affirming the order of the bankruptcy court granting summary judgment against Oriental Bank on all of the claims asserted against it, holding that remand was required for further proceedings in which remaining issues could be addressed.Builders Holding Company filed for bankruptcy and then filed an adverse action against the Puerto Rico Infrastructure Financing Authority and Oriental Bank. Builders's surety intervened in the adverse action and filed claims against Oriental Bank. Oriental Bank, in turn, filed counterclaims. All claims in the adverse action pertained to funds that the Financing Authority had directly deposited in Builder's account with Oriental Bank that the bank had taken to set off a debt that Builders owed to it. The bankruptcy court granted summary judgment against Oriental Bank on all claims against it, and the district court affirmed. The First Circuit vacated and remanded the summary judgment against Oriental Bank as to all claims, holding that the bankruptcy court was wrong to find that Article 1795 of the Puerto Rico Civil Code compelled the return of funds Oriental Bank set off against Builders's debt to it. View "Oriental Bank v. Builders Holding Co., Corp." on Justia Law

Plaintiffs appealed a district court judgment dismissing their action against Defendants-Appellees BLC Bank, S.A.L. (“BLC”), Credit Libanais, S.A.L. (“CL”), AlMawarid Bank, S.A.L. (“AM”), and Banque du Liban (“BDL”) for want of subject-matter jurisdiction, for want of personal jurisdiction, and for forum non conveniens based on binding forum selection clauses in agreements Plaintiffs entered into with AM and BLC. Plaintiffs alleged that Defendants- (together, “the Banks”) engaged in a scheme to cheat them out of millions of U.S. dollars (“USD”) by inducing them to deposit those dollars in Lebanese bank accounts with the promise that they would be able to withdraw that money in the United States, only to renege on that promise and keep the money trapped in Lebanon. The district court dismissed the claims against AM and BLC because the Daous’ agreements with those banks included valid, enforceable forum selection clauses specifying Beirut as the proper forum; those against CL because it lacked personal jurisdiction over that bank, and those against BDL because that bank is an agency or instrumentality of the Lebanese state and no exception applied under the Foreign Sovereign Immunities Act (“FSIA”).   The Second Circuit held that the district court lacked personal jurisdiction over AM, BLC, and CL (together, “the Commercial Banks”) under the relevant provision of New York’s long-arm statute, N.Y. C.P.L.R. Section 302(a)(1), because there was insufficient connection between Plaintiffs’ claims against the Commercial Banks and those banks’ business transactions in New York. The court further held that BDL, an agency or instrumentality of a foreign sovereign is entitled to sovereign immunity. View "Daou v. BLC Bank, S.A.L." on Justia Law

The Supreme Judicial Court reversed in part the Housing Court judge's grant of summary judgment in favor of HSBC Bank USA, N.A., as trustee of the Fremont Home Loan Trust 2005-E, Mortgage Backed Certificate, Series 2005-E (HSBC), in this summary process action, holding that one of Defendants' counterclaims was not barred.Defendants purchased their home with proceeds from two loans secured by a mortgage on the property. The primary loan was at issue on appeal. After Defendants defaulted on their monthly payments HSBC, the assignee of the home mortgage loan, held a foreclosure sale and sold Defendants' home to the highest bidder. When Defendants refused to vacate the property HSBC initiated the present summary process action. Defendants brought counterclaims under section 15(b)(2) of the Predatory Home Loan Practices Act (PHLPA), Mass. Gen. Laws ch. 183C and under Mass. Gen. Laws ch. 93A. The trial judge granted summary judgment in favor of HSBC. The appeals court affirmed. The Supreme Judicial Court reversed, holding (1) Defendants were entitled to assert a counterclaim under PHLPA to limited monetary damages; and (2) Defendants' counterclaim under chapter 93A was barred. View "HSBC Bank USA, N.A. v. Morris" on Justia Law

The Bank Secrecy Act, 31 U.S.C. 5311, and its implementing regulations require certain individuals with foreign financial interests to file annual disclosures, subject to penalties. In 2008, Bedrosian filed an inaccurate Report of Foreign Bank and Financial Accounts (FBAR), omitting from the report the larger of his two Swiss bank accounts. If this omission was accidental, the IRS could fine Bedrosian up to $10,000; if he willfully filed an inaccurate FBAR, the penalty was the greater of $100,000 or half the balance of the undisclosed account at the time of the violation. Believing Bedrosian’s omission was willful, the IRS imposed a $975,789.17 penalty—by its calculation, half the balance of Bedrosian’s undisclosed account. Following Bedrosian’s refusal to pay the full penalty, the IRS filed a claim in federal court.The Third Circuit affirmed the district court in finding Bedrosian’s omission willful and ordering him to pay the IRS penalty in full. While the IRS failed to provide sufficient evidence at trial showing its $975,789.17 penalty was no greater than half his account balance, Bedrosian admitted this fact during opening statements and thus relieved the government of its burden of proof. View "Bedrosian v. United States Department of the Treasury" on Justia Law

Plaintiffs brought a suit under the Commodity Exchange Act (CEA), alleging that the Defendants engaged in fraudulent trading tactics – to Plaintiffs’ detriment – in markets for precious metals. The district court granted Defendants’ motion to dismiss under Rule 12(b)(6) for failure to state a claim, concluding that Plaintiffs’ claims are time-barred and that Plaintiffs did not adequately plead that they were injured by Defendants’ fraudulent trading activity. On appeal, Plaintiffs contend that their claims took years to accrue, and were therefore timely because they were not on notice of their injury. They separately argued that they have adequately pleaded that Defendants’ fraud injured them.   The Second Circuit affirmed the dismissal for failure to plead an injury. The court concluded that neither of Plaintiffs’ theories, alone or in combination, adequately alleges that Defendants’ trading activities injured them. The court explained that the CEA does not deputize traders to rove the commodities markets hunting for bad behavior. Rather, it makes fraudsters liable for actual damages.   Here, Plaintiff has not plausibly alleged that it was damaged. Instead, it theorizes that its regular participation in the relevant commodities markets supports an inference that it was injured by Defendants’ spoofing at least once. But this argument is so broad that endorsing it would permit any regular market participant to proceed to discovery any time a significant market player has repeatedly committed fraud – contravening both the statute and case law. Further, Plaintiffs’ allegations do not support an inference of damages. View "Gamma Traders - I LLC v. Merrill Lynch Commodities, Inc." on Justia Law

The United States Court of Appeals for the District of Columbia Circuit reversed the judgment of the district court declining to reach the merits of Plaintiffs' complaint challenging a determination of the Federal Deposit Insurance Corporation (FDIC) as unlawful under the Administrative Procedure Act (APA), 5 U.S.C. 706(2), holding that the district court erred in concluding that the FDIC exceeded its authority in making the determination.Plaintiffs, two bank executives, were fired after a proposed merger because they refused to accept a reduction in the amount of a payment that was contractually provided for them. Plaintiffs sued the bank that terminated them and the bank with which it merged, alleging that they were entitled to the full payments. The banks, in turn, sought guidance from the FDIC as to whether the relief sought by Plaintiffs would constitute a statutorily-restricted "golden parachute" payment. The FDIC responded that the payment would constitute a golden parachute. Plaintiffs then brought this action challenging the FDIC's determination as unlawful under the APA. The district court declined to reach the merits, concluding that the FDIC lacked authority to render a golden parachute determination at all. The Court of Appeals reversed and remanded the case, holding that the district court erred in concluding that the FDIC lacked authority to render its golden parachute determination. View "Bauer v. Federal Deposit Insurance Corp." on Justia Law

Triller Inc., a social media company was being sold to a group of owners, including Carnegie Technologies, Inc. Prior to the sale, Triller executed a promissory note in favor of Carnegie and then immediately assigned the note to a group of “legacy” owners—including Carnegie—as part of the deal’s closing. After the note was defaulted, Carnegie sued Triller to collect the amounts due. Triller claimed that it had no obligations under the note because it had been assigned, resulting in novation. The district court rejected Triller's novation defense and Triller appealed.The Fifth Circuit affirmed, finding that the plain meaning of the agreement was silent on the extinction of any obligation between Triller and Carnegie. The laws of both California and Texas require clear evidence illustrating the parties' intent to replace an earlier agreement, and the agreement's merger clause precludes evidence of a contemporaneous or earlier agreement. Thus, the court held that Triller failed to raise an issue of material fact regarding whether its obligations under the note were extinguished. View "Carnegie Technologies. v. Triller" on Justia Law