Cases & Deals

U.S. Bank defeats class certification in putative class action alleging billions in class-wide losses in connection with residential mortgage-backed securities

Client(s) U.S. Bank National Association

Jones Day represented U.S. Bank National Association in a putative class action seeking billions of dollars in alleged class-wide losses in connection with investments in notes issued by 25 residential mortgage-backed securities trusts for which U.S. Bank served as trustee. The named plaintiffs, a group of sophisticated investment funds, alleged that U.S. Bank breached its duties under the Trust Indenture Act and the trusts' governing agreements by, among other things, failing to investigate and remedy defective mortgage loans collateralizing the securities. U.S. Bank denies the claims. The plaintiffs sought certification of a class of current holders of the notes.

On January 31, 2018, the United States District Court for the Southern District of New York granted U.S. Bank a major victory, agreeing with U.S. Bank that the named plaintiffs were inadequate class representatives for most of the trusts, that individualized issues would predominate, and that the plaintiffs' proposed damages model failed to match their theory of liability as required by the United States Supreme Court's decision in Comcast Corp. v. Behrend, 569 U.S. 27 (2013). Following the district court's denial of the plaintiffs' class-certification motion, the parties stipulated to the dismissal of the case from federal court.

Blackrock Allocation Target Shares: Series S Portfolio, et al. v. U.S. Bank National Association, No. 1-14-cv-09401 (S.D.N.Y.)