Retirement Board v. The Bank of New York Mellon (Second Circuit)

The Trust Indenture Act (TIA) extends certain statutory requirements and protections to trust instruments. Investors in residential mortgage-backed securities (RMBS) sued the securitization trustee, The Bank of New York Mellon, asserting in part that it breached certain TIA obligations. After the district court rejected the longstanding industry understanding that the TIA does not apply to the kind of RMBS at issue, we successfully persuaded the court to certify its order for an interlocutory appeal. We then successfully petitioned for interlocutory appeal and secured reversal on the merits: the court of appeals held that the RMBS fall within an exception for certificates of interest or participation in two or more securities that have substantially different rights or privileges. In addition, the Second Circuit agreed that the plaintiffs lacked standing to bring class-action claims with respect to securities in which they never personally invested.