Kramer Levin Files Amicus Brief for SIFMA, the American Bankers Association and The Clearing House in the U.S. Supreme Court

On November 7, 2016, Kramer Levin filed an amicus brief in the United States Supreme Court on behalf of the Securities Industry and Financial Markets Association, an association of hundreds of securities firms, banks and asset managers, the American Bankers Association, the principal national trade association of the financial services industry in the United States, and The Clearing House Association L.L.C., a nonpartisan advocacy organization that represents the interests of the world’s largest commercial banks which together hold more than half of all U.S. deposits and employ over one million people in the United States and more than two million worldwide. The brief supports a petition for a writ of certiorari filed by First Horizon Asset Securities, Inc., First Tennessee Bank, N.A., FTN Securities Corp., UBS Securities LLC, RBS Securities Inc., Wells Fargo Asset Securities Corp., Credit Suisse Securities (USA) LLC, and HSBC Securities (USA) Inc. following a decision by a divided panel of the Second Circuit Court of Appeals in a case brought by the Federal Deposit Insurance Corporation (“FDIC”), as Receiver for Colonial Bank. The FDIC asserts claims under Sections 11 and 15 of the Securities Act of 1933 concerning Colonial Bank’s purchases of billions of dollars of mortgage-backed securities from the defendants. The Second Circuit construed a provision of the Financial Institutions Reform, Recovery and Enforcement Act of 1989 that extends the “statute of limitations” for the FDIC to bring “contract” or “tort” claims to permit the FDIC to bring claims under the Securities Act after the expiration of its statute of repose.

The amicus brief argues that the Supreme Court should grant certiorari to determine whether the Second Circuit’s decision is inconsistent with a recent Supreme Court decision that ruled that similar language in the Comprehensive Environmental Response, Compensation and Liability Act of 1980 applies only to statutes of limitations, and not to statutes of repose. The Second Circuit did not address the enormous importance of the Securities Act’s three-year statute of repose.

The case is First Horizon Asset Securities, Inc., et al. v. FDIC, No. 16-463. The Kramer Levin team consisted of Litigation partner Michael J. Dell and special counsel Karen Steinberg Kennedy. This is the ninth amicus brief we have filed on behalf of SIFMA within the past two years — two in the United States Supreme Court, four in the Second Circuit, two in the Fifth Circuit, and one in the Ninth Circuit. The Clearing House has joined six of these briefs and the American Bankers Association has joined three.