RMBS Claims Against U.S. Bank National Association Dismissed in Part

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On May 31, Judge John G. Koeltl of the United States District Court for the Southern District of New York granted in part and denied in part a motion to dismiss claims brought against U.S. Bank National Association (U.S. Bank) by the Oklahoma Police Pension and Retirement System on behalf of a putative class of investors in Bear Stearns residential mortgage-backed securities. Plaintiff alleges that U.S. Bank, as trustee for the RMBS, owed it and the putative class duties under the governing agreements and the Trust Indenture Act of 1939 (TIA). Judge Koeltl held that the certificates at issue were not covered by the TIA because the contracting parties structured the transactions so as to exempt them from the TIA, as allowed by the statute. The court held Plaintiff had, however, adequately alleged standing and had stated a claim for breach of contract based on alleged failures to ensure adequate title and documentation of the loans, to enforce the repurchase protocol and to provide notice of default by the servicer. The court allowed these claims for breach of contract to proceed, but dismissed duplicative claims for breach of the covenant of good faith and fair dealing. Opinion.