On February 27, 2012, the United States Court of Appeals for the Second Circuit reversed the decision of the United States District Court for the Southern District of New York and ordered the district court to remand to New York State Supreme Court the proceeding seeking court approval of the $8.5 billion Bank of America settlement of claims based on alleged breaches of representations and warranties in connection with RMBS securitizations.  The district court had determined that it had subject matter jurisdiction pursuant to the Class Action Fairness Act, reasoning that the settlement approval proceeding constituted a “mass action.”  In reversing, the Second Circuit concluded that the “securities exception” to the Act applied, and that the federal court therefore lacked jurisdiction.  Decision.

Tags: Bank of America, Litigation, New York State Supreme Court, RMBS