U.S. Bank, National Association v. The Charitable Donor Advised Fund, L.P.

Background

After the court dismissed counterclaims brought against Highland CLO Funding, Ltd. (HCLOF), HCLOF moved under Federal Rule of Civil Procedure 54(b) for entry of a partial final judgment. Rule 54(b) permits a court to make a ruling involving fewer than all claims or parties immediately final and appealable only when there are multiple claims or parties, at least one claim or party’s rights and liabilities have been finally determined, and the court expressly finds no just reason to delay entry of judgment.

HCLOF argued that the first two requirements were met because the case contained multiple claims and parties and the counterclaims against HCLOF had been finally determined. It also argued that there was no reason to delay because HCLOF was winding down its business.

Court’s Analysis

The court agreed that the first two Rule 54(b) requirements were satisfied. It focused on whether the dismissed claims were sufficiently separate from the claims that remained in the case and whether immediate review would promote fairness and efficient court administration.

The court found substantial overlap. The earlier dismissal of the counterclaims against HCLOF relied in part on the conclusion that the DAF Parties lacked standing to seek invalidation of the 2021 and 2023 Agreements. The earlier ruling also addressed whether the counterclaims adequately alleged a breach and relied on the preclusive effect of a Guernsey judgment. Meanwhile, the plaintiffs’ remaining declaratory-judgment claims involve whether claims asserted or threatened by the DAF Parties and CLO HoldCo were released by HCLOF and whether the relevant settlement agreements are valid and enforceable.

Because the remaining claims could require the court or an appellate court to address the same validity and enforceability issues, the court concluded that the dismissed and remaining claims were not sufficiently separable. Immediate certification therefore risked duplicative appeals and repeated review of related issues. The court considered HCLOF’s argument that it was winding down its business but concluded that HCLOF had not shown the kind of hardship or injustice that would justify immediate appeal.

Disposition

Judge Gregory H. Woods denied HCLOF’s motion for entry of partial judgment under Rule 54(b). The Clerk of Court was directed to terminate the motion at Docket No. 266.