Ambac Assurance Corporation v. US Bank National Association
- Paul Engelmayer
- 1:17-cv-02614
- U.S. District Court · Southern District of New York
- 5
In Ambac Assurance v. U.S. Bank, Judge Parker granted U.S. Bank’s motion to compel Nationstar to produce subpoenaed documents.
U.S. Bank obtained an order requiring Nationstar, a non-party, to produce the subpoenaed documents. The order concerns discovery in Ambac’s claims against U.S. Bank and does not decide the underlying claims.
What happened
Ambac Assurance Corporation sued U.S. Bank National Association over losses connected to five residential mortgage-backed securities trusts. Ambac alleged that U.S. Bank breached contractual and common-law duties as trustee, causing losses after Ambac paid more than $300 million in insurance claims.
U.S. Bank subpoenaed Nationstar Mortgage LLC, a non-party mortgage servicer, for communications, settlement materials, and loan and servicing files. Nationstar did not object, did not produce documents after agreeing to do so, and did not oppose U.S. Bank’s motion to compel.
Judge Katharine H. Parker granted U.S. Bank’s motion, finding that the subpoena complied with the federal rules and sought relevant, properly limited information. The court ordered Nationstar to produce the documents by February 28, 2020, or face sanctions.
The detailed version
- Ambac Assurance Corporation v. US Bank National Association · No. 1:17-cv-02614
- Paul Engelmayer
- Feb. 3, 2020
Background
Ambac Assurance Corporation insured five residential mortgage-backed securities trusts. U.S. Bank National Association served as trustee for those trusts. Ambac alleged that U.S. Bank breached contractual and common-law obligations involving the underlying mortgage loans, including duties to enforce certain obligations of the entities that originated, transferred, and serviced the loans. Ambac alleged that these breaches caused losses, and the opinion states that Ambac paid more than $300 million in insurance claims.
Nationstar Mortgage LLC was a non-bank residential mortgage servicer that originated, underwrote, approved, and/or funded loans within the trusts. U.S. Bank served Nationstar with a subpoena under Federal Rule of Civil Procedure 45 on July 22, 2019. The subpoena sought communications with Ambac, settlement materials, and loan and loan-servicing files.
Subpoena and Motion to Compel
Nationstar acknowledged receiving the subpoena but did not object or respond by the August 12, 2019 deadline. U.S. Bank’s counsel made repeated efforts to obtain compliance without court intervention. Nationstar later agreed to produce responsive documents, but it missed multiple agreed-upon deadlines and ultimately produced no documents. Nationstar did not move to quash the subpoena and did not oppose U.S. Bank’s motion to compel.
Court’s Analysis
The court explained that Rule 45 permits discovery from non-parties, subject to the relevance and proportionality requirements of Federal Rule of Civil Procedure 26(b)(1). The court found that U.S. Bank properly served the subpoena and the motion to compel, and that the subpoena complied with Rule 45. Because Nationstar did not timely object, the court held that Nationstar had waived its objections.
The court also found that the subpoena complied with Rule 26. The requested documents were relevant because they concerned loans supporting the securities involved in the case, communications about those loans, and settlements that could relate to damages. The court noted that Nationstar had offered no basis for failing to comply.
Disposition
Judge Katharine H. Parker granted U.S. Bank’s motion to compel Nationstar to respond to the subpoena. The court ordered Nationstar to produce responsive documents no later than February 28, 2020, or face sanctions. The clerk was directed to terminate the motion at Electronic Case Filing No. 133.
Read the full 5-page opinion on CourtListener, the free public archive maintained by the Free Law Project.