Commerzbank A.G. v. U.S. Bank N.A.

Background

Commerzbank sued U.S. Bank over its investments in residential mortgage-backed security trust certificates. Commerzbank alleged that U.S. Bank, as trustee, failed to monitor, notify, and take action concerning breaches involving the mortgages underlying the trusts. Earlier in the case, Judge William H. Pauley III granted in part U.S. Bank’s motion for summary judgment—a ruling resolving claims without a trial when the court determines that no trial is required on those claims. The decision barred Commerzbank’s claims concerning 51 certificates held by German entities because the claims were untimely under Germany’s three-year statute of limitations. Commerzbank’s earlier motion to reconsider that decision was denied in February 2021.

After the case was reassigned to Judge Cote, the parties conducted extensive expert discovery concerning the certificates remaining for trial. In February 2022, they informed the court that they had reached a settlement in principle concerning the trial-related claims. The court discontinued the case and gave the parties 30 days to move to restore it. Two days before that period expired, Commerzbank moved to reopen the case, stating that it intended to seek reconsideration of the prior dismissal of claims involving 18 of the German Certificates. It relied on an Ohio statute enacted in March 2021 and effective in June 2021, which Commerzbank argued had retroactive effect and changed the applicable statute-of-limitations analysis.

The court’s analysis

Judge Cote held that Commerzbank’s request was untimely under Local Civil Rule 6.3, which requires a motion for reconsideration to be served within 14 days after the court’s decision on the original motion. Commerzbank sought reconsideration nearly two years after the summary judgment decision and nearly a year after the Ohio law on which it relied was enacted. The court explained that even if the 14-day period restarted when the Ohio law was enacted or took effect, Commerzbank still waited too long.

The court rejected Commerzbank’s argument that Federal Rule of Civil Procedure 54(b) allowed the request at any time before final judgment. Although that rule gives a district court authority to revise certain decisions, the court stated that it did not require revision and that the court could enforce a consistent local deadline.

Judge Cote also found that Commerzbank’s delay was not excusable. Commerzbank had not identified when it learned of the Ohio law and had not informed U.S. Bank or the court about the issue during settlement discussions. Reopening the case would have required revisiting extensive expert discovery and would have prejudiced U.S. Bank. The court therefore denied Commerzbank’s March 8, 2022 motion and directed the clerk to close the case. The opinion did not decide the merits of Commerzbank’s proposed reconsideration argument concerning the Ohio statute.