Judge Jed Rakoff
Plaintiffs’ state action was removed under the Edge Act. JPMorgan Chase Bank (Bank) is a national bank chartered under federal law. Its subsidiary, nonparty Flagstar Bank, issued mortgages on 18 properties in the U.S. Virgin Islands, securitized by a residential mortgage-backed security (RMBS). The court ruled it held Edge Act jurisdiction and that Bank’s issuance of the mortgages was irrelevant. The court’s April 3, 2013, "bottom line" order granted defendants summary judgment on all claims by Dexia SA/NV, Dexia Holdings Inc and Dexia Crédit Local SA, but allowed plaintiff FSA Asset Management to pursue claims on its five RMBS certificates. On April 19 the Second Circuit held, in Am. Int’l Grp. Inc. v. Bank of Am. Corp., that for the Edge Act’s federal jurisdiction and removability to apply the suit must have a federally charted corporation as a party, and must arise from an offshore banking or financial transaction of that corporation. Because the subject mortgages were issued by Flagstar Bank and not Bankthe only federally chartered party to which Edge Act jurisdiction might applydistrict court found it lacked jurisdiction. Therefore, district court vacated its April 3, 2013, order and remanded suit to state supreme court.
