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

• Decision Date: 16 February 2021
• Docket Number: 16cv4569
• Parties: COMMERZBANK AG, Plaintiff, v. U.S. BANK NATIONAL ASSOCIATION, Defendant.
• Court: U.S. District Court — Southern District of New York

COMMERZBANK AG, Plaintiff, v. U.S. BANK NATIONAL ASSOCIATION, Defendant.

16cv4569

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

February 16, 2021

MEMORANDUM & ORDER

WILLIAM H. PAULEY III, Senior United States District Judge:

Plaintiff Commerzbank AG ("Commerzbank") moves for reconsideration, (ECF No. 399), of this Court's comprehensive Opinion and Order granting in part and denying in part Defendant U.S. Bank National Association's ("U.S. Bank") motion for summary judgment, see Commerzbank AG v. U.S. Bank Nat'l Ass'n, 457 F. Supp. 3d 233 (S.D.N.Y. 2020). In deciding the summary judgment motion, this Court observed that the parties submitted "a staggering 1,274 pages of factual assertions supported by 1,049 exhibits." Commerzbank, 457 F. Supp. 3d at 238. Now, adding to the pile, Commerzbank seeks to relitigate the motion. Alternatively, Commerzbank seeks interlocutory appeal or certification of a question to the Ohio Supreme Court. For the following reasons, Commerzbank's motion is denied.

BACKGROUND

This Court assumes familiarity with its prior Opinions and Orders and summarizes only the facts necessary to decide this motion. See Commerzbank, 457 F. Supp. 3d at 238-40; Commerzbank AG v. U.S. Bank Nat'l Ass'n, 277 F. Supp. 3d 483, 487-89 (S.D.N.Y. 2017).

Apparently dissatisfied with this Court's ruling, Commerzbank moves for reconsideration. (See ECF No. 399.) Ignoring that reconsideration is not an invitation to relitigate a motion that was fully briefed and argued, Commerzbank seeks to relitigate three separate rulings. First, Commerzbank takes issue with this Court's determination that New York law governs the sale of certain certificates sold by Commerzbank. Second, Commerzbank contends that this Court overlooked documentary evidence regarding Commerzbank's ownership of the Duke Repo Certificates. Finally, Commerzbank argues that this Court mistakenly invoked—and misapplied—German law with respect to the statute of limitations and then misapplied it.

DISCUSSION

I. Motion for Reconsideration

A. Legal Standard

A motion for reconsideration under Local Rule 6.3(a) "should be granted only when the [the moving party] identifies an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice." Kolel Beth Yechiel Mechil of Tartikov, Inc. v. YLL Irrevocable Tr., 729 F.3d 99, 104 (2d Cir. 2013) (quotation marks omitted). The Second Circuit instructs that "unless the moving party can point to controlling decisions or data that the court overlooked—matters, in other words, that might reasonably be expected to alter the conclusion reached by the court," a motion for reconsideration should generally be denied. Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995); see also Van Buskirk v. United Grp. of Companies, Inc., 935 F.3d 49, 54 (2d Cir. 2019) ("[R]econsideration is an extraordinary request that is granted only in rare circumstances, such as where the court failed to consider evidence or binding authority.").

A motion for reconsideration is not an opportunity to "relitigat[e] old issues, present[] the case under new theories, secur[e] a rehashing on the merits, or otherwise tak[e] a second bite at the apple." Sequa Corp. v. GBJ Corp., 156 F.3d 136, 145 (2d Cir. 1998) (quotation marks omitted). Practically speaking, this means that a movant "cannot assert new arguments or claims which were not before the court on the original motion and consequently cannot be said to have been considered." Koehler v. Bank of Berm. Ltd., 2005 WL 1119371, at *1 (S.D.N.Y. May 10, 2005) (emphasis omitted). The arguments available on a motion for reconsideration are limited because "Rule 6.3 is intended to ensure the finality of decisions and to prevent the practice of a losing party examining a decision then plugging the gaps of a lost motion with additional matters." SEC v. Ashbury Capital Partners, L.P., 2001 WL 604044, at *1 (S.D.N.Y. May 31, 2001) (quotation marks omitted). As such, "Local Rule 6.3 is to be narrowly construed and strictly applied so as to avoid repetitive arguments on issues that have been considered fully by the Court." Dietrich v. Bauer, 198 F.R.D. 397, 399 (S.D.N.Y. 2001).

The decision to grant or deny the motion "is within the sound discretion of the trial court." McGraw-Hill Glob. Educ. Holdings, LLC v. Mathrani, 293 F. Supp. 3d 394, 397 (S.D.N.Y. 2018); accord Hosokawa v. Screen Actors Guild-Am., Fed'n of Television & Radio, Artists, 2017 WL 5508454, at *1 (S.D.N.Y. Mar. 20, 2017).

B. Sold Certificates

1. Which Conflict-of-Law Test this Court Should Apply

To begin, Commerzbank argues that this Court erred in determining that New York law governs the sold certificates. However, Commerzbank's motion for reconsideration merely parrots back arguments made in its initial briefing. (Compare Pls.'s Mem. of L. in Supp. of Reconsideration, ECF No. 400 ("Commerzbank Reconsideration MOL"), at 2-4, with Pls.'sMem. of L. in Opp'n to Summ. J., ECF No. 322 ("Commerzbank SJ Opp'n"), at 5-6.) While this alone is sufficient grounds for this Court to deny the motion, see Sequa Corp., 156 F.3d at 145, Commerzbank also fails on the merits.

Commerzbank avers that this Court erred by applying the tort conflict analysis, rather than the contract conflict analysis. But Commerzbank's own reconsideration briefing notes that the test this Court utilized, "the Second Restatement's 'most significant relationship' test[,] applies to both [tort and contract] claims." (Commerzbank Reconsideration MOL, at 3 (citing Estate of Sample v. Xenos Christian Fellowship, Inc., 139 N.E.3d 978, 984 (Ohio Ct. App. 2019).)

Undeterred, Commerzbank asserts that this Court should have afforded a different weight to these factors. But this Court followed clear precedent from the Ohio Supreme Court on how to apply the "most significant relationship" factors. See Commerzbank, 457 F. Supp. 3d at 242 ("'Generally, Ohio follows the rule that where a conflict of law issue arises in a case involving a contract, the law of the state where the contract is to be performed governs.'" (quoting Gries Sports Enter., Inc. v. Modell, 473 N.E.2d 807, 810 (1984) (emphasis added)). Following the Ohio Supreme Court's guidance, this Court ruled the sale of the certificates was performed in New York, at the Depository Trust Company ("DTC"). Commerzbank offers no reason why this Court should deviate from this controlling law.

2. Applying Ohio's Conflict-of-Law Test

Commerzbank next argues that even if this Court utilized the correct test, this Court misapplied it to find that New York law, rather than English law, controlled. In support of this proposition, Commerzbank launches a barrage of stale arguments this Court already addressed in its summary judgment decision. (Compare, e.g., Commerzbank Reconsideration MOL, at 4-8, with Commerzbank SJ Opp'n, at 4-5.)

First, Commerzbank challenges this Court's citation to a Delaware Chancery Court opinion because the Chancery Court considered other factors in addition to clearing through DTC. (See Commerzbank Reconsideration MOL, at 6.) But this ignores three critical facts. First, this Court explicitly noted that the Chancery Court looked to additional factors. See Commerzbank, 457 F. Supp. 3d at 243 (S.D.N.Y. 2020) ("finding that New York had the most significant relationship in part because 'the physical location of the Certificates at the Depository Trust Company [was] located in New York'" (quoting Bear Stearns Mortg. Funding Tr. 2006-SL1 v. EMC Mortg. LLC, 2015 WL 139731, at *10 (Del. Ch. Jan. 12, 2015) (emphasis added))). Second, the Chancery Court's opinion was well-reasoned even though it was not officially published. Finally, this Court's citation to Bear Stearns Mortgage Funding merely buttressed the other sounds reasons supporting its ruling. See Commerzbank, 457 F. Supp. 3d at 242-43.

Next, Commerzbank cites a litany of cases to argue that settlement through DTC should not guide this Court's analysis. (See Commerzbank Reconsideration MOL, at 5.) But none of these cases apply Ohio law. See Pac. Life Ins. Co. v. Bank of N.Y. Mellon, 2018 WL 1382105, at *16 (S.D.N.Y. Mar. 16, 2018) (applying California's "center of gravity" test); Sealink Funding Ltd. v. UBS AG, 997 N.Y.S.2d 101 (Sup. Ct. N.Y. Cty. 2014) (parties agreeing English law applies); Sealink Funding Ltd. v. Morgan Stanley, 2014 WL 1511156, at *3-*7 (Sup. Ct. N.Y. Cty. Apr. 17, 2014) (parties agreeing English law applies). Nor is Commerzbank's reliance on In re Petrobras Securities Litigation persuasive. 152 F. Supp. 3d 186 (S.D.N.Y. 2016). There, the court was not using Ohio's choice-of-law test to determine what law applies to the transfer of RMBS certificates. Instead, the court addressed whether plaintiffs purchased notes in a domestic transaction, as required to bring a suit in the UnitedStates under Morrison v. National Australia Bank Ltd., 561 U.S. 247 (2010) and its progeny. In re Petrobras, 152 F. Supp. 3d at 193.

Commerzbank also reiterates that it is not a DTC participant. But this ignores the fact that Commerzbank trades through a wholly-owned subsidiary, which is a DTC participant. (See U.S. Bank's Reply and Resp. to Commerzbank's Counter-Statement of Undisputed Facts Pursuant to Local Rule 56.1, ECF No. 347, ¶¶ 65.3-65.6.)

Additionally, Commerzbank challenges this Court's finding that Commerzbank did not sell certificates out of its London branch. But this argument misses the mark. This Court merely noted that, a bank's branch is not a separate legal entity from the bank. See Commerzbank, 457 F. Supp. 3d at 242-43. The fact that the cited cases deal with tort law do not change that analysis. Moreover, such a finding was not necessary to support this Court's holding. Even if Commerzbank's London branch was a separate legal entity, it would not change the fact that the certificates were sold through the DTC in New York.

Finally, this Court is not persuaded by...