American International Group, Inc. v. Bank of America Corp.
712 F.3d 775
2d Cir.2013Background
- AIG and subsidiaries sued BOA entities and Countrywide in NY state court for fraud in RMBS underwriting/sponsorship and aggregate losses around $28 billion.
- Defendants removed the action to federal court under 28 U.S.C. § 1441(a) citing 12 U.S.C. § 632 (Edge Act) jurisdiction.
- The district court denied remand and certified the question as interlocutory under § 1292(b).
- The court held that § 632 grants federal jurisdiction for offshore banking transactions involving Edge Act banks, but the district court’s ruling is contested.
- The issue on appeal is whether the Edge Act § 632 applies to remove this NY state case to federal court; the panel holds it does not.
- The appellate court vacates the district court’s remand denial and remands for further proceedings consistent with its interpretation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 632 applies to permit removal | Plaintiffs contend § 632 covers suits arising from offshore banking transactions by the US-chartered corporation or its agencies. | Defendants argue the statute applies only if the corporation itself conducted the offshore transaction, not via agency. | No removal under § 632; remand required. |
| How to read the modifier 'either directly or through the agency, ownership, or control of branches' | Modifier applies to all three preceding categories of transactions. | Modifier applies only to the immediately preceding item unless punctuation dictates otherwise. | Modifier applies to the entire list; § 632 requires the US-chartered corporation as party and an offshore transaction by that corporation. |
Key Cases Cited
- In re Lehman Bros. Mortg.-Backed Sec. Litig., 650 F.3d 167 (2d Cir. 2011) (context on RMBS structure and securities)
- A.I. Trade Fin., Inc. v. Petra Int’l Banking Corp., 62 F.3d 1454 (D.C. Cir. 1995) (statutory interpretation of Edge Act provisions)
- Barnhart v. Thomas, 540 U.S. 20 (2003) (statutory modifiers and last antecedent rule (quoted and applied))
- Sompo Japan Ins. Co. of Am. v. Union Pac. R. Co., 456 F.3d 54 (2d Cir. 2006) (parity of parallel provisions in statutory reading)
- U.S. v. Wilson, 503 U.S. 329 (1992) (canon against absurd results in statutory interpretation)
- Kahn Lucas Lancaster, Inc. v. Lark Int'l Ltd., 186 F.3d 210 (2d Cir. 1999) (interpretation of modifiers in series when comma used)