The Clerk of the Court is directed to amend the off icial ca ption in thi s caseto conform * to the listi ngof the pa

rties above
. 0 9 -1 6 2 8 -cv The Ba nk of N ew Y ork v . Firs t Mi llennium , Inc. UN I TED STATES CO UR T OF A PP EALS F ORTH E S EC ON D C IR C U IT
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T HE B AN KOF N EW Y ORK, i n i t s capa ci t yas I ndentur e Trus t ee f o r th e N e x tC a rd C re d it C a rd M a ste r N o te T ru st, I nt er pl eaderP l ai nt i

f f

- C ount erC l ai m antD ef endant

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A DV AN TAG E I NC OME F UN D , Int erpl ead er D ef

end an t s-App el l ees, and F E D E RA L D EP OS I T I NS URAN C E C ORPO RATI ON , i n it s capacityas

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o r N e x tB a n k , N .A ., I nt er pl eaderD ef

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- C ount erC l ai m ant -Appel l ant *

B e f o re:A tt he t i m e of or al ar gum ent , J udge C hi n w as U ni t ed St at es D i s t r i ctJ udge fort he * Sou the rn Di s t r i c tof

N e w Y ork, s i t t i ng byde s i gn a t i on . The H on or a bl e Ros e maryS. P o o ler , o rig in a llya m e m b e r o f th is p a n e l, did n o t p a rticip a te in th e c o n sid e ra tio n o f th is appea l
. T he tw o r emai ni ng m ember s of the pane l , w ho ar e i n agr eement , have de t erm i ned th e m a tte r. See 2 8 U .S .C . § 4 6 (d ); 2 d C ir. I. O .P . E ; U ni t ed Stat es v. D es i m one , 140 F. 3d 4 5 7 (2d C ir
. 1 9 9 8 ). 2 L YN C H and C H IN , C i r cui tJudges
. *

__________________ 1 I nt erpl eade rdefe ndant–count ercl ai m ant–appel l ant , the Feder al D epos i tI ns ur ance 2 C orpor at i on, appea l s fr om or der s of t he U ni t ed S t at es D i s t r i ctC our tfort he Sout hern D i s tr i ct 3 o f N e w Y o rk (H a ig h t, J. ) ( 1) deny i ng a mot i on t o t r ans fert he ac t i on t o t he U ni t ed St at es 4 Di s tr i c tCou r tf

o rt h e Di s t r i c to f

Col u mbi a ( e n t e r e d o n M a y1 0 , 2 0 0 7 ) , ( 2 ) e n j o i n i ng 5 i nt erpl eade rpl aintiff–count ercl ai m antdefe ndant–appel l ee, T he B ank of N ew Y or k, fr om 6 m a k in g d istrib u tio n s o f th e in terp lea d e r f

u n d s (e n ter e d o n Ju ly 5 , 2 0 0 7 ), (3 ) d ism iss in g its 7 count er cl ai m s agai ns ti nt erp l eade rpl ai nt i ff–c ount ercl ai m antdefe ndant–appel l ee, T he B ank 8 o f N ew Y o rk (e n tered o n M arc h 3 1 , 2 0 0 8 ), an d (4) d en y ing it s m o ti o n fo r sum m ary 9 j ud gm ent and g rant i ng sum m aryj u d g m ent t o Int erpl eader D efen dan t s–A pp el l ees, F i rs t 1 0 M i l l enni um , I nc. , M i l l enni um Par t ner s , L
. P. , and R M K A dvant age I ncome Fund (e nt er ed on 1 1 F e b ru a ry 2 4 , 2 0 0 9 ). 12 A F F I R MED . 13 14 15 S C OTT H. C HR I ST ENS EN , H ughes H ubbar d & R eed LL P, W as hi ngt on,3 1 D
. C
. ( G eor ge A
. D avi ds on, H ughes H ubbar d & R eed LL P, N ew Y or k, 2 N Y an d C o ll ee n J. B o les, L aw ren ce H
. R ichm o n d , an d Jac lyn C
. T an er, 3 F e d e ra l D e p o s it I n su ran ce C o rp o ra tio n , A rl in g to n , V A , on the br i ef ) f or 4 In te r p le a d e r D e

fe n da n t- C o u n te rC la im a n t-Ap p e lla n t, F e d e ra l D e p o sit 5 I n s u r a n c e Co rp o r a t i o n , i n i t s c a p a c i t y a s Re c e i v e r f o rNe x t Ba n k , N. A. 6 7 M IC H A E L E. J OH NS ON (J u d ith A . A m o ro s a , on the br i ef ), A lst o n & B ir d 8 L L P , N e w Y o r k , N Y , f orI nt er pl eaderP l ai nt i

f f

- C ount erC l ai m ant 9 D ef endant

-Appel l ee , T he B ank of N ew Y or k, i n i t s capa ci t yas T rus t ee 1 0 f o r th e N e x tC a rd C re d it C a rd M a ste r N o te T ru st. 11 12 M IC H A E L J. E DEL MAN (M ic h a e l G . D a v ie s , on the br i ef ) , V edderPr i ce 1 3 P .C ., N e w Y o rk , N Y , fo rI n t e r p le a d e rD e

fe n da n ts

–

Ap p e lle e s , F i rs t 1 4 M i l l e nn i um, I nc . a nd M i l l e nn i um Part ne r s , L. P. 15 16 R ON AL D S. H ERZ OG (M ic h a e l W e x e lb a u m , E v a n g e lo s M ic h a ilid is , on 17 the br i ef ), S n o w B e c k e r K ra u s s P .C ., N e w Y o rk , N Y , f orI nt er pl eader 18 D e fe n da n t– Ap p e lle e , R M K A dvant age I ncome Fund. 19 20 G ERARD E. L YNCH , C i r cui tJudge : 2 1 I n thi s i nt erpl eade ract i on, t he part i es as s ertcompet i ng cl ai m s t o t he dr egs of a 2 2 fai l ed s ecur i t i zat i on of cr edi tcar d debt
. A ppel l ant , the Feder al D epos i tI ns ur ance 2 3 C orpor at i on ( t he “FD I C ”) , as w el l as appel l ees , Fi r s tM i l l enni um , I nc. , M i l l enni um 2 4 P artne rs, L
. P
. (t o g ethe r, “M il lenn ium ”) a n d R M K A d v an tage Inc o m e F u n d (“R M K ”), 2 5 see k d istri b u ti o n o f th e f u n d s h eld b ythe in terplea d er p lai n ti ff , the B an k o f N ew Y o rk 2 6 ( “B N Y ”) , as t rus t ee f ort he N ext C ar d C r edi tC ar d M as t erN ot e Trus t( “the trus t ”)
. T he 2 7 F D IC a rg u e s th a t it is e n title d to th e f u n d s a s th e re c e iv e r f

o r N e x tB a n k , N .A ., 2 8 (“ N e x tB a n k ” ) a n o w -d e f u n c t in ter n e t-o n lyb a n k , w h ich e sta b lish e d th e tru st in o rd e r to4 1 g en era te m o n eyto len d to cre d itca rd h o lders. M il lenn ium an d R M K claim that theyare 2 e n tit led to th e f

u n d s a s o w n e rs o f

n o tes iss u e d b yth e tru st. 3 B N Y init iat ed this i n terplea d er a cti o n in N ew Y o rk state c o u rt . T h e F D IC 4 rem o v ed itto the U n it ed S tat es D istri ct C o u rtfo r th e S o u thern D istri ct of N ew Y o rk 5 (H a ig h t, J. )
. I n a s er i es of rul i ngs , the di s t r i ctcour tdeni ed the FD I C ’ s m ot i on t o t r ans fer 6 th e a c t i o n t o t h e Un i t e d S t a t e s Di s t r i c tCo u r tf o rth e Di s t r i c to f

Co l u mb i a , e n

j o i n e d BN Y 7 fro m m ak ing d istri b u ti o n s fro m the in terplea d er f u n d s, d ism issed the F D IC ’s 8 count er cl ai m s agai ns tB N Y , and, l as t l y , deni ed the FD I C ’ s m ot i on fors um m aryj udgm ent 9 and gr ant ed s um m aryj udgm entt o M i l l enni um and R M K
. T he di s t r i ctcour tthen or der ed 1 0 B N Y t o begi n di s t r i but i ng t he trus tcorpus , gi vi ng pr efe r ence t o s at i s fy i ng the cl ai m s of 1 1 M ille n n iu m a n d R M K
. T h e F D I C n o w a p p e a l s th e d e c i s i o n s o f th e d i s t r i c tc o u r t . We 1 2 a f

f i r m. 13 BA CKGROUND 14 I . T he Securi t i zat i on T rans act i on 1 5 In 1 9 9 9 , N e x tB a n k , an in ter n e t-o n lyb a n k , b e g a n to iss u e c o n su m e r c re d it ca rd s to 1 6 su b -prim e b o rrow ers w h o ap p li ed o v er the interne t. T h e b u sine ss g rew , an d b yF eb rua ry 1 7 2002, N ext B ank had 1. 2 m i l l i on car dhol der s . R atherthan borr ow m oneydi r ect l yt o l end 1 8 to co n su m ers, N ex tB an k en tered into a sec u ri ti za ti o n tr an sac ti o n to g en era te fu n d s. It 1 9 e sta b lish e d a tru st a t B N Y a n d so ld its c re d it ca rd re c e iv a b les – th e rig h ts to b e p a id 2 0 in ter e st a n d p rin c ip a l f o r p u rc h a se s o n th e c a rd s – to th e tru st, u sin g th e p ro c e e d s to5 1 f i n a n c e c a r d h o l d e r s ’ p u r c h a s e s . BN Y th e n i s s u e d n o t e s b a c k e d b yth e c a s h f l o ws 2 g e n e ra ted f

ro m th e re c e iv a b les to in v e sto rs. T h is tra n sa c tio n g e n e ra ted a p p ro x im a tely 3 $1. 7 bi l l i on and pr ovi ded fundi ng form os tof the cr edi tcar ds i s s ued byN ext B ank. 4 T he trusti ssued t w o seri es of n otes , the 2 00 0-1 S eri es and the 20 01 -1 Seri es, 5 w h ic h c a m e d u e , re s p e c tiv e ly, in D e c e m b e r 2 0 0 6 a n d A p ri l 2 0 0 7
. T h ese n o tes w ere 6 i s s ued i n fourcl as s es ( A , B , C and D ) , w hi ch pai d di ffe r entr at es of i nt er es tand ca r r i ed 7 di ffe r i ng l evel s of r i s k. T he cl as s A not es w er e the l eas tr i s ky , s i nce theycarr i ed the r i ght 8 t o fir strepaym ent fr om t he trustcorpus. A ccordi ng l y , the clas s A no t es pai d the l ow est 9 ra te o f

in ter e st. T h e c las s B n o tes b o th c a rrie d m o re risk – sin c e th e ir h o ld e rs h a d rig h ts 1 0 t o r epaym ents ubor di nat e t o t he cl as s A not ehol der s ’ – and pai d a s l i ght l yhi gherr at e of 1 1 in te re s t. T h e c la s s e s C a n d D n o te s w e re s u c c e s s iv e ly b o th ri s k ie r a n d h ig h e r p a y in g . 1 2 H ow ever , as pr ot ect i on fort he hol der s of thes e r i s ki erC and D not es , cert ai n m oneyfr om 1 3 thei ri ni t i al pur chas e of the not es w as s etas i de i n a “s pr ead a ccount ” t o be us ed t o fund 1 4 i nt er es tand pr i nci pal paym ent s on t he not es s houl d t he moneygener at ed bythe 1 5 r ece i vabl es pr ove i ns uffi ci ent . O verthe l i fe of the trus t , the amountof m oneyi n t he 1 6 s pr ead a ccountw as adj us t ed on a r egul arbas i s acc or di ng t o a form ul a. 1 7 T he s ecur i t i zat i on w as exec ut ed thr ough a s etof document s thati ncl uded a mas t er 1 8 in d e n tu re a n d v a ri o u s in d e n tu re s u p p le m e n ts . A s i s cus t om ary , s om e t erm s of the 1 9 n o teh o ld e rs’ in v e stm e n ts w e re a lso laid o u t o n th e n o tes th e m se lv e s. A d d iti o n a lly , all6 1 pot ent i al pur chas er s of the not es r ece i ved copi es of off er i ng m emora nda thatdes cr i bed 2 th e t e r ms o f

t h e n o t e s a n d t h e r i s k s a s s o c i a t e d wi t h i n v e s t i n g i n th e m. 3 U n d e r t h e tr a n s a c tio n d o c u m e n ts , th e tru s t o w n e d th e c re d it c a rd re c e iv a b le s . 4 C ar dhol der s ’ paym ent s of fe es and i nt er es t( or , as theyar e des cr i bed i n t he dea l 5 do cum ents , “fi nan ce cha rges”) w ere used t o m ake int eres tpay m ents on the n otes . M oney 6 notus ed t o m ake i nt er es tpaym ent s w as di vi ded i nt o t w o pot s , l abel ed “c ol l at er al ” and the 7 “tr ans fer ori nt er es t . ” The col l at er al w as i nt ended f orthe eve ntual r epaym entof the 8 pr i nci pal of the not es ( al t hough dur i ng an i ni t i al “r evol vi ng per i od” i tw as us ed t o fund 9 n ew loan s to c red itca rd h o lders.) T he tr ans fer ori nt er es t , on t he otherhand, w as i nt ended 1 0 to f

u n d re g u lar p a ym e n ts to N e x tB a n k a s th e c re a to r o f th e tru st. T h e tru st d o c u m e n ts 1 1 p rov ided that at th e term ination o f th e trust, an ym o n eyleft ov er a fter all th e trust’s 1 2 obl i gat i ons had bee n s at i s fi ed i n ful l w as t o be di s t r i but ed t o N ext B ank. 1 3 I n the eve ntt hatcar dhol der s defa ul t ed on thei rcar d paym ent s , the def aul t ed 1 4 a m o u n t w a s c h a rg e d o f f a g a in s t th e a s s e ts in th e tru s t la b e le d th e “ in v e s te d a m o u n t,” 1 5 w h ic h w a s d e f

in e d a s th e s u m o f

th e c o lla te ra l a n d th e s p re a d a c c o u n t. In e f f e c t, i f 1 6 car dhol der s fai l ed t o r epayt hei rl oans , the r educt i on w as acc ount ed fori n t he trus tby 1 7 re d u c in g th e f

u n d s la b e led c o llate ra l ra th e r th a n th o se lab e led tra n sf e ro r in ter e st. T h is 1 8 ac co u n ti n g p rov isi o n p rov ed sign ifi ca n t w h en large n u m b ers o f th e su b -prim e b o rrow ers 1 9 w i th w hom N ext B ank di d bus i nes s eventual l ydefa ul t ed.7 1 II . N e x tB a n k ’s R e c e iv e r sh ip 2 I n 2001, t he FD I C det erm i ned thatN ext B ank’ s under capi t al i zat i on and pr act i ce of 3 e x te n d in g c re d it to s u b p ri m e b o rr o w e rs h a d e n d a n g e re d its a b ility to c o n tin u e o p e ra tin g . 4 I n 2002, aft ert he C om pt r ol l erof the C urr encydi s cover ed thatN ext B ank’ s acc ount i ng 5 w a s im p ro p e r, i t a p p o in te d th e F D IC a s th e b a n k ’s re c e iv e r. A s rec eive r, the F D IC 6 s u c c e e d e d t o “ a l l [ Ne x t Ba n k ’ s ] r i g h t s , t i t l e s , p o we r s , a n d p r i v i l e g e s , ” 1 2 U. S
. C. 7 § 1 8 2 1 (d )(2 )(A )(I), w h ile c o n tin u in g to o p e ra te th e b a n k . T h e F D IC a llo w e d th e c re d it 8 c a r d a c c o u n t s t o r e m a i n o p e n w h i l e i ts o u g h ta b u ye rf o rN e x t B a n k ’ s a s s e t s . E v e n tu a l l y, 9 how ever , w hen no buy erm at er i al i zed, the FD I C cl os ed the cr edi tcar d acc ount s . T he 1 0 car dhol der s w er e then unabl e t o m ake ne w char ges on t hei rcar ds , butr emai ned 1 1 re s p o n s ib le f

o r p a y in g o f

f th e irb a la n c e s . 1 2 F u n d s fro m the trust w ere d istri b u ted to the c lasses A an d B n o teho lders, w h o w ere 1 3 ful l yr epai d t he pr i nci pal and i nt er es tdue on thei rnot es . C l as s C not ehol der s r ece i ved 1 4 p arti al rep ay m en t of the p ri n cipa l and interest ow ed to the m . C lass D n o teho lders 1 5 r ece i ved s om e i nt er es tpaym ent s , butthei ri nves t m entpr i nci pal w as notr epai d. T he 1 6 FD I C cont i nued t o r ece i ve paym ent s of tr ans fer ori nt er es tfr om the trus tunt i l s uch 1 7 p a ym e n ts w e re s to p p e d in c o n n e c tio n w ith th is in te rp le a d e r a c tio n . 1 8 A s t hi ngs s t and now , car dhol der s have de faul t ed on thei rl oans i n l ar ge number 1 9 a n d c h a rg e -o f

f s h a v e re d u c e d th e c o llate ra l in th e tru st to z e ro . F u rth e rm o re , the f u n d s in 2 0 the s pr ead a ccounthave now been di s t r i but ed t o t he cl as s C not ehol der s , byan or derof8 1 the di s tr i ctcour tnotchal l enged i n thi s appea l , w i t h t he r es ul tthatthe ent i r e trus tcorpus 2 c o n sis ts o f

f u n d s la b e led “ tra n sf

e ro r in ter e st.” T h e p re se n t d isp u te c o n c e rn s w h o is 3 ent i t l ed t o t hes e funds as betw een the r emai ni ng unpai d not ehol der s and the FD I C , w hi ch 4 as r ece i verfort he trus t ’ s cr eat orN ext B ank pos s es s es both r i ght s t o r egul arpaym ent s of 5 tr ans fer ori nt er es tand a r es i duaryi nt er es ti n anyas s et s of the trus tthatr emai n aft eral l t he 6 trus t ’ s otherobl i gat i ons have be en s at i s fi ed. 7 I I I . T he D i s t ri ct of C ol um bi a L i t i gat i on 8 I n J une 2003, B N Y fi l ed s ui tagai ns tthe F D IC in the U n it ed S tat es D istri ct C o u rt 9 fort he D i s t r i ctof C ol um bi a on beha l f of the C and D not ehol der s , br i ngi ng s i x cl ai m s for 1 0 c o n v e rs io n . O n e o f B N Y ’s c la im s w a s d is m is s e d b yth e c o u rt e a rl yin th e litig a tio n , s ee 11 Ba n k

o f Ne w Yo rk

v . FDIC, 4 5 3 F
. S u p p . 2 d 8 2 , 9 1 (D
. D
. C
. 2 0 0 6 ) (“ N ext B ank I ” ), a ff’d , 1 2 508 F. 3d 1 ( D
. C
. C i r . 2007) , and fourot hercl ai m s w er e di s m i s s ed pur s uantt o a 1 3 s e ttle m e n t a g re e m e n t th a t p ro v id e d f o r t h e d is tr ib u tio n o f

s o m e tru s t a s s e ts to th e F D IC
. 1 4 T he D
. C
. di s t r i ctcourtgr ant ed s um m aryj udgm entt o t he FD I C on B N Y ’ s fi nal 1 5 claim , that the F D IC h ad u n law fu ll yco n v erted fu n d s to w h ich th e n o teho lders w ere 1 6 ent i t l ed byr efus i ng t o honort he s o- cal l ed ip so fa c to cl aus e of the mast eri ndentur e. T hat 1 7 t erm pr ovi ded foracc el er at ed r epaym entof pr i nci pal t o t he not ehol der s i n t he eve ntt hat 1 8 N ext B ank w as pl ace d i n r ece i ver s hi p. T he FD I C cont ended – a nd the courtagr eed – that 1 9 i twa s e n t i t l e d t o d i s r e g a r d t h i s p r o v i s i o n u n d e rth e F i n a n c i a l I n s t i tu t i o n s Re f o r m, 2 0 R e c o v e ry , an d E n f o rc e m e n t A c t (“ F IR R E A ” ). 1 2 U .S .C . § 1 8 2 1 (e )(1 2 )(A ) (2 0 0 4 ); s ee9 1 N ext B ank I at101. 2 S h o rtlyth e re a f ter , d e sp ite th e D istric t o f C o lu m b ia d istric t co u rt’s d e c isio n , ce rta in 3 not ehol der s demanded t hatB N Y di s t r i but e the trus tas s et s t o t hem, ci t i ng, among ot her 4 gr ounds , the i

ps o f act o c la u s e o f

th e m a s te r i n d e n tu re . I n r e s p o n s e t o th i s c l a i m, BN Y 5 cea s ed maki ng r egul ardi s t r i but i ons of the tr ans fer ori nt er es tt o t he FD I C and i ni t i at ed the 6 curr enti nt erpl eade ract i on i n N ew Y or k s t at e court . T he FD I C r emoved t he i nt erpl eade r 7 act i on t o the U nit ed S t at es D i stri ctC ou rtfor the S ou t hern D i stri ctof N ew Y ork. Ital so 8 as s er t ed a numberof count er cl ai m s agai ns tB N Y , char gi ng thatB N Y w as l i abl e for 9 vi ol at i ng the tr ans act i on document s , the court ’ s or deri n N ext B ank I, and the s ett l ement 1 0 a g re e m e n t in th a t liti g a tio n , a n d f o r a b u s e o f

th e ju d ic ia l p ro c e s s . 1 1 T he FD I C t hen fi l ed a ne w s ui ti n t he D
. C
. di s t r i ctcour t , s eeki ng, among ot her 1 2 r emedi es , t hatt he courtenj oi n t he i nt erpl eade ract i on fr om pr ocee di ng. T he FD I C ar gued 1 3 thatthe i ni t i at i on of the S. D
. N
. Y
. i nt erpl eade rvi ol at ed the or der s of the courti n 14 N

ext B ank I, a s we l l a s t h e s e t t l e me n ta g r e e me n t s e x e c u t e d i n th a ta c t i o n , a n d th a tBN Y 1 5 h a d c o n v e rt e d its f u n d s b yc e a s in g d is tr ib u tio n s o f tr a n s f e ro r i n te re s t. See FD ICv. B ank 16 of N

ew Y ork , 4 7 9 F
. S u p p . 2 d 1 (D
. D
. C
. 2 0 0 7 ) (“ N ex tB a n k II” )
. T he D
. C
. cour trul ed 1 7 that , t o the degr ee thatt he not ehol der s pur s ued r emedi es on t he bas i s of the ip so fa c to 1 8 pr ovi s i on of the trus t ’ s m as t eri ndentur e, thei ract i on w as col l at er al l yes t opped by 19 N

ext B ank I, s in c e th a t d e c is io n h a d h e ld th a t th e c la u s e w a s v o id a n d u n e n f o rc e a b le
. I

d. 2 0 at18. T he D
. C
. di s t r i ctcourtt her efor e enj oi ned B N Y and the not ehol der s fr om10 1 r el i t i gat i ng t he i s s ue of the ip so fa c to cl aus e i n t he i nt erpl eade ract i on. I tal s o or der ed 2 B N Y t o cont i nue t o m ake di s t r i but i ons of tr ans fer ori nt er es tt o t he FD I C i n acc or dance 3 w i th the schedu l e i n the trustdo cum ents , as w el l as t o m ake b ack p aym ents for tho se 4 d istri b u ti o n s tha t had b ee n m issed sinc e B N Y h ad su sp en d ed the p ay m en ts. T h e c o u rt 5 not ed, how ever , t hat“the N ot ehol der s appea rt o have r ai s ed an a ddi t i onal cl ai m . . . bas ed 6 on t he matur i t ydat e of the .
. . not es [, ] w hi ch theyappar ent l ycl ai m i s notdepende nton 7 the enf

or cea bi l i t yof [the ip so fa c to c lau se ]. . . . T o th e e x ten t th a t th is a ltern a tiv e c laim 8 has been r ai s ed i n t he i nt erpl eade r , i tm aypr es entnew i s s ues and thi s C our tm aynot 9 enj oi n futur e l i t i gat i on r egar di ng t hi s cl ai m . ” Id
. at20. 10 I V . T he Souther n D i s t ri ct of N ew Y ork L i t i gat i on 1 1 A ft ert he D
. C
. di s t r i ctcourti s s ued i t s deci s i on i n N ex tB a n k II, the d istric t co u rt in 1 2 the Southern D i s t r i ctof N ew Y or k l i ft ed the s t ayon t he i nt erpl eade ract i on, w hi ch i thad 1 3 gr ant ed w hi l e thatdeci s i on w as pendi ng, and i s s ued an or dercl ar i fy i ng thatB N Y w as not 1 4 p rec lud ed fro m co m p ly ing w ith the o rde rs of the D
. C
. d istri ct co u rt i n N ex tB a n k II
. It 1 5 then proceed ed to deal w i t h v ari ou s m oti on s m ade b ythe p art i es. 1 6 T he courtfi r s trul ed on the FD I C ’ s m ot i on t o t r ans fervenue f orthe i nt erpl eade r 1 7 act i on t o the D i s t r i ctof C ol um bi a. T he FD I C pr es ent ed tw o s epar at e ar gum ent s that 1 8 venue w as pr operi n D
. C
. r athert han i n t he Southern D i s t r i ctof N ew Y or k: fi r s t , that 1 9 F I RRE A c o n f

e rr e d e x c l u s i v e j u r i s d i c t i o n o n th e DC d i s t r i c tf o rc l a i ms a g a i n s tth e F DI C, 2 0 ci t i ng 12 U
. S. C
. § 1821( d) ( 6) ( A ) , and s econd, thatthe ac t i on s houl d be tr ans ferr ed i n the11 1 i nt er es tof j us t i ce be caus e i tw as cl os el yr el at ed t o t he pr evi ous l i t i gat i on i n D
. C
. T he 2 di s tr i ctcourtr ej ect ed both ar gum ent s . T he courtrul ed thatFI R R E A di d notgovern the 3 i nterpleader act i on , becau se i tapp l i ed o nlyt o clai m s ag ainst the FD I C , and the 4 i n t e rp l e a d e rp r o p e r l yr e p r e s e n t e d a c l a i m by th e F D IC to th e tru s t c o rp u s . See B ank of 5 N ew Y ork v. F i rs tMi l l enni um , I nc. , N o. 06 C i v. 13388 ( C SH ) , 2007 W L 1404433 6 ( S. D
. N
. Y
. M ay9, 2007)
. T he courtal s o rul ed thatvenue s houl d notbe tr ans ferr ed i n t he 7 i nt er es tof j us t i ce, concl udi ng t hat , s i nce the i s s ues i nvol ved i n t he i nt erpl eade ract i on 8 w er e di s t i nctfr om t he pr evi ous l y - adj udi cat ed i s s ues i nvol vi ng the ip so fa c to cl aus e, 9 fa irn ess a n d co n v en ienc e f ac tors d id n o t sup p o rtthe tran sfe r. F u rth erm o re, th e c o u rt 1 0 det erm i ned thatt he D
. C di s t r i ctcour tl acke d per s onal j ur i s di ct i on overM i l l enni um and 1 1 R M K , si nce those enti t i es di d n ot do bu si ness i n the D i stri ctof C olum bia, and – b ecause 1 2 the N ew Y or k and D
. C
. act i ons pr es ent ed di s t i ncti s s ues – coul d notr eas onabl yhave 1 3 a n t i c i p a t e d b e i n g h a l e d i n t o c o u r tt h e r e s i mp l yb yr e a s o n o f th e i rp a r t i c i p a t i o n i n th e D. C. 1 4 act i on. A ccor di ngl y , t he courtdeni ed the FD I C ’ s m ot i on t o t r ans fer
. T he courtthen 1 5 i s s ued an or derpr ecl udi ng B N Y fr om m aki ng fur t herdi s t r i but i ons fr om the trus tcorpus 1 6 w ith o u t a f

u rth e r o rd e r f

ro m th e c o u rt. 1 7 In its n e x t o p in io n , the c o u rt a d d re ss e d th e n o teh o ld e rs’ m o tio n f o r im m e d iate 1 8 di s tr i but i on of the funds i n t he s pr ead a ccount . A l t hough the FD I C di d notoppos e the 1 9 di s tr i but i on, i tcont ended thati n or dert o r ece i ve the funds , the not ehol der s w er e obl i gat ed 2 0 to s u rr e n d e r t h e irn o te s a n d to d is c la im a n ya d d itio n a l r e c o v e ry f ro m th e in te rp le a d e r.12 1 T he courtcons t rued the dea l document s nott o r equi r e thatcl ai m ant s s urr enderthei rnot es 2 i n or dert o acc es s t he funds i n t he s pr ead a ccount , and or der ed the i m m edi at e di s t r i but i on 3 o f th e s p re a d a c c o u n t f

u n d s w ith o u t im p o s in g th e c o n d itio n . See B ank of N ew Y ork v. 4 F i rs tMi l l enni um , I nc . , 5 4 4 F
. S u p p . 2 d 2 5 3 (S
. D
. N
. Y
. 2 0 0 8 ). 5 S h o rt lythere af ter, the c o u rtissue d an o p inion d ism issi n g the F D IC ’s 6 c o u n te rc la im s . See B ank of N ew Y ork v. F i rs tMi l l enni um , I nc . , N o. 06 C i v. 13388 7 ( C SH ) , 2008 W L 953619 ( S. D
. N
. Y
. A pr . 8, 2008)
. T he di s t r i ctcour tfound thats i nce 8 BNY f

a c e d c o mp e t i n g c l a i ms t o t h e tru s ta s s e t s f r o m th e n o t e h o l d e r s a n d f r o m th e F DI C, 9 i tact ed pr oper l yi n comm enci ng t he i nt erpl eade ract i on. I tcoul d notther efor e be f ound 1 0 lia b le f

o r a b u s in g th e ju d ic ia l p ro c e s s s im p ly b yv ir tu e o f in itia tin g th e in te rp le a d e r. 1 1 S i n c e th i s wa s t h e s o l e b a s i s f o rt h e F DI C’ s a b u s e o f

th e j u d i c i a l p r o c e s s c o u n t e r c l a i m, 1 2 the di s tr i ctcour tdi s m i s s ed thatcl ai m . A ddi t i onal l y , the courtconcl uded thatal l of the 1 3 FD I C ’ s othercl ai m s w er e ul t i m at el ybas ed on the comm ence m entand mai nt enanc e of the 1 4 i n t e rp l e a d e ra c t i o n , a n d t h e r e f o r e s i mi l a r l yf

a i l e d a s a ma t t e ro f

l a w. 1 5 F in a lly , the c o u rt issu e d a n o p in io n re so lv in g th e rig h ts to th e re m a in in g a ss e ts in 1 6 the trus tbydi s pos i ng of cr os s - m ot i ons fors um m aryj udgm entfi l ed bythe FD I C and by 1 7 M ille n n iu m a n d R M K
. See B ank of N ew Y ork v. F i rs tMi l l enni um , I nc . , 598 F. Supp. 2d 1 8 550 ( S. D
. N
. Y
. 2009)
. T he not ehol der s ar gued thattheyw er e ent i t l ed t o t he r emai ni ng 1 9 trus tas s et s , s i nce thei rnot es had r eac hed fi nal m atur i t yand w er e now due and pa y abl e, 2 0 and s i nce the unpai d pr i nci pal on t he not es w as gr eat erthan the r emai ni ng as s et s i n t he13 1 tru st. T h e F D IC , o n th e o th e r h a n d , m a d e tw o se p a ra te a rg u m e n ts th a t itw a s e n tit led to 2 the r emai ni ng t rus tas s et s . Fi r s t , i tar gued that , acc or di ng t o t he dea l document s , the 3 char ge- offs agai ns tt he col l at er al m ade w hen ca r dhol der s had s t opped r epay i ng thei rl oans 4 h a d re d u c e d to z e ro n o t o n lyth e c o llate ra l in th e tru st, b u t als o th e a m o u n t o f u n p a id 5 p rin c ip a l d u e to th e n o teh o ld e rs. A c c o rd in g ly , itc o n ten d e d , the n o teh o ld e rs h a d n o v a lid 6 cl ai m t o anyof the trus tas s et s . Second, i tar gued thatthe i s s uer ’ s obl i gat i on t o pay 7 pr i nci pal and i nt er es ton t he not es w as l i m i t ed byr ecour s e onl yt o t he col l at er al and the 8 s pr ead a ccount . A ccor di ngl y , i tar gued, s i nce the funds i n t he s pr ead a ccounthad bee n 9 d isb u rse d a n d th e c o llate ra l h a d b e e n re d u c e d to z e ro , the tru st h a d n o o b lig a tio n to 1 0 dis tri bu t e anyasset s t o the noteholder s. 1 1 T h e d istri ct co u rtinterpre ted th e d ea l do cu m en ts as a c o n tr ac t un d er N ew Y o rk 1 2 l aw . Fi r s t , on t he bas i s of w hati tdet erm i ned t o be the unambi guous l anguage of the 1 3 contr act , i tr ej ect ed the FD I C ’ s cl ai m thatchar ge- offs r educe d t he pr i nci pal amount 1 4 repay able t o the noteholder s upo n the m aturi t yof thei r not es. S ec o n d , the c o u rt 1 5 concl uded thatt he dea l document s w er e i ncons i s t entas t o w hetherthe not es w er e ful l or 1 6 li m it ed rec o u rse o b li g ati o n s. O n the o n e h an d , a p rov isi o n o f th e m aster ind en ture 1 7 ind icated that the n o tes w ere li m it ed rec o u rse, an d there fo re tha t th eir ho lders w ere 1 8 ent i t l ed t o r epaym entonl yfr om t rus tas s et s cons i der ed col l at er al
. O n t he otherhand, 1 9 anotherpr ovi s i on of the mast eri ndentur e pr ovi ded that“notw i t hs t andi ng anyot her 2 0 p ro v isio n ,” th e tru st’s o b lig a tio n to p a yin ter e st a n d p rin c ip a l o n th e n o tes w a s “ a b so lu te14 1 and uncondi t i onal
. ” The cour tdet erm i ned thatthi s “notw i ths t andi ng cl aus e, ” w hi ch w as 2 si m i l ar t o langua ge o n the C cl ass not es them sel ves, trum ped the li m i t ed recou rs e 3 p ro v isio n o f

th e in d e n tu re . A c c o rd in g ly , the c o u rt g ra n ted su m m a ryju d g m e n t to 4 M ille n n iu m a n d R M K
. 5 T he courtent er ed fi nal j udgm entr efl ect i ng i t s ear l i errul i ngs . T hi s appea l 6 fol l ow ed. 7 DI S CU S S I ON 8 I n thi s appea l , t he FD I C ar gues pr i m ar i l ythatthe di s t r i ctcour tm i s cons t rued the 9 not ehol der s ’ r i ght s undert he tr ans act i on document s , and ther efor e err ed i n gr ant i ng 1 0 s um m aryj udgm entt o M i l l enni um and R M K
. T he age ncycl ai m s both t hatbythe t i m e of 1 1 the in terplea d er, no am o u n t w as d u e a n d p ay ab le on the n o tes, an d also that ev en if th ere 1 2 w er e an a m ountdue on the not es , t he not ehol der s m aynotcol l ecti tfr om the trust’s 1 3 r emai ni ng as s et s , w hi ch ar e l abel ed “tr ans fer ori nt er es t ” i n t he dea l document s , s i nce the 1 4 not es w er e l i m i t ed i n r ecour s e onl yt o t rus tas s et s l abel ed “c ol l at er al ” ori n t he “s pr ead 1 5 a c c o u n t.” T h e F D IC a rg u e s th a t sin c e o n lyf u n d s la b e led “ tra n sf

e ro r in ter e st” a re lef

t in 1 6 the trust , i tshou l d b e able t o term i nate the trustand app ropri at e i t s r em ai ning asset s. 1 7 T h e F D IC a lso a ss e rts th a t th e d istric t co u rt e rre d in th re e o th e r re sp e c ts. F irst, it 1 8 ar gues t hatbefor e B N Y i ni t i at ed the i nt erpl eade ract i on, the D
. C
. l i t i gat i on had al r eady 1 9 c o n c lu s iv e ly d e te rm in e d th a t o n ly th e F D IC h a d a v a lid c la im o n th e tru s t a s s e ts . 2 0 A ccor di ngl y , i tcont ends , al l of the not ehol der s ’ cl ai m s w er e barr ed bycl ai m and i s s ue15 1 pr ecl us i on and the di s t r i ctcourts houl d have di s m i s s ed the ac t i on. Second, the age ncy 2 a rg u e s th a t th e d istric t co u rt e rre d in d e n y in g th e F D IC ’s m o tio n to tra n sf e r th e a c tio n to 3 th e Di s tr i c to f

Co l u mb i a , a n d t h a t , s i n c e th i s d e c i s i o n wa s d e t e r mi n a t i v e o f th e o u t c o me 4 o f th e law su it , rev ersa l of the d istri ct co u rt ’s fina l ord er is w arran ted. T h ir d , the F D IC 5 a p p e a ls th e d is m is s a l o f its c o u n te rc la im s a g a in s t B N Y
. 6 I . T he Sum m ary Ju dgm ent D eci s i on 7 T he FD I C ’ s pr i m aryar gum enton appea l i s thatthe di s t r i ctcour terr ed i n gr ant i ng 8 s um m aryj udgm entt o M i l l enni um and R M K beca us e i tm i s cons t rued the natur e of the 9 deal betw een the not ehol der s and the trus t . T he FD I C ar gues that , acc or di ng t o t he dea l 1 0 document s , t he amountdue on the not es w as r educe d t o zer o bychar ge- offs w hen 1 1 car dhol der s defa ul t ed on thei rpaym ent s . T he FD I C addi t i onal l yar gues thatthe not es 1 2 w er e def

i ned i n t he mast eri ndentur e as l i m i t ed r ecour s e obl i gat i ons – m eani ng thateven 1 3 i f pr i nci pal w er e pay abl e on the not es , the not ehol der s w oul d be ent i t l ed t o r epaym ent 1 4 o n lyfro m the trust fu n d s set asid e a s co ll ateral. S ince there is no co ll ateral l ef t, the F D IC 1 5 assert s, t he ag encyi s ent i t l ed to t erm i nate the trustand cl ai m i t s r em ai ning asset s. 1 6 W e re v iew a g ra n t o f su m m a ryju d g m e n t de novo
. McBri de v. B ICC ons um er 17 P r ods
. M

f g. C o. , 5 8 3 F .3 d 9 2 , 9 6 (2 d C ir. 2 0 0 9 ). S u m m a ryju d g m e n t is a p p ro p ria te o n ly 1 8 w h e re “ th e p lea d in g s, th e d isc o v e rya n d d isc lo su re m a ter ials o n f ile, a n d a n ya f

f id a v its 1 9 s how thatt her e i s no genui ne i s s ue as t o anym at er i al fac tand thatthe movanti s ent i t l ed 2 0 to ju d g m e n t a s a m a tte r o f la w .” F e d . R . C iv . P . 5 6 (c )( 2 ).16 1 T he part i es agr ee thatt he tr ans act i on document s cons t i tut e a c ontr actgoverned by 2 N ew Y or k l aw . U nderN ew Y or k l aw , the keyi nqui r yatthe i ni t i al s t age of i nt erpr et i ng a 3 c o n tr a c t is w h e th e r i t is a m b ig u o u s w ith re s p e c t to th e is s u e d is p u te d b yth e p a rt ie s . Law 4 D ebentur e Tr us tC o. of N
. Y
. v. M aver i ck Tube Corp. , 5 9 5 F .3 d 4 5 8 , 4 6 5 (2 d C ir . 2 0 1 0 ). 5 “A n ambi gui t yexi s t s w her e the .
. . contr actcoul d s ugges tm or e than one meani ng w hen 6 vi ew ed obj ect i vel ybya r eas onabl yi nt el l i gentper s on w ho has exami ned the cont extof 7 the ent i r e i nt egr at ed agr eementand w ho i s cogni zantof the cus t om s , pr act i ces , us ages 8 and t erm i nol ogyas gener al l yunder s t ood i n t he part i cul artr ade orbus i nes s . ” Mor gan 9 Stanl ey G r oup I

nc. v. N ew E ng. I

ns . C o. , 225 F. 3d 270, 275 ( 2d C i r . 2000) ( i nt ernal 1 0 quot at i on m arks om i t t ed)
. Sum m aryj udgm enti s gener al l yi nappr opr i at e w her e the 1 1 c o n te s te d c o n tr a c tu a l la n g u a g e is a m b ig u o u s . P alm i er i v. A l l s tat e I ns . C o. , 445 F. 3d 179, 1 2 1 8 7 ( 2 d Ci r . 2 0 0 6 )
. We r e v i e w de novo b o th w h e th e r a c o n tr a c t is a m b ig u o u s , i d. , and, 1 3 w h e n th e d is tr ic t c o u rt f in d s a c o n tr a c t u n a m b ig u o u s , its in te rp re ta tio n o f th e c o n tr a c t, 14 R el i aStarLi

f e I ns . C o. of

N
. Y
. v. H om e D epot , 5 7 0 F
. 3 d 5 1 3 , 5 1 7 (2d C ir
. 2 0 0 9 ). 15 A
. The A m ountD ue on the N ot es 1 6 T he cl as s C and cl as s D not es s t at e: “The ent i r e unpai d pr i nci pal amount of thi s [] 1 7 N ot e s hal l be due a nd pay abl e” a tt he not e’ s m atur i t y . D es pi t e thi s cl earl anguage , the 1 8 FD I C cont ends t hatt he not ehol der s ar e due pa ym entonl yof the “i nves t ed amount , ” a 1 9 t erm defi ned i n t he mast eri ndentur e as the unpai d pr i nci pal amount , m i nus char ge- offs on 2 0 a c c o u n t o f

c a rd h o ld e rs ’ d e f

a u lts
. If the F D IC ’s i n terpretati o n o f th e c o n tr ac t w ereT h e F D IC a lso in v o k e s la n g u a g e in th e o f f e rin g m e m o ra n d a th a t es se n tially 1 re p ro d u c e s th is p ro v isio n o f th e m a ste r in d e n tu re . T h is la n g u a g e d o e s n o t d ire c tlysta te thatchar ge- offs on t he bas i s of ca r dhol derdefa ul tr educe d t he amountpay abl e on the n o tes , an d m u st b e a n a ly z e d in th e sa m e w a ya s th e p ro v isio n o f th e in d e n tu re itse lf di s cus s ed i n t he t extabove. 17 1 c o rr e c t , th e r e wo u l d b e n o a mo u n td u e o n th e n o t e s , s i n c e b yth e t i me th e n o t e s b e c a me 2 due, t hi s “i nves t ed amount ” w as zer o. 3 T he FD I C , how ever , has adduce d no evi dence t o s uppor ti t s cont ent i on thatthe 4 a m o u n t d u e o n th e n o tes a t th e ir m a tu rityis th is “ in v e ste d a m o u n t” r a th e r th a n th e u n p a id 5 pr i nci pal amount . T he FD I C r el i es on l anguage i n t he mast eri ndentur e, pr ovi di ng that 6 “i n the eve ntof def aul t. . . t he I ndentur e Trus t ee may. . . caus e the I s s uert o s el l Pr i nci pal 7 R ece i vabl es i n an amountequal t o t he I nves t ed A m ount . ” E v e n re a d in iso latio n , this is 8 nota cl ears t at ementt hatnot ehol der s ar e ent i t l ed onl yt o r epaym entof the I nves t ed 9 A m o u n t in th e e v e n t o f d e f a u lt. B u t th e F D IC f

a ils to m e n tio n th a t th e iss u e r’s p o w e r to 1 0 s el l the r ece i vabl es i n t he eve ntof def aul tunderthi s pr ovi s i on i s expr es s l ym ade 1 1 condi t i onal ei t herupon t he not ehol der s ’ cons entorupon t he trus t ee’ s det erm i nat i on “that 1 2 an yp roc ee d s o f su ch ex erc ise d istri b u table to th e N o teho lders o f th e a ff ec ted s eries are 1 3 s uffi ci entt o di s char ge i n ful l al l amount s then due a nd unpai d upon t he N ot es for 1 4 pr i nci pal and i nt er es t . ” R ead i n i t s cont ext , thi s pr ovi s i on does notr ei nfor ce, butr ather 1 5 contr adi ct s , t he FD I C ’ s as s ert i on t hatthe amountdue on the not es i s the i nves t ed amount 1 6 ra th e r th a n th e e n tire u n p a id p rin c ip a l. 1T he FD I C al s o cont ends t hatanotherpr ovi s i on of the dea l document s l i m i t s t he 2 not ehol der s ’ r ecour s e t o t he funds l abel ed col l at er al : the s t at ementon t he r ever s e of the n o tes th a t ea c h n o teh o ld e r “ c o v e n a n ts a n d a g re e s th a t n o re c o u rse m a yb e tak e n , d ire c tly o r i n d ir e c tly . . . a g a in s t . . . a n yo w n e r o f a b e n e f ic ia l in te re s t in th e Is s u e r.” Th e F DI C, 18 1 I n l i ghtof the FD I C ’ s fai l ur e t o i dent i fyanypr ovi s i on of the dea l document s t hat 2 su p p o rts its c o n ten tio n th a t th e a m o u n t d u e o n th e n o tes is a n yth in g o th e r th a n th e u n p a id 3 pr i nci pal amount , and i n l i ghtof the cl earl anguage t o t he contr aryon t he not es 4 th e m se lv e s, th e d istric t co u rt w a s rig h t to c o n c lu d e th a t th e c o n tra c t u n a m b ig u o u sly 5 provides for the fu l l repaym ent of t he en t i re unpa i d p ri ncipal am ou nt atthe n otes ’ 6 m a tu r i ty. 7 B
. The R ecour s e N at ur e of the N ot es 8 T h e F D IC ’s a rg u m e n t th a t th e d istric t co u rt m isc o n stru e d th e e x ten t o f tru st a ss e ts 9 subjectt o the noteholder s’ cl ai m s for r epay m ent has m ore tract i on , bu tult i m at el ym ust 1 0 al s o be r ej ect ed. T he FD I C cl ai m s thatthe “l i m i t ed r ecour s e pr ovi s i on” of the mast er 1 1 in d e n tu re lim its th e f u n d s th a t th e n o teh o ld e rs c a n p u rsu e f o r re p a ym e n t o f

th e ir n o tes to 1 2 thos e s etas i de as col l at er al
. T he FD I C cont ends thats i nce – a s al l part i es agr ee – no 1 3 funds l abel ed “c ol l at er al ” r emai n i n t he trus t , the di s t r i ctcour tw as w r ong t o concl ude that 1 4 the not ehol der s had anyval i d cl ai m on t he trus tas s et s and ther efor e err ed i n gr ant i ng 1 5 th e m su m m a ryju d g m e n t. 1 6 T h e F D IC re lie s o n th e lim ite d re c o u rs e p ro v is io n o f th e m a s te r i n d e n tu re , a 1 7 prefat oryprovis i on of the do cum ent w hich r eads: 2h o w e v e r, m isc o n stru e s th is p ro v isio n , w h ich d o e s n o t li m it th e n o teh o ld e rs’ re c o u rse to

part i cul art rus tas s et s butr atherpr event s the not ehol der s fr om s eeki ng t o have thei rnot es repai d w i th n on -trustasset s hel d b yotherpart i es. 19 1 T he obl i gat i on of the I s s uert o m ake pa ym ent s of pr i nci pal of, 2 a n d in ter e st o n a n d o th e r a m o u n ts w ith re sp e c t to , the N o tes is 3 lim ited b yre c o u rse o n lyto th e C o llate ra l. 4 5 T he FD I C cont ends t hatt hi s pr ovi s i on s t r i ct l yl i m i t s the not ehol der s ’ r i ght s i n t he eve nt 6 o f d e f a u lt to th o s e a s s e ts a c c o u n te d a s “ c o lla te ra l.” 7 T he l i m i t ed r ecour s e pr ovi s i on, how ever , i s notthe onl ypr ovi s i on of the 8 tr ans act i on document s t hatconce r ns the r ecour s e natur e of the not es . T w o other 9 p ro v isio n s a lso g o v e rn th e n o teh o ld e rs’ rig h ts to re p a ym e n t in th e e v e n t o f d e f a u lt. F irst, 1 0 the trusti nd entur e con t ai ns a prov i si on (the “n otw i t hst and i ng cl ause”) that r eads: 1 1 N ot w i t hs t andi ng anyot herpr ovi s i on i n t hi s I ndentur e, eac h 1 2 H ol derof a N ot e s hal l have the r i ghtw hi ch i s abs ol ut e and 1 3 un con dit i on al t o recei ve p aym ent of the p ri ncipal and i nter est 1 4 i n r es pectof s uch not e as s uch pr i nci pal and i nt er es tbecomes 1 5 due and pa y abl e and t o i ns t i tut e s ui tforthe enf or cementof 1 6 a n ysu c h p a ym e n t. 17 1 8 In a d d iti o n , the c las s C n o tes (a lth o u g h n o t th e c las s D n o tes ) sta te 1 9 N o re f e re n c e h e re in to th e In d e n tu re a n d n o p ro v isio n o f th is 2 0 C l as s C N ot e orof the I ndentur e s hal l al t erori m pai rthe 2 1 o b lig a tio n o f th e Iss u e r, w h ich is a b so lu te a n d u n c o n d iti o n a l, 2 2 t o payt he pr i nci pal of and i nt er es ton t hi s C l as s C not e atthe 2 3 t i m es , pl ace , and r at e, and i n t he coi n orcurr encypr es cr i bed. 24 2 5 T h e se tw o p ro v isio n s p ro v id e to h o ld e rs o f th e n o tes “ a b so lu te a n d u n c o n d iti o n a l” r ig h ts 2 6 t o r epaym ent , r i ght s w hi ch ca nnotbe l i m i t ed t o funds l abel ed “c ol l at er al ” i n t heT he di s t r i ctcourtal s o concl uded thatthe i ncons i s t encybetw een the 3 notw i ths t andi ng cl aus e and the l i m i t ed r ecour s e pr ovi s i on of the mast eri ndentur e w as in ten d e d b yth e p a rties to m a k e th e c las s C n o tes f u ll rec o u rse o b lig a tio n s, w h ile confe rr i ng l i m i t ed r ecour s e s t atus on the cl as s D not es , w hi ch l acke d an “a bs ol ut e and uncondi t i onal ” guar antyof paym ent . T he di s t r i ctcour tfound thatbyacc ept i ng not es l acking t his gu aranty , t he clas s D no t eho l ders i m pli ci t l ycon sent ed to the li m i t ed recou rs e pr ovi s i on of the i ndentur e. T hi s under s t andi ng of the agr eementbetw een the part i es acc ount s bot h fort he i ncl us i on of the i ndentur e’ s l i m i t ed r ecour s e pr ovi s i on and al s o for the s tr i ki ng economi c di ffe r ence betw een the cl as s D not es , w hi ch pai d t he London I nt erbank O ffe r ed R at e ( L I B O R ) pl us 6. 35% or6. 5% ( dependi ng on t he s er i es ) , and the cl as s C not es , w hi ch pai d onl yL I B O R pl us 1. 60% or1. 65%
. W e nee d notaddr es s the di s tr i ctcourt ’ s concl us i on t hatt he cl as s D not es w er e l i m i t ed r ecour s e obl i gat i ons , s i nce th is d e te rm in a tio n w a s n o t a p p e a le d
. S e e P e lm a n ex r e l. P e lm a n v . McD o n a ld ’s C o r p ., 3 9 6 F
. 3 d 5 0 8 , 5 1 1 (2d C ir
. 2 0 0 5 ); F ed
. R
. A p p . P
. 2 8 (a). 20 1 tr a n s a c tio n d o c u m e n ts . S e e Hib b s v . B r o w n , 82 N
. E
. 1108, 1110 ( N
. Y
. 1907) ( “an or der 2 o r p ro m ise to p a yo u t o f a p a rticu lar f

u n d is n o t u n c o n d iti o n a l”) (q u o tin g T h e N e g o tiab le 3 In s tru m e n ts L a w § 2 2 (1 8 9 7 ))
. 4 T h e d istric t co u rt c o n c lu d e d th a t th e tru st in d e n tu re is in c o n sis ten t in h o w it 5 des cr i bes t he r ecour s e natur e of the not es , and, r el y i ng on I nt er nat i onalMul t i

f oods C or p. 6 v. C om m er ci alU ni on I ns ur ance Co. , 3 0 9 F .3 d 7 6 (2 d C ir. 2 0 0 2 ), re so lv e d th is 7 i ncons i s t encybydet erm i ni ng t hatt he notw i t hs t andi ng cl aus e’ s pl ai n l anguage trum ped 8 the c o n fli cti n g li m it ed rec o u rse p rov isi o n . T h e F D IC co n tend s tha t th e d istri ct co u rt 3 9 e rre d b e c a u se th e re is n o c o n f lict b e tw e e n th e se “ a b so lu te a n d u n c o n d iti o n a l” r ig h ts to 1 0 re p a ym e n t a n d th e lim ite d re c o u rs e p ro v is io n o f th e in d e n tu re . 1 1 T he F D IC present s tw o co nv olut ed theori es as t o w hythe n otw i t hst and i ng cl ause 1 2 does notconfl i ctw i t h t he l i m i t ed r ecour s e pr ovi s i on. T he FD I C ’ s fi r s tar gum enthi nges21 1 o n th e p h ra sin g o f th e n o tw ith sta n d in g c lau se , w h ich sa y s th a t th e re p a ym e n t rig h t is “ in 2 r es pectof s uch not e as s uch pr i nci pal and i nt er es tbecomes due and pa y abl e. ” T h e F D IC 3 argues t hat because t he am ou nt “due an d p ay able” i s l i m i t ed b ythe li m i t ed recou rs e 4 pr ovi s i on t o t he amountof the col l at er al , no confl i ctexi s t s betw een the notw i t hs t andi ng 5 c la u s e a n d th e lim ite d re c o u rs e p ro v is io n . 6 T hi s ar gum enti s w i t houtm er i t . T he cl as s C and D not es pl ai nl ys aythat“[t ] he 7 ent i r e unpai d pr i nci pal amount . . . s hal l be due a nd pay abl e” a tthe not es ’ m atur i t i es . T he 8 lim ited re c o u rse p ro v isio n d o e s n o t p u rp o rt to a lter th is, p e rta in in g o n lyto w h ich a ss e ts 9 not ehol der s can a cce s s forr epaym ent , and the FD I C fai l s t o i dent i fyanyot herpr ovi s i on 1 0 of the tr ans act i on document s t hats uppor t s i t s cont ent i ons thatthe amountdue on the 1 1 n o te s is a n yth in g o th e r t h a n th e ire n tir e u n p a id p ri n c ip a l. See supra , S e c tio n I( a ). 1 2 A c c o rd in g ly, th e d is tr ic t c o u rt d id n o t e rr in re je c tin g th is a rg u m e n t. 1 3 T he FD I C al s o ar gues t hatt he notw i t hs t andi ng cl aus e does notconfl i ctw i t h t he 1 4 lim ited re c o u rse c lau se b e c a u se it i s “ b o ilerp late ” in c lu d e d in th e tra n sa c tio n d o c u m e n ts 1 5 s o le ly o n a c c o u n t o f th e T ru s t I n d e n tu re A c t o f 1 9 3 9 (t h e “ T IA ” ). T he FD I C obs erves 1 6 thatthe l anguage of the notw i t hs t andi ng cl aus e i s s i m i l art o Sect i on 316( b) of the TIA , 15 1 7 U .S .C . § 7 7 p p p (b ), a s tatu to ryp ro v isio n re q u irin g th a t b o n d in d e n tu re s p ro tec t m in o rity 1 8 bondhol der s bypr ohi bi t i ng m aj or i t ybondhol der s fr om col l us i vel yagr eei ng t o m odi fyt he 1 9 bond’ s paym entt erm s . Si nce the l anguage of the i ndentur e pr ovi s i on i s m odel ed on the 2 0 p r o v i s i o n o f

t h e TI A, t h e F DI C a r g u e s , th i s Co u r ts h o u l d i n t e rp r e tb o t h t o h a v e th e s a me22 1 purpos e. T he FD I C ur ges us , t her efor e, t o vi ew thi s pr ovi s i on of the i ndentur e as 2 in c lu d e d b yth e p a rties “ f o r th e lim ited p u rp o se ” o f p re v e n tin g o p p re ss io n o f m in o rity 3 n o teh o ld e rs a t th e h a n d s o f m a jo rityn o teh o ld e rs, a n d to f in d th a t ith a s n o a p p lica b ili tyto 4 th e c u rr e n t d is p u te . 5 W e dec l i ne t o di s r egar d t he pl ai n l anguage of the i ndentur e pr ovi s i on on acc ount 6 of i t s s i m i l ar i t yt o a pr ovi s i on of the TIA
. A bs enta fi ndi ng thatthe tr ans act i on 7 document s ar e ambi guous – w hi ch the FD I C does notcont end – extr i ns i c evi dence 8 c o n c e rn in g th e p u rp o s e b e h in d c o n tr a c t p ro v is io n s is n o t a d m is s ib le
. I nnophos , I

nc. v. 9 R h o d ia , S
. A. , 8 5 2 N .Y .S . 2 d 8 2 0 , 8 2 3 (2 0 0 8 ). E v e n if w e w e re to c o n sid e r th e sim ilarity 1 0 betw een the notw i t hs t andi ng cl aus e and Sec t i on 316( b) of the TIA as evi dence forw hy 1 1 th e p a rties in c lu d e d th e c lau se in th e in d e n tu re , tha t ev id e n c e w o u ld n o t co m p e l u s to 1 2 lim it th e a p p lica b ili tyo f th e c lau se to in ter -n o teh o ld e r d isp u tes . W h ile c o m p ly in g w ith 1 3 Sect i on 316( b) m ayhave be en one r eas on the dr aft er s i ncl uded the notw i t hs t andi ng 1 4 c lau se , itc o u ld n o t h a v e b e e n th e o n lyre a so n . N o th in g in S e c tio n 3 1 6 (b ), o r th e T IA in 1 5 g e n e ra l, req u ire s th a t b o n d h o ld e rs b e a f f o rd e d “ a b so lu te a n d u n c o n d iti o n a l” r ig h ts to 1 6 paym ent , t he pr eci s e t erm t hatt he FD I C s eeks t o have us di s r egar d. T he “a bs ol ut e and 1 7 uncondi t i onal ” r i ghtt o r epaym ent– a r i ghtthatexpr es s l yconfl i ct s w i t h t he l i m i t ed 1 8 r ecour s e pr ovi s i on of the i ndentur e – has no obvi ous r el at i on t o t he purpos e of pr event i ng 1 9 the oppr es s i on of m i nor i t ybondhol der s . W e ca nnotr ead thatr i ghtoutof the contr act 2 0 beca us e i ti s embedded i n a pr ovi s i on t hatar guabl yw as i ncl uded foranotherr eas on.23 1 H avi ng r ej ect ed the FD I C ’ s ar gum ent s thatthe notw i t hs t andi ng cl aus e and the 2 l i m i t ed r ecour s e pr ovi s i on of the mast eri ndentur e ca n be r econc i l ed, ourpr i orcas es 3 appl y i ng N ew Y or k l aw pr ovi de cl eardi r ect i on on t he pr operw ayt o r es ol ve the 4 i ncons i s t ency . T hi s C our thas r ecogni zed manyt i m es thatunderN ew Y or k l aw , cl aus es 5 s i m i l art o the phr as e “[ n] ot w i t hs t andi ng anyot herpr ovi s i on” trum p confl i ct i ng contr act 6 te rm s . See Int ’l

Mult i f oo ds, 3 0 9 F .3 d a t 9 0 -9 1 ; L&B 57t h St
. , I nc. v. E
. M
. B l anchar d, 7 I nc. , 1 4 3 F .3 d 8 8 , 9 3 (2 d C ir. 1 9 9 8 ); Mors e/ D i es el , I nc. v. Tri ni t

y I ndus
. , I nc . , 67 F. 3d 8 4 3 5 , 4 3 8 -3 9 (2 d C ir. 1 9 9 5 ). B yits p lain ter m s, th e “ a b so lu te a n d u n c o n d iti o n a l” r ig h t to 9 r epaym entgr ant ed t o t he not ehol der s bythe i ndentur e overr i des the conf l i ct i ng l i m i t ed 1 0 r ecour s e pr ovi s i on, and al l ow s t he not ehol der s t o s eek r epaym entfr om al l the as s et s of 1 1 th e tru s t. 1 2 W e not e, m or eover , t hatt he FD I C does nots er i ous l yaddr es s the conf l i ctbetw een 1 3 the l i m i t ed r ecour s e pr ovi s i on of the i ndentur e and the “a bs ol ut e and unc ondi t i onal ” r i ght 1 4 t o paym enton t he r ever s e of the cl as s C not es , s ay i ng onl ythats i nce the not es s aythat 1 5 theyare “s ubj ectt o all t he term s of t he Inde ntur e, ” t he li m i t ed recou rs e provis i on app l i es. 1 6 O f cour s e, t he cl as s C not es expl i ci t l ys t at e thatthe r epaym entr i ghts uper cede s both the 1 7 ter m s o f

th e in d e n tu re a n d a ll o th e r p ro v isio n s o f th e n o te. F u rth e rm o re , N e w Y o rk law is 1 8 cl ear that w here there i s a conf l i ctbetw een the t erm s of t he n ote and an ci l l arydo cum ents , 1 9 th e te rm s o f

th e n o te c o n tr o l. C unni ngham v. P r es s ed St eel C arC o. , 265 N
. Y
. S. 256, 2 0 2 5 9 -6 0 (1 s t D e p ’t 1 9 3 3 ), a ff’d , 189 N
. E
. 750 ( N
. Y
. 1934) ( “[A ] nyi ncons i s t encybetw een24 1 th e b o n d a n d th e in d e n tu re m u st b e c o n stru e d in f a v o r o f th e b o n d h o ld e r.”) . T h is 2 lan g u a g e o n th e c las s C n o tes – n e v e r f u llyc o n f ro n ted b yth e F D IC in its a ttem p ts to 3 cons true the tr ans act i on document s as cons i s t ent l yr epr es ent i ng the not es as l i m i t ed 4 re c o u rse – f

u rth e r stre n g th e n s o u r c o n v ictio n th a t th e p a rties in ten d e d th e n o tes to b e f u ll 5 rec o u rse o b li g ati o n s o f th e issu er. 6 A ccor di ngl y , t he di s t r i ctcour tdi d noterri n det erm i ni ng thatthe cl as s C not es 7 w er e ful l r ecour s e obl i gat i ons of the i s s uerand gr ant i ng s um m aryj udgm entt o t he 8 no t eho l ders on t hat basi s. 9 I I . I s s ue and Cl ai m Pre c l us i on 1 0 T he FD I C al s o cont ends t hatthi s i nt erpl eade ract i on i s an att empt ed end run 1 1 ar ound t he j udgm entof D
. C
. di s t r i ctcour t , w hi ch i tcl ai m s unequi vocal l yaw ar ded al l t he 1 2 r emai ni ng t rus tas s et s t o i tas t he r ece i verforN ext B ank. T he FD I C ar gues that 13 N

ex tB a n k I and N

ex tB a n k II

det erm i ned thatthe FD I C ow ned the tr ans fer ori nt er es t , and 1 4 thatthi s det erm i nat i on i s bi ndi ng underthe doctr i ne of c l ai m pr ecl us i on on M i l l enni um 1 5 and R M K as part i es i n pr i vi t yw i t h B N Y
. Fur t herm or e, i tar gues thatthe doctr i ne of i s s ue 1 6 pr ecl us i on bar s t he not ehol der s ’ cl ai m s , beca us e al l of the i s s ues r ai s ed i n t he i nt erpl eade r 1 7 act i on w er e ac tual l yl i t i gat ed, ful l yand fa i r l y , i n the D
. C
. l i t i gat i on. T hes e cont ent i ons 1 8 ar e unper s uas i ve. 1 9 “The doctr i ne of .
. . cl ai m pr ecl us i on[] hol ds thata fi nal j udgm enton t he mer i t s of 2 0 a n a c tio n p re c lu d e s th e p a rties o r th e ir p riv ies f ro m re lit ig a tin g iss u e s th a t w e re o r c o u ld25 1 have be en r ai s ed i n t hatact i on. ” Mo n a h a n v . N .Y . C ity D e p ’to f C o r r ., 214 F. 3d 275, 284 2 (2d C i r. 20 00 ) ( i nternal quotat i on m arks om i t t ed). O t herw i se kno w n as re s ju d ica ta , 3 cl ai m pr ecl us i on bar s a s ubs equentact i on – i nvol vi ng ei t herthe s ame pl ai nt i ffs orpart i es 4 i n p r i v i tywi t h t h o s e p l a i n t i f f s – f r o m a s s e r t i n g c l a i ms t hatw er e, orcoul d have be en, 5 ra is e d in a p ri o r a c tio n th a t r e s u lte d in a n a d ju d ic a tio n o n th e m e ri ts . A l l en v. M cC urry , 6 449 U
. S. 90, 94 ( 1980)
. 7 I n contr as t , i s s ue pr ecl us i on, al s o know n as col l at er al es t oppel , bar s a pl ai nt i ff 8 fr om r el i t i gat i ng an is s ue t hathas al r eadybeen f ul l yand fa i r l yl i t i gat ed i n a pr i or 9 p ro c e e d in g . P ur dy v. Zeldes , 337 F. 3d 253, 258 ( 2d C i r . 2003)
. I s s ue pr ecl us i on appl es 1 0 w hen “( 1) t he i dent i cal i s s ue w as r ai s ed i n a pr evi ous pr ocee di ng; ( 2) the i s s ue w as 1 1 a c tu a llylit ig a ted a n d d e c id e d in th e p re v io u s p ro c e e d in g ; (3 ) th e p a rtyh a d a f u ll an d f a ir 1 2 o p p o rtu n ityto lit ig a te th e iss u e ; an d (4 ) th e re so lu tio n o f th e iss u e w a s n e c e ss a ryto 1 3 s uppor ta val i d and fi nal j udgm enton t he mer i t s . ” B al lv. A
. O
. Sm i th C or p. , 451 F. 3d 66, 1 4 6 9 (2 d C ir . 2 0 0 6 ) ( in te rn a l q u o ta tio n m a rk s o m itte d ). 1 5 W e r evi ew t he di s t r i ctcourt ’ s appl i cat i on of the pr i nci pl es of cl ai m and i s s ue 1 6 pr ecl us i on de novo
. Char t i e rv . M ar l i n M gmt . , LLC , 2 0 2 F
. 3 d 8 9 , 9 3 (2d C ir
. 2 0 0 0 ). 17 N

ext B ank I actuall yand necessari l ydeterm i ned that the earl yam ort i zat i on cl ause 1 8 of the mast eri ndentur e w as unenfor cea bl e aga i ns tthe FD I C
. I s s ue pr ecl us i on, ther efor e, 1 9 di d barone of M i l l enni um ’ s and R M K ’ s cl ai m s i n t he i nt erpl eade ract i on: thei rcl ai m on 2 0 the bas i s of the ea r l yamort i zat i on pr ovi s i on of the mast eri ndentur e. Forthi s r eas on, t he26 1 not ehol der s ’ cl ai m on t he bas i s of thatpart i cul arcl aus e w as barr ed fr om r el i t i gat i on by 2 the doctr i ne of i s s ue pr ecl us i on, as t he D
. C
. di s t r i ctcour t ’ s opi ni on i n N ex tB a n k II 3 re c o g n iz e d
. N

ex tB a n k II , at17. T he di s t r i ctcour tbel ow r ecogni zed the corr ectnes s of 4 thi s rul i ng and di d notr econs i dert hati s s ue. 5 T he FD I C ’ s ar gum entt hatt he ent i r e i nt erpl eade ract i on i s barr ed byi s s ue 6 pr ecl us i on on acc ountof the D
. C
. l i t i gat i on, how ever , i s w i t houtm er i t . T he ip so fa c to 7 clau se c lai m w as o n lyo n e o f th e tw o claim s to the tru st assets asse rt ed b ythe n o teho lders 8 i n the Sout hern D i s t r i ctact i on. B yt he t i m e the not ehol der s fi l ed thei rans w er s i n t he 9 in terp lea d e r a c tio n , the ir n o tes h a d b e c o m e d u e a n d p a y a b le. A c c o rd in g ly , in a d d iti o n to 1 0 thei rcl ai m s undert he i ps o f act o c l a u s e , th e ya l s o a s s e rt e d i n th e p r e s e n ta c t i o n th a tBN Y 1 1 w as obl i gat ed t o di s t r i but e t o t hem t he trus tas s et s as r epaym entof the pr i nci pal due on 1 2 th e irn o te s . 1 3 C o n tr a ry to th e F D IC ’s c o n te n tio n , th is is s u e w a s n o t a d d re s s e d b yth e D .C . c o u rt . 1 4 Att h e t i me o f

t h e D. C. l i t i g a t i o n , t h e n o t e s h a d n o ty e tma tu r e d
. Ac c o r d i n g l y , th e D. C. 1 5 cour tdi d notcons i derw hethert he not es w er e ful l r ecour s e orl i m i t ed r ecour s e obl i gat i ons 1 6 of the i s s uer , s i nce thatdi s t i nct i on m at t er s w hen not es ar e due a nd pay abl e. B eca us e the 1 7 not ehol der s ’ cl ai m s on t he bas i s of the not es ’ m atur i t yw er e notati s s ue i n t he ea r l i er 1 8 litig a tio n , th e s u b s e q u e n t liti g a tio n o f th is is s u e in th e in te rp le a d e r w a s n o t p re c lu d e d
. 1 9 T he D
. C
. courti t s el f r eac hed thi s veryconcl us i on i n N ex tB a n k II, r efus i ng t o enj oi n t he 2 0 no t eho l ders’ l i t i gati on i n the So uthern D i stri ctof clai m s on the basi s of t he n otes ’27 1 m atur i ty , s i nce N ext B ank I h a d n o t c o n s id e re d m a tu ri ty-b a s e d c la im s . N ex tB a n k II, at20. 2 T h e F D IC ’s d e f e n se o f c laim p re c lu sio n is lik e w ise w ith o u t m e rit. C laim 3 p re c lu s io n b a rs th e re litig a tio n o n ly o f c la im s th a t w e re , orcould have be en , br oughti n an 4 e a rl ie r l itig a tio n b e tw e e n th e s a m e p a rt ie s o r t h e irp ri v ie s . D uane Reade, I nc. v. St
. P aul 5 F i r e & Mar i ne I

ns . C o. , 6 0 0 F
. 3 d 1 9 0 , 1 9 5
- 9 6 ( 2 d Ci r . 2 0 1 0 )
. I th a s n o e f f e c to n c l a i ms 6 th a t could nothave be en b r o u g h ti n th e p r i o ra c t i o n . Th e f i r s to f th e c l a s s C n o t e s c a me 7 d u e i n De c e mb e r2 0 0 6
. Ac c o r d i n g l y , th e n o t e h o l d e r s c o u l d n o th a v e r a i s e d th e i rc l a i ms 8 on t he bas i s of the not es ’ fi nal m atur i t yi n t he N ext B ank I act i on, w hi ch bega n i n 2003, 9 noras a count er cl ai m i n N ext B ank I I , w hi ch bega n i n N ovember2006. C l ai m pr ecl us i on 1 0 does notbarcl ai m s , even be t w een i dent i cal part i es , thatar i s e af t erthe comm ence m entof 1 1 th e p ri o r a c tio n . S e e S to r e y v . C e llo H

o ld in gs , L L C, 347 F. 3d 370, 383 ( 2d C i r . 2003) 1 2 ( “C l ai m s ar i s i ng s ubs equentt o a pr i oract i on need not , and oft en perhaps coul d not , have 1 3 b e e n b r o u g h ti n t h a tp r i o ra c t i o n ; a c c o r d i n g l y, th e y a r e n o tb a r r e d b y r es j udi cata. ” ). 1 4 A ccor di ngl y , t he cl ai m s i n t hi s i nt erpl eade ract i on w er e notpr ecl uded bythe ea r l i er 1 5 l i t i gat i on. 16 I I I . D eni al of t he T rans f

er M ot i on 1 7 T h e F D IC a lso c o n ten d s th a t th e d istric t co u rt a b u se d its d isc re tio n b yd e n y in g its 1 8 mo t i o n t o t r a n s f e rt h e i n t e rp l e a d e ra c t i o n t o th e D. C d i s t r i c tc o u r t . T h e F DI C c i t e s two 1 9 s epar at e r eas ons w hyt he ac t i on s houl d have be en tr ans ferr ed. Fi r s t , i tar gues that 2 0 FI R R E A di ct at es t hatal l act i ons i nvol vi ng the FD I C be br oughtei t heri n t he D i s t r i ctof28 1 C o lu m b ia o r in th e d istric t w h e re th e in stitu tio n in re c e iv e rsh ip is h e a d q u a rte re d , in th is 2 cas e the D i s t r i ctof A r i zona. Second, the FD I C ar gues thatthe di s t r i ctcour ts houl d have 3 tra n sf

e rre d th e a c tio n “ in th e in ter e st o f ju stic e ,” b e c a u se re late d a c tio n s h a d p re v io u sly 4 b e e n b r o u g h ti n D. C. 5 T he FD I C ’ s fi r s tar gum enti s bas ed on FI R R E A
. T he age ncycl ai m s that12 6 U. S
. C. § § 1 8 2 1 ( d ) ( 6 ) ( A) ( i i ) a n d 1 8 2 1 ( d ) ( 1 3 ) ( D) ( i i ) l i mi tth e i n t e rp l e a d e ra c t i o n t o two 7 v en u es, th e D istri ct of C o lum b ia an d the D istri ct of A ri zo n a, th e loc ati o n o f N ex tB an k ’s 8 h e a d q u a rte rs. A lth o u g h c a st a s a n a rg u m e n t th a t th e d istric t co u rt a b u se d its d isc re tio n in 9 d e n y in g its m o tio n to tr a n s f e r t h e v e n u e o f

th e a c tio n to th e D is tr ic t o f C o lu m b ia , s ee 10 F ilm lin e (C r o s s -C o u n tr y ) P r o d u c tio n s , In c . v . U n ite d A r tis ts C o r

p ., 865 F. 2d 513, 520 1 1 ( 2d C i r . 1989) , t he FD I C ’ s cont ent i on thatFI R R E A nece s s i t at ed br i ngi ng the i nt erpl eade r 1 2 i n ei therD
. C
. orA r i zona i s actual l yan ar gum entthatthe i nt erpl eade ract i on w as 1 3 i m pr oper l yvenued i n t he Sout hern D i s t r i ctof N ew Y or k as a mat t erof l aw , oreven that 1 4 th e N e w Y o rk c o u rt la c k e d s u b je c t m a tte r j u ri s d ic tio n , s ee Carl yl e Tow er

s C ondom i ni um 15 A s s ’n , In c . v . F

D IC, 1 7 0 F
. 3 d 3 0 1 ( 2 d Ci r . 1 9 9 9 ) ( t r e a t i n g a n a r g u me n tu n d e r1 2 U. S
. C. 1 6 § 1 8 2 1 ( d ) ( 1 3 ) ( D ) a s a c l a i m t h a tt h e d i s t r i c tc o u r tl a c k e d s u b j e c tm a t t e rj u r i s d i c t i o n )
. We 1 7 r evi ew t he di s t r i ctcourt ’ s l egal concl us i ons conce r ni ng s ubj ectm att erj ur i s di ct i on or 1 8 venue de novo
. T r ie s tm a n v . Fe d . B u r e a u o f P r is o n s , 470 F. 3d 471, 474 ( 2d C i r . 2006) 1 9 (su b

jec t m a tter ju risd ictio n ); G ulf Ins. C o. v. G l asbrenn er, 4 1 7 F
. 3 d 3 5 3 , 3 5 5 (2d C ir
. 2 0 2 0 0 5 ) ( v e n u e ).29 1 No ma t t e rh o w t h e F DI C’ s a r g u me n ti s c a t e g o r i z e d , i ti s wi t h o u tme r i t . 1 2 U. S
. C. 2 § 1 8 2 1 ( d ) , a mo n g o t h e rt h i n g s , e s t a b l i s h e s a d mi n i s t r a t i v e p r o c e d u r e s f o rb r i n g i n g c l a i ms 3 a g a in s t in s titu tio n s f o r w h ic h th e F D IC is re c e iv e r. See Vi l l
. of O akw ood v. Stat e Bank & 4 Trus tC o. , 539 F. 3d 373, 385 ( 6t h C i r . 2008)
. W i t hi n t hi s cont ext§ 1821( d) ( 6) ( A ) ( i i ) , on 5 w hi ch the FD I C r el i es , pr ovi des 6 th e c laim a n t m a yre q u e st a d m in istra tiv e re v iew o f th e c laim 7
. . . i n t he di s t r i ctort err i t or i al cour tof the U ni t ed St at es for 8 t he di s t r i ctw i t hi n w hi ch the depos i t oryi ns t i tut i on’ s pr i nci pal 9 p lace o f b u sine ss is l o ca ted o r th e U n it ed S tat es D istri ct C o u rt 1 0 forthe D i s t r i ctof C ol um bi a ( and s uch courts hal l have 1 1 juri sd ict ion to h ea r suc h claim ). 12 1 3 T hi s pr ovi s i on conce r ns j udi ci al r evi ew of cl ai m s br oughtunderthe admi ni s t r at i ve 1 4 pr ocedur es of § 1821( d)
. Such admi ni s t r at i ve cl ai m s m ayonl ybe r evi ew ed byfede r al 1 5 cour t s i n the D i s t r i ctof C ol um bi a and i n t he di s t r i ctw her e the ent i t yi n r ece i ver s hi p w as 1 6 h e a d q u a rt e re d
. 1 7 T hi s i nt erpl eade r , how ever , i s notan admi ni s t r at i ve cl ai m , norcoul d i thave be en 1 8 on e. T he n otehol ders ar e no tcredi t ors of N extB ank , and theyassertno cl ai m s agai nst 1 9 ei thert hatfai l ed i ns t i tut i on oragai ns tthe FD I C
. T heyhol d not es i s s ued bythe trus t , an 2 0 i ndepende ntand s t i l l s ol ventent i t y . A ccor di ngl y , s i nce theyas s ertno cl ai m s agai ns tt he 2 1 FD I C as r ece i verforN ext B ank, t heyar e notbound bythe j ur i s di ct i onal l i m i t at i ons or 2 2 o th e r p ro c e d u ra l r e q u ir e m e n ts o f th e § 1 8 2 1 (d ). 2 3 W hil e t he p l ai n langua ge o f t he o t her provis i on on w hich the F D IC rel i es,30 1 § 1821( d) ( 13) ( D ) ( i i ) , m ayi ni t i al l yappea rhel pful t o t he FD I C ’ s ar gum ent , cl os er 2 exami nat i on r evea l s i tt o be i r r el evant . Sect i on 1821( d) ( 13) ( D ) ( i i ) s t at es : “[e ] xceptas 3 o th e rw ise p ro v id e d in th is s u b se c tio n , n o c o u rt sh a ll h a v e ju risd ictio n o v e r . . . a n yc laim 4 r el at i ng t o anyactorom i s s i on of [a n] i ns t i tut i on [i n r ece i ver s hi p] orthe C orpor at i on as 5 r ece i ver . ” R ead outof cont ext , t hi s pr ovi s i on m ays eem t o depr i ve court s of j ur i s di ct i on 6 ov er anycl ai m i nv olvi ng t he F D IC ’s “actor om i ssi on , ” even a cl ai m no tdir ect l yagainst 7 the FD I C
. Such an i nt erpr et at i on w oul d be err oneous . T hi s pr ovi s i on i s notan i s ol at ed 8 edi ct , buti s par tof FI R R E A ’ s s t atut orys cheme, w hi ch w as i nt ended t o for ce pl ai nt i ffs 9 w i th cl ai m s agai ns tfai l ed depos i t oryi ns t i tut i ons t o exhaus tadmi ni s tr at i ve r emedi es 1 0 b e f

o re c o m in g to f

e d e ra l c o u rt . C arl

yl e T ow ers , 170 F. 3d at307. C our t s i nt erpr et i ng t he 1 1 br oad l anguage of § 1821( d) ( 13) ( D ) ( i i ) have uni ver s al l yconcl uded thatthi s pr ovi s i on 1 2 b ars o n lyclaim s tha t cou ld b e b rou g h t un d er the ad m inistrati v e p roc ed u res o f § 1 8 2 1 (d), 1 3 n o t a n yc la im a t a ll in v o lv in g th e F D IC
. S e e Au c t i o n Co
. o f Am. v . FDIC, 141 F. 3d 1198, 1 4 1 2 0 1 (D .C . C ir. 1 9 9 8 ) (h o ld in g th a t § 1 8 2 1 (d )(1 3 )(D )(ii) g ra n ts th e F D IC im m u n ityo n ly 1 5 fro m claim s tha t can b e b rou g h t th rou g h the a d m inistrati v e p roc esse s o f § 1 8 2 1 (d)); 16 Hud

s o n Uni t e d

Ba n k v . Cha s e M

a n h a t ta n Ba n k

o f Con n e c t i c u t

, N. A. , 43 F. 3d 843, 849 1 7 ( 3d C i r . 1994) ( “The purpos e [of FI R R E A ] w as nott o i m m uni ze c ert ai n cl ai m s fr om 1 8 r evi ew . ”)
. W e agr ee w i t h t hei rconcl us i on. A ccor di ngl y , s i nce the not ehol der s as s ertno 1 9 c laim a g a in st e ith e r th e F D IC o r N e x tB a n k , an d sin c e th e ya re n o t co m p e lled to c o m p ly 2 0 w ith th e a d m in istra tiv e p ro c e d u re s o f § 1 8 2 1 (d ), § 1 8 2 1 (d )(1 3 )(D )(ii) n e ith e r b a rs th e ir31 1 c laim s n o r f

o rc e s th e m to b rin g th e c laim s in a d if f e re n t co u rt. F IR R E A , the re f o re , d id 2 notdepr i ve the di s t r i ctcourtof s ubj ectm att erj ur i s di ct i on overthe i nt erpl eade ract i on nor 3 d id itren d er the S o u thern D istri ct of N ew Y o rk a n im p rop er v en u e, an d the d istri ct co u rt 4 d id n o t e rr in re f

u s in g to tr a n s f

e r t h e m o tio n to D .C . o n th is b a s is
. 5 T he FD I C ’ s ot herar gum ent s thatD
. C
. w as a more appr opr i at e venue forthe 6 i nt erpl eade rt han the Sout hern D i s t r i ctof N ew Y or k ar e s i m i l ar l yunavai l i ng. W e r evi ew 7 a dec i s i on gr ant i ng ordeny i ng a mot i on t o t r ans fervenue f orconveni ence of the part i es 8 f o r a b u s e o f

d is c re tio n . See Fi lm l i ne , 8 6 5 F .2 d a t 5 2 0 . W h e re th e d istric t co u rt b a se s its 9 deci s i on on a conc l us i on conce r ni ng per s onal j ur i s di ct i on, the l egal concl us i on i s s ubj ect 1 0 to p le n a ry re v ie w . SongB yr d, I nc. v. Es tat e of

G r os s m an , 2 0 6 F
. 3 d 1 7 2 , 1 7 9 (2d C ir
. 1 1 20 00 ). H ow ever, as So ngB yrd m akes cl ear , the s t andar d of r evi ew fora dec i s i on gr ant i ng 1 2 o r d e n y in g tra n sf e r is d istin c t f

ro m th e sh o w in g th a t h a s to b e m a d e in o rd e r f o r u s to 1 3 re v e rs e a tr a n s f

e r r u lin g b ya d is tr ic t c o u rt a f te r f in a l ju d g m e n t h a s b e e n re n d e re d
. Id
. To 1 4 obt ai n a r ever s al of an or derdeny i ng a mot i on t o t r ans fer , the appe al i ng par t ym us t“s how 1 5 thata di ffe r entr es ul tw oul d have be en r eac hed had the s ui tbeen tr ans ferr ed. ” F i lm l i ne , 1 6 8 6 5 F .2 d a t 5 2 0 (i n te rn a l q u o ta tio n m a rk s o m itte d ). 1 7 I n thi s cas e, t he FD I C has m ade no s uch s how i ng. T he age ncy ’ s onl yar gum ent 1 8 thatthe out come of t he i nt erpl eade ract i on w oul d have be en di ffe r enti f i thad bee n 1 9 conduct ed i n D
. C
. i s t hatt he D
. C
. cour tw oul d have r ecogni zed thati t s ear l i errul i ngs 2 0 pr ecl uded the Sout hern D i s t r i ctl i t i gat i on. Si nce the FD I C ’ s ar gum ent s fori s s ue and32 1 cl ai m pr ecl us i on ar e mer i t l es s , w e ca nnotas s um e thatthe D
. C
. di s t r i ctcour tw oul d have 2 e rro n e o u slya c c e p ted th e m . In a n ye v e n t, th e F D IC ’s a rg u m e n ts f o r iss u e a n d c laim 3 pr ecl us i on w ere pr es ent ed t o t he D
. C
. cour t , w hi ch l ar gel yr ej ect ed them i n N ex tB a n k II
. 4 A ccor di ngl y , t he FD I C has pr es ent ed no r at i onal e forr ever s i ng the di s t r i ctcour t ’ s deni al 5 of i t s m ot i on t o t r ans fert he i nt erpl eade ract i on t o D
. C
. , and w e nee d notfur t hercons i der 6 i t s ar gum ent s t hatD
. C
. w oul d have be en a pr efe r abl e di s t r i ctforbr i ngi ng thi s i nt erpl eade r 7 act i on. 8 I V. Th e Di s mi s s a l o f t h e F DI C’ s Co u n t e r c l a i ms 9 A s a p a rtin g sh o t, th e F D IC c o n ten d s th a t th e d istric t co u rt e rre d in d ism iss in g its 1 0 c o u n t e r c l a i ms f

o rb r e a c h o f

c o n t r a c ta n d f

o ra b u s e o f

j u d i c i a l p r o c e s s b yg r a n t i n g BN Y 1 1 jud g m en t on the p lead ing s p u rsua n t t o F ed era l R u le of C ivil P roc ed u re 1 2 (c). T h e F D IC 1 2 a s s e r t s t h a tBNY b r e a c h e d t h e t r a n s a c t i o n d o c u me n t s , a n d v i o l a t e d th e o r d e r s o f th e D. C. 1 3 di s tr i ctcourti n N ex tB a n k I, w hen i tcea s ed mont hl ypaym ent s t o t he FD I C and i ns t i tut ed 1 4 an i nt erpl eade ract i on. T he FD I C acknow l edges thatatthe t i m e thatB N Y i ns t i tut ed the 1 5 i nt erpl eade ract i on, i tfac ed cl ai m s on t he trus tcorpus fr om the not ehol der s thatcompet ed 1 6 w i th it s ow n clai m t o regularpay m ents of the transfer or i nter est . T he ag encyargues, 1 7 how ever , t hatbeca us e the tr ans act i on document s al l ow ed B N Y t o r efus e demands for 1 8 p a ym e n t th a t w e re “ in c o n f lic t w ith a n yru le o f

la w o r w ith [ th e ] I n d e n tu re ,” B N Y act ed 1 9 wr o n g f

u l l yi n i n s t i tu t i n g t h e i n t e rp l e a d e ra c t i o n . T h e F DI C f u r t h e rc l a i ms th a tBN Y 2 0 a b u se d th e ju d icia l p ro c e ss b yin stitu tin g th e in terp lea d e r a s “ a n e x c u se ” to sto p p a ym e n ts33 1 to th e F D IC . L a stly , the F D IC a rg u e s th a t itsh o u ld b e a w a rd e d a tto rn e y s’ f e e s f o r its 2 expens es i n t hi s l i t i gat i on beca us e i tw as dupl i cat i ve and br oughti m pr oper l y , ci t i ng 3 I ngers ol lMi l l i ng Machi ne C o. v. M / V B odena , 8 2 9 F
. 2 d 2 9 3 , 3 0 9 (2d C ir
. 1 9 8 7 ). 4 W e revi ew a j ud gm ent on t he p l eadings de novo
. See H ar dy v. N
. Y
. C i t y H eal th & 5 H os ps . C or p. , 1 6 4 F
. 3 d 7 8 9 , 7 9 2 ( 2 d Ci r . 1 9 9 9 )
. Th e s a me s t a n d a r d a p p l i c a b l e t o F e d
. R. 6 C i v. P. 12( b) ( 6) m ot i ons t o di s m i s s appl i es t o Fed. R
. C i v. P. 12( c) m ot i ons forj udgm ent 7 o n th e p le a d in g s . Sheppar d v. B eerm an , 1 8 F .3 d 1 4 7 , 1 5 0 (2 d C ir. 1 9 9 4 ). “T h u s, w e w ill 8 accep tal l factual al l egati on s i n the com plai nt as true and draw al l reas on able i nferences” 9 in f a v o r o f th e c o u n te r- c la im a n t. H ayden v
. P at ers on , 594 F. 3d 150, 160 ( 2d C i r . 2010) 1 0 (i nternal quotat i on m arks om i t t ed). T o survi ve a R ule 12(c) m oti on , the co m plai nt “m ust 1 1 c o n tain su f

f icie n t f a c tu a l m a tter, a c c e p ted a s tru e , to s tate a c laim to re lief th a t is p lau sib le 1 2 on i t s fac e. ” Id
. (i n terna l qu o tat ion m ark s o m itted). 1 3 B N Y comm ence d t he i nt erpl eade runderN ew Y or k l aw , w hi ch perm i t s “a pe r s on 1 4 w h o is o r m a yb e e x p o se d to m u lti p le lia b ili tya s th e re su lt o f a d v e rse c laim s” to 1 5 “comm ence an ac t i on of i nt erpl eade ragai ns ttw o orm or e” pe r s ons w ho have “ m ade or 1 6 m aybe expe ct ed t o m ake a n [adve r s e] cl ai m . ” N
. Y
. C i v. Pr ac. L
. & R
. § 1006( a) 1 7 ( M cK i nney1997)
. T he i nt erpl eade rpl ai nt i ff i s notr equi r ed t o as s es s the l egal val i di t yof 1 8 the compet i ng cl ai m s agai ns ti t ; i nt erpl eade ri s pr opers o l ong as the part yr eques t i ng i thas 1 9 “r eal orr eas onabl e fe arof doubl e l i abi l i t yorvexat i ous , confl i ct i ng cl ai m s . ” W as hi ngt on 20 El e c . Co o

p . , I n c . v . Pa t e rs o n , Wa lke & Pr a t t , P. C. , 985 F. 2d 677, 679 ( 2d C i r . 1993)34 1 (i n te rn a l q u o ta tio n m a rk s o m itte d ). 2 G i ven thatthe not ehol der s had nots i m pl ya pl aus i bl e but , i n fac t , a val i d cl ai m on 3 the trus tas s et s , t he FD I C ’ s cont ent i on thatB N Y di d notgenui nel yfac e adve r s e cl ai m s on 4 th e tru st c o rp u s g iv e n its rig h t u n d e r th e in d e n tu re to ig n o re th e n o teh o ld e rs’ d e m a n d s is 5 obvi ous l yw i t houtm er i t . A ccor di ngl y , the FD I C does nots t at e a va l i d cl ai m forabus e of 6 th e ju d ic ia l p ro c e s s a g a in s t B N Y
. See M er r i l lLynch, P i er ce, Fenner& Sm i th, I nc. v. 7 C lem e n te , N o. 98 C i v. 1756, 2001 W L 11070, at*6 ( S. D
. N
. Y
. J an. 4, 2001) 8 ( “[C]ount er cl ai m s [that ] ar i s e fr om act s t aken [ byan i nt erpl eade rpl ai nt i ff] w i t hi n t he 9 r i ght s gr ant ed t o i tbyl aw i n br i ngi ng i t s i nt erpl eade ract i on . . . fai l as a mat t erof l aw . ”) 1 0 ( br acke t s and i nt ernal quot at i on m arks om i t t ed)
. Fur t herm or e, s i nce w e fi nd thatthe 1 1 n o teh o ld e rs w e re e n tit led to th e tru st a ss e ts u n d e r th e tra n sa c tio n d o c u m e n ts a n d th a t th is 1 2 fi ndi ng does notconfl i ctw i t h t he pr evi ous or der s of the D
. C
. cour t , the FD I C ’ s br eac h of 1 3 contr actcount er cl ai m s , and i t s ar gum ent s thatthe not ehol der s vi ol at ed the or der s of the 1 4 D
. C
. courti n br i ngi ng t hi s act i on, fai l as a mat t erof l aw . Fi nal l y , s i nce the i nt erpl eade r 1 5 a c tio n w a s n e ith e r d u p lica tiv e n o r im p ro p e r, th e re is n o re a so n f o r u s to o rd e r B N Y to 1 6 rei m bu rs e t he F D IC for i t s at t orney s’ fees. 17 CO NC L US I ON 1 8 F o rt h e r e a s o n s s e tf o r t h a b o v e , th e j u d g me n to f th e d i s t r i c tc o u r ti s AF F I RMED
.