Commonwealth of Pennsylvania Public School Employees' Retirement System v. Morgan Stanley & Co.

814 F.3d 641, 2016 U.S. App. LEXIS 3151, 2016 WL 707204

• Court: Court of Appeals for the Second Circuit
• Decided: February 23, 2016
• Docket: Docket 13-2095-cv(L), 13-2283-cv(XAP), 13-2286-cv(XAP), 13-2287-cv(XAP)
• Status: Published

Opinion

PER CURIAM:

Commerzbank AG (“Commerzbank”) appealed from Judge Scheindlin’s denial of class certification and dismissal of the claims asserted by certain investors for lack of standing, including Commerzbank. In a previous decision, familiarity with which is assumed, we affirmed the district court in part and certified to the New York Court of Appeals the question of whether a reasonable trier of fact could, on the record of this case, conclude that Com-merzbank was validly assigned the right to bring a common-law fraud claim, and therefore had standing to sue various defendants. See Pa. Pub. Sch. Emps.’ Ret. Sys. v. Morgan Stanley & Co., 772 F.3d 111, 116-25 (2d Cir.), as amended, (Nov. 12, 2014). The New York Court of Appeals has since resolved that, under New York law, Commerzbank does not have standing to pursue its fraud claim. Pa. Pub. Sch. Emps.’ Ret. Sys. v. Morgan Stanley & Co., 25 N.Y.3d 543, 553, 14 N.Y.S.3d 313, 35 N.E.3d 481 (2015).

Our prior opinion did not reach the question of whether the District Court properly denied Commerzbank’s Fed. R.Civ.P. 17(a)(3) motion as untimely. 1 Rule 17(a)(3) permits ratification of a claim within a “reasonable time” after a standing objection is raised. That issue is now ripe for decision. We review a district court’s decision whether to dismiss pursuant to Rule 17(a) for abuse of discretion. Stichting Ter Behartiging Van de Belangen Van Oudaandeelhouders In Het Kapitaal Van Saybolt Int’l B.V. v. Schreiber, 407 F.3d 34, 43-44 (2d Cir.2005). Commerzbank’s Rule 17(a) motion was made on September 10, 2012, after summary judgment was entered against it and even after the filing of its motion to reconsider, whereas the issue was raised in defendants’ pleadings in March 2011 and again in the motion for summary judgment. Given Commerz-bank’s delay in filing the motion, the district court acted well within its discretion in denying Commerzbank’s ratification motion as untimely.

In light of the New York Court of Appeals decision and our affirmance of the denial of the Fed.R.Civ.P. 17(a) motion, we affirm.

1 . Given our disposition of this matter, we may assume, for purposes of this case, that Commerzbank’s 17(a)(3) Notice of Ratification Pursuant to Fed.R.Civ.P. 17(a)(3) would have afforded the relief sought.