13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT August Term, 2013 (Argued: May 8, 2014 Decided: June 24, 2015) Docket No. 13‐3325
Cortlandt Street Recovery Corp., Plaintiff‐Appellant,
v.
Hellas Telecommunications, S.à.r.l., Hellas Telecommunications I, S.à.r.l, Hellas Telecommunications Co‐Invest Ltd., Hellas Telecommunications Employees Ltd., TCW HT‐Co‐Invest I L.P., TCW HT‐Co‐Invest II L.P., Defendants–Appellees.*
Before: JACOBS, SACK, and LYNCH, Circuit Judges. The plaintiff appeals from an August 2, 2013, order of the United States
District Court for the Southern District of New York (J. Paul Oetken, Judge)
dismissing the plaintiffʹs claims without prejudice. We conclude that the district
court correctly decided that the plaintiff lacked Article III standing to bring the
claims at issue. We further conclude that the district court did not err in denying
the plaintiffʹs request to attempt to cure this standing defect under Fed. R. Civ. P.
17(a)(3). The judgment of the district court is therefore:
AFFIRMED.
The Clerk of Court is respectfully directed to amend the official caption in this case to conform *
with the caption above. No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
Judge Sack also files a separate concurring opinion.
JARED B. STAMELL, Stamell & Schager, LLP, New York, NY (Andrew R. Goldenberg, Stamell & Schager, LLP, New York, NY, on the brief), for Plaintiff– Appellant. ROBERT S. FISCHLER, Ropes & Gray LLP, New York, NY (Evan P. Lestelle, Ropes & Gray LLP, New York, NY, Paul M. OʹConnor III, David J. Abrams, Kasowitz, Benson, Torres & Friedman LLP, New York, NY, on the brief), for Defendants– Appellees Hellas Telecommunications Co‐ Invest Ltd., Hellas Telecommunications Employees Ltd., TCW HT‐Co‐Invest I L.P., and TCW HT‐Co‐Invest II, L.P. DWIGHT A. HEALY, White & Case LLP, New York, NY (Katherine J. Mims, of counsel, White & Case LLP, New York, NY, on the brief), for Defendants–Appellees Hellas Telecommunications, S.à.r.l., and Hellas Telecommunications I, S.à.r.l. SACK, Circuit Judge: This is an appeal from a judgment of the United States District Court for
the Southern District of New York (J. Paul Oetken, Judge) dismissing the
plaintiffʹs claims without prejudice for lack of standing. The plaintiff appeals
from that decision and from the district courtʹs denial of the plaintiffʹs request to
attempt to cure the standing defect by having the real party in interest ʺratify,
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
join, or be substituted into the actionʺ pursuant to Fed. R. Civ. P. 17(a)(3).
Because we agree that the plaintiff lacked standing to pursue its stated claims,
and because we conclude that the district court did not abuse its discretion in
declining to allow ratification, joinder, or substitution under Rule 17(a)(3), we
affirm.
BACKGROUND
Cortlandt Street Recovery Corp. (ʺCortlandtʺ), a New York corporation, is
attempting to collect approximately €83.1 million allegedly owed to it under
defaulted ʺSubordinated Notesʺ (ʺSub Notesʺ) issued in 2006 by a now‐dissolved
entity, Hellas Telecommunications (Luxembourg) II, S.C.A. (ʺHellas IIʺ).
Cortlandt alleges that the holders of the Sub Notes, citizens severally of Greece,
the British Virgin Islands, the Cayman Islands, and Gibraltar assigned Cortlandt
a portion of the notes in 2011, thereby authorizing Cortlandt to bring the present
action.1
The only evidence of assignment that is in the record pertains to a tranche of 1
notes unrelated to the Sub Notes. Cortlandt asserts here, as it did before the district court, however, that the language of this assignment is identical to the language of the Sub Notes assignment. We assume that to be true for purposes of this appeal. The relevant portion of the assignment reads: The Noteholder hereby assigns to Cortlandt Street Recovery Corp. . . . full rights to collect amounts of principal and interest due on the Notes, and to pursue all 3
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
Cortlandt contends, in substance, that the private equity firms TPG
Capital, L.P. (ʺTPGʺ) and Apax Partners, LLP (ʺApaxʺ), which are not parties to
the present suit, used the Sub Notes to defraud their creditors. According to
Cortlandt, TPG and Apax owned a group of related foreign companies including
Hellas II and defendants Hellas Telecommunications, S.à.r.l. and Hellas
Telecommunications I, S.à.r.l., also Luxembourg entities (the ʺHellas
Defendantsʺ). Cortlandt alleges that TPG and Apax issued promissory notes, in
the name of one of the Hellas Defendants, pledging TPGʹs and Apaxʹs equity in
the company and its subsidiaries as collateral. According to Cortlandt, the firms
then used the proceeds from this sale to buy their own collateral, rendering the
Hellas entities insolvent.
remedies with respect to the Notes against Hellas Finance [or related entities] . . . and any other person or entity who may be liable to Noteholder. The Noteholder remains the owner of the Notes and person in whose name the Notes are registered. The Noteholder hereby irrevocably appoints [Cortlandt] its true and lawful attorney and proxy, with full power of substitution, to pursue collection and all remedies with respect to the Notes . . . . Under this appointment [Cortlandt] shall have all requisite power and authority . . . to make any request or demand or to take any other action under or with respect to the Notes, or under the December 21, 2006 Indenture under which the Notes were issued. J.A. 109‐10.
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
Cortlandt argues that this process—termed a ʺbleed‐outʺ—rendered both
the Hellas Defendants and several now‐dissolved foreign investment funds that
owned or financed the Hellas entities2 (the ʺSponsor Defendantsʺ) liable to the
noteholders or their assignees. In November 2012, Cortlandt, as purported
assignee of the Sub Notes, filed a complaint against both sets of defendants in the
United States District Court for the Southern District of New York claiming, inter
alia, the right to payment under the Sub Notes, breach of contract, violations of
prohibitions on distributions, fraudulent conveyances, and unjust enrichment.
Cortlandt requested relief in the form of payment of the amounts owed on the
Sub Notes, plus interest, and fees, costs, and expenses.
Cortlandt also filed several other lawsuits in state and federal court
seeking to collect on the Sub Notes and on another tranche of notes it claims it
was assigned, the so‐called ʺPIK Notes,ʺ3 which are not at issue in this case. See,
e.g., Cortlandt St. Recovery Corp. v. Aliberti, No. 12 CIV. 8686 JPO, 2014 WL 941900,
2014 U.S. Dist. LEXIS 32041 (S.D.N.Y. Mar. 11, 2014), on reconsideration, 2014 WL
These funds are Hellas Telecommunications Co‐Invest Ltd., Hellas 2
Telecommunications Employees Ltd., TCW HT‐Co‐Invest I L.P., and TCW HT‐Co‐ Invest II L.P. ʺPIKʺ is an acronym for ʺpayment‐in‐kind.ʺ See In re TPG Troy, LLC, 492 B.R. 150, 154 3
(Bankr. S.D.N.Y. 2013).
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
6907548, 2014 U.S. Dist. LEXIS 170277 (S.D.N.Y. Dec. 9, 2014); Cortlandt St.
Recovery Corp. v. Deutsche Bank AG, London Branch, No. 12 CIV. 9351 JPO, 2013
WL 3762882, 2013 U.S. Dist. LEXIS 100741 (S.D.N.Y. July 18, 2013), appeal
dismissed (Sept. 16, 2013); Cortlandt St. Recovery Corp. v. Hellas Telecomms., S.à.r.l.,
996 N.Y.S.2d 476 (N.Y. Sup. Ct. Sept. 16, 2014) (consolidating four actions
initiated by Cortlandt on the Sub and PIK Notes).
In one of these other actions, Cortlandt brought suit on the Sub Notes
against Deutsche Bank AG, London Branch (ʺDeutsche Bankʺ), alleging it to be
an underwriter of the Sub Notes. Cortlandt St. Recovery Corp. v. Deutsche Bank
AG, London Branch, No. 12 CIV. 9351 JPO, 2013 WL 3762882, 2013 U.S. Dist.
LEXIS 100741 (S.D.N.Y. July 18, 2013) (the ʺDeutsche Bank Opinionʺ), appeal
dismissed (Sept. 16, 2013); see also Complaint at 2, Cortlandt St. Recovery Corp. v.
Deutsche Bank AG, London Branch, No. 12 CIV. 9351 JPO (S.D.N.Y. 2013). In both
the Deutsche Bank action and the present one, the defendants moved to dismiss
on several grounds, including that the court lacked subject matter jurisdiction
over the action. See Fed. R. Civ. P. 12(b)(1). Specifically, the defendants argued
that Cortlandt lacked title to the Sub Notes and therefore lacked Article III
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
standing to bring claims related to those notes. See Deutsche Bank Op., 2013 WL
3762882, at *1 & n.1, 2013 U.S. Dist. LEXIS 100741, at *1 & n.1.
The district court granted the defendantsʹ motions to dismiss in both cases.
In July 2013, the court issued an order and opinion in the Deutsche Bank case
concluding that Cortlandt had failed adequately to plead title to claims arising
under the Sub Notes and that Cortlandt had therefore failed adequately to plead
facts on which Article III standing could be based. See Deutsche Bank Op., 2013
WL 3762882, at *3, 2013 U.S. Dist. LEXIS 100741, at *9‐10. In August 2013, the
court issued an order in the present action explaining that the action was
dismissed without prejudice ʺ[f]or the reasons set forth in [the Deutsche Bank
Opinion].ʺ Order, Cortlandt St. Recovery Corp. v. Aliberti, No. 12 Civ. 8685 JPO
(S.D.N.Y. Aug. 2, 2013).4
Cortlandt appealed.
DISCUSSION Cortlandt argues that the district court erred in granting the defendantsʹ
motion to dismiss its complaint for lack of subject matter jurisdiction pursuant to
Fed. R. Civ. P. 12(b)(1). Cortlandt further asserts that the district court erred in
4 Defendant Giancarlo Aliberti was voluntarily dismissed from the action.
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failing to grant to it the opportunity to cure any standing defect under Fed. R.
Civ. P. 17(a)(3), which allows for ʺthe real party in interest to ratify, join, or be
substituted intoʺ a pending action. We disagree with both contentions.
I. Standard of Review A district court properly dismisses an action under Fed. R. Civ. P. 12(b)(1)
for lack of subject matter jurisdiction if the court ʺlacks the statutory or
constitutional power to adjudicate it,ʺ Makarova v. United States, 201 F.3d 110, 113
(2d Cir. 2000), such as when (as in the case at bar) the plaintiff lacks
constitutional standing to bring the action. See W.R. Huff Asset Mgmt. Co., LLC v.
Deloitte & Touche LLP, 549 F.3d 100, 104, 106 (2d Cir. 2008); see also Alliance for
Envtl. Renewal, Inc. v. Pyramid Crossgates Co., 436 F.3d 82, 88 n.6 (2d Cir. 2006)
(ʺ[T]he proper procedural route [for standing challenges at the pleadings stage]
is a motion under Rule 12(b)(1).ʺ). On appeal from a dismissal under Rule
12(b)(1), we review the courtʹs factual findings for clear error and its legal
conclusions de novo. Makarova, 201 F.3d at 113.
The plaintiff bears the burden of ʺalleg[ing] facts that affirmatively and
plausibly suggest that it has standing to sue.ʺ Amidax Trading Grp. v. S.W.I.F.T.
SCRL, 671 F.3d 140, 145 (2d Cir. 2011). In assessing the plaintiffʹs assertion of
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
standing, ʺwe accept as true all material allegations of the complaint[] and . . .
construe the complaint in favor of the complaining party.ʺ W.R. Huff, 549 F.3d at
106 (internal quotation marks omitted). In deciding a Rule 12(b)(1) motion, the
court may also rely on evidence outside the complaint. Makarova, 201 F.3d at 113.
ʺ[A] district courtʹs decision whether to dismiss pursuant to Rule 17(a) is
reviewed for abuse of discretion.ʺ Stichting Ter Behartiging Van de Belangen Van
Oudaandeelhouders In Het Kapitaal Van Saybolt Intʹl B.V. v. Schreiber, 407 F.3d 34,
43‐44 (2d Cir.), certified question accepted, 5 N.Y.3d 730, 832 N.E.2d 1185 (2005),
certified question withdrawn sub nom. Intʹl B.V. (Found. of Sʹholdersʹ Comm.
Representing Former Sʹholders of Saybolt Intʹl B.V.) v. Schreiber, 421 F.3d 124 (2d Cir.
2005).
II. Standing ʺIn its constitutional dimension, standing imports justiciability: whether
the plaintiff has made out a ʹcase or controversyʹ between himself and the
defendant within the meaning of Art. III.ʺ Warth v. Seldin, 422 U.S. 490, 498
(1975). To have such Article III standing, ʺthe plaintiff [must have] ʹalleged such
a personal stake in the outcome of the controversyʹ as to warrant [its] invocation
of federal‐court jurisdiction and to justify exercise of the courtʹs remedial powers
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
on [its] behalf.ʺ Id. at 498‐99 (quoting Baker v. Carr, 369 U.S. 186, 204 (1962)).
Others may benefit ʺcollaterallyʺ from a resolution favorable to the plaintiff, id. at
499, or suffer from an unfavorable one, but the plaintiffʹs genuinely personal
stake ensures the presence of ʺthat concrete adverseness which sharpens the
presentation of issues upon which [a] court so largely depends.ʺ Baker, 369 U.S.
at 204.
A plaintiff claiming such a stake must establish, first, that it has sustained
an ʺinjury in factʺ which is both ʺconcrete and particularizedʺ and ʺactual or
imminent,ʺ Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992) (internal
quotation marks omitted); second, that the injury was in some sense caused by
the opponentʹs action or omission, id.; and finally, that a favorable resolution of
the case is ʺlikelyʺ to redress the injury, id. at 561. These elements form an
ʺirreducible constitutional minimumʺ without which a federal court may not
proceed to the merits of a claim. Id. at 560. ʺ[T]he jurisdictional issue must be
resolved before the merits issue . . . .ʺ Alliance For Envtl. Renewal, 436 F.3d at 85.
Cortlandt does not allege that it has suffered direct injury as a result of the
defendantsʹ actions. It points instead to the well‐established principle that
ʺ[l]awsuits by assignees . . . are ʹcases and controversies of the sort traditionally
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
amenable to, and resolved by, the judicial process.ʹʺ Sprint Commcʹns Co., L.P. v.
APCC Servs., Inc., 554 U.S. 269, 285 (2008) (quoting Vt. Agency of Natural Res. v.
United States ex rel. Stevens, 529 U.S. 765, 777–78 (2000)). The defendants, for their
part, do not dispute that an assignment of claims from the noteholders to
Cortlandt would allow Cortlandt to ʺstand in the place of the injured partyʺ and
satisfy constitutional standing requirements. W.R. Huff, 549 F.3d at 107. Neither
do they dispute that the noteholders could have assigned their claims to
Cortlandt. See Advanced Magnetics, Inc. v. Bayfront Partners, Inc., 106 F.3d 11, 17
(2d Cir. 1997) (ʺIn general, claims or choses in action may be freely transferred or
assigned to others.ʺ). Instead, the parties dispute whether the noteholders
actually did assign the claims such that Cortlandt has standing to bring suit on
the Sub Notes.
To assign a claim effectively, the claimʹs owner ʺmust manifest an intention
to make the assignee the owner of the claim.ʺ Id. (internal quotation marks and
brackets omitted). A would‐be assignor need not use any particular language to
validly assign its claim ʺso long as the language manifests [the assignorʹs]
intention to transfer at least title or ownership, i.e., to accomplish ʹa completed
transfer of the entire interest of the assignor in the particular subject of
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
assignment.ʹʺ Id. (emphasis added) (citations omitted). An assignorʹs grant of,
for example, ʺʹthe power to commence and prosecute to final consummation or
compromise any suits, actions or proceedings,ʹʺ id. at 18 (quoting agreements that
were the subject of that appeal), may validly create a power of attorney, but that
language would not validly assign a claim, because it does ʺnot purport to
transfer title or ownershipʺ of one. Id.
Cortlandt has not carried its burden of showing a valid assignment of a
claim. First, Cortlandtʹs complaint does not allege ʺa completed transferʺ of the
noteholdersʹ ʺentire interestʺ in any claim arising under the Sub Notes. Id. at 17.
The complaint alleges that Cortlandt was assigned ʺfull rights under the
assignments to collect principal and interest due and to pursue all remedies,ʺ
Pl.ʹs First Am. Compl. ¶ 12 (J.A. 60), and that Cortlandt is ʺauthorized to sue and
collect on the Sub Notesʺ on behalf of the assignors, id. ¶ 108 (J.A. 82). It does
not, however, indicate that Cortlandt was assigned ownership of the claims.
Cortlandt argues that an ʺassignment of full rights to collect is sufficientʺ to
satisfy the injury‐in‐fact requirement. Appellantʹs Br. at 11. But, as we have
explained,
[a] provision by which one person grants another the power to sue on and collect on a claim confers on the grantee a power of attorney 12
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
with respect to that claim. The grant of a power of attorney, however, is not the equivalent of an assignment of ownership; and, standing alone, a power of attorney does not enable the grantee to bring suit in his own name. Advanced Magnetics, 106 F.3d at 17‐18 (citations omitted); cf. 6A Charles Alan
Wright et al., Fed. Prac. & Proc. Civ. § 1545 (3d ed. 2014) (ʺ[T]he mere transfer of
a general power of attorney . . . does not create a sufficient interest or right in the
chose and the grantor of the power remains the only real party in interest.ʺ).
Nor has Cortlandt pointed to anything in the assignment, or to other
evidence in the record, suggesting that title to claims arising under the Sub Notes
was assigned to it.5 The assignment reads:
The Noteholder hereby assigns to Cortlandt Street Recovery Corp. . . . full rights to collect amounts of principal and interest due on the Notes, and to pursue all remedies with respect to the Notes against Hellas Finance [or various other related entities] . . . and any other person or entity who may be liable to Noteholder. The Noteholder remains the owner of the Notes and person in whose name the Notes are registered. The Noteholder hereby irrevocably appoints [Cortlandt] its true and lawful attorney and proxy, with full power of substitution, to pursue collection and all remedies with respect to the Notes . . . . Under this appointment [Cortlandt] shall have all requisite power and authority . . . to make any request or demand or to take any other
As noted above: ʺIn resolving a motion to dismiss for lack of subject matter 5
jurisdiction under Rule 12(b)(1), a district court may refer to evidence outside the pleadings.ʺ Makarova, 201 F.3d at 113.
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
action under or with respect to the Notes, or under the December 21, 2006 Indenture under which the Notes were issued. J.A. 109‐10. The language of the assignment confirms that Cortlandt was
authorized to collect payment on behalf of the noteholders, but it does not so
much as hint that title to the claims at issue was being transferred. An
assignment such as the one in issue, which does not transfer ownership of claims,
is, on its own, ʺinsufficient to permit [a purported assignee] to sue on those
claims in its name.ʺ Advanced Magnetics, 106 F.3d at 18.
Cortlandt urges us to reconsider the approach of Advanced Magnetics in
light of Sprint Communications Co., L.P. v. APCC Services, Inc., 554 U.S. 269 (2008).
We think Advanced Magnetics remains persuasive. In Sprint, payphone operators
had assigned their right to collect specified payments from telephone carriers to
collection firms called ʺaggregators.ʺ Id. at 271‐72. Through a separate
agreement, the aggregators agreed to remit any payments obtained from the
carriers to the payphone operators, less a fee for the aggregatorsʹ services. Id. at
272. The aggregators brought suit against the carriers. Id. The carriers moved to
dismiss the complaint on the ground that the remittance agreement deprived the
aggregators—mere ʺassignees for collectionʺ—of any real interest in the claims
and, therefore, of standing to pursue them, despite the valid assignment. Id.
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The Court rejected the carriersʹ challenge, recognizing the longstanding
ʺhistorical tradition of suits by assignees, including assignees for collection.ʺ Id.
at 285. Whatever the aggregators did with their payments post‐lawsuit, the
Court reasoned, was of no constitutional moment. After all, the aggregatorsʹ
ʺinjuries would be redressed whether the aggregators remit[ted] the litigation
proceeds to the payphone operators, donate[d] them to charity, or use[d] them to
build new corporate headquarters.ʺ Id. at 287.
Cortlandt argues that ʺ[n]othing in Sprint suggests that ʹtitleʹ or ʹownershipʹ
must be recitedʺ in an assignment to confer standing upon an assignee.
Appellantʹs Reply Br. at 4. But Sprint did not focus on the aggregatorsʹ title to the
claims because there was ʺno reason to believe the assignment [was] anything
less than a complete transfer to the aggregator[s] of the injury and resulting
claim.ʺ Sprint, 554 U.S. at 286 (internal quotation marks omitted). The
assignment at issue in Sprint ʺassign[ed], transfer[red] and set[] over to [the
aggregator] for purposes of collection, all rights, title and interest of the [payphone
operators] in [the operatorsʹ] claims, demands, or causes of action.ʺ Id. at 272
(emphases added). The assignment here, by contrast, confers only ʺfull rights to
collect amounts of principal and interest due on the Notes, and to pursue all
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remedies with respect to the Notes,ʺ making no mention of title to, or ownership
of, the claims. Whereas the payphone operators in Sprint ʺassigned their claims
to the aggregators lock, stock, and barrel,ʺ id. at 286, the noteholders in the case at
bar assigned to Cortlandt only the ability to collect under the claims. Although
Sprint confirms that an assignee need not possess more than title to a claim to
bring suit upon that claim, nothing in that case suggests that an assignee may
proceed with less.
If there was any doubt about the continuing relevance of Advanced
Magnetics in light of Sprint, it was settled by W.R. Huff Asset Management Co., LLC
v. Deloitte & Touche LLP, 549 F.3d 100 (2d Cir. 2008). There we concluded that
Sprint ʺimplicitly supports the holding of Advanced Magnetics that a mere power‐
of‐attorney . . . does not confer standing to sue in the holderʹs own right.ʺ Id. at
108. It is still true that ʺthe minimum requirement for an injury‐in‐fact is that the
plaintiff have legal title to, or a proprietary interest in, the claim.ʺ Id.
Cortlandt argues, finally on this score, that an assignment of rights to
collect payments under the Notes and to pursue all remedies under the notes
confers an interest ʺat least as broad asʺ that conferred by an assignment of title.
Appellantʹs Br. at 12. The dispositive inquiry does not go to the breadth of the
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
assignment, however, but rather to its nature. ʺThere is an important distinction
between simply hiring a lawyer and assigning a claim to a lawyer . . . . The latter
confers a property right (which creditors might attach); the former does not.ʺ
Sprint, 554 U.S. at 289. Our caselaw confirms that a purported assignee of a claim
must plead a proprietary interest in that claim, and not simply the ability to
pursue the claim on behalf of another, to bring the claim in his or her own name
and satisfy the requirements of constitutional standing.
III. Rule 17 Cortlandt further argues that even if it lacked constitutional standing, the
district court erred by not providing Cortlandt with the opportunity to cure this
deficiency under Fed. R. Civ. P. 17(a)(3). As noted above, ʺa district courtʹs
decision whether to dismiss pursuant to Rule 17(a) is reviewed for abuse of
discretion.ʺ Schreiber, 407 F.3d at 43‐44.
Rule 17(a)(1) requires that an action ʺbe prosecuted in the name of the real
party in interest.ʺ In Part II of our opinion, above, we concluded that the district
court was correct in deciding that, absent an assignment of the claims in issue,
this lawsuit was not brought or prosecuted in the name of the real party in
interest. But Rule 17(a)(3) prohibits a court from dismissing an action for failure
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
to comply with subsection (a)(1) ʺuntil, after an objection, a reasonable time has
been allowed for the real party in interest to ratify, join, or be substituted into the
action.ʺ
The real party in interest principle embodied in Rule 17 ensures that only
ʺa person who possesses the right to enforce [a] claim and who has a significant
interest in the litigationʺ can bring the claim. Schreiber, 407 F.3d at 48 n.7
(quoting Va. Elec. & Power Co. v. Westinghouse Elec. Corp., 485 F.2d 78, 83 (4th Cir.
1973)); see also Oscar Gruss & Son, Inc. v. Hollander, 337 F.3d 186, 193 (2d Cir. 2003)
(ʺ[A]n action must be brought by the person who, according to the governing
substantive law, is entitled to enforce the right.ʺ (internal quotation marks
omitted)). The rule was initially adopted to ensure that assignees could bring
suit in their own names, contrary to the common‐law practice. See Fed. R. Civ. P.
17 advisory committeeʹs notes, 1966 Amendment. However, ʺthe modern
function of the rule . . . is [] to protect the defendant against a subsequent action
by the party actually entitled to recover, and to insure generally that the
judgment will have its proper effect as res judicata.ʺ Id.; see also Gogolin & Stelter
v. Karnʹs Auto Imports, Inc., 886 F.2d 100, 102 (5th Cir. 1989) (ʺThe purpose of the
rule is to prevent multiple or conflicting lawsuits by persons such as assignees,
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executors, or third‐party beneficiaries, who would not be bound by res judicata
principles.ʺ). The dismissal provision in Rule 17(a)(3) was added later ʺto avoid
forfeiture and injustice when an understandable mistake has been made in
selecting the party in whose name the action should be brought.ʺ 6A Charles
Alan Wright et al., Fed. Prac. & Proc. Civ. § 1555 (3d ed. 2014). That provision
codifies the modern ʺjudicial tendency to be lenient when an honest mistake has
been made in selecting the proper plaintiff.ʺ Id.
If a party successfully moves for ratification, joinder, or substitution, ʺthe
action proceeds as if it had been originally commenced by the real party in
interest.ʺ Fed. R. Civ. P. 17(a)(3). Crucially for statute of limitations purposes,
the claim of the real party in interest therefore dates back to the filing of the
complaint. Cortlandt argues that although its lawsuit was dismissed for lack of
subject matter jurisdiction, the dismissal was based solely on the fact that
Cortlandt was not the real party in interest. It should therefore have been
permitted either to amend the complaint to substitute the parties who actually
held the claims at issue as plaintiffs in the lawsuit, or to amend its agreement
with the real parties in interest to transfer title to the claims to Cortlandt, thereby
making it the real party interest.
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
The defendantsʹ first argument to the contrary is that Cortlandt forfeited
any Rule 17(a)(3) objection by failing to raise the issue before the district court.
ʺ[I]t is a well‐established general rule that an appellate court will not consider an
issue raised for the first time on appeal.ʺ Bogle‐Assegai v. Connecticut, 470 F.3d
498, 504 (2d Cir. 2006) (internal quotation marks omitted). Cortlandt asserts that
it preserved the objection by requesting the opportunity to amend its complaint
ʺif the [c]ourt conclude[d] there [were] any defects or deficiencies.ʺ Mem. in
Oppʹn to the Sponsor Defs.ʹ Mot. to Dismiss at 25 n.21, Dkt. No. 68, Cortlandt St.
Recovery Corp. v. Aliberti, No. 12 Civ. 8685 JPO (S.D.N.Y. Apr. 22, 2013); Mem. in
Oppʹn to the Mot. to Dismiss of [the Hellas Defs.] at 24 n.22, Dkt. No. 77,
Cortlandt St. Recovery Corp. v. Aliberti, No. 12 Civ. 8685 JPO (S.D.N.Y. May 31,
2013).
Cortlandt did not explicitly refer to Rule 17 or specify a means by which it
hoped to remedy any standing deficiency in the action as filed. But it did invoke
Rule 17 in the context of the defendantʹs standing objection in the Deutsche Bank
action, arguing that it should have been given the opportunity to substitute the
noteholders as the real parties in interest or to obtain a new assignment.
Deutsche Bank Op., 2013 WL 3762882, at *3, 2013 U.S. Dist. LEXIS 100741, at *10‐
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
11. And the district court squarely addressed those arguments, denying the
requests. Id., 2013 WL 37628827, at *3 & n.4, 2013 U.S. Dist. LEXIS 100741 at *11‐
12 & 12 n.4. Because the district court dismissed the present action ʺ[f]or the
reasons set forthʺ in the Deutsche Bank Opinion, Order, Cortlandt St. Recovery
Corp. v. Aliberti, No. 12 Civ. 8685 JPO (S.D.N.Y. Aug. 2, 2013), thus reaching and
rejecting Cortlandtʹs implied 17(a)(3) objection, and because we may in any event
exercise our discretion to consider an issue raised for the first time on appeal
ʺwhere the argument presents a question of law and there is no need for
additional fact‐finding,ʺ Bogle‐Assegai, 470 F.3d at 504 (internal quotation marks
omitted), we decline to conclude that Cortlandt has forfeited its rights under
Rule 17.
The question then is whether the district court abused its discretion in
denying an amendment request under Rule 17. We have had few occasions on
which to address this issue. See Schreiber, 407 F.3d at 43 (noting that as of 2005
ʺthis [C]ircuit appears never to have stated the proper standard of review for a
district courtʹs application of the curative procedures set forth in that ruleʺ). In
Advanced Magnetics, our Circuitʹs leading case interpreting the Rule, we
concluded that the assignment agreements in issue ʺwere insufficient to transfer
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
to [the plaintiff] ownership of the claims of the [assignors] and hence were
insufficient to permit [the plaintiff] to sue on those claims in its name.ʺ 106 F.3d
at 18 (emphasis added).
We nonetheless returned the case to the district court directing ʺthat leave
to file the proposed amended complaint substituting the [assignors] as plaintiffs
to pursue their own claims [be] granted under Rule 17(a).ʺ Id. at 21. We
reasoned that such substitution was warranted for three reasons: First, ʺ[t]he
complaintʹs only pertinent flaw was the identity of the party pursuing those
claims.ʺ Id. at 20. In other words, the proposed amended complaint sought only
to substitute one name for another; the factual and legal allegations of the
complaint would remain unaltered. Second, there was no indication of ʺbad faith
or . . . an effort to deceive or prejudice the defendants.ʺ Id. at 21. Finally, the
proposed substitution did not threaten to prejudice the defendants, who had
timely notice of the substance of the allegations, the relevant parties, and their
claims. Id.
But the facts underlying our decision in Advanced Magnetics differ from
those in the case at bar in at least one significant respect: There, unlike here, the
named plaintiff had standing irrespective of any amendment under Rule 17 to
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
pursue at least some of its claims against the defendants; Cortlandt did not. The
district court here followed the lead of several other district courts in this Circuit
by distinguishing Advanced Magnetics based on that difference.6 See, e.g., Clarex
Ltd. v. Natixis Sec. Am. LLC, No. 12 CIV. 0722 PAE, 2012 WL 4849146, at *8, 2012
U.S. Dist. LEXIS 147485, at *20‐21 (S.D.N.Y. Oct. 12, 2012); In re SLM Corp. Sec.
Litig., 258 F.R.D. 112, 115 (S.D.N.Y. 2009).
In Cortlandtʹs case, absent a complete assignment of the only claims on
which the lawsuit was based, there was no valid lawsuit pending before the
district court in which to permit an amended complaint. The district court
reasoned that ʺ[s]tanding . . . ʹis to be determined as of the commencement of
suit.ʹ Lujan, 504 U.S. at 570 n. 5. A court may not permit an action to continue,
even where the jurisdictional deficiencies have been subsequently cured, ʹif
jurisdiction [was] lacking at the commencement of a suit . . . .ʹ Disability
Advocates, Inc. v. N.Y. Coal. for Quality Assisted Living, Inc., 675 F.3d 149, 160 (2d
Cir. 2012).ʺ Deutsche Bank Op., 2013 WL 3762882, at *3, 2013 U.S. Dist. LEXIS
100741, at *11 (second ellipsis in original). The court also noted that ʺʹwhere
Advanced Magnetics did not explicitly rely on the fact that the plaintiff had standing 6
on some claims to reach the plaintiffʹs Rule 17 objection as to the other claims, nor did it examine the relationship between constitutional standing requirements and Rule 17.
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
courts in this Circuit have used [] Rule 17(a)(3) to remedy defects in standing,
they have generally done so where the plaintiff clearly had standing on another
claim that it brought.ʹʺ Id., 2013 U.S. Dist. LEXIS 100741, at *11‐12 (quoting Clarex
Ltd., 2012 WL 4849146, at *8, 2012 U.S. Dist. LEXIS 147485, at *22) (brackets in
original). In other words, in the absence of a plaintiff with standing, this lawsuit
was a nullity, and there was therefore no lawsuit pending for the real party in
interest to ʺratify, join, or be substituted intoʺ under Rule 17(a)(3) or otherwise.
The question whether a plaintiff may use Rule 17(a)(3) to remedy a
standing deficiency when it lacks standing as to all of its claims – as is the case
here – appears to be an issue of first impression in this Court, if not the district
courts in this Circuit. See W.R. Huff, 549 F.3d at 104 n.3 (avoiding Rule 17(a)
question where only issue on appeal was constitutional standing); Lunney v.
United States, 319 F.3d 550, 556‐57 (2d Cir. 2003) (avoiding Rule 17(a) question by
affirming dismissal on other jurisdictional grounds). At least one other circuit
has addressed the question, see Zurich Ins. Co. v. Logitrans, Inc., 297 F.3d 528, 531
(6th Cir. 2002) (plaintiff that ʺhad no standing to bring th[e] action [had] no
standing to make a motion to substitute the real party in interestʺ), although this
decision has met with some criticism, see, e.g., Park B. Smith, Inc. v. CHF Indus.
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
Inc., 811 F. Supp. 2d 766, 773‐74 & n.3 (S.D.N.Y. 2011) (declining to follow Zurich
Insurance Co. based on the district courtʹs view that that case adopted an
unnecessarily ʺrigidʺ approach); 13A Charles Alan Wright et al., Fed. Prac. &
Proc. Civ. § 3531 n.61 (3d ed. 2014) (characterizing Zurich Insurance Co. as
ʺparticularly troublingʺ).
We need not, however, resolve this question to dispose of Cortlandtʹs
request to attempt to cure the standing defect under Fed. R. Civ. P. 17(a)(3). We
affirm because neither of the requests made by Cortlandt in its effort to cure the
standing problem would have been consistent with Rule 17(a)(3). Therefore, the
district courtʹs decision to deny relief under that rule was not an abuse of
discretion.
Cortlandt made two specific, alternative requests: first, to substitute the
noteholders for it as plaintiffs, or, second, for leave to obtain a new assignment
from the noteholder vesting in Cortlandt sufficient title to maintain this lawsuit.7
7 As the district court described it: During a recent telephone conference, Cortlandt suggested that, were the [c]ourt to hold that Cortlandt lacked standing, it should be permitted to cure the deficiency by ʺinterven[ing] the real party . . . or establish[ing] authorizationʺ through a new agreement. (Trans. at 5:16‐18; see also id. at 5:18‐22 (Plaintiffʹs Counsel: ʺIf [Defense Counsel] is questioning whether the authorization is sufficient, rather than to say that this is sufficient 25
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
We conclude that neither provides the plaintiff with a means of employing the
provisions of Rule 17(a)(3) to solve its standing problems.
As to Cortlandtʹs first request, substitution of the noteholders as plaintiffs
would cure the standing defect. Simultaneously and necessarily, though, it
would create a different, fatal jurisdictional defect. Cortlandt conceded at oral
argument that the noteholders, foreign citizens, are not diverse from the
defendants, also foreign entities. While
diversity is present when the action is between ʺcitizens of a State and citizens or subjects of a foreign state,ʺ 28 U.S.C. § 1332(a)(2), or between ʺcitizens of different States and in which citizens or subjects of a foreign state are additional parties,ʺ id. § 1332(a)(3)[,] diversity is lacking within the meaning of these sections where the only parties are foreign entities.
Universal Licensing Corp. v. Paola del Lungo S.p.A., 293 F.3d 579, 580‐81 (2d Cir.
2002). It is undisputed that the only potential basis for federal subject matter
jurisdiction in this case is diversity. We have explained that ʺ[t]he procedural
mechanisms set forth in Rule 17(a) for ameliorating real party in interest
problems may not, under the Rules Enabling Act, 28 U.S.C. § 2072(b), be
employed to expand substantive rights.ʺ Schreiber, 407 F.3d at 49. Thus, ʺRule
where he says it isnʹt, he is just giving me language that he wants to see, why donʹt I just go out and get it?ʺ). Deutsche Bank Op., 2013 WL 3762882, at *3, 2013 U.S. Dist. LEXIS 100741, at *10‐11.
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
17(a) . . . does not extend or limit the subject matter jurisdiction of a federal courtʺ
by conferring subject matter jurisdiction when it would ʺnot otherwise exist.ʺ
Airlines Reporting Corp. v. S & N Travel, Inc., 58 F.3d 857, 861 n.4 (2d Cir. 1995)
(internal quotation marks omitted); see also Lunney, 319 F.3d at 556‐57. Because
the noteholders Cortlandt sought to substitute would have lacked subject matter
jurisdiction to bring the claims, the district court did not abuse its discretion by
denying Cortlandtʹs request to substitute those entities under Rule 17(a)(3). See 4
Mooreʹs Federal Practice 3D § 17.12[1][c] (ʺIf joinder or substitution of, or
ratification by, a real party in interest would destroy the courtʹs jurisdiction, the
action must be dismissed.ʺ).
If Cortlandtʹs second request—for leave to obtain a new assignment—were
pursued, diversity jurisdiction would not appear to present a barrier. The
diversity jurisdiction that now obtains between the plaintiff and the defendants
would survive. But while granting Cortlandtʹs request to create and execute a
new assignment transferring complete title and ownership of the claims in issue
to Cortlandt might theoretically create a claim litigable by Cortlandt, it would
not enable Cortlandt to alter its complaint in the district court pursuant to Rule
17(a)(3) to reflect the contents of the revised transfer.
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
As we have discussed, Cortlandtʹs First Amended Complaint alleges that it
was assigned ʺfull rights under the assignments to collect principal and interest
due and to pursue all remedies.ʺ Pl.ʹs First Am. Compl. ¶ 12 (J.A. 60). In order to
have standing, however, Cortlandt would have to allege that it was assigned title
to the claims, not merely a power of attorney. A new assignment would ʺalter[]
the original complaintʹs factual allegations as to the events or the participants,ʺ
Advanced Magnetics, 106 F.3d at 20, because the language of the new complaint, to
cure the standing bar, would necessarily reflect the contents of the new
assignment.
We have ordinarily allowed amendments under Rule 17 only ʺwhen a
mistake has been made as to the person entitled to bring suit and such
substitution will not alter the substance of the action.ʺ Park B. Smith, Inc., 811 F.
Supp. 2d at 773. Cortlandtʹs legal claims might remain unaltered if a new
assignment were substituted for the old one, but the factual allegations
supporting them would not. Unlike a substitution, such as the one requested in
Advanced Magnetics or Zurich Insurance Co., pleading the existence of a new and
substantively different assignment would require more than a ʺmerely formalʺ
alteration of the complaint. See Advanced Magnetics, 106 F.3d at 20. Such an
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
attempt to employ Rule 17(a)(3) to cure the standing problem here would thus be
fated to fail.
We cannot rule out the possibility that Cortlandt might have avoided these
challenging procedural pitfalls through a request for leave to obtain a valid
assignment under some other rule of civil procedure. It did not. It has relied
upon only Rule 17 in the present appeal. For the reasons set forth above, its
request falls outside the bounds of the proper application of that rule. 8
We have apparently never, in a precedential opinion, adopted a rule to the effect 8
ʺthat even when [a] claim is not assigned until after [an] action has been instituted, the assignee is the real party in interest and can maintain the action.ʺ 6A Charles Alan Wright et al., Fed. Prac. & Proc. Civ. § 1545 (3d ed. 2014); see, e.g., Dubuque Stone Prod. Co. v. Fred L. Gray Co., 356 F.2d 718, 724 (8th Cir. 1966); Kilbourn v. W. Sur. Co., 187 F.2d 567, 571 (10th Cir. 1951); see also 4 Mooreʹs Federal Practice § 17.11[1][e]. But see Lambrinos v. Exxon Mobil Corp., 349 F. Appʹx 613, 614 (2d Cir. 2009) (summary order) (apparently relying on this rule). The ʺruleʺ apparently predates adoption of Rule 17(a)(3), but modern courts sometimes support their approval of such post‐ commencement assignment by reference to Rule 17(a). See, e.g., Campus Sweater & Sportswear Co. v. M. B. Kahn Constr. Co., 515 F. Supp. 64, 84 (D.S.C. 1979), affʹd, 644 F.2d 877 (4th Cir. 1981). We need not determine under what circumstances, if ever, a post‐ commencement assignment might be appropriate under 17(a)(3) or some other provision of the Federal Rules, although we note that Advanced Magnetics suggests that 17(a)(3) alone would not authorize such an assignment under these circumstances. Cortlandt has not made this argument in the district court or before us. See McCarthy v. S.E.C., 406 F.3d 179, 186 (2d Cir. 2005) (ʺWe think it reasonable to hold appellate counsel to a standard that obliges a lawyer to include his most cogent arguments in his opening brief, upon pain of otherwise finding them waived.ʺ).
No. 13‐3325 Cortlandt St. Recovery Corp. v. Hellas Telecommunications, S.à.r.l.
Conclusion
For the foregoing reasons, the district court did not err in concluding that
the plaintiff lacked standing nor did the court abuse its discretion in denying the
plaintiff relief under Rule 17(a)(3). It therefore did not err in dismissing the
complaint without prejudice. The judgment of the district court is therefore
SACK, Circuit Judge, concurring:
Unsurprisingly, I concur in the foregoing opinion – I am, after all, its
author. I add this brief concurrence, though, to explain my view that a decision
referred to in that opinion, Zurich Insurance Co. v. Logitrans, Inc., 297 F.3d 528 (6th
Cir. 2002), is not the law of this Circuit, and also to express some doubt that it
should be. My colleagues point out that the resolution of this issue is not
necessary to our resolution of this appeal, and decline, therefore, to express their
views on the subject.
In Zurich Insurance Co., the Sixth Circuit affirmed the denial of a motion
that had been brought in an attempt to cure a standing defect under Fed. R. Civ.
P. 17(a)(3). An insurance company subsidiary, Zurich Switzerland, initially
thinking itself to be the subrogee of certain claims, requested leave of the district
court to substitute the proper subrogee of all of those claims, a parallel
subsidiary* referred to as American Guarantee. Zurich Ins. Co., 297 F.3d at 530.
The district court denied the motion, see id. at 530‐31, and the court of appeals
affirmed, id. The court of appeals concluded that because the plaintiff ʺhad no
A separate opinion explained that Zurich Switzerland and American Guarantee were *
ʺsister companies under the common ownership of a single corporate entity.ʺ Zurich Insurance Co., 297 F.3d at 533 (Gilman, J., concurring).
standing to bring th[e] action, [it had] no standing to make a motion to substitute
the real party in interest.ʺ Id. at 531. The court explained:
An attorney made a mistake and filed the action in the name of Zurich Switzerland, when Zurich Switzerland had no claims whatsoever against the defendants, and no Article III standing to sue. American Guarantee, a totally separate entity, which was not vigilant in protecting its claims, cannot now benefit from Zurich Switzerlandʹs mistake. Id. at 532. The court cited other cases – Ensley v. Cody Resources, Inc., 171 F.3d 315,
320 (5th Cir. 1999), and Whelan v. Abell, 953 F.2d 663, 672 (D.C. Cir. 1992) – in
which courts first determined that a plaintiff had standing independent of any
requested substitution before addressing the Rule 17 inquiry, Zurich Ins. Co., 297
F.3d at 532. Those cases did not address whether that order of operations was
constitutionally required.
As our opinion notes, some courts and commentators have criticized
Zurich Insurance Co. See ante at 25. I think this criticism has some merit. It was
undisputed in Zurich Insurance Co. that an entity, waiting in the wings and
willing to become a party to the action, had a claim that could be ʺappropriately
resolved through the judicial process.ʺ Lujan v. Defenders of Wildlife, 504 U.S. 555,
560 (1992) (internal quotation marks omitted). The Zurich Insurance Co. court
declined to permit the substitution, even though the kinds of concerns typically
raised by a standing challenge, such as the risk that ʺa plaintiff raising only a
generally available grievance about government—claiming only harm to his and
every citizenʹs interest in proper application of the Constitution and laws, and
seeking relief that no more directly and tangibly benefits him than it does the
public at large,ʺ id. at 573‐74 — would inadequately present or defend his claim,
would have been absent had the substitution been allowed. The only bar to the
courtʹs jurisdiction was a complaint heading containing the wrong clientʹs name.
To be sure, the Supreme Court has frequently said that a federal courtʹs
constitutional authority to hear the merits of a case must be established at the
outset of the litigation. See, e.g., Mollan v. Torrance, 22 U.S. 537, 539 (1824)
(ʺ[J]urisdiction . . . depends upon the state of things at the time of the action
brought.ʺ). This is said to be so both with respect to standing, see, e.g., Friends of
the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 189 (2000) (standing
ʺmust exist at the commencement of the litigationʺ), and with respect to other
aspects of subject matter jurisdiction, see, e.g., Grupo Dataflux v. Atlas Global Grp.,
L.P., 541 U.S. 567, 570‐71 (2004) (ʺTh[e] time‐of‐filing rule . . . measures all
challenges to subject‐matter jurisdiction premised upon diversity of citizenship
against the state of facts that existed at the time of filing.ʺ).
But the jurisdiction‐at‐commencement rule is not absolute. ʺIn cases where
the plaintiff lacked initial standing or the case suffered from some other
jurisdictional defect at the time suit is commenced, the Supreme Courtʹs cases are
less than clear as to whether and how a jurisdictional defect can be remedied in
the course of litigation.ʺ Schreiber Foods, Inc. v. Beatrice Cheese, Inc., 402 F.3d 1198,
1203 (Fed. Cir. 2005). In some cases, a jurisdictional defect existing at the outset
of litigation can be cured by subsequent events. In the case of diversity
jurisdiction, for example, the dropping‐out of a nondiverse plaintiff whose
presence would otherwise defeat diversity confers diversity jurisdiction upon a
federal court, provided other jurisdictional requirements are satisfied. See, e.g.,
Grupo Dataflux, 541 U.S. at 572 (ʺ[D]ismissal of [a] party that had destroyed
diversity . . . [as a] method of curing a jurisdictional defect ha[s] long been an
exception to the time‐of‐filing rule.ʺ). And several courts have held that a loss of
standing after commencement of a litigation but prior to trial may be cured by
reacquisition of standing or by joinder of a party with standing. See, e.g.,
Schreiber Foods, 402 F.3d at 1204 (collecting cases); Corbin v. Blankenburg, 39 F.3d
650, 654 (6th Cir. 1994) (en banc); but see id. at 655 (Celebrezze, J., dissenting).
Moreover, in the case of a substitution request such as in Zurich Insurance
Co., allowing substitution may be ʺʹthe wiser answer to the problem of expediting
trials and avoiding unnecessary delay and expense of requiring an action to be
started anew where a substitution is desired though the subject matter of the
actions remains identical.ʹʺ Park B. Smith, Inc. v. CHF Indus. Inc., 811 F. Supp. 2d
766, 774 (S.D.N.Y. 2011) (quoting Natʹl Mar. Union of Am. v. Curran, 87 F. Supp.
423, 426 (S.D.N.Y. 1949)). The cases cited by the Advisory Committee in the note
explaining the adoption of Rule 17(a)(3), Levinson v. Deupree, 345 U.S. 648 (1953),
and Link Aviation, Inc. v. Downs, 325 F.2d 613 (D.C. Cir. 1963), take a similarly
pragmatic approach. In the latter case, for example, parties who had subrogated
their interests in a given claim mistakenly brought suit in their own names,
rather than in the names of the subrogees. Link Aviation, 325 F.2d at 613‐14. The
court reasoned that this error, while significant, did not render the suit ʺa
nullity.ʺ Id. at 615. It concluded that substitution of the subrogees was merited.
Id. The court explained:
Any other rule would be highly technical without meaningful purpose. The complaint alleged injury at the hands of the defendants. The suit was to recover therefor. That the recovery, if made, would inure not to the benefit of the nominal plaintiffs, but to that of the [subrogees] . . . did not deprive the suit of a status which enabled the [subrogees] to substitute themselves as plaintiffs and continue the suit in their own names.
Id.
Of course, jurisdictional requirements imposed by the Constitution cannot
be cast aside because they are onerous or require expense, or because the results
of their application appear unfair or unduly technical. But here the concerns
animating a constitutional principle are absent, so it seems to me that practical
considerations may ultimately prevail.
Concededly, the plaintiffʹs request in the case at bar to obtain a post‐
commencement assignment may implicate different concerns than the type of
substitution request at issue in Zurich Insurance Co. The latter entails a change in
name only, while the former seems to involve a change in the status quo ante, in
that Cortlandt would have to obtain title to claims to which it currently lacks
title. Even so, having considered this issue in the course of reaching a result on
other legal grounds, I have come to doubt that our Court should, when directly
confronted by the issue, adopt the categorical approach taken the by the Sixth
Circuit.