- Case Type:
- Consumer
- Case Status:
- Affirmed
- Citation:
- 24-2478 (2nd Circuit, Nov 05,2025) Not Published
- Tag(s):
-
- Ruling:
- Assignments to a Chapter 7 Trustee does not divest the district court of subject-matter jurisdiction and render the matter moot.
- Procedural context:
- On appeal, plaintiffs challenged two district court rulings: (1) dismissal of their civil conspiracy claims as duplicative of their aiding-and-abetting claim; and (2) summary judgment for defendants on plaintiff's aiding and abetting cause of action. Defendants cross-appealed arguing that plaintiffs lacked standing or that their claims had become moot due to the assignment of claims to a chapter 7 trustee.
The Second Circuit affirmed the judgement entered by the district court, rejecting defendants’ argument that plaintiffs’ post-filing assignment of claims to the chapter 7 trustee mooted the case or divested the court of jurisdiction. The court explained that an assignment does not erase injury, break causation, or undermine redressability. It also rejected the notion that restitution payments or an obligation to remit litigation proceeds to a trustee mooted the case, citing the collateral source rule and Sprint Communications.
- Facts:
- Plaintiffs are a group of investors who allege they were harmed by defendants' manipulation and deceptive trading practices relating to a fraudulent scheme by the defunct broker-dealer A.R. Baron.
- Judge(s):
- JOSÉ A. CABRANES, MICHAEL H. PARK, STEVEN J. MENASHI,
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