Standing

Constitutional standing in federal court

Article III of the Constitution limits federal courts to actual cases or controversies. In Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992), the Supreme Court described three elements: an injury in fact, a causal connection between the injury and the conduct complained of, and a likelihood that the injury will be redressed by a favorable decision.

Standing to enforce a note or foreclose

In debt and foreclosure cases, “standing” often refers to whether the plaintiff is the party entitled to enforce the obligation. For negotiable notes, the UCC’s person entitled to enforce rules, as each state enacted them, and state foreclosure law answer that question.

Borrower challenges to assignments

However, courts disagree about when a borrower — who is not a party to an assignment between lenders or investors — may challenge it. For example, in Yvanova v. New Century Mortgage Corp., 62 Cal.4th 919 (2016), the California Supreme Court held that a borrower whose home was sold in a nonjudicial foreclosure has standing to sue for wrongful foreclosure on the ground that the assignment was void, not merely voidable. The court limited that holding to borrowers whose homes had already been sold, did not allow pre-sale suits on that theory, and did not decide whether the assignment in that case was actually void.

In contrast, in Saterbak v. JPMorgan Chase Bank, N.A., 245 Cal.App.4th 808 (2016), a California appellate court concluded that an assignment into a securitization trust made after the trust’s closing date was merely voidable under New York law, declining to follow Glaski v. Bank of America, 218 Cal.App.4th 1079 (2013). Other states apply their own rules.

Standing in state court

Article III does not bind state courts. Instead, each state sets its own standing rules. Read the decisions of your state’s appellate courts.

Researching standing in your state

First, find the statute or rule that governs standing where you live. State law controls most of these questions, so the answer can change from one state to the next. Next, read recent decisions from the appellate courts in your state. They show how judges apply the law today. Also, check the local rules of the court that would hear your case. Our state procedures guide links to each state’s official rules. In addition, the Research Center explains how to confirm a source is still good law.

Sources and further reading

Official sources used on this page:

• supreme.justia.com

Related reading on Lawtopolis:

• Person Entitled to Enforce a Note
• Assignments of Notes, Mortgages and Receivables
• Chain of Title
• Judicial Foreclosure