U.S. Bank N.A. v. Fox

Case Summary: ABA filed a coalition amicus brief urging the U.S. Supreme Court to examine whether the retroactive application of FAPA is unconstitutional.

U.S. Bank is a successor to a mortgage made by Cassandra Fox in connection with her purchase of residential property in 2008. After a prior foreclosure action brought by U.S. Bank’s predecessor was dismissed on non-merits grounds, U.S. Bank filed a new foreclosure action in New York Supreme Court relying on a provision of New York’s Civil Practice Law and Rules that allows a plaintiff to recommence an action within six months of a non-merits dismissal, even if the statute of limitations expired after commencement of the dismissed action.

While that action was pending, in December 2022, the New York legislature enacted FAPA, which became effective on December 30, 2022. FAPA excluded foreclosure actions to refile otherwise time-barred actions dismissed on non-merits grounds within six months of dismissal. Put another way, under FAPA, once a lender files a complaint to accelerate mortgage payments from a defaulting borrower, the six-year statute of limitations begins to run and cannot be paused.

In 2023, Fox moved to reargue or renew, arguing FAPA made the foreclosure action untimely. U.S. Bank contended that applying FAPA retroactively violated the Due Process Clause. However, the First Department granted Fox’s motion, withdrew its prior decision, and affirmed the trial court’s ruling without addressing U.S. Bank’s constitutional arguments. The First Department concluded the foreclosure was time-barred under CPLR 205-a(a) because U.S. Bank was not the original plaintiff. After the New York Court of Appeals rejected U.S. Bank’s appeal, U.S. Bank petitioned the U.S. Supreme Court for certiorari.

In its brief supporting U.S. Bank, ABA argued that FAPA exacerbates an already burdensome foreclosure system and undermines the enforceability of mortgage loans. ABA explained that FAPA retroactively overturns settled precedent without evidence of lender misconduct, despite New York already having one of the strictest foreclosure regimes in the country. With most foreclosures taking over five years, ABA warned that FAPA could bar enforcement of valid mortgages simply due to procedural delays—placing mortgage holders under uniquely harsh burdens.

ABA also argued that FAPA’s indefinite retroactivity is unconstitutional. ABA argued that retroactively extinguishing mortgage liens constitutes an uncompensated regulatory taking under the Fifth Amendment and violates due process by imposing new legal burdens without fair notice or a legitimate legislative purpose. In addition, ABA emphasized that FAPA undermines legal certainty and has destabilized the secondary mortgage market, raising borrowing costs and reducing credit access. Finally, ABA argued the Second Circuit raised serious concerns about FAPA’s constitutionality and its retroactive application. In East Fork Funding LLC v. U.S. Bank, the court noted that FAPA’s plain language does not clearly state whether, or how broadly, the law should apply retroactively.