Facts

Several trustees of residential mortgage-backed securities (RMBS) trusts sued the City of Richmond and Mortgage Resolution Partners LLC (MRP) seeking a preliminary injunction in connection with the plan of Richmond and MRP to acquire underwater mortgage loans using eminent domain, if necessary.

Defendants filed a motion to dismiss.

PLAINTIFFS' CONTENTIONS:
Plaintiffs contended that the targeting by the City and MRP of hundreds of mortgage loans held by plaintiff RMBS trusts was an elaborate scheme driven by profit. Plaintiffs also contended that defendants sought to impermissibly use the City's power of eminent domain to seize certain mortgage loans.

DEFENDANTS' CONTENTIONS:
Defendants contended that the acquisition of local mortgage loans at fair value for the purpose of mitigating the effects of the underwater mortgage crisis is in compliance with the Constitution. Defendants also contended that plaintiffs lacked standing to bring the lawsuit because the harm they complained of was speculative.

The City contended that it has not adopted a resolution of necessity of authorizing the use of eminent domain authority to acquire the mortgage loans. Further, the City contended that it was still exploring possible solutions to the devastating effects of the underwater mortgage crisis. As such, the City contended that plaintiffs' claims were not ripe for adjudication. Consequently, the court lacked jurisdiction to hear the matter.

Result

U.S. District Judge Charles R. Breyer denied plaintiffs' motion for a preliminary injunction and dismissed the case without prejudice for lack of jurisdiction, finding that the claim was not yet ripe for adjudication.