Court Signals it Will Not Halt Richmond’s March Toward Eminent Domain

General information

Last week the federal district court judge in San Francisco during oral argument indicated he is likely to dismiss the case against the City of Richmond, which has already approved a plan to use its eminent domain powers to take underwater mortgages to reduce loan principal and then resell the mortgages to other investors. While Judge Charles Breyer acknowledged that the plan raises serious legal issues, the law suit by certain trustees of mortgage backed securities was not “ripe” for consideration because the city council of Richmond has yet to adopt a resolution of necessity.The resolution is required before eminent domain can be used and requires a super-majority council vote.  Because of his inclination to dismiss, Judge Breyer did not consider the request by multiple parties to file amicus briefs, including CBA.