The Supreme Court today denied certiorari in Midland
Funding v. Madden. Although the denial leaves the Second
Circuit's May 2015 decision in place, it does not signal the
Supreme Court's view of the correctness of that ruling or of
the ultimate outcome of the case. The parties in Madden
will now proceed in the district court to litigate important state
law issues like the common law valid-when-made doctrine and the
enforceability of the choice-of-law provisions under New York law,
which we discussed in greater detail in
our November 2015 case update. It also remains to be seen
whether courts outside of the Second Circuit will follow the
Madden decision, particularly in light of the U.S.
Government's position that Madden was wrongly decided
(discussed
here). Even within the Second Circuit, the courts will now have
to grapple with how to construe Madden and
whether to extend the decision beyond the context addressed by the
Second Circuit—the sale of defaulted-debt.
We will continue to monitor these issues closely and provide
updates when appropriate. As always, please feel free to reach out
to us with any questions.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
