Article 13 LLC v. LaSalle Nat’l Bank Ass’n

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23-7247-cv
Article 13 LLC v. LaSalle Nat’l Bank Ass’n
In the
United States Court of Appeals
for the Second Circuit
___________
August Term 2024
No. 23-7247-cv
A RTICLE 13 LLC,
Plaintiff-Appellee,
O FFICE OF THE NEW Y ORK S TATE A TTORNEY G ENERAL ,
Intervenor,
v.
PONCE D E L EON F EDERAL B ANK, A LLIANCE MORTGAGE B ANKING C ORP ., V AN
B UREN G ROUP , INC.,
Defendants,
v.
L AS ALLE NATIONAL B ANK A SSOCIATION,
Defendant-Appellant.
___________
On Appeal from the United States District Court
for the Eastern District of New York
___________
A RGUED: NOVEMBER 13, 2024
DECIDED: MAY 13, 2026
___________

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Before: K EARSE , RAGGI, and K AHN, Circuit Judges.
In 2020, Plaintiff-Appellee, Article 13 LLC, brought this quiet title action
against Defendant-Appellant, LaSalle National Bank Association, the predecessor-
in-interest to U.S. Bank National Association. Article 13 LLC, the holder of a junior
mortgage, sought to discharge U.S. Bank’s senior mortgage as time-barred under
New York’s six-year statute of limitations because an unsuccessful action to
foreclose on the senior mortgage had been commenced in 2007 in New York state
court. The district court found that there was a disputed issue of material fact
regarding the validity of the 2007 foreclosure action and denied both parties’
motions for summary judgment.
Days after the district court’s ruling, New York enacted the Foreclosure
Abuse Prevention Act (“FAPA”), which, in part, bars the defense of the invalidity
of prior accelerations of mortgages in quiet title actions. Article 13 LLC moved for
reconsideration of the district court’s order denying summary judgment. The
district court held that FAPA applied retroactively and that FAPA’s retroactive
effect did not violate the New York or U.S. Constitutions. U.S. Bank appealed.
After oral argument, we certified the following two questions to the New
York Court of Appeals:
1. Whether, or to what extent does, Section 7 of the Foreclosure Abuse
Prevention Act, codified at N.Y. C.P.L.R. § 213(4)(b), apply to foreclosure
actions commenced before the statute’s enactment?
2. Whether FAPA’s retroactive application violates the right to substantive
and procedural due process under the New York Constitution, N.Y.
Const., art. I, § 6?
Article 13 LLC v. Ponce De Leon Fed. Bank, 132 F.4th 586, 594 (2d Cir. 2025).
The New York Court of Appeals held that FAPA applied retroactively and
that its retroactive application did not violate the right to substantive and
procedural due process secured by the New York Constitution. See Article 13 LLC
v. Ponce De Leon Fed. Bank, No. 96, ___N.E.3d ___, 2025 WL 3272351, (N.Y. Nov. 25,
2025). We must now determine whether FAPA’s retroactive application violates

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the right to substantive and procedural due process, the Contracts Clause, or the
Takings Clause under the U.S. Constitution. We hold that it does not and AFFIRM
the judgment of the district court.
________________
P ATRICK G. B RODERICK (Steve Lazar, on the reply brief),
Greenberg Traurig, LLP, New York, NY; (Kathleen
M. Massimo, on the opening brief), Houser LLP, New
York, NY, for Defendant-Appellant.
Danielle Paula Light, Hasbani & Light, P.C., New
York, NY, for Plaintiff-Appellee.
MARK S. G RUBE , Senior Assistant Solicitor General
(Barbara D. Underwood, Solicitor General, Ester
Murdukhayeva, Deputy Solicitor General, on the
brief), for Letitia James, Attorney General for the State
of New York, New York, NY, for Intervenor.
Matthew A. Schwartz, Leonid Traps, Austin P.
Mayron, Sullivan & Cromwell LLP, New York, NY,
for Amici Curiae New York Bankers Association, New
York Mortgage Bankers Association, American Bankers
Association, Mortgage Bankers Association, Housing
Policy Council, and Independent Bankers Association of
New York State, in support of Defendant-Appellant.
________________
MARIA A RAÚJO K AHN, Circuit Judge:
In 2020, Plaintiff-Appellee, Article 13 LLC, brought this quiet title action in
the Eastern District of New York against Defendant-Appellant, LaSalle National
Bank Association, the predecessor-in-interest to U.S. Bank National Association.

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Article 13 LLC, the holder of a junior mortgage encumbering real property located
in Brooklyn, sought to discharge and cancel U.S. Bank’s senior mortgage on that
property as time-barred. Article 13 LLC argued that the six-year statute of
limitations for U.S. Bank (or its predecessors) to foreclose on the real property at
issue expired in 2013 because LaSalle’s loan servicer accelerated the debt by
commencing a foreclosure action on the property in 2007. See N.Y. C.P.L.R.
§ 213(4); 53rd St., LLC v. U.S. Bank Nat’l Ass’n, 8 F.4th 74, 78 (2d Cir. 2021). See
generally Van Dyke v. U.S. Bank, Nat’l Ass’n, No. 97, ___ N.E.3d ___, 2025 WL
3272341, at *1–*2 (N.Y. Nov. 25, 2025) (“Van Dyke”), (explaining that prior to 2022,
“an accelerated loan could in some circumstances be de-accelerated,” id. at *1, and
that under Freedom Mortgage Corp. v. Engel, 37 N.Y.3d 1 (2021), “if the borrower
defaulted again, the noteholder could re-accelerate the loan,” file a new foreclosure
action, and thereby “cause[] the six-year limitations period to reset,” id. at *2, i.e.,
begin anew). The district court (Hector Gonzalez, J.) found that there was a
disputed issue of material fact regarding the validity of the 2007 foreclosure action
and denied both parties’ motions for summary judgment. See Article 13 LLC v.
Ponce de Leon Fed. Bank, No. 20-cv-3553, 2022 WL 17977493 (E.D.N.Y. Dec. 28, 2022)
(“Article 13 I”).

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Days after the district court’s ruling, New York enacted the Foreclosure
Abuse Prevention Act (“FAPA”), which, in part, bars the defense of the invalidity
of prior accelerations of mortgages in quiet title actions. Article 13 LLC moved for
reconsideration of the district court’s order denying summary judgment. In
opposition, U.S. Bank argued that FAPA did not apply retroactively and, if it did,
retroactivity would violate its substantive and procedural due process rights
under the New York and U.S. Constitutions.
On reconsideration, the district court held that FAPA applied retroactively
and that FAPA’s retroactive effect did not violate U.S. Bank’s due process rights.
See Article 13 LLC v. Ponce de Leon Fed. Bank, 686 F. Supp. 3d 212 (E.D.N.Y. 2023)
(“Article 13 II”). U.S. Bank promptly appealed, arguing that FAPA does not apply
retroactively and, in the alternative, that FAPA’s retroactive application violates:
(1) the right to substantive due process guaranteed by the New York and U.S.
Constitutions; (2) the right to procedural due process guaranteed by the New York
and U.S. Constitutions; (3) the Contracts Clause of the U.S. Constitution; and/or
(4) the Takings Clause of the U.S. Constitution.
After oral argument, we certified the following two questions to the New
York Court of Appeals:

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1. Whether, or to what extent does, Section 7 of the Foreclosure Abuse
Prevention Act, codified at N.Y. C.P.L.R. § 213(4)(b), apply to foreclosure
actions commenced before the statute’s enactment?
2. Whether FAPA’s retroactive application violates the right to
substantive and procedural due process under the New York Constitution,
N.Y. Const., art. I, § 6?
Article 13 LLC v. Ponce De Leon Fed. Bank, 132 F.4th 586, 594 (2d Cir. 2025) (“Article
13 III”).
The New York Court of Appeals held that FAPA applied retroactively and
that its retroactive application did not violate the right to substantive and
procedural due process secured by the New York Constitution. See Article 13 LLC
v. Ponce De Leon Fed. Bank, No. 96, ___N.E.3d ___, 2025 WL 3272351 (N.Y. Nov. 25,
2025) (“Article 13 IV”).
We must now determine whether FAPA’s retroactive application violates
the right to substantive and procedural due process, the Takings Clause, or the
Contracts Clause under the U.S. Constitution. We hold that it does not and affirm
the judgment of the district court.
BACKGROUND
We summarize the relevant facts, which are set out more fully in this Court’s
certification opinion, Article 13 III, 132 F.4th 586, and the New York Court of

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Appeals’ opinion answering our certified questions, Article 13 IV, 2025 WL
3272351.
In 2006, Lisa Abbott held title to a residential property located in Brooklyn,
New York. Through a series of transactions, Abbott obtained a consolidated loan
in the amount of $645,000, secured by a mortgage (the “Senior Mortgage”) on the
property. Shortly thereafter, Abbott took out another mortgage (the “Junior
Mortgage”) on the property.
As of January 31, 2007, LaSalle was the trustee for the trust that held the
consolidated loan, and, since 2011, U.S. Bank has served as the trustee and
document custodian for that trust as the successor-in-interest to LaSalle. Through
July 31, 2008, Central Mortgage Company (“CMC”) serviced the consolidated loan
on the trust’s behalf.
On February 1, 2007, Abbott defaulted on the consolidated loan. On August
27, 2007, CMC brought a foreclosure action (the “Foreclosure Action”) against
Abbott in the New York State Supreme Court, Kings County. The complaint in the
Foreclosure Action identified CMC as the holder of the consolidated loan. In May
2017, CMC moved to voluntarily discontinue the Foreclosure Action without
prejudice. The state court granted that motion in June 2017.

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In 2020, the Junior Mortgage was assigned to Article 13 LLC. Article 13 LLC
filed this quiet title action seeking, inter alia, a judgment cancelling and discharging
the Senior Mortgage as time-barred. After discovery, both Article 13 LLC and U.S.
Bank, as successor-in-interest to LaSalle, moved for summary judgment. The
district court denied both motions on December 28, 2022, holding in part that there
was a dispute of material fact as to whether CMC had standing to bring the
Foreclosure Action as a “holder” of the consolidated loan. Article 13 I, 2022 WL
17977493, at *7, *9. At the time, that dispute of fact was material because if CMC
lacked standing, the statute of limitations on U.S. Bank’s time to foreclose on the
Senior Mortgage did not begin to run with CMC’s initiation of the 2007 Foreclosure
Action.
Days after the district court’s ruling, New York enacted FAPA, see 2022 N.Y.
Laws at 2180, which took “effect immediately” and applied “to all actions . . . in
which a final judgment of foreclosure and sale has not been enforced.” FAPA § 10,
2022 N.Y. Laws at 2182. Section 7(b) of FAPA provides that:
In any action seeking cancellation and discharge of record of an
instrument . . ., a defendant shall be estopped from asserting that the
period allowed by the applicable statute of limitation for the
commencement of an action upon the instrument has not expired
because the instrument was not validly accelerated prior to, or by way
of commencement of a prior action, unless the prior action was

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dismissed based on an expressed judicial determination, made upon
a timely interposed defense, that the instrument was not validly
accelerated.
FAPA § 7(b), 2022 N.Y. Laws at 2181–82 (codified at N.Y. C.P.L.R. § 213(4)(b)).
On January 11, 2023, Article 13 LLC filed a motion for reconsideration of the
district court’s denial of its motion for summary judgment, arguing that FAPA was
an intervening change in controlling law. In response, U.S. Bank argued that FAPA
should not be applied retroactively and that retroactive application of FAPA
would violate its right to substantive and procedural due process. On August 11,
2023, the district court granted Article 13 LLC’s motion for reconsideration and
held that U.S. Bank was estopped from arguing that the acceleration of the
mortgage debt was invalid. See Article 13 II, 686 F. Supp. 3d at 220. Because U.S.
Bank could not argue that CMC’s initiation of the 2007 Foreclosure Action was
invalid, the district court ruled that the six-year statute of limitations for U.S. Bank
to foreclose on the Senior Mortgage had expired. See id. Accordingly, the district
court granted summary judgment in Article 13 LLC’s favor. See id.
U.S. Bank appealed, and after oral argument, we certified the following two
questions to the New York Court of Appeals:

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1. Whether, or to what extent does, Section 7 of the Foreclosure Abuse
Prevention Act, codified at N.Y. C.P.L.R. § 213(4)(b), apply to foreclosure
actions commenced before the statute’s enactment?
2. Whether FAPA’s retroactive application violates the right to
substantive and procedural due process under the New York Constitution,
N.Y. Const., art. I, § 6?
Article 13 III, 132 F.4th at 594.
The New York Court of Appeals answered the first question in the
affirmative. See Article 13 IV, 2025 WL 3272351, at *5. It held that
even if a prior foreclosure action was commenced by another party
not in possession of the underlying note, and that action was
discontinued without an express determination by the court that the
instrument was not validly accelerated, the six-year statute of
limitations accrued on the date that action was commenced and
continued to run from that date.
Id.
As to the second certified question, the New York Court of Appeals
concluded that FAPA’s retroactive application did not violate U.S. Bank’s due
process rights under the New York Constitution. See id. at *8. The New York Court
of Appeals ruled that U.S. Bank’s substantive due process challenge was
unavailing because U.S. Bank did not have a protectable interest in “the right to
challenge collaterally the validity of the prior foreclosure action,” id. at *7, and,
even if it did, FAPA was rationally related to a legitimate legislative purpose, id. at
*7–*8. The New York Court of Appeals likewise rejected U.S. Bank’s contention

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that procedural due process required that it be given a “reasonable time in which
to file foreclosure actions that would be timely but for FAPA’s application.” Id. at
*8 (alterations adopted and internal quotation marks omitted).
The same day that the New York Court of Appeals answered the certified
questions in this case, it also issued its ruling in Van Dyke, 2025 WL 3272341, in
which it held, inter alia, that FAPA’s retroactive application did not violate the
Contracts Clause of the U.S. Constitution, see id. at *6.
DISCUSSION
“We review de novo a district court’s decision to grant summary judgment,
construing the evidence in the light most favorable to the party against whom
summary judgment was granted and drawing all reasonable inferences in that
party’s favor.” Covington Specialty Ins. Co. v. Indian Lookout Country Club, Inc., 62
F.4th 748, 752 (2d Cir. 2023). We generally review a district court’s decision on a
motion for reconsideration for abuse of discretion, see L-7 Designs, Inc. v. Old Navy,
LLC, 647 F.3d 419, 435 (2d Cir. 2011), but “we also review de novo the [district]
judge’s reconsideration, on a motion for reconsideration, of the merits of the
summary judgment motion,” Lowrance v. Achtyl, 20 F.3d 529, 534 (2d Cir. 1994).

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It is well-established that “when applying state law,” federal courts “are
bound to apply the law as established by the state’s highest court.” Donohue v.
Cuomo, 980 F.3d 53, 65 (2d Cir. 2020). The New York Court of Appeals’ answers to
our certified questions in Article 13 IV are authoritative, leaving only U.S. Bank’s
claims under federal law for this Court to resolve. Our task is therefore limited to
determining whether retroactive application of § 7 of FAPA violates the right to
substantive and procedural due process, the Contracts Clause, and the Takings
Clause under the U.S. Constitution. We conclude that it does not.
I. Substantive Due Process
The Fourteenth Amendment provides that no state shall “deprive any
person of life, liberty, or property, without due process of law.” U.S. Const.
amend. XIV, § 1. The substantive component of the Due Process Clause “prevents
the government from engaging in conduct that shocks the conscience or interferes
with rights implicit in the concept of ordered liberty.” United States v. Salerno, 481
U.S. 739, 746 (1987) (internal quotation marks and citations omitted). “To establish
a substantive due process violation, a plaintiff must show both (1) that [it] has an
interest protected by the Fourteenth Amendment, and (2) that the statute,
ordinance, or regulation in question is not rationally related to a legitimate

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government interest.” Principle Homecare, LLC v. McDonald, 158 F.4th 326, 333 (2d
Cir. 2025).1
Not all rights are entitled to protection by the Fourteenth Amendment. Only
two categories of substantive rights are protected: rights guaranteed by the first
eight Amendments and those that are “deeply rooted in [our] history and
tradition” and “essential to our Nation’s scheme of ordered liberty.” Dobbs v.
Jackson Women's Health Org., 597 U.S. 215, 237 (2022) (internal quotation marks
omitted).
At the outset, U.S. Bank is unable to demonstrate that it had a “deeply-
rooted” right to wait until after the limitations period expired to challenge the
validity of an earlier foreclosure action. U.S. Bank only relies on recent New York
1 U.S. Bank frames its substantive due process challenge as arising out of Landgraf v. USI
Film Products, 511 U.S. 244 (1994) and New York state court decisions applying Landgraf. Pursuant
to these cases, U.S. Bank argues that the presumption against retroactivity precludes FAPA’s
application to the instant suit. U.S. Bank’s reliance on Landgraf and the presumption against
retroactive application is misplaced. Landgraf relied on the presumption to address the
interpretive question of whether the Civil Rights Act of 1991 applied to conduct occurring before
the law’s enactment. See id. at 247. The Court relied on the presumption only because the law
did “not evince any clear expression of intent on § 102’s application to cases arising before the
Act’s enactment.” Id. at 264; see also id. at 280 (“When a case implicates a federal statute enacted
after the events in suit, the court’s first task is to determine whether Congress has expressly
prescribed the statute’s proper reach. If Congress has done so, of course, there is no need to resort
to judicial default rules.”). Here, the antecedent question of whether FAPA applies retroactively
is not before us because the New York Court of Appeals has already determined that it does. See
Article 13 IV, 2025 WL 3272351, at *4–*5. We therefore consider U.S. Bank’s substantive due
process challenge under traditional substantive due process principles.

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state court decisions in urging us to accept that the right at issue was “well-
settled.” Appellant’s Br. at 9–10, 33 (first citing MLB Sub I, LLC v. Grimes, 170
A.D.3d 992 (N.Y. App. Div. 2019); then citing Wells Fargo Bank, N.A. v. Burke, 94
A.D.3d 980 (N.Y. App. Div. 2012); and then citing Pryce v. Nationstar Mortg. LLC,
131 N.Y.S.3d 832 (Sup. Ct. 2020)). In those cases, the New York courts held that
because the plaintiffs in earlier foreclosure actions lacked authority to commence
those actions, the statute of limitations to foreclose on the notes did not begin to
run when those earlier foreclosure actions were filed. MLB Sub I, 170 A.D.3d at
993–94; Wells Fargo, 94 A.D.3d at 983–84; Pryce, 131 N.Y.S.3d at 839, 844.
The decisions on which U.S. Bank relies were issued within the last twenty
years and, as such, do not support a longstanding historical recognition of a
deeply-rooted right. Importantly, other New York courts have failed to recognize
such a right exists. See Secured Equities Invs., Inc. v. McFarland, 300 A.D.2d 1137,
1138–39 (N.Y. App. Div. 2002) (successor-in-interest estopped from taking a
position that “there was never a proper acceleration of the mortgage, for purposes
of avoiding the statute of limitations”); Bank of New York Mellon v. Cort, 171 A.D.3d
1275, 1276 (N.Y. App. Div. 2019) (noteholder unable to challenge earlier
foreclosure action as invalid); Cap. One, N.A. v. Saglimbeni, 170 A.D.3d 508, 509

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(N.Y. App. Div. 2019) (“Because there was no finding in the prior action that
plaintiff’s assignor did not have the authority or standing to accelerate the
mortgage debt, [the New York] Supreme Court had no basis to nullify the prior
assignor’s acceleration.” (citations omitted)). As the New York Court of Appeals
noted, U.S. Bank has, in essence, “failed to identify any caselaw recognizing a
vested right in one’s ability to collaterally challenge another’s prior conduct where
the party in question (or its predecessor) chose to sit on its rights.” Article 13 IV,
2025 WL 3272351, at *6.
Even if a protected right were implicated, that is not the end of our inquiry.
For U.S. Bank to succeed on its substantive due process challenge, it “would be
required to establish” that FAPA’s retroactivity is “arbitrary and irrational.” E.
Enters. v. Apfel, 524 U.S. 498, 537 (1998) (quoting Usery v. Turner Elkhorn Mining Co.,
428 U.S. 1, 15 (1976)). This is a high burden for a party challenging the
constitutionality of an economic statute, as “[i]t is by now well established that
legislative Acts adjusting the burdens and benefits of economic life [carry] a
presumption of constitutionality.” Usery, 428 U.S. at 15. Retroactive legislation is
constitutional if the legislation “is supported by a legitimate legislative purpose
furthered by rational means.” Pension Ben. Guar. Corp. v. R.A. Gray & Co., 467 U.S.

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717, 729 (1984). To uphold FAPA’s retroactive effect, we “need only find some
reasonably conceivable state of facts that could provide a rational basis for the
legislative action.” Molinari v. Bloomberg, 564 F.3d 587, 608 (2d Cir. 2009) (internal
quotation marks omitted).
FAPA is “justified by a rational legislative purpose.” Pension Ben. Guar., 467
U.S. at 730. As noted by the New York Court of Appeals, FAPA’s legislative history
“identifies certain abusive litigation practices engaged in by mortgage lenders and
noteholders as the animating force behind FAPA’s enactment.” Article 13 IV, 2025
WL 3272351, at *7 (alteration adopted and internal quotation marks omitted). By
estopping noteholders from asserting the invalidity of “long-outdated claims” tied
to the spike of foreclosure actions associated with the 2007 mortgage crisis, Article
13 IV, 2025 WL 3272351, at *2, *8, FAPA adjusts “the burdens and benefits of
economic life,” Usery, 428 U.S. at 15. These purposes are, at minimum, legitimate,
and rationally related to FAPA’s substantive provisions. See Concrete Pipe & Prods.
of Cal., Inc. v. Constr. Laborers Pension Tr. for S. Cal., 508 U.S. 602, 639 (1993)
(“[U]nder the deferential standard of review applied in substantive due process
challenges to economic legislation there is no need for mathematical precision in
the fit between justification and means.”). We discern no reason to find that

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FAPA’s retroactivity is “arbitrary” or “irrational.” E. Enters., 524 U.S. at 537. We
therefore hold that FAPA does not violate U.S. Bank’s right to substantive due
process.
II. Procedural Due Process
The procedural and substantive components of the Due Process Clause
confer distinct rights. See Albright v. Oliver, 510 U.S. 266, 272 (1994). Substantive
due process protects only rights born out of the federal constitution and rights
deeply rooted in our nation’s history, see Dobbs, 597 U.S. at 327, but procedural due
process protects liberty and property interests “that stem from an independent
source such as state law,” Town of Castle Rock v. Gonzales, 545 U.S. 748, 756 (2005).
“An essential principle” of procedural due process “is that a deprivation of life,
liberty, or property be preceded by notice and opportunity for hearing appropriate
to the nature of the case.” Chase Grp. All. LLC v. City of New York Dep't of Fin., 620
F.3d 146, 150 (2d Cir. 2010). To establish that it holds a protectable property right,
U.S. Bank “must demonstrate more than an ‘abstract need or desire’ for the matter
at issue, or a ‘unilateral expectation’ as to its [ability to exercise that right].” Ace
Partners, LLC v. Town of E. Hartford, 883 F.3d 190, 195 (2d Cir. 2018) (quoting Bd. of
Regents of State Colls. v. Roth, 408 U.S. 564, 577 (1972)). Rather, U.S. Bank must

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show that it has a protected property interest—recognized by New York law and
subject to federal constitutional protection, see Castle Rock, 545 U.S. at 757—such
that it was entitled to notice and an opportunity to be heard. For the reasons set
forth below, U.S. Bank fails to do so.
U.S. Bank claims that retroactive application of § 7 of FAPA deprives it of its
property interest as a lienholder and its vested right to “pursue a legal cause of
action in foreclosure or otherwise.” Appellant’s Br. at 34. Like the New York Court
of Appeals, we disagree with that characterization. Although U.S. Bank holds a
property interest in the Senior Mortgage, see Permanent Mission of India to the United
Nations v. City of New York, 551 U.S. 193, 198–99 (2007), and “assuming, without
deciding,” that U.S. Bank holds a vested right to pursue a “timely commenced”
cause of action, Van Dyke, 2025 WL 3272341, at *5, those rights are not impaired by
retroactive application of FAPA § 7. Rather, “it is the six-year statute of limitations,
not FAPA itself, that has extinguished that interest.” Id. By its terms, FAPA does
not necessarily extinguish a noteholder’s lien or prevent a noteholder from
instituting a foreclosure action. Indeed, the statutory text makes plain that
aggrieved noteholders can, in an initial foreclosure action, seek “an express[]
judicial determination . . . that [a mortgage] was not validly accelerated.” N.Y.

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C.P.L.R. § 213(4)(b). FAPA accordingly implicates only a noteholder’s right to
“wait long past the limitations period to challenge the validity of a foreclosure
action that could have been challenged and refiled by the actual holder of the note
and mortgage at any time during the six-year limitations period.” Article 13 IV,
2025 WL 3272351, at *6. U.S. Bank cannot establish that it has a right protected by
the procedural component of the Due Process Clause.
Even if the right at issue were constitutionally protected, U.S. Bank was not
deprived of notice and an opportunity to be heard. Relying on New York cases
citing to Terry v. Anderson, 95 U.S. 628 (1877), U.S. Bank contends that it was denied
due process because it should have been afforded a grace period to raise its
affirmative defense or otherwise challenge the validity of the Foreclosure Action
prior to the time that FAPA took effect. See Appellant’s Br. at 35 (citing Bros. v.
Florence, 739 N.E.2d 733 (N.Y. 2000)). U.S. Bank’s reliance on Terry and its progeny
is misplaced.
In Terry, the plaintiffs brought suit to enforce the liability of the stockholders
of a bank. See Terry, 95 U.S. at 632. The applicable statute of limitations for that
action was twenty years. See id. The Georgia legislature enacted a new statute of
limitations that had the effect of rendering the plaintiffs’ claims untimely before

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the twenty years allotted under the original statute had expired. See id. The
Supreme Court noted that statutes of limitation affecting existing rights are
constitutional “if a reasonable time is given for the commencement of an action
before the bar takes effect” and held that the legislature’s enactment of the new
statute of limitations was constitutional due in part to the nine-month grace period
the statute provided for potential plaintiffs. Id. at 632–33.
Unlike the statute at issue in Terry, FAPA did not alter the existing six-year
statute of limitations applicable under New York law. See id. at 633; see also Article
13 IV, 2025 WL 3272351, at *8. This alone places FAPA outside Terry’s scope. In
addition, U.S. Bank and its predecessors had an opportunity to be heard in the
prior Foreclosure Action or “commence a new one lacking the prior infirmity”
before the expiration of the statute of limitations. Article 13 IV, 2025 WL 3272351,
at *8. U.S. Bank does not contend that it and its predecessors were unaware of the
action that CMC commenced or that it was otherwise unable to intervene in that
action to protect its rights. U.S. Bank and its predecessors chose not to act, and the
consequences of their willful inaction while the limitations period ran do not
amount to a deprivation of the procedures guaranteed by the Due Process Clause.
III. Contracts Clause

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U.S. Bank argues that retroactive application of FAPA violates the Contracts
Clause because it “destroy[s]” U.S. Bank’s means of enforcing the Senior Mortgage
contract and “discharge[s]” Article 13 LLC’s contractual obligations. Appellant’s
Br. at 22. We are unpersuaded.2
The Contracts Clause provides that “[n]o State shall . . . pass any . . . Law
impairing the Obligation of Contracts.” U.S. Const. art. I, § 10, cl. 1. Although
“[t]he Contract Clause prohibits the impairment by the state of existing contracts,”
Fabri v. United Techs. Int’l, Inc., 387 F.3d 109, 124 (2d Cir. 2004) (emphasis omitted),
“not all laws affecting pre-existing contracts violate the Clause,” Sveen v. Melin,
584 U.S. 811, 819 (2018). To ascertain whether a law violates the Contracts Clause,
we must determine “(1) whether the contractual impairment is substantial and, if
so, (2) whether the law serves a legitimate public purpose such as remedying a
general social or economic problem and, if such purpose is demonstrated, (3)
2 Article 13 LLC correctly argues that U.S. Bank did not raise its Contracts and Takings
Clause challenges below. “It is a well-established general rule that an appellate court will not
consider an issue raised for the first time on appeal.” In re Nortel Networks Corp. Sec. Litig., 539
F.3d 129, 132 (2d Cir. 2008) (internal quotation marks omitted and alteration adopted).
“Nevertheless, the rule against entertaining arguments raised for the first time on appeal . . . is
prudential, not jurisdictional, and we therefore have discretion to consider them.” Lenzi v.
Systemax, Inc., 944 F.3d 97, 109 (2d Cir. 2019) (internal quotation marks omitted). Because the
challenges arising from the Contracts and Takings Clauses “present[] question[s] of law” that do
not “require additional fact finding,” we exercise our discretion to reach the merits of those
challenges. Id.

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whether the means chosen to accomplish this purpose are reasonable and
necessary.” Sullivan v. Nassau Cnty. Interim Fin. Auth., 959 F.3d 54, 64 (2d Cir. 2020)
(alterations adopted and internal quotation marks omitted). “If the impairment is
insubstantial, or the law is a reasonable and necessary means to remedy a
legitimate public purpose, the Contracts Clause is not violated.” Id.
As to the first prong, U.S. Bank claims that retroactive application of FAPA
deprives it of its “validly established, contractual remedy of foreclosure.”
Appellant’s Br. at 25. But as with U.S. Bank’s due process challenges, it is not
FAPA’s retroactive application that deprived it of a guaranteed right. Rather, the
inaction of U.S. Bank and its predecessors allowed its right to foreclose on the
Senior Mortgage to expire. Because it is U.S. Bank’s own inaction that deprived it
of the right it seeks to enforce, we cannot conclude that FAPA’s retroactivity
resulted in a substantial contractual impairment.
As to the second prong, it provides no support for U.S. Bank’s Contracts
Clause challenge. FAPA serves a legitimate public purpose because it addresses
“ongoing . . . abuses of the judicial foreclosure process and lenders’ attempts to
manipulate statutes of limitations.” Article 13 IV, 2025 WL 3272351, at *3 (quoting
N.Y. Assembly Introducer’s Mem. in Support, Bill Jacket, L. 2022, ch. 821 at 8); see

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also Sanitation & Recycling Indus., Inc. v. City of New York, 107 F.3d 985, 993 (2d Cir.
1997) (redressing “a general social or economic problem” is a legitimate purpose
under the Contracts Clause); Melendez v. City of New York, 16 F.4th 992, 1036 (2d
Cir. 2021) (“[C]ontrolling precedent recognizes the mitigation of economic
emergencies as a public purpose that can support contract impairment.”).3
“[T]he final inquiry is whether the means chosen to achieve those purposes
are reasonable and necessary.” Sal Tinnerello & Sons, Inc. v. Town of Stonington, 141
F.3d 46, 54 (2d Cir. 1998). In addressing this inquiry, “[u]nless the State itself is a
contracting party, . . . courts properly defer to legislative judgment as to the
necessity and reasonableness of a particular measure.” Energy Rsrvs. Grp., Inc. v.
Kan. Power & Light Co., 459 U.S. 400, 412–13 (1983) (citation and internal quotation
marks omitted); see also Buffalo Tchrs. Fed’n v. Tobe, 464 F.3d 362, 369 (2d Cir. 2006).4
The New York legislature’s means of addressing the societal harms it identified
are “sensibly tailored to the specific litigation practices that the legislature saw fit
3 FAPA’s additional purpose of ending manipulation of the statute of limitations—which
“provide security and stability to human affairs” and are “vital to the welfare of society,” Gabelli
v. S.E.C., 568 U.S. 442, 448–49 (2013) (internal quotation marks omitted)—is also a legitimate
legislative purpose under the Contracts Clause.
4 In Melendez, we identified five non-exhaustive factors relevant in determining whether a
challenged law survives the third prong of the Contracts Clause’s test. See 16 F.4th at 1038–46.
Because the parties do not invite us to weigh those factors and we think it clear that FAPA is
reasonably tailored to achieve its stated goals, we do not address the Melendez factors here.

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to curb” because FAPA’s provisions “narrowly bar successive, collateral
challenges to certain prior loan accelerations and curtail noteholders’ ability to
unilaterally reset the limitations period to foreclose.” Van Dyke, 2025 WL 3272341,
at *6. Because FAPA’s provisions are “sensibly” tailored, and in light of the
deference owed to the legislature’s determination, we conclude that the means
chosen to achieve the legislature’s stated purposes are reasonable and necessary.
IV. Takings Clause
U.S. Bank’s final constitutional challenge runs into the same obstacles as its
preceding ones. The interest that FAPA infringes on is not a protected property
interest, and even if it were, FAPA’s retroactive application does not constitute a
regulatory taking.
Under the Takings Clause, private property shall not “be taken for public
use, without just compensation.” U.S. Const. amend. V. The possession of a
property interest and the government’s interference with that interest are
necessary predicates to a Takings Clause claim. See 1256 Hertel Ave. Assocs., LLC v.
Calloway, 761 F.3d 252, 261 (2d Cir. 2014). Although a mortgagee’s lien is a
protected property interest within the meaning of the Takings Clause, see, e.g.,
United States v. Sec. Indus. Bank, 459 U.S. 70, 75–78 (1982) (secured creditor’s lien);

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Armstrong v. United States, 364 U.S. 40, 48–49 (1960) (mechanic’s lien); 1256 Hertel
Ave. Assocs., 761 F.3d at 263 (judgment lien), FAPA does not interfere with that
property interest. As noted above, FAPA’s retroactive application implicates only
U.S. Bank’s right to collaterally challenge the invalidity of a prior foreclosure
action years after the limitations period expired, which is not a protected right
under the Takings Clause.
Even if FAPA could be characterized as affecting U.S. Bank’s mortgagee’s
lien, it would still withstand Takings Clause scrutiny. Generally, there are “two
branches of Takings Clause cases: physical takings and regulatory takings.” 1256
Hertel Ave. Assocs., 761 F.3d at 263. “Because application” of FAPA “to pre-existing
liens does not present the classi[c] taking in which the government directly
appropriates private property for its own use, any taking in this case would be
regulatory in nature.” Id. at 263–64 (internal quotation marks and citation
omitted); see also id. at 263 n.7; Sec. Indus. Bank, 459 U.S. at 75–76.
A regulatory taking occurs when government regulation on private
property “goes too far.” Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 537 (2005)
(quoting Pa. Coal Co. v. Mahon, 260 U.S. 393, 415 (1922)). “The rub, of course, has
been—and remains—how to discern how far is ‘too far.’” Id. at 538. The Supreme

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Court has “generally eschewed any set formula” for determining “how far is too
far” in favor of “ad hoc, factual inquiries.” Lucas v. S.C. Coastal Council, 505 U.S.
1003, 1015 (1992) (internal quotation marks omitted). In the ordinary case,
however, regulatory takings are analyzed according to the considerations set forth
in Penn Central Transp. Co. v. New York City, 438 U.S. 104 (1978).5 Under Penn
Central, courts are to consider (1) “[t]he economic impact of the regulation on the
claimant”; (2) “particularly, the extent to which the regulation has interfered with
distinct investment-backed expectations”; and (3) “the character of the
governmental action,” including whether that action relates to “some public
program adjusting the benefits and burdens of economic life to promote the
common good.” Penn Central, 438 U.S. at 124.
To the extent that FAPA’s retroactivity creates a negative economic impact
for U.S. Bank, we find that such was the result of its own inaction. FAPA has not
interfered with U.S. Bank’s investment-backed expectations. In the years
5 The Supreme Court has identified “two relatively narrow categories” in which
regulatory takings will be deemed “per se takings for Fifth Amendment purposes.” Lingle, 544
U.S. at 538. Relevant here is the categorical rule prohibiting the deprivation of “all economically
beneficial or productive use” of the property. Lucas, 505 U.S. at 1015. U.S. Bank does not explicitly
contend that this categorical rule applies. Instead, it argues that we must examine the “justice
and fairness” of the government’s regulation. Reply Br. at 19 (citing E. Enters., 524 U.S. at 523).
We accordingly decline to consider whether FAPA’s retroactive application constitutes a per se
regulatory taking.

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preceding FAPA’s enactment, “the laws and rules were repeatedly changed to
mitigate certain recurring problems in residential foreclosure litigation.” Article
13 IV, 2025 WL 3272351, at *6. This is not a case in which a legislative act
destabilized a settled area of law that U.S. Bank and its predecessors detrimentally
relied upon. Rather, U.S. Bank invested in an area “that has long been the source
of public concern and government regulation.” Ruckelshaus v. Monsanto Co., 467
U.S. 986, 1007 (1984). In such cases, a subsequent regulation clarifying the rules of
estoppel and accrual “can hardly be called a taking.” Id. Finally, FAPA is a “public
program” that adjusts “the benefits and burdens of economic life to promote the
common good.” Connolly v. Pension Ben. Guar. Corp., 475 U.S. 211, 225 (1986).
Specifically, FAPA seeks to redress abusive tactics in real property litigation that
negatively impact New York homeowners and to end manipulation of the statute
of limitations. As discussed previously, both of those interests are beneficial to
society. See Buffalo Tchrs., 464 F.3d at 374; Gabelli, 568 U.S. at 448–49.
In the aggregate, the Penn Central factors weigh against U.S. Bank. We
therefore hold that FAPA’s retroactivity does not constitute a regulatory taking.
CONCLUSION
Accordingly, the judgment of the district court is AFFIRMED.

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