Morgan Stanley Mortgage Capital Inc. v. Insurance Commissioner of the California

WILLIAM A. NORRIS, Circuit Judge:

Morgan Stanley Mortgage Capital Inc. appeals the dismissal of its diversity action to establish ownership and possession of certain negotiable mortgage notes (“Notes”) issued by two California limited partnerships (collectively the “Signature Partnerships”). Morgan Stanley bought these Notes from the Signature Partnerships pursuant to reverse-repurchase transactions in which the Signature Partnerships agreed to buy back the Notes at a later date. The transactions were described by the California Court of Appeal in a related state action as follows:

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