Goodan

We must decide whether a 1994 assignment of a leasehold interest in a 1926 ground lease was a novation such that the “gold clause” in the original lease is enforceable under 31 U.S.C. § 5118 (d)(2) as part of an “obligation issued after October 27, 1977.” “Gold clauses” became unenforceable when private ownership of gold was banned in 1933, see Joint Resolution of June 5,1933, eh. 48, 48 Stat. 112 , 113 (formerly codified at 31 U.S.C. § 463 ) (codified as amended at 31 U.S.C. § 5118 (d)(2) (1988)), but the ban was repealed October 27, 1977 for obligations issued after that date. 31 U.S.C. § 5118 (d)(2).

In this case a controversy arose among the current lessee of downtown Los Angeles property, Grand Avenue Partners L.P. (GAP); Sumitomo Bank; and Douglas Goo-dan and Jean Barclay, who are Trustees of the E.W. Goodan Trust which is the owner and successor of the original lessor, over the enforceability of the gold clause in light of Sumitomo Bank’s 1994 assignment of its interest as lessee. The district court held in a published opinion that Sumitomo’s assignment does not constitute a novation — and so is not an obligation issued after October 22, 1977 for purposes of § 5118(d)(2) —…