News broke on Friday that Citigroup (NYSE:C) may have to go back into court to refight a case that could cost it $8.3 billion. As expected, the market is showing its displeasure, with shares of the superbank opening tentatively in the green today, but now decidedly into the red.

Back on Terra Firma, unfortunately
The case involves the 2007 purchase of recording and publishing giant EMI by British financier Guy Hands and his private equity fund, Terra Firma Capital. Citi was Terra Firma's banker for the $6.8 billion transaction.

In his $8.3 billion suit, Hands alleged that a Citi investment banker lied about another bidder, which resulted in Terra Firma grossly overpaying for EMI. The case went to court, and Citi won, but now a federal appeals judge has overturned the jury verdict, citing that "improper jury instructions from the [original] trial court judge required a reversal," according to The New York Times. 

Look ma, no financial crisis!
This potential payout is unusual in at least one regard -- it's not related to the financial crisis. Whether it's Citigroup, Bank of America, JPMorgan Chase, or Wells Fargo, when you hear about a multi-billion dollar payout anymore, you automatically assume it relates back to the financial crisis. And 99 times out of 100, you're right.

So, at least this isn't another soured-securities case, but a potential $8.3 billion payout isn't a jolly proposition, whatever its origin.

There is the chance this could be settled out of court, which could be a good thing, because if it doesn't, the case would end up in Judge Jed S. Rakoff's court. Rakoff, who sits on the U.S. District Court in the Southern District of New York, has gotten a reputation as a "hanging judge," though he's been as tough on regulators as he has been on Wall Street.

Regardless of how the case eventually turns out, the reopened wound is almost undoubtedly unsettling investors today. Of course, a look around the sector also shows the rest of the Big Four down in the mouth, which is likely affecting Citi's performance, too.

Because it's so difficult to ascertain exactly what makes a stock move on a day-to-day basis, here at The Motley Fool, we stress a long-term approach to investing. Tune out the market noise and tune into the fundamentals of the companies you're invested in. And leave the daily ticker checks to the day traders: Your broker won't thank you, but your portfolio will. 

Fool contributor John Grgurich owns shares of Citigroup and JPMorgan Chase. Follow John's dispatches from the not-so-muddy trenches of high-finance and big-banking on Twitter @TMFGrgurich.

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