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Second Time's the Charm for Plaintiffs in WaMu Complaint
The American Lawyer
October 29, 2009
Like some editors we know, many judges have a sore spot for disorganized, confusing or wordy complaints. As we reported earlier this year, Seattle federal district court Judge Marsha Pechman didn't much care for how Bernstein Litowitz Berger and Grossmann presented their allegations in a 388-page complaint against various former Washington Mutual officers and directors, underwriters and the auditing firm Deloitte & Touche. But she apparently liked the revision. In a decision issued on Tuesday, Pechman allowed most of the claims to move forward and declined to dismiss any of the defendants from the case.
The allegations in the case center on Washington Mutual's residential lending practices. The plaintiffs contend that the bank's standards were relaxed to meet consumer demand and bolster the company's stock price. While Pechman found the first complaint "verbose" and "disorganized," she described the allegations in the 267-page amended complaint as "cogent and concise."
Chad Johnson, a partner at Bernstein Litowtiz, said in an e-mail to us: "We are pleased that the judge took a pragmatic approach to the matter and agreed that the case can move forward because the complaint already shows a strong indication of fraud at the top level of WaMu's management -- and the judge similarly sustained the complaint against Wall Street investment banks and the auditor Deloitte, all of whom failed in their duty to protect investors from the fraud at WaMu."
The lineup for the defendants includes Simpson Thacher & Bartlett attorneys Barry Ostrager and Rob Pfister for former WaMu officers; Ronald Berenstain of Perkins Coie for former WaMu outside directors; Barry Kaplan of Wilson Sonsini Goodrich & Rosati for former WaMu CEO Kerry Killinger; Peter Wald of Latham & Watkins for Deloitte; and Jonathan Dickey of Gibson Dunn & Crutcher for the underwriters.
We left messages for each camp.
This article first appeared on The Am Law Litigation Daily blog on AmericanLawyer.com.
