L.A. Federal Judge Refuses to Dismiss Countrywide Subprime Class Action--Again
By Alison Frankel
April 08, 2009
Hey, Countrywide and related defendants: Wake up and smell the coffee. Los Angeles federal district court judge Mariana Pfaelzer is just not going to dismiss the shareholder class action against you, no matter how many times you ask her to.In an 18-page ruling on April 6, Judge Pfaelzer denied motions by Countrywide, its auditors at KPMG, its underwriters, and its outside directors to dismiss the plaintiffs' second amended complaint against them. (She did dismiss certain counts against some of the individual defendants.) The ruling comes less than four months after Judge Pfaelzer, in a landmark 112-page ruling, denied motions to dismiss the plaintiffs' first complaint. That ruling, in turn, followed her refusal last May to dismiss a shareholders derivative suit against several Countrywide directors and officers.
We'll repeat what we wrote after motions to dismiss the shareholders suit were first denied in December: Lead plaintiffs counsel is Joel Bernstein of Labaton Sucharow, who will now have a chance (another chance) to get to know a long list of defense counsel a lot better. They include: Goodwin Procter for Countrywide and its former execs; O'Melveny & Myers for Bank of America; Gibson, Dunn & Crutcher for the underwriters; and Morrison & Foerster for the outside directors.
In some kind of weird sychronicity, Judge Pfaelzer's last Countrywide ruling on motions to dismiss came out right around the same time as a Gibson Dunn report on early trends in the subprime litigation--and this one does too! Here's the latest Gibson report, which our favorite subprime litigation savant, Kevin LaCroix at D&O Diary, hails for "categorizing the various kinds of allegations that plaintiffs have alleged as well as the defenses that defendants have asserted."
