National Credit Union Administration Board v. Barclays Capital Inc. et al
MEMORANDUM AND ORDER granting 17 Defendants' Motion to Dismiss as amended and plaintiff's complaint is hereby dismissed. Signed by District Judge John W. Lungstrum on 7/10/2013. (ses)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
NATIONAL CREDIT UNION
BARCLAYS CAPITAL INC.; BCAP LLC;
and SECURITIZED ASSET BACKED
Case No. 12-2631-JWL
MEMORANDUM AND ORDER
This matter is presently before the Court on defendants’ motion to dismiss (Doc.
# 17). The Court concludes that plaintiff’s claims are time-barred. Accordingly, the
Court grants the motion, and plaintiff’s complaint is hereby dismissed.
Plaintiff National Credit Union Administration Board brings this suit as
conservator and liquidating agent of two credit unions, U.S. Central Federal Credit
Union (“U.S. Central”) and Western Corporate Federal Credit Union (“WesCorp”). The
suit relates to 12 different residential mortgage-backed securities (“RMBS” or
“certificates”), each purchased by one of the credit unions. Those purchases, in amounts
ranging from $12,515,000 to $200,000,000, took place between October 15, 2006, and
June 12, 2007. By the present suit, filed on September 25, 2012, plaintiff brings claims
under the federal Securities Act of 1933 (all 12 certificates) and California (two
certificates) and Kansas (seven certificates) statutes, based on alleged untrue statements
or omissions of material facts relating to each RMBS. Defendant Barclays Capital Inc.
was the underwriter or seller for the certificates, while the other two defendants issued
the certificates. Defendants have moved to dismiss all claims.
Plaintiff has brought seven other similar suits, involving different certificates, in
this district, which cases have been re-assigned to the undersigned judge. In one of those
actions, Case No. 12-2648, by Memorandum and Order dated April 8, 2013, the Court
granted in part and denied in part the motion to dismiss filed by the Credit Suisse
defendants (“Credit Suisse”). See National Credit Union Admin. Bd. v. Credit Suisse
Sec. (USA) LLC, 2013 WL 1411769 (D. Kan. Apr. 8, 2013) (“Credit Suisse”). In that
opinion, the Court held as follows: (1) Credit Suisse did not show that the Court lacked
venue over plaintiff’s claims asserted on behalf of credit unions WesCorp and
Southwest; (2) plaintiff’s claims were not untimely as a matter of law with respect to the
applicable one- and two-year discovery limitations periods; (3) the so-called Extender
Statute, 12 U.S.C. § 1787(b)(14), which provides the limitations period for claims
brought by plaintiff as conservator or liquidator, applies to federal and statutory claims;
(4) the Extender Statute displaces both limitations periods in the otherwise-applicable
federal (Section 13, 15 U.S.C. § 77m) and state statutes; (5) plaintiff’s three-year
limitations period under the Extender Statute was triggered by plaintiff’s appointment
as conservator for a credit union, not by its later appointment as liquidator; (6) the
Extender Statute’s three-year limitations period may not be extended by a tolling
agreement; (7) plaintiff’s assertion of American Pipe tolling with respect to its federal
claims based on some certificates did not fail as a matter of law at this stage; and (8)
plaintiff’s substantive allegations were sufficient to state plausible and cognizable claims
against Credit Suisse. In some of its rulings, the Court followed the reasoning of Judge
Rogers in ruling on a motion to dismiss in another of these eight similar cases (before
the case was reassigned). See id. (citing National Credit Union Administration Board
v. RBS Securities, Inc., 2012 WL 3028803 (D. Kan. July 25, 2012) (“RBS”)).
Subsequently, the Court invited the parties in the other seven similar cases to
submit briefs addressing how application of the Court’s rulings in Credit Suisse would
affect the resolution of the motions to dismiss filed by the defendants in those cases. In
addition, in the present case, after the Court issued its opinion in Credit Suisse,
defendants sought leave to amend their pending motion to dismiss to include the
argument, accepted by the Court in Credit Suisse, that plaintiff could not rely on the
parties’ tolling agreement to comply with the Extender Statute’s limitations period. On
April 29, 2013, the Court granted defendants’ motion to amend the motion to dismiss,
and it invited the parties in all of these cases to submit additional briefing concerning the
specific issue of the enforceability of plaintiff’s tolling agreements.
Defendants in this action seek dismissal of plaintiff’s claims brought on behalf
of WesCorp for lack of venue, on the same basis argued by Credit Suisse in its case. The
Court rejected that argument in Credit Suisse. In their supplemental briefing, defendants
have neither challenged that ruling by the Court nor indicated that this case is
distinguishable from Credit Suisse with respect to this issue of venue. Accordingly, for
the same reasons set forth in Credit Suisse, the Court denies defendants’ motion to
dismiss certain claims for lack of venue.
Timeliness of Claims
Defendants seek dismissal of plaintiff’s claims as time-barred pursuant to the
three-year limitations period imposed by the Extender Statute. The Court reaffirms here
the rulings that it issued in the Credit Suisse case concerning the application of that
statute. Accordingly, absent some form of tolling, plaintiff was required to file these
claims by March 20, 2012, three years after its appointment as conservator for U.S.
Central and WesCorp. Plaintiff did not initiate this action, however, until September 25,
2012. Nor may plaintiff rely on the Extender Statute’s alternative reference to the
applicable state-law limitations periods, as this case was filed more than five years after
the purchases of these certificates.
Plaintiff has not asserted American Pipe tolling in this case. It has asserted tolling
pursuant to an agreement executed by the parties, but the Court has, by an opinion issued
in the Credit Suisse case on this date, reaffirmed its ruling that plaintiff may not rely on
such an agreement to avoid application of the Extender Statute’s limitations period, and
that ruling will also be applied in the present case. Accordingly, all of the claims
asserted by plaintiff in this action are time-barred, and plaintiff’s complaint is hereby
dismissed in its entirety.1
IT IS THEREFORE ORDERED BY THE COURT THAT defendants’ motion
to dismiss (Doc. # 17) as amended is granted, and plaintiff’s complaint is hereby
IT IS SO ORDERED.
Dated this 10th day of July, 2013, in Kansas City, Kansas.
s/ John W. Lungstrum
John W. Lungstrum
United States District Judge
In light of this ruling, the Court need not address defendants’ arguments that
plaintiff’s claims also were time-barred under the discovery limitations period at the time
of plaintiff’s appointment as conservator and that plaintiff’s substantive allegations are
insufficient to state a claim with respect to certain certificates.
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