National Credit Union Administration Board v. Credit Suisse Securities (USA) LLC et al
Filing
47
MEMORANDUM AND ORDER - The Credit Suisse defendants motion to dismiss 23 is granted in part and denied in part. The motion is granted with respect to all of plaintiffs state-law claims, as well as plaintiffs federal claims based on 12 particular certificates, as set forth herein, which are time-barred. The motion is denied with respect to plaintiffs federal claims based on the other eight certificates. Signed by District Judge John W. Lungstrum on 4/8/2013. (ses)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF KANSAS
NATIONAL CREDIT UNION
ADMINISTRATION BOARD,
)
)
)
Plaintiff,
)
)
v.
)
)
CREDIT SUISSE SECURITIES (USA) LLC; )
CREDIT SUISSE FIRST BOSTON
)
MORTGAGE SECURITIES CORP.; and
)
INDYMAC MBS, INC.,
)
)
Defendants.
)
)
_______________________________________)
Case No. 12-2648-JWL
MEMORANDUM AND ORDER
This matter is presently before the Court on the motion to dismiss by defendants
Credit Suisse Securities (USA) LLC and Credit Suisse First Boston Mortgage Securities
Corp. (collectively “Credit Suisse”) (Doc. # 23). For the reasons set forth below, the
motion is granted in part and denied in part. The motion is granted with respect to
all of plaintiff’s state-law claims, as well as plaintiff’s federal claims based on 12
particular certificates, as set forth herein, which are time-barred. The motion is denied
with respect to plaintiff’s federal claims based on the other eight certificates.
I.
Background
Plaintiff National Credit Union Administration Board brings this suit as
conservator and liquidating agent of three credit unions: U.S. Central Federal Credit
Union (“U.S. Central”), Western Corporate Federal Credit Union (“WesCorp”), and
Southwest Corporate Federal Credit Union (“Southwest”). The suit relates to 20
different residential mortgage-backed securities (“RMBS” or “certificates”), each
purchased by one of the credit unions. Plaintiff brings claims under the federal
Securities Act of 1933 and California and Kansas statutes, based on alleged untrue
statements or omissions of material facts relating to each RMBS. Defendant Credit
Suisse Securities (USA) LLC was the underwriter or seller for various certificates, while
the other two defendants issued the certificates.
II.
Venue
Credit Suisse seeks dismissal of plaintiff’s claims brought on behalf of WesCorp
or Southwest for lack of venue. Plaintiff’s sole allegation relating to venue reads as
follows:
Venue is proper in this District under Section 22 of the Securities Act, 15
U.S.C. § 77v(a), because many of the transactions at issue occurred in
Lenexa, Kansas, the headquarters of U.S. Central.
Credit Suisse’s sole argument in the brief supporting its motion is that because this
allegation says nothing about the other two credit unions, it cannot support venue for the
claims brought on behalf of WesCorp and Southwest, which should therefore be
2
dismissed. The Court rejects this argument.
The relevant statute allows for venue in any district “wherein the defendant is
found or is an inhabitant or transacts business.” See 15 U.S.C. § 77v(a). The statute
does not require that the business transacted by the defendant have been related to the
particular claims in order to support venue. See id.; Adair v. Hunt Int’l Resources Corp.,
526 F. Supp. 736, 740 (N.D. Ill. 1981) (liberal special venue provisions, including
Section 77v(a), “do not require that the activities used to establish venue be ‘related’ or
‘connected’ to the transaction attacked in the complaint”). Credit Suisse has not argued
that any such nexus is required. Thus, the same business activity by Credit Suisse in
Kansas supporting venue with respect to claims on behalf of U.S. Central (venue for
which Credit Suisse seemingly concedes is proper) would also support venue under this
statute for claims against Credit Suisse generally, brought on behalf of any credit union.
Accordingly, plaintiff’s claims on behalf of the other two credit unions are not subject
to dismissal on this basis.
In its reply brief, Credit Suisse argues for the first time that its alleged activities
in Kansas are not sufficient to meet the standard that it “transacts business” in Kansas.
The Supreme Court, in interpreting a similar venue statute from the Clayton Act, has
found the “transacting business” requirement to be broader than being “found” or “doing
business” in the district. See United States v. Scophony Corp. of Am., 333 U.S. 795, 807
(1948) (citing Eastman Kodak Co. of N.Y. v. Southern Photo Materials Co., 273 U.S.
359, 373 (1927)). Courts have thus noted that this standard requires less business
3
activity than that required under a “doing business” or “minimum contacts” standard, as
“it is intended to have a more flexible and broader meaning than the jurisdictional
predicates.” See Zorn v. Anderson, 263 F. Supp. 745, 747 (S.D.N.Y. 1966); see also
Uccellini v. Jones, 182 F. Supp. 375, 376 (D.D.C. 1960) (cited in Zorn).
Credit Suisse asks the Court to apply the standard articulated by one court as
follows:
Despite the comparatively latitudinous interpretation which has been given
to “transacts business” under [§ 77v(a)] of the Securities Act of 1933, the
courts have insisted that the activities constitute a substantial part of a
defendant’s ordinary business, that they be continuous, and at least of
some duration.
See United Indus. Corp. v. Nuclear Corp. of Am., 237 F. Supp. 971, 978 (D. Del. 1964).
The Court concludes that this standard is satisfied here. Credit Suisse did not merely
have de minimis or random or fortuitous contacts with this district; rather, plaintiff
alleges that Credit Suisse and U.S. Central conducted numerous transactions, over
several months, involving hundreds of millions of dollars. Accordingly, Credit Suisse
is alleged to have engaged in activity that would constitute the transaction of business
in this district for purposes of the applicable venue statute. See, e.g., Birdman v. ElectroCatheter Corp., 352 F. Supp. 1271, 1273 (E.D. Pa. 1973) (venue proper under United
Industries standard where defendant had two percent of its sales in the district); cf.
Hodgdon v. Needham-Skyles Oil Co., 556 F. Supp. 75, 78 (D.D.C. 1982) (mere recording
of a deed, which was not part of the defendants’ ordinary business and was not
4
continuous, did not constitute transaction of business under similar standard).1
Accordingly, the Court denies Credit Suisse’s motion to dismiss certain claims for lack
of venue.
III.
Timeliness of Claims
A.
Introduction
Credit Suisse argues that plaintiff’s federal and state claims are time-barred.
Section 13 of the Securities Act, 15 U.S.C. § 77m, provides the initial limitations periods
for plaintiff’s federal claims. That statute provides:
No action shall be maintained . . . unless brought within one year after the
discovery of the untrue statement or omission . . . . In no event shall any such
action be brought more than three years after [the relevant sale or public offering
of the security].
Id.
Plaintiff’s claim under Kansas law is governed by the following statute of
limitations:
A person may not obtain relief . . . unless the action is instituted within the earlier
of two years after discovery of the facts constituting the violation or five years
after the violation.
K.S.A. § 17-12a509(j)(2). The timeliness of plaintiff’s claim under California law is
1
Credit Suisse also argues that plaintiff, in alleging venue, has not distinguished
between the activities of the two moving defendants. Because it was raised for the first
time in the reply brief, however, the Court will not consider this argument. See, e.g.,
U.S. Fire Ins. Co. v. Bunge N. Am., Inc., 2008 WL 3077074, at *9 n.7 (D. Kan. Aug. 4,
2008) (court will not consider issues raised for first time in reply brief) (citing Minshall
v. McGraw Hill Broadcasting Co., 323 F.3d 1273, 1288 (10th Cir. 2003)).
5
governed by the following provision:
[N]o action shall be maintained . . . unless brought before the expiration of five
years after the act or transaction constituting the violation or the expiration of two
years after the discovery by the plaintiff of the facts constituting the violation,
whichever shall first expire.
Cal. Corp. Code § 25506. Thus, these statutes require that these federal and state claim
have been filed within one or two years of their discovery and within three or five years
of the sale or violation, respectively.
The dates of the sales alleged in the complaint—the dates on which the limitations
periods would begin to run absent the discovery rule—range as follows: for claims on
behalf of WesCorp (12 certificates), from October 27, 2005, to June 4, 2007; for claims
on behalf of U.S. Central (7 certificates), from September 22, 2006, to March 8, 2007;
and for Southwest (1 certificate), on June 14, 2006. For the four WesCorp certificates
sold before April 2006, only California state law claims are alleged. Plaintiff filed this
suit on October 4, 2012. Thus, even assuming compliance with the one- and two-year
discovery limitations periods, plaintiff’s claims would still be untimely under the threeand five-year limitations periods for every certificate.
Plaintiff asserts various means of avoiding the statutory time bars (other than by
arguing timeliness under the discovery rule). First, plaintiff would apply the so-called
Extender Statute, 12 U.S.C. § 1787(b)(14), which applies to actions brought by this
plaintiff (a governmental entity) as a conservator or liquidating agent. The Extender
Statute provides as follows:
6
(A) In general
Notwithstanding any provision of any contract, the applicable statute of
limitations with regard to any action brought by the Board as conservator
or liquidating agent shall be--(i) in the case of any contract claim, the longer of--(I) the 6-year period beginning on the date the claim
accrues; or
(II) the period applicable under State law; and
(ii) in the case of any tort claim, the longer of—
(I) the 3-year period beginning on the date the claim
accrues; or
(II) the period applicable under State law.
(B) Determination of the date on which a claim accrues
For purposes of subparagraph (A), the date on which the statute of
limitations begins to run on any claim described in such subparagraph
shall be the later of—
(i) the date of the appointment of the Board as conservator or
liquidating agent; or
(ii) the date on which the cause of action accrues.
Thus, plaintiff would apply a three-year Extender Statute limitations period2 running
from the dates of its appointments as conservator and liquidating agent for the three
credit unions—March 20, 2009, and October 1, 2010 for WesCorp and U.S. Central; and
2
Plaintiff concedes that its claims are more akin to tort claims than to contract
claims for purposes of the Extender Statute.
7
September 24, 2010, and October 30, 2010, for Southwest.
Second, plaintiff would also apply a tolling agreement, which expressly included
statutes of repose, that the parties executed on August 16, 2011, and which expired on
September 12, 2012. Third, with respect to the federal claims based on eight particular
certificates, P would apply American Pipe tolling, which would allow for tolling from
the filing of a class action that encompass these claims. The class actions cited by
plaintiff were filed in November 2007, September 2008, and January 2009 for the
WesCorp claims; in September 2008 for U.S. Central claims; and in January 2009 for
the Southwest claims.
B.
Discovery of Claims
Credit Suisse argues that plaintiff’s claims became time-barred, by virtue of the
one-year (federal) and two-year (state) discovery limitations periods, before plaintiff
could take advantage of the Extender Statute. In the complaint, plaintiff alleges that, as
noted in a November 2008 government report, certain conditions made it difficult for
investors of RMBS to know about problems with the underwriting for the original loans;
and that WesCorp and U.S. Central could not have discovered their claims within one
year before March 20, 2009, and Southwest could not have discovered its claim within
one year before September 29, 2010. (Those are the dates plaintiff was appointed
conservator, which would trigger the Extender Statute and its separate limitations
period.) Plaintiff further alleges: “A reasonably diligent investor would not have known
even to begin investigating misrepresentations in the Offering Documents until at least
8
the date the certificates were downgraded to a credit rating below investment grade.”
The complaint sets out the dates of downgrading by S&P or Moody’s for these 20
certificates: for the WesCorp certificates, dates from October 6, 2008, to July 24, 2009;
for the U.S. Central certificates, dates from March 27, 2008, to March 13, 2009; and for
the Southwest certificate, May 8, 2008.
1.
PLEADING REQUIREMENT
As a preliminary matter, the parties disagree about the extent to which plaintiff
must plead facts to show that its claims are timely. Credit Suisse relies on Ames v.
Uranus, Inc., 1993 WL 106896 (D. Kan. Mar. 17, 1993), in which this Court quoted the
Tenth Circuit’s statement that a plaintiff must “plead and prove facts showing that his
or her claim was timely with respect to both the one-year and three-year limitations
periods.” See id. at *4 (quoting Anixter v. Home-Stake Prod. Co., 939 F.2d 1420, 1434
(10th Cir. 1991), vacated on other grounds sub nom. Dennler v. Trippet, 503 U.S. 978
(1992)). Credit Suisse argues that plaintiff has not complied with that requirement
because the complaint cites only two government reports and states conclusorily that the
credit unions would not have discovered their claims until within a year of the triggering
of the Extender Statute.
The Court rejects this argument, essentially for the same reasons cited by Judge
Rogers in National Credit Union Administration Board v. RBS Securities, Inc., 2012 WL
3028803 (D. Kan. July 25, 2012). In RBS, which involved two consolidated cases filed
in this district, this same plaintiff brought similar claims on behalf of credit unions
9
involving other RMBS certificates. See id. In RBS, Judge Rogers addressed this same
argument about a plaintiff’s pleading requirement based on the Tenth Circuit’s statement
in Anixter. See id. at *19-20. Judge Rogers noted that the pleading requirement urged
by the defendants in that case “appears contrary to more recent Supreme Court cases
which generally hold against special pleading rules for particular types of cases and that
do not require that plaintiffs plead facts to negate affirmative defenses, such as the
statute of limitations. See id. at *19 (citing Jones v. Bock, 549 U.S. 199, 214-16, 224
(2007)). Judge Rogers further noted that such a requirement has also been criticized by
circuit courts in securities law actions. See id. at *20 (citing cases). Instead Judge
Rogers employed an approach seemingly favored by the Tenth Circuit in one securities
fraud case, see id. (citing Olcott v. Delaware Flood Co., 76 F.3d 1538, 1549 (10th Cir.
1996)), which approach would “permit the defendant to raise the defense of statute of
limitations on a motion to dismiss when the complaint reveals on its face that the suit is
time-barred, and on a summary judgment motion when it does not.” See id. (quoting 5
Wright & Miller, Federal Practice and Procedure § 1276 (3d ed. 2004)).
The Court is persuaded by Judge Rogers’s analysis in RBS, and it therefore adopts
the same approach in this case. The Court also agrees with Judge Rogers that “[w]hile
courts may dismiss an action pursuant to a 12(b)(6) motion on the basis of an affirmative
defense such as the statute of limitations, it must be ‘clear’ from the dates given in the
complaint ‘that the right sued upon has been extinguished.’” See id. (quoting Aldrich v.
McColloch Props, Inc., 627 F.2d 1036, 1041 n.4 (10th Cir. 1980)). As Judge Rogers
10
concluded:
Thus, there is a difference in the burden facing plaintiff and
defendants in this matter. Plaintiff must merely allege a plausible claim.
Defendants must demonstrate that it is clear from the face of the complaint
and the matters considered via judicial notice that the plaintiff’s claim is
barred by the statute of limitation. This is often a matter best reserved for
summary judgment.
See id. (citations omitted).
2.
APPLICABLE DISCOVERY STANDARD
Credit Suisse also argues that the limitations period should be triggered after
“inquiry notice,” again based on the Tenth Circuit’s opinion in Anixter. By that
standard, inquiry notice would be present when there are “sufficient storm warnings” to
alert of the possibility of misleading statements or omissions. See Anixter, 939 F.2d at
1437. The Court rejects that standard, however. In Sterlin v. Biomune Systems, 154 F.3d
1191 (10th Cir. 1998), the Tenth Circuit concluded that the inquiry notice time from
Anixter merely triggers an investor’s duty to exercise reasonable diligence, and that the
statute of limitations runs once the investor, exercising such diligence, should have
discovered the facts underlying the violation. See id. at 1201; see also RBS, 2012 WL
3028803, at *21 (rejecting this same argument for an “inquiry notice” standard).
3.
APPLICATION OF THE DISCOVERY RULE
Credit Suisse argues that the credit unions should have discovered their claims by
March 19, 2007, or at least by March 19, 2008. Credit Suisse cites 2005 and 2006
warnings from plaintiff’s agency to credit unions of various risks with RMBS, as well
11
as an after-the-collapse statement by the agency that the risk from the concentration of
investment in RMBS should have been recognized earlier than 2007 and 2008. Credit
Suisse also cites public information, including from lawsuits—“public storm
warnings”—about problems in the industry. Credit Suisse also cites loan performance
data to which the credit unions had access—the same type of data cited in the complaint
by plaintiff as showing that defendants should have warned of risk—including data
showing that delinquency rates for the underlying loans jumped in 2007 and had
substantially increased by 2008.
Judge Rogers thoroughly analyzed these potential sources of notice in RBS—the
credit unions’ notice of general problems, poor performance of these investments, spikes
in default and delinquency rates, the particular risks disclosed in the offering documents,
and the class-action lawsuits filed—and he concluded that none meant as a matter of law
that a reasonable investor would have discovered sufficient evidence to bring these
claims before March 2007 or even March 2008. See RBS, 2012 WL 3028803, at *2227.3 The Court finds that analysis to be sound and persuasive and equally applicable to
the present case (and thus the Court will not repeat the analysis here).
The Court therefore concludes in this case that it is not clear from the allegations
in the complaint and the additional materials submitted by Credit Suisse (of which Credit
3
Judge Rogers did dismiss claims based on certain certificates as time-barred, but
in those instances there had been a credit downgrade and an FDIC cease-and-desist
letter, with the originator’s announcement that it was leaving the business. See RBS,
2012 WL 3028803, at *26-27. No such similar circumstances are argued here.
12
Suisse asks the Court to take judicial notice) that, as a matter of law, the credit unions
reasonably should have discovered the facts giving rise to plaintiff’s claims.4 This issue
is better left for a consideration of the evidence at the summary judgment stage or at trial.
Accordingly, the Court denies Credit Suisse’s motion to dismiss plaintiff’s claims as
untimely to the extent the motion is based on application of the discovery limitations
periods.
C.
Extender Statute
As noted above, plaintiff relies on the Extender Statute to make its claims timely.
Plaintiff argues that the Extender Statute provides the sole applicable limitations period,
displacing Section 13 (the one- and three-year federal limitations periods) and the state
statutes of limitation for all claims not already barred at the time plaintiff became
conservator of the credit unions (March 20, 2009, for WesCorp and U.S. Central;
September 24, 2010, for Southwest). Plaintiff would then count the Extender Statute’s
three-year period from the subsequent dates of its appointment as liquidating agent for
the credit unions (October 1, 2010, for WesCorp and U.S. Central; October 30, 2010, for
Southwest). Again, this suit was filed on October 4, 2012.
1.
APPLICATION TO FEDERAL, STATUTORY CLAIMS
4
Credit Suisse cites a class-action lawsuit filed against it and other defendants in
California state court on November 14, 2007. Although that filing may have triggered
the credit unions’ duty to investigate, the Court cannot say as a matter of law that they
should then have discovered their claims by March 19, 2008. See RBS, 2012 WL
3028803, at *25 (reaching same conclusion regarding a suit filed in November 2007).
13
Credit Suisse argues that the Extender Statute does not apply to federal claims,
by virtue of its reference to state-law periods of limitation. Credit Suisse further argues
that because the Extender Statute refers only to contract and tort claims (providing a
different limitations period for each), it does not apply to statutory claims.
The Court concludes that these arguments lack merit. Again, Judge Rogers has
thoroughly analyzed these issues, and his reasoning is persuasive. See RBS, 2012 WL
3028803, at *13-15.5 In particular, the Court notes that although Credit Suisse relies on
the text of the Extender Statute for its interpretations, the text actually supports a more
expansive reading, as the statute expressly applies to “any action” brought by plaintiff
as conservator or liquidating agent (and not merely to state-law contract or tort claims).
Under any reasonable reading, the fact that the statute refers to a state-law limitations
period as one possible deadline does not necessarily exclude federal claims, which would
be governed by the alternative deadline provided in the statute. Similarly, the fact that
the statute provides a choice between contract claims and tort claims does not trump the
statute’s express application to “any action,” as a court may readily determine whether
a particular claim is more akin to a contract claim or a tort claim for purposes of
choosing the applicable limitations period. See, e.g., FHFA v. Countrywide Fin. Corp.,
2012 WL 5275327, at *9 (C.D. Cal. Oct. 18, 2012) (rejecting argument that the Extender
5
The defendants in RBS have filed an interlocutory appeal of Judge Rogers’s
opinion, which appeal has been accepted by the Tenth Circuit, with respect to issues
relating to the application of the Extender Statute.
14
Statute does not apply to federal or statutory claims); FHFA v. UBS Americas, Inc., 858
F. Supp. 2d 306, 317 (S.D.N.Y. 2012) (rejecting argument that the Extender Statute does
not apply to federal claims); FDIC v. Zibolis, 856 F. Supp. 57, 60-61 (D.N.H. 1994)
(rejecting argument that Extender Statute does not apply to statutory claims). Most
significantly, Credit Suisse has been unable to cite any caselaw supporting its
interpretations, which this Court rejects.
2.
DISPLACEMENT OF SECTION 13
In relying on the Extender Statute, plaintiff contends that the statute establishes
the sole applicable limitations period, thereby displacing both of the limitations periods
from Section 13 of the federal Securities Act (one year from discovery, but at most three
years from sale) and the California and Kansas statutory limitations periods (two years
from discovery, but at most five years from violation). Credit Suisse argues, however,
that the Extender Statute displaces only the traditional statutes of limitations based on
the discovery rule (one year federal, two years state), but leaves in place the limitations
periods that act as traditional statutes of repose (three years federal, five years state).
Based on that interpretation, Credit Suisse argues that plaintiff’s claims are time-barred
under those three-year and five-year statutes of repose.
Credit Suisse relies on the language of the Extender Statute. Specifically, Credit
Suisse argues that because the Extender Statute provides the applicable “statute of
limitations,” it does not on its face affect the statues of repose contained in Section 13
and the state statutes. Credit Suisse cites to cases that distinguish those two types of
15
statutes generally. Credit Suisse also notes that the Extender Statute refers to the accrual
date, which is a concept that is part of a statute of limitations, but not a part of a statute
of repose (which runs from the violation or the sale, regardless of when the claim
accrues). Moreover, in Anixter the Tenth Circuit seemingly gave credit to this dual
characterization of Section 13 by stating that that statute “sets forth a statute of
limitations framed by a statute of repose.” See Anixter, 939 F.2d at 1434; accord Joseph
v. Wiles, 223 F.3d 1155, 1166 (10th Cir. 2000).
In support of its interpretation, Credit Suisse cites federal district court cases from
California and Arizona. In RTC v. Olson, 768 F. Supp. 283 (D. Ariz. 1991), however,
the court did not conduct any meaningful analysis, but merely stated that a similar
extender statute dealt only with procedural statutes of limitation and not with substantive
statutes of repose, such as the state statute of repose at issue there. See id. at 285. In
NCUAB v. RBS Secs., Inc., No. 11-5887 (C.D. Cal. Dec. 19, 2011) (tentative ruling), in
ruling that the Extender Statute did not displace Section 13’s three-year limitations
period, the court cited Olson and reasoned that the Extender Statute “plainly refers to
statutes of limitation” without mentioning statutes of repose. See id. slip. op. at 14-16.
The Court is not persuaded by these opinions and does not agree that the plain
language of the statutes indicates any intent by Congress that the Extender Statute should
not displace Section 13’s three-year limitations period. On its face, Section 13 does not
provide a statute of limitations and a separate statute of repose; instead, it merely sets
two different time periods after which an action may not be prosecuted. The Tenth
16
Circuit has described Section 13’s three-year period as a statute of repose; that
distinction is not particularly meaningful in this context, however, as the issue does not
turn on whether the three-year period was intended to extinguish the right to sue or
merely to bar the remedy. See, e.g., Rosenfield v. HSBC Bank, USA, 681 F.3d 1172,
1182-83 (10th Cir. 2012) (statute of repose operates to extinguish the claim after lapse).6
Rather, the issue is whether Congress intended to displace all other applicable limitations
periods. The Extender Statute provides that the “applicable statute of limitations” for an
action by plaintiff shall be a certain time period. Thus, there is no basis in the statutes’
text to indicate an intent that the Extender Statute displace one limitations period in
Section 13 but not the other. The Court is not persuaded that the use of the word
“accrual” provides evidence that Congress did intend such a dichotomy.
The Court further notes that where Section 13 provides the initial limitations
period, Credit Suisse’s interpretation would produce a somewhat nonsensical result, in
that the Extender would purport to provide a three-year extension that could never last
the entire three years, as the three-year period in Section 13 would always expire first.
This result further supports the conclusion that Congress did not intend that the Extender
Statute leave one limitations period in Section 13 intact while displacing the other.
The Court thus follows the thorough reasoning of Judge Rogers and other courts
6
Whether Section 13 or the Extender Statute extinguishes the right is relevant to
the application of the tolling agreement, see infra Part III.D; thus, in that context, the
Tenth Circuit’s reference to Section 13 as containing a statute of repose is meaningful.
17
that have rejected this interpretation of the Extender Statute offered by Credit Suisse.
See RBS, 2012 WL 3028803, at *16-18; FHFA v. Countrywide Fin. Corp., 2012 WL
5275327, at *3-9 (C.D. Cal. Oct. 18, 2012); FHFA v. UBS Americas, Inc., 858 F. Supp.
2d 306, 313-17 (S.D.N.Y. 2012). Those courts also noted that the purpose of the
Extender Statute is furthered by applying it to limitations periods akin to statutes of
repose, and that statutes of limitations are generally construed in favor of the
government. For these same reasons, the Court concludes that the Extender Statute also
displaces Section 13’s three-year limitations period and the state statutes’ five-year
limitations period. Credit Suisse’s motion is therefore denied to the extent that it is
based on an argument that the three- and five-year periods in Section 13 and the state
statutes respectively bar plaintiff’s claims despite application of the Extender Statute.
3.
USE OF DATE OF APPOINTMENT AS LIQUIDATOR
One dispute remains concerning the application of the Extender Statute. Plaintiff
argues that in applying the statute, it should be able to count its three years from the
dates of its appointment as liquidator for these three credit unions, and not from the
earlier dates on which it was appointed conservator. Credit Suisse argues that the
conservator appointment date would start the three-year clock, and that plaintiff should
not be able to reset that clock simply by also becoming the liquidator, as that
appointment did not give plaintiff any more right to bring these claims on behalf of the
credit unions than it already had as conservator. Neither side has located any caselaw
addressing this issue.
18
The Court agrees with Credit Suisse on this issue. Subparagraph (B) of the
Extender Statute provides that the limitations period begins to run on the “later of”
(i) the date of the appointment of the Board as conservator or liquidating
agent; or
(ii) the date on which the cause of action accrues.
See 12 U.S.C. § 1787(b)(14)(B). Plaintiff argues that the statute thus offers three
possible dates for starting the three-year clock: the date of appointment as conservator,
the date of appointment as liquidating agent, and the date of accrual. Plaintiff would
then choose the date of appointment as liquidator as the last of those three dates. The
statute cannot be reasonably read in that manner, however, as it clearly offers only two
possible “dates” (numbered accordingly): the “date” (singular) of appointment as either
conservator or liquidator, and the date of accrual. That provision of two possible dates
is reinforced by the use of “later” instead of “last” (which modifier would be required
for three alternatives). Plaintiff satisfied the first possible date when it was appointed
as conservator for the credit unions; thus that date must be used in applying the Extender
Statute’s three-year limitations period.
Plaintiff did not file this suit within three years after its appointment as
conservator for WesCorp and U.S. Central on March 20, 2009. Accordingly, plaintiff’s
claims on behalf of those credit unions are timely only if the Extender Statute’s threeyear limitations period was tolled in some manner.
D.
Tolling Agreement
19
Plaintiff contends that the Extender Statute’s limitations period was tolled by a
tolling agreement executed by the parties. Credit Suisse argues that the Extender
Statute’s limitations period may not be tolled by agreement. The Court agrees with
Credit Suisse that the Extender Statute is not subject to tolling by agreement.
Credit Suisse relies on Mid State Horticultural Co. v. Pennsylvania Railroad Co.,
320 U.S. 356 (1943), in which the Supreme Court refused to allow a particular statutory
limitations period to be waived by agreement. See id.7 In that case, the Supreme Court
determined that Congress had intended to extinguish the right to sue at the end of the
limitations period, with no exception allowed, instead of merely barring the remedy after
such period. See id. Plaintiff would distinguish Mid State as involving a particular
statute not at issue here. Nevertheless, Mid State teaches that if a statutory limitations
period was intended to extinguish the right to sue, that period may not be extended or
waived by agreement.
The Court concludes that the Extender Statute includes just such a limitations
period. The Tenth Circuit has repeatedly referred to Section 13’s three-year limitations
period as a form of a statute of repose, see Joseph, 223 F.3d at 1166 (citing Sterlin v.
7
Credit Suisse also relies on the Supreme Court’s statement in Lampf, Pleva,
Lipkind, Prupis & Petigrow v. Gilbertson, 501 U.S. 350 (1991), that the three-year
“period of repose” for actions under Section 10(b) of the Securities Exchange Act is not
subject to tolling, but it was clear in that case that the Court was referring to equitable
tolling. See id. at 363. The present case involves the issue of legal tolling by agreement.
See Joseph v. Wiles, 223 F.3d 1155, 1166-67 (10th Cir. 2000) (concluding that Lampf
is not applicable to the issue of legal tolling).
20
Biomune Sys., 154 F.3d 1191, 1196 (10th Cir. 1998)), which suggests the Tenth Circuit’s
view that that limitations period was intended to extinguish the right the sue. See, e.g.,
Rosenfield, 681 F.3d at 1182-83 (statute of repose operates to extinguish the claim after
lapse).8 The Extender Statute operates in a similar manner in displacing Section 13.
Moreover, Congress’s intent is most clearly articulated by the text of the Extender
Statute, which prescribes a particular limitations period “[n]otwithstanding any provision
of any contract.” See 12 U.S.C. § 1787(b)(14)(A). Plaintiff argues that Congress
intended by that language to trump a contractual provision setting a particular limitations
period, but not a contract entered into after the Extender Statute’s limitations period has
already begun to run (such as a tolling agreement entered into by plaintiff as
conservator).9 The text of the statute is not so limiting, however. Just as the Extender
Statute broadly applies to “any action” (as discussed above with respect to the statute’s
application to federal and statutory claims), so to must the statute’s broad reference to
“any provision of any contract” be given effect. Plaintiff’s policy arguments are also
unavailing. Plaintiff argues that the policy behind the Extender Statute was to give it,
as conservator, additional time in which file claims. The policy of any limitations
period, however, is to limit the time in which claims may be brought, and the statute’s
8
Of course, Congress was free to modify Section 13’s absolute bar by enacting the
Extender Statute.
9
In responding to the Court’s invitation for additional authority, plaintiff was
unable either to identify any specific legislative history concerning the “notwithstanding”
language or to identify any caselaw interpreting that language.
21
“notwithstanding” provision was clearly intended to limit plaintiff’s ability to bring
claims.10 Accordingly, under the analysis of Mid State, the Extender Statute evidences
an intent to extinguish plaintiff’s claim after lapse of the limitations period, and that
period therefore may not be waived or extended by a tolling agreement.
Finally, plaintiff argues that Credit Suisse should be equitably estopped from
challenging the application of the tolling agreement that it freely executed. The Tenth
Circuit has held that equitable estoppel is not available to avoid Section 13’s three-year
limitations period. See Anixter, 939 F.2d at 1436. In Anixter, the Court grounded that
holding on the language of Section 13 and concluded that “the more accurate analysis
excludes the application of this doctrine when the consequence operates to trump a clear
outer limit intended by Congress.”
See id.
In the Extender Statute, the
“notwithstanding” provision demonstrates Congress’s intent to set an outer limit that
may not be extended by agreement, and allowing plaintiff to enforce its tolling
agreement through equitable estoppel would undermine that intent and render the
“notwithstanding” limitation meaningless. Therefore, the Court believes that the Tenth
Circuit would similarly find the doctrine of equitable estoppel to be unavailable in the
context of the Extender Statute.
Accordingly, the Court concludes that plaintiff may not rely on the parties’ tolling
agreement to modify the Extender Statute’s three-year limitations period in this case.
10
Because the statute is not ambiguous in this respect, there is no reason to
construe this phrase in favor of the governmental entity.
22
E.
American Pipe Tolling
Plaintiff also seeks to use American Pipe tolling to avoid or extend the various
applicable limitations periods with respect to its federal claims based on eight of the 20
certificates at issue here. See American Pipe & Constr. Co. v. Utah, 414 U.S. 538
(1974). Under American Pipe tolling, the commencement of a class action tolls the
limitations period for claims later brought by putative class members. See Joseph v.
Wiles, 223 F.3d 1155, 1166-67 (10th Cir. 2000). American Pipe tolling may apply to toll
the limitations periods in Section 13, see id., and Credit Suisse does not dispute that that
tolling doctrine could also apply to the Extender Statute’s limitations period.
Plaintiff has alleged that for each of eight certificates at issue here, at least one
class action involving Credit Suisse included that certificate within its putative class.
Credit Suisse argues, however, that a party may only take advantage of American Pipe
tolling with respect to a claim based on a particular certificate if a named plaintiff in the
class action had standing to assert such claim in that case; and that such a plaintiff would
have standing only if it purchased that certificate. Credit Suisse further argues that for
seven of these eight certificates, the named class action plaintiffs either did not purchase
that certificate or have not alleged such a purchase. With respect to the eighth
certificate, Credit Suisse concedes that a named plaintiff purchased the certificate, but
it argues that because that plaintiff did not purchase the same tranche within that
certificate, it does not have standing sufficient to toll the limitations periods (assuming
a requirement of tranche-based standing). Thus, Credit Suisse argues that plaintiff
23
cannot claim American Pipe tolling for any of these eight certificates.
The courts are split on the issue of whether American Pipe tolling requires that
the named plaintiffs in the class action have standing to assert the particular claim at
issue. Although the Tenth Circuit has not addressed that particular question, the court
in Genesee County Employees’ Retirement System v. Thornburg Mortgage Securities
Trust 2006-3, 825 F. Supp. 2d 1082 (D.N.M. 2011), ably and thoroughly examined that
issue specifically under available Tenth Circuit authority. See id. at 1161-64. That court
noted that the majority of courts have ruled that American Pipe tolling applies even
where the named plaintiff was later determined to have lacked standing. See id. at 1161
(citing cases from the Third and Eleventh Circuits). The court chose to follow the
majority rule as the more well-reasoned approach, as the alternative approach would
create “a needless multiplicity of actions—precisely the situation that [Rule 23] and the
tolling rule of American Pipe were designed to avoid.” See id. at 1162 (quoting Griffin
v. Singletary, 17 F.3d 356, 360 (11th Cir. 1994). The court found unpersuasive the
criticism that the majority approach could lead to abuse by the use of placeholder class
action lawsuits, as such abuse may be avoided by the court’s disallowing tolling when
“the representative so clearly lacks standing that no reasonable class member would have
relied on the filing of the class action.” See id. (internal quotation omitted). The court
further noted that the Tenth Circuit itself had stated, in response to such criticism, that
“there is no evidence that American Pipe released any flood of class actions.” See id.
(quoting State Farm Mut. Auto. Ins. Co. v. Boellstorff, 540 F.3d 1223, 1234 (10th Cir.
24
2008)). The Court finds this analysis under Tenth Circuit law in Genessee County to be
sound and persuasive, and it will also follow the majority approach under which the class
action plaintiff’s standing is not necessarily required for American Pipe tolling. See
also, e.g., In re Morgan Stanley Mtge. Pass-Through Certificates Litig., 810 F. Supp. 2d
650, 668-70 (S.D.N.Y. 2011) (adopting same approach).
Applying this majority approach, the Court cannot say that the representative
plaintiffs in the class actions cited by plaintiff “so clearly lacked standing that no
reasonable class member would have relied on the filing of the action.” This conclusion
is due to the fact that Credit Suisse’s other assumption—that a named plaintiff in the
class action must have purchased the particular certificate or tranche in order to have
standing to assert a claim based on that certificate or tranche—is not an established
principle of law, as courts are split on that question as well. In fact, the two circuit
courts that have addressed the issue in the context of RMBS certificates are themselves
split. Compare Plumbers’ Union Local No. 12 Pension Fund v. Nomura Asset
Acceptance Corp., 632 F.3d 762, 768-71 (1st Cir. 2011) (standing requires purchase of
the certificate by the name plaintiff), with NECA-IBEW Health & Welfare Fund v.
Goldman Sachs & Co., 693 F.3d 145, 157-64 (2d Cir. 2012) (named plaintiff that did not
purchase the particular security may have class standing to assert a claim based on that
security if its claims raise the same set of concerns). The Court need not decide whether
the Tenth Circuit would more likely follow the First Circuit or the Second Circuit on this
question, as the split in authority at least disposes of the argument that no reasonable
25
class member could have relied on the filing of these class actions.
The Court further notes that this result would be the same even if it rejected
Genessee County and adopted the minority approach concerning whether standing is
required for tolling. Credit Suisse relies on FDIC v. Countrywide Fin. Corp., 2012 WL
5900973 (C.D. Cal. 2012), in advocating the minority approach, but even that court
conceded that “in the case of ‘bona fide dispute’ over the named plaintiff’s standing, the
Court would consider allowing tolling for plaintiffs who reasonably but mistakenly
relied on that standing.” See id. at *9 n.20 (citation omitted). In light of these splits of
authority, the Court cannot say as a matter of law, on the present record, that plaintiff
may not avail itself of American Pipe tolling with respect to these eight certificates.11
Accordingly, Credit Suisse’s motion is denied to the extent that it relies on this
argument.
F.
Summary of Limitations Issues
The Court’s resolution of the various limitations issues raised by the parties may
be summarized as follows. Application of the discovery limitations periods remains for
further litigation, and therefore no claims became time-barred as a matter of law prior
11
The Court also notes that although Credit Suisse appears to dispute that these
eight certificates are named in the class actions cited by plaintiff, only one of the class
action complaints has been submitted to the Court, and that complaint (Luther) did
include the particular certificate at issue here. Credit Suisse has also failed to support
its argument that these particular named class action plaintiffs did not purchase these
certificates with the submission of any documents from which the Court could take
judicial notice of those facts.
26
to the dates when plaintiff triggered the Extender Statute by becoming conservator of the
three credit unions. With respect to claims still surviving on those dates, the Extender
Statute displaces all other limitations periods, including the three-year and five-year
periods imposed by Section 13 and the state statutes. Except in the case of tolling, the
Extender Statute would allow three years from the conservator appointment
dates—March 20, 2009, for claims on behalf of WesCorp and U.S. Central; September
24, 2010, for claims on behalf of Southwest—in which plaintiff could bring these claims.
Suit was filed on October 4, 2012; thus, the claims on behalf of WesCorp and U.S.
Central would be untimely without tolling. Plaintiff may not rely on the parties’ tolling
agreement to toll the Extender Statute’s three-year limitations period. The Court has
rejected Credit Suisse’s argument that plaintiff may not use American Pipe tolling as a
matter of law; thus, with respect to eight certificates, the Court cannot say at this time
that plaintiff’s federal claims are time-barred. No tolling is available with respect to the
claims based on the other 12 certificates, however. Because those claims (all on behalf
of WesCorp and U.S. Central) were not filed within three years of the date on which
plaintiff became conservator, they are untimely and are subject to dismissal. Moreover,
plaintiff has not asserted American Pipe tolling with respect to its state-law claims;
therefore, all such claims are time-barred.12
Accordingly, Credit Suisse’s motion to dismiss is granted with respect to all of
12
Plaintiff did file this suit within three years of becoming conservator for
Southwest, but plaintiff has not asserted any state-law claim on behalf of Southwest.
27
plaintiff’s state-law claims and with respect to plaintiff’s federal claims based on the
following certificates:
CUSIP
Issuing Entity
Purchaser
31659TEJ0
31659TEK7
437084QZ2
43709NAE3
43709QAD8
43709QAE6
43709QAG1
74924XAC9
225470B28
00703QBF8
00703AAG2
80556AAD9
FLIT Series 2005-3
FLIT Series 2005-3
HEAT 2005-9
HEAT 2006-7
HEAT 2006-8
HEAT 2006-8
HEAT 2006-8
RASC Series 2007-EMX1 Trust
ARMT 2006-1
ARMT 2006-3
ARMT 2007-2
SAST 2006-3
WesCorp
WesCorp
WesCorp
U.S. Central
U.S. Central
U.S. Central
U.S. Central
U.S. Central
WesCorp
WesCorp
WesCorp
U.S. Central
Credit Suisse’s motion to dismiss, to the extent based on timeliness, is denied with
respect to plaintiff’s federal claims based on the other eight certificates.
IV.
Sufficiency of Allegations
Credit Suisse also challenges the sufficiency of plaintiff’s allegations. The Court
will dismiss a cause of action for failure to state a claim only when the factual allegations
fail to “state a claim to relief that is plausible on its face,” Bell Atlantic Corp. v.
Twombly, 550 U.S. 544, 570 (2007), or when an issue of law is dispositive, see Neitzke
v. Williams, 490 U.S. 319, 326 (1989). The complaint need not contain detailed factual
allegations, but a plaintiff’s obligation to provide the grounds of entitlement to relief
requires more than labels and conclusions; a formulaic recitation of the elements of a
28
cause of action will not do. See Bell Atlantic, 550 U.S. at 555. The Court must accept
the facts alleged in the complaint as true, even if doubtful in fact, see id., and view all
reasonable inferences from those facts in favor of the plaintiff, see Tal v. Hogan, 453
F.3d 1244, 1252 (10th Cir. 2006). Viewed as such, the “[f]actual allegations must be
enough to raise a right to relief above the speculative level.” Bell Atlantic, 550 U.S. at
555. The issue in resolving a motion such as this is “not whether [the] plaintiff will
ultimately prevail, but whether the claimant is entitled to offer evidence to support the
claims.” Swierkiewicz v. Sorema N.A., 534 U.S. 506, 511 (2002) (quoting Scheuer v.
Rhodes, 416 U.S. 232, 236 (1974)).
Plaintiff’s central claim is that defendants in their offering documents represented
that certain underwriting guidelines were generally followed, with certain exceptions,
by the loan originators, when in fact some originators systematically abandoned or
disregarded those guidelines. As a part of that claim, plaintiff also asserts that certain
ratios for the loans were significantly understated and that owner-occupancy levels were
misstated. In support of that claim, plaintiff alleges, among other things, (1) that default
rates surged for these loans after the sale; (2) that these originators had high “originateto-distribute” (OTD) rates, giving them less incentive to adhere to the underwriting
standards; (3) that losses exceeded those expected; (4) that credit ratings for the
certificates went from mostly AAA to below investment grade; and (5) that revelations
show abandonment of the guidelines by originators, in the industry generally and with
respect to six specific originators, as shown by media and government reports and other
29
lawsuits and investigations.
A.
Abandonment of Underwriting Guidelines
With respect to plaintiff’s central claim, Credit Suisse argues that these omissions
were not material and that the disclosures adequately informed of risks from these
investments, including by warning that some loans could be non-conforming and that
exceptions had been made. Plaintiff responds that such warnings do not disclose that the
guidelines were systematically ignored. The Court rejects this argument by Credit
Suisse, for the same reasons set forth by Judge Rogers in rejecting this argument in RBS.
See RBS, 2012 WL 3028803, at *30-32. The Court concludes that plaintiff has stated a
plausible claim in this regard, and the Court does not believe that the public materials
cited by Credit Suisse compel the conclusion, at this pleading stage, that the alleged
omissions could not have been material as a matter of law.
Credit Suisse also argues that the complaint does not sufficiently tie the
allegations of general malfeasance by originators in general to the particular certificates
and loans in this case. Again, the Court is persuaded by the conclusions reached by
Judge Rogers in RBS. See id. at *27-30. In that case, Judge Rogers rejected a similar
argument that the allegations were too conclusory about the industry in general, at least
with respect to certificates with originators that were specifically alleged to have
abandoned underwriting standards. Judge Rogers did dismiss certain claims based on
loans involving originators for whom there were no specific allegations other than OTD
rates. In the instant case, plaintiff makes allegations about six specific originators.
30
Moreover, as alleged by plaintiff, each of the eight surviving certificates (after the
Court’s limitations analysis) involved at least one of those six specific originators.
Accordingly, applying Judge Rogers’s analysis here, none of the remaining claims would
be subject to dismissal on this basis.13 The Court concludes that plaintiff has stated
plausible claims, with sufficient specificity, based on the remaining eight certificates.14
B.
LTV and Other Ratios
Credit Suisse also seeks dismissal of plaintiff’s claims to the extent that they rely
on alleged omissions or misleading statements relating to loan-to-value (LTV) and
similar ratios. Credit Suisse argues that the disclosures warned of borrower fraud and
that these ratios were disclosed as estimates with no guarantees that those levels would
stay the same. Plaintiff’s claim, however, is that appraisals were significantly higher
than they should have been. The Court agrees with Judge Rogers that plaintiff’s
statement of these claims is not too conclusory, for the same reasons stated by Judge
Rogers with respect to plaintiff’s general claim involving the abandonment of
13
Thus the Court need not decide in this case whether additional allegations absent
in RBS, including forensic analyses tied to specific certificates, would be sufficient for
claims based on certificates that did not involve one of the six specific originators.
14
The Court rejects Credit Suisse’s specific argument that plaintiff may not rely
on facts taken from other lawsuits or investigations that plaintiff itself has not verified.
See RBS, 2012 WL 3028803, at *35-36 (rejecting similar argument). Also for the
reasons cited by Judge Rogers, the Court rejects Credit Suisse’s “Hobson’s Choice”
argument that plaintiff should not be permitted to argue that it didn’t have enough
information to state a claim until 2008 or later (for purposes of the statute of limitations),
while at the same time relying on statistics and information and lawsuits from earlier to
state its claims. See id. at *37.
31
underwriting guidelines. See id. at *33-34. The Court does not agree with Credit Suisse
that plaintiff was required at this stage to plead facts linking this behavior regarding the
ratios to specific loans making up the certificates.
Credit Suisse also argues that an appraisal is an opinion that cannot supply the
basis for a claim unless the speaker knew it was false or did not really have that opinion.
Plaintiff responds that some LTV ratios are based on fact, not opinion, because they are
based on actual sales prices instead of appraisals; that the speaker may not have believed
it, as plaintiff has alleged; and that the originators may not have believed and in fact did
inflate the figures. The Court agrees with plaintiff and Judge Rogers that plaintiff’s
theories are at least plausible for purposes of stating a claim. See id. at *33. For the
same reason, the Court rejects Credit Suisse’s argument that plaintiff’s forensic analysis
is merely an alternative opinion that does not bear on whether the prior opinions
(appraisals) were misstated; plaintiff’s allegations are not based solely on that analysis,
and the Court concludes that plaintiff has stated a plausible claim here, with sufficient
detail.
C.
Owner-Occupancy Rates
Finally, Credit Suisse seeks dismissal of plaintiff’s claims to the extent that they
rely on alleged omissions or misleading statements relating to owner-occupancy rates.
Credit Suisse argues that the disclosures did not predict any future owner-occupancy
rates and that they disclosed that their present rates were based on information from the
borrowers, which could include misrepresentations. The Court rejects this basis for
32
dismissal.
Credit Suisse relies primarily on the opinion in Footbridge Ltd. v. Countrywide
Home Loans, Inc., 2010 WL 3790810 (S.D.N.Y. Sept. 28, 2010). In that case, the court
dismissed claims based on owner-occupancy ratios (under a heightened pleading
standard under Rule 9(b) and the PSLRA) because the offering documents explained that
owner-occupancy ratios were based on representations by the borrowers. See id. at *9.
That conclusion, which was not based on any citation to authority, is not persuasive,
however, for the reason that the Footbridge court did not consider the issue of a
defendant’s liability for repeating third-party misrepresentations under the Securities
Act.15
Instead, the Court finds persuasive the rejection of this same argument by the
court in FHFA v. UBS Americas, Inc., 858 F. Supp. 2d 306 (S.D.N.Y. 2012). In FHFA,
the court noted that the Securities Act imposes strict liability for any material
misrepresentation or omission, and the court concluded that the defendant’s position was
incompatible with such liability, as follows: “If defendants were correct that a party
could transform the Securities Act’s strict liability regime into one that required scienter
simply by attributing factual information in the offering materials to a non-defendant
15
The other federal case cited by Credit Suisse, Massachusetts Mutual Life
Insurance Co. v. Residential Funding Co., 843 F. Supp. 2d 191 (D. Mass. 2012), merely
relied on Footbridge. See id. at 204-05. The two state-court cases cited by Credit Suisse
did not contain any citations to supporting authority. Like Footbridge, these cases did
not address the issue of a defendant’s liability for repeating third-party
misrepresentations, and therefore they are not persuasive.
33
third-party, this purpose [behind the strict liability standard] would be significantly
undermined.” See id. at 329. The court further found the defendant’s position to be
inconsistent with the structure of the Securities Act, which allows a defendant to assert
its due diligence regarding third-party information as an affirmative defense—which
defense could not form the basis for a motion under Rule 12(b)(6). See id. (citing, inter
alia, 15 U.S.C. § 77k(b)(3)). The court concluded: “It is thus plain from the statutory
structure itself that a Securities Act defendant cannot simply claim that she blindly
reported information given to her by third parties and thereby avoid liability for
inaccuracies that made their way into the offering materials.” See id. at 330.
The Court agrees with the FHFA court that the Securities Act’s strict liability
standard allows for a claim based on a defendant’s passing along misstatements by third
parties. Plaintiff has plausibly stated such claims here concerning owner-occupancy
rates. Accordingly, the Court denies Credit Suisse’s motion to dismiss those claims.16
IT IS THEREFORE ORDERED BY THE COURT THAT the Credit Suisse
defendants’ motion to dismiss (Doc. # 23) is granted in part and denied in part. The
motion is granted with respect to all of plaintiff’s state-law claims, as well as plaintiff’s
federal claims based on 12 particular certificates, as set forth herein, which are time-
16
The Court also rejects Credit Suisse’s challenge to plaintiff’s alleged analyses
of actual owner-occupancy rates; the Court is not persuaded that the plaintiff may not
rely on such analyses in stating plausible claims.
34
barred. The motion is denied with respect to plaintiff’s federal claims based on the other
eight certificates.
IT IS SO ORDERED.
Dated this 8th day of April, 2012, in Kansas City, Kansas.
s/ John W. Lungstrum
John W. Lungstrum
United States District Judge
35
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?