FHLBP Claims Dismissed In Part

On November 29, 2010, Judge R. Stanton Wettick Jr. of the Court of Common Pleas of Allegheny County, in Pittsburgh, Pennsylvania, decided motions to dismiss three RMBS actions in which the Federal Home Loan Bank of Pittsburgh (FHLBP) alleged misrepresentations by various J.P. Morgan and Countrywide affiliates and three rating agencies (Moody’s, S&P and Fitch). The court dismissed all claims asserted against the rating agencies except for state law fraud claims. The court sustained a variety of claims against the J.P. Morgan and Countrywide defendants, however, and rejected their argument, relying on the Fifth Circuit’s decision in Lone Star Fund V (U.S.) v. Barclays Bank, PLC, 594 F.3d 383 (5th Cir. 2010), that the offering documents’ disclosure of a sole “repurchase or cure” remedy for non-conforming mortgage loans demonstrated that there was no misrepresentation. Decision.