Orrick Takes Lead In Successful Effort To Obtain Jurisdictional Discovery In RMBS Litigation

On May 2, 2011, a federal court in the District of Massachusetts ruled that the defendants in a suit brought by Cambridge Place Investment Management, Inc. (“CPIM”) had a “colorable claim” of federal jurisdiction and were therefore entitled to jurisdictional discovery. CPIM originally brought suit in Massachusetts state court against several underwriters, issuers and depositors of RMBS. After defendants removed the case to federal court, CPIM moved to remand the case back to state court. Simultaneous with defendants’ opposition to CPIM’s remand motion, defendants jointly moved the court for leave to take jurisdictional discovery to support their argument that diversity jurisdiction exists because the alleged assignment of claims by numerous foreign entities to CPIM was collusive and for the purpose of destroying diversity jurisdiction. The magistrate judge to whom the motions were assigned issued a report and recommendation in December 2010 denying jurisdictional discovery and remanding the action to state court. After subsequent briefing, District Court Judge Nathanial M. Gorton rejected the report and recommendation, finding that the ultimate question of diversity jurisdiction could be decided only after jurisdictional discovery was concluded. Orrick, Herrington & Sutcliffe LLP, representing Barclays, took the lead in briefing and arguing the motion for jurisdictional discovery on behalf of all of the defendants in the case. Decision.