New York Federal Court Transfers Countrywide RMBS Case to California to Prevent “Judge-Shopping”

On June 14, 2011, District Judge Alvin Hellerstein of the S.D.N.Y. granted defendant Countrywide’s motion to transfer this case to the U.S. District Court for the Central District of California. Allstate’s complaint alleges that Countrywide, several associated entities, and certain high-ranking employees committed fraud in connection with statements regarding underwriting standards in the sale of over $700 million in RMBS. Judge Hellerstein noted that this case is closely related to another case in the Central District of California involving the same parties and the same issues, and that Allstate filed its New York case only after the California judge narrowed the case to exclude some of the securities upon which Allstate bases its claims. Judge Hellerstein further found that the New York suit “gives the appearance of judge-shopping” and granted the motion to “promote the efficient use of judicial resources” and “prevent the possibility of inconsistent results.” Decision.