Aaron M. Rubin

Managing Associate

New York


Read full biography at www.orrick.com

Aaron M. Rubin is a Managing Associate in the New York office and a member of the Commercial Litigation Group.

Aaron has experience with a wide array of matters, including securities and commercial litigation, accountants’ liability, mass torts, and insurance. He has represented clients in federal and state courts. He is also active in pro bono matters.

Aaron's representations and experience include:
  • The successful representation of the Commonwealth of Pennsylvania in partially vacating an arbitration award rendered against it under the Tobacco Master Settlement Agreement.
  • The successful representation of a bank in a state commercial dispute with a hedge fund.
  • The successful representation of a political action committee against a political candidate asserting a defamation claim in state court.
  • The successful representation of a smelting company in a federal mass tort suit involving plaintiffs alleging exposure to metals emitted from the smelter.
  • Representing a mortgage servicer in various RMBS related disputes.
  • Representing various investment banks in federal and state litigations involving premium-financed life insurance policies.
  • Representing an auditor in connection with defending state law claims of fraud and negligence.
  • Representing a bank in a federal dispute regarding a contractual forum selection clause.

Posts by: Aaron Rubin

S.D.N.Y. Grants in Part and Denies in Part Trustee Bank of New York Mellon’s Motion for Summary Judgment in Suit Brought by Certificateholder Phoenix Light

 

On September 7, 2017, Judge Valerie Caproni in the United States District Court for the Southern District of New York granted the majority of RMBS trustee Bank of New York Mellon’s (“BNYM“) summary judgment motion and denied certificateholder Phoenix Light SF Ltd.’s (“Phoenix Light“) cross motion in its entirety in Phoenix Light SF Ltd. v. Bank of New York Mellon. Judge Caproni’s decision significantly curtailed Phoenix Light’s Complaint, which alleged various breaches of the trustee’s duties in connection with 21 RMBS trusts. For eight of the trusts at issue, Judge Caproni rejected Phoenix Light’s breach-of-contract claims alleging that BNYM failed to notify other parties upon discovery of breaches of representations and warranties due to lack of evidence that BNYM actually discovered any breaches. Judge Caproni also rejected the breach claims in connection with another eight trusts due to Phoenix Light’s failure to support the claims with evidence on a “loan-by-loan and trust-by-trust” basis. Only Phoenix Light’s breach-of-contract claims related to trusts where BNYM had notice of a specific breach or an event of default survived, as did Phoenix Light’s Trust Indenture Act claims for three trusts (because BNYM did not address the claims in its reply brief). The Court also granted BNYM’s motion with respect to Plaintiffs’ negligence, gross negligence, and negligent misrepresentation claims, finding that Plaintiffs’ tort-based arguments were duplicative of their breach-of-contract allegations.

S.D.N.Y. Denies Plaintiffs’ Sampling Motion in Consolidated Actions Against RMBS Trustee

 

On August 21, 2017, Judge Katherine Polk Failla of the United States District Court for the Southern District of New York upheld a magistrate’s order denying plaintiff-certificateholders’ motion to attempt to prove their claims by re-underwriting a sample of the loans at issue in a consolidated action against Wells Fargo Bank, National Association, in its capacity as RMBS trustee. Judge Failla, after reviewing the magistrate’s order for clear error, affirmed that under the governing agreements, to prevail on a breach of contract claim against an RMBS trustee with respect to the loans underlying the trust, Plaintiffs must demonstrate a breach on a loan-by-loan and trust-by-trust basis. Accordingly, Plaintiffs cannot utilize sampling in their efforts to prove that the RMBS trustee breached its contractual obligations. Judge Failla also noted that Plaintiffs, rather than needing to prove that the trustee had actual knowledge of breaches of representations and warranties, could potentially demonstrate the trustee’s discovery of breaches through a showing of conscious avoidance or implied actual knowledge. Wells Fargo Sampling Order.

NCUA Enters $445 Million Settlement with UBS in Lawsuit Alleging Untrue Statements in Connection with Sale of RMBS

 

On April 25, 2017, the National Credit Union Administration (“NCUA“), as liquidating agent for U.S. Central Federal Credit Union and Western Corporate Federal Credit Union, voluntarily dismissed its complaint against UBS Securities, LLC (“UBS“) and Mortgage Asset Securitization, Inc., in the United States District Court for the District of Kansas following a settlement between the parties. Under the terms of the settlement, UBS agreed to pay $445 million to end the NCUA’s five-year old lawsuit (the filing of the lawsuit was covered here). The NCUA’s suit involved claims for losses suffered by the two failed credit unions from allegedly untrue statements and omissions of fact by UBS regarding RMBS that it underwrote and sold. This settlement is in addition to the $79.3 million the NCUA also recovered from UBS in April 2016 for RMBS losses suffered by two other defunct credit unions. Voluntary Dismissal.

Wells Fargo Wins Summary Judgment Motion on All Claims Brought by German Bank LBBW Luxemburg

 

On March 30, 2017, Judge J. Paul Oetken granted Defendants Wells Fargo Securities LLC (“Wells Fargo“), f/k/a Wachovia Capital Markets LLC (“Wachovia“), and Fortis Securities LLC’s motion for summary judgment, dismissing the remaining causes of action and closing the case in LBBW Luxemburg S.A. v. Wells Fargo Securities LLC in the United States District Court for the Southern District of New York.

In a prior motion to dismiss order in 2014, the Court granted in part Defendants’ motion to dismiss, “keeping alive” only one theory of liability brought by LBBW. That remaining theory was that Wachovia’s internal valuation markdown of the Grand Avenue II (“GAII“) CDO Preference Shares, for which Defendants had served as some of the initial purchasers, on the same day it issued those shares allegedly signaled Wachovia’s potential misrepresentation or omission to purchasers of other GAII’s securities. Plaintiffs argued this markdown supported a plausible inference that Wachovia knowingly misrepresented the value of CDO shares and constituted circumstantial evidence of conscious misbehavior.

In its ruling, the Court held that LBBW failed to show that it conveyed its right to sue to another German entity, Landesbank, when the two companies merged in 2014, and therefore failed to establish standing.

Judge Oetken also found that LBBW failed to overcome the motion for summary judgment on the merits. The Court found that LBBW’s single surviving theory of liability was unsupported by the record, as discovery in the case had not produced evidence to connect the markdown to any secretly held view by Wells Fargo that GAII’s portfolio of assets was in trouble.

The Court also rejected the fraud claims brought against Defendants, finding that LBBW failed to point to specific evidence as to a misrepresentation or material omission on Defendants’ part based on the single surviving theory. Judge Oetken also dismissed constructive fraud and negligent misrepresentation claims against Defendants, concluding again that there was a lack of evidence to support any misrepresentation, an essential element of both claims. Finally, the Court found that LBBW’s breach of contract claim, which alleged that Defendants agreed to notify it of any material changes to the CDO’s capital structure, must fail, as the “evidence establishes beyond genuine dispute that the internal markdown on the Preference Shares was not related to any change in Wachovia’s view of GAII’s underlying portfolio of assets.”

In addition to granting Defendants’ motion for summary judgment, Judge Oetken also denied LBBW’s motion to supplement the summary judgment record as untimely; LBBW’s motion to strike certain of Defendants’ arguments; and LBBW’s motion for adverse inference sanctions. Opinion.

SDNY Grants Defendant GreenPoint Mortgage Summary Judgment

 

On March 29, 2017, Judge Andrew L. Carter, Jr., of the United States District Court for the Southern District of New York granted Defendant GreenPoint Mortgage Funding, Inc.’s (“GreenPoint“) motion for summary judgment, dismissing all causes of action against it as time-barred and terminating the case in Lehman XS Trust et al. v. GreenPoint Mortgage Funding, Inc.

Plaintiff Trustee U.S. Bank National Association, on behalf of the Lehman XS Trust, Series 2006-GP2 (“GP2“), Lehman XS Trust, Series 2006-GP3 (“GP3“), and Lehman XS Trust, Series 2006-GP4 (“GP4“) (collectively, the “Trusts“), and Freddie Mac Conservator Federal Housing Finance Agency (collectively, “Plaintiffs“) brought consolidated claims against GreenPoint regarding GP2, GP3, and GP4. Plaintiffs alleged breach of contract and indemnification claims for specific performance and damages arising out of GreenPoint’s alleged breach of certain representations and warranties.

Citing N.Y. C.P.L.R. § 214(3), the Court first found that Plaintiffs’ breach of contract claims under the mortgage loan purchase agreements (“MLPA“) for all three Trusts were time-barred under New York state’s six-year statute of limitations for breach of contract actions. The Trusts’ respective MLPAs required GreenPoint to cure or repurchase the defective loans in the event that any of the mortgage loans breached these representations and warranties. The closing dates for the Trusts were as follows: GP2 on May 15, 2006; GP3 on June 15, 2006; and GP4 on July 17, 2006. FHFA filed summons with notice for GP2 on May 30, 2012; for GP3 on June 29, 2012; and for GP4 on July 30, 2012.

Judge Carter then rejected Plaintiffs’ indemnification claims arising out of GreenPoint’s alleged breaches of representations and warranties. Plaintiffs sought indemnification for its losses, costs, fees, and expenses arising out of and related to the breaches of GreenPoint’s representations and warranties. Since Plaintiffs did not face liability to a third party as a result of the alleged breaches, the Court held that Plaintiffs’ indemnification cause of action was “more appropriately characterized as one to recover losses incurred by breach of contract” and therefore also barred by the statute of limitations.

Finally, the Court dismissed as time-barred Plaintiffs’ newly alleged causes of action for breach of GreenPoint’s representations and warranties made in the Trusts’ Indemnification Agreements, which provide for indemnity to the Trusts and other entities for claims arising out of breaches of the representations and warranties made in the information provided by or on behalf of GreenPoint for inclusion in the Prospectus Supplements. Opinion.

SDNY Finds Three of Commerzbank AG’s RMBS Claims Against The Bank of New York Mellon Timely Under German Three-Year Statute of Limitations

 

On March 21, 2017, Judge George Daniels of the United States District Court for the Southern District of New York partially granted and partially denied defendant’s motion to dismiss in Commerzbank AG v. The Bank of New York Mellon. With respect to the central breach of contract claims, Judge Daniels held that The Bank of New York Mellon (“BNYM”) had not carried its burden for dismissal under applicable German law, as it had failed to prove that Commerzbank AG had sufficient knowledge of each element of each of its claims with respect to each Trust, “such that it could have commenced [the] action with an expectation, or some prospect, of success,” three years prior to filing. The court also denied the BNYM’s motion to dismiss for failure to state a claim with respect to Commerzbank’s claims for breach of contract, and negligence for failure to avoid conflicts of interest. It granted BNYM’s motion to dismiss Commerzbank AG’s claims for the violation of the covenant of good faith, violation of the Streit Act, and breach of fiduciary duty. Memorandum Decision and Order.

SDNY Grants Trustees’ Motion to Dismiss Triaxx CDOs’ RMBS Claims for Lack of Standing

 

On March 21, 2017, Judge Naomi Reice Buchwald of the United States District Court for the Southern District of New York issued a Memorandum and Order granting defendants’ motion to dismiss plaintiffs’ First Amended Complaint in Triaxx Prime CDO 2006-1, Ltd., et al. v. The Bank of New York Mellon and U.S. Bank, for lack of standing. In dismissing the claims, the court held that the plaintiff CDOs – certificateholders in several RMBS trusts for which the defendants, U.S. Bank and Bank of New York Mellon, serve as RMBS trustees – had ceded any right to initiate litigation on their own behalf when they assigned away “all . . . right, title and interest” in the underlying assets to their respective CDO indenture trustees. Judge Buchwald granted leave to file an amended complaint within thirty days so long as any such amended complaint explains how the plaintiffs’ cured the standing issue. Order and Memorandum.

RMBS Trustee Defeats Motion to Certify Class

 

On March 21, 2017, Judge Alison Nathan of the United States District Court for the Southern District of New York denied plaintiff’s Motion to Certify Class without prejudice in Royal Park Investments SA/NV v. Deutsche Bank National Trust Company. In a text-only Order, Judge Nathan wrote that Royal Park failed to carry its burden to show that the proposed class is sufficiently ascertainable. The full Memorandum and Order will remain under seal for ten days while the parties confer as to which portions should be redacted prior to public filing. Order.

First Department Grants Summary Judgment Against RMBS Collateral Manager for Failure to Raise Issue of Fact Regarding Loss Causation

 

On March 2, 2017, the New York Supreme Court, Appellate Division, First Department reversed a decision from the New York Supreme Court and dismissed a complaint filed by two hedge funds against the collateral manager of a $400 million collateralized debt obligation (“CDO“) investment. Plaintiff hedge funds Basis PAC-Rim Opportunity Fund (Master) and Basis Yield Alpha Fund (Master) (together, “Basis“) filed a lawsuit asserting fraud claims against defendant TCW Asset Management Company (“TCW“), which had served as the collateral manager for the Dutch Hill II CDO. Dutch Hill II was created to serve as an investment vehicle for the purpose of taking a net long position on extremely risky RMBS; TCW selected the assets for the Dutch Hill II portfolio and made representations to Basis about the viability of the subprime RMBS market. Basis purchased over $27 million of Dutch Hill II notes in 2007, but the notes were all but valueless following the housing crisis. In moving for summary judgment, TCW submitted expert evidence showing that the housing market crash would have caused Basis’s losses even if the collateral underlying the CDO had not been misrepresented, as Basis alleged. In response, Basis did not submit sufficient evidence rebutting that opinion or showing that any of the particular misrepresentations by TCW caused its losses. The Supreme Court had denied summary judgment, holding that there were issues of fact as to loss causation. The First Department reversed, concluding that by failing to rebut TCW’s evidence, Basis had not raised an issue of fact as to loss causation.  Opinion.

Moody’s to Pay $864 Million to U.S. Department of Justice & 21 States in Credit Rating Settlement

 

On January 13, 2017, Moody’s Corporation agreed to pay $864 million in a settlement with the U.S. Department of Justice and 21 states in connection with the ratings agency’s credit rating work on residential mortgage‑backed securities and other products during the years leading up to the financial crisis. The settlement is comprised of a $437.5 million payment to the Department of Justice and $426.3 million to 21 states. The Statement of Facts accompanying the Settlement Agreement states that from 2004‑2010, Moody’s issued credit ratings of RMBS and CDOs, but that there were potential conflicts of interest in Moody’s “issuer‑fee‑based” business model, in which issuers paid Moody’s for their credit opinions. The settlement agreement does not constitute sanctions “for any act or practice of Moody’s.” In accordance with the settlement agreement, Moody’s agrees to maintain and adopt certain compliance measures that “promote the integrity and independence of Moody’s credit ratings” for a period of five years. Settlement Agreement. Statement of Facts. Moody’s Compliance Commitments.