Darren S. Teshima

Partner

San Francisco


Read full biography at www.orrick.com

Darren Teshima helps clients through complex commercial litigation, with a special focus on intelligent risk mitigation. From providing counsel to safeguard against anticipated and unforeseen dangers to handling high stakes litigation, clients turn to him for creative solutions to protect their businesses. Chambers USA 2021 quotes clients praising him for being “collaborative and a strong negotiator." Darren’s Insurance Recovery clients are exclusively policyholders. They seek his advice to pursue claims and help them improve their coverage programs.

Darren’s proactive judgement has protected clients’ long-term business goals time and again. He serves as a true business partner to technology and financial services clients, working closely with in-house risk management and legal departments to tailor innovative strategies to maximize available insurance and indemnification coverage. Industry leaders rely on Darren to guide them through the cutting-edge issues they’re facing today, from D&O coverage on SPAC transactions, to reps & warranties and indemnification coverage in agreements and transactions, to E&O and cyber coverage related to data breaches.

When litigation is necessary, Darren helps clients assert their rights. He has successfully litigated high stakes commercial disputes with significant wins in connection with insurance coverage, D&O coverage, and cyber insurance for some of the largest data breaches in history.

Darren has been recognized for his work on behalf of insurance policyholders by Legal 500, Chambers USA, and has been named a Law360 Rising Star, as well as one of the “Best Lawyers Under 40” by the National Asian Pacific American Bar Association.

Darren is a leader at Orrick, currently serving as co-leader of Orrick’s Diversity, Equity and Inclusion Initiative, and previously as deputy, co-leader and leader of the Complex Litigation and Dispute Resolution practice from 2016-2020. He is passionate about making the legal profession inclusive for all and takes an active role in D&I industry engagements, including as a fellow in the Leadership Council on Legal Diversity and participating in the Diversity in Law Hackathon.

Darren also is deeply committed to pro bono work and community involvement. He’s handled administrative trials and hearings on behalf of asylum seekers and low-income tenants and provided litigation advice to nonprofit organizations. For his efforts, Legal Services for Children honored him with the Pro Bono Advocate Award twice. Currently, Darren is the chair of the Asian Americans Advancing Justice – Asian Law Caucus, and serves on the board of Legal Services for Children.

In 2012, Darren spent three months on loan to the San Francisco District Attorney’s Office as an Assistant District Attorney, where he first-chaired four criminal jury trials to verdict.

Posts by: Darren S. Teshima

Justice Friedman of the New York Supreme Court Dismisses Two FHFA Repurchase Actions

On April 12, 2016, Justice Marcy Friedman of the New York Supreme Court granted motions to dismiss in two RMBS breach of contract actions filed by FHFA against Morgan Stanley ABS Capital I Inc. (“MSAC”) and Morgan Stanley Mortgage Capital Holdings LLC (“Morgan Stanley”).  In the decisions, he Court dismissed the actions on similar grounds and granted the parties the opportunity to brief claims for failure to notify, in light of the October 13, 2015 First Department’s decision in Nomura Home Equity Loan Inc. Series 2006-FM2 et al. v. Nomura Credit & Capital Inc.

Like Justice Friedman’s ruling last month in ACE Securities v. DB Structured Products, Inc., which we previously covered, the Court held that both actions were not rendered untimely by the Plaintiff’s failure to file repurchase demand condition precedent prior to the filing of the summons with notice.  However, the FHFA, as certificate holder, lacked standing to commence the action and thus the Trustee’s cause of action was untimely because it did not relate back to the FHFA’s summons with notice.  In so holding, the Court rejected the Trustee’s arguments in both cases that the action was timely commenced, and also that the accrual clause in the RMBS extended the statute of limitations, and that the federal Housing and Economic Recovery Act of 2008, applicable to certain actions brought by FHFA, extended the limitations period.  Finally, the Court also held that no tolling agreements saved Trustee’s claims, and also dismissed the causes of action for breach of the implied covenant of good faith and fair dealing, breach of repurchase obligations, and anticipatory breach. Decision 116. Decision 134.

RMBS Claims Against Bank of New York Mellon Remain in Federal Court

On December 18, Judge William Pauley III of the U.S. District Court for the Southern District of New York denied Bank of New York Mellon’s motion to dismiss RMBS claims regarding fourteen trusts and one indenture trust for lack of subject matter jurisdiction.  With respect to the indenture trust, the Court held that it did have original jurisdiction over that claim because the federal Trust Indenture Act (“TIA”) implicitly creates a private right of action.  Judge Pauley exercised supplemental jurisdiction over plaintiffs’ Pooling and Servicing Agreement (“PSA”) claims for the remaining fourteen trusts.  Citing Judge Shira Scheindlin’s March 31, 2015 decision in BlackRock v. HSBC, Judge Pauley held that both the TIA and PSA claims share a common nucleus of operative fact because all of the trusts at issue in the case were sponsored by Countrywide affiliates and serviced by Countrywide Home Loan Servicing.  Judge Pauley dismissed any concern that allowing a single TIA claim to create jurisdiction over fourteen state law claims would “allow a federal tail to wag a state dog,” noting Countrywide’s imprint on every transaction as sponsor and servicer.  Judge Pauley also highlighted that the case has been pending in the S.D.N.Y. for over four years and to create parallel proceedings would be both inconvenient and against the interests of judicial economy. Decision.

New York Appellate Court Allows Repurchase Action Against J.P. Morgan To Proceed

On December 1, 2015, the First Department of the Appellate Division of the Supreme Court for the State of New York affirmed the denial of a motion to dismiss an action brought by Bank of New York Mellon Corporation against J.P. Morgan Mortgage Acquisition Corporation (“JPMMAC”) and WMC Mortgage LLC.  The case is based on claims that JPMMAC breached its obligation to repurchase mortgage loans originated by WMC that violated certain representations and warranties.  At issue in JPMMAC’s appeal was a representation and warranty that stated that “[w]ith respect to the period from [the] Whole Loan Sale Date to and including the Closing Date” the information in the Mortgage Loan Schedule (“MLS”) and the loan tape “is true, correct, and complete in all material respects.” JPMMAC argued that this representation and warranty was a “bring-down” provision that only provided against defects that arose after JPMMAC purchased the loans from WMC, and did not apply to alleged defects that existed at the time WMC sold the loans to JPMMAC.  The Appellate Division rejected JPMMAC’s arguments, holding that the contractual language was not so limited.  Decision.

Investors File Putative Class Action Against Citibank for Allegedly Failing to Comply with RMBS Trustee Duties

On November 24, 2015, a group of investors, led by Pacific Investment Management Co. (“PIMCO”), filed suit in the Supreme Court of the State of New York against Citibank, N.A.,   as trustee of 25 private-label RMBS Trusts. This state court complaint follows the Southern District of New York’s dismissal of a similar action for lack of jurisdiction over claims relating to the majority of trusts, as discussed here.  The investors allege that Citibank  knew the trusts contained loans that breached seller representations and warranties, and that Citibank failed to perform its contractual obligations to require the sellers to cure or repurchase the defective loans.  Plaintiffs further allege that Citibank breached its duties to enforce the obligations of loan servicers by failing to redress alleged servicer misconduct.  The complaint also alleges breaches of Citibank’s fiduciary duties and a violation of New York’s Streit Act.  Complaint.

U.S. Supreme Court Denies S&P Investors’ Petition for Certiorari

On November 2, 2015, the United States Supreme Court denied investors’ petition for review of a Second Circuit decision affirming the dismissal of their class action against Standard & Poor’s Rating Services’ parent, McGraw-Hill Cos. Inc., and two of its corporate officers.  In that case, the plaintiff pension fund had made claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Section 15 of the Securities Act of 1933, alleging that S&P’s Ratings Services had intentionally made false and misleading statements to investors about the accuracy of its credit ratings for mortgage-backed securities.  As we previously covered, the Second Circuit had affirmed a decision by Judge Sidney H. Stein of the Southern District of New York dismissing the suit and holding that S&P’s ratings were “mere commercial puffery” and could not form the basis for a securities fraud claim.  In its certiorari request, Plaintiff argued that Judge Stein’s and the Second Circuit’s broad interpretation of “puffery” conflicted with Supreme Court precedent, Omnicare Inc. et al. v. Laborers District Council Construction Industry Pension Fund by holding that the alleged knowing falsity of S&P’s statements is irrelevant.  Petition for CertOrder List.

 

Goldman Sachs Settles CDO Class Action

On November 3, 2015, Goldman Sachs Group Inc. agreed to settle a lawsuit brought by a class of investors over Goldman’s sale of two collateralized debt obligations.  The settlement agreement comes on the heels of a September 8, 2015 summary judgment decision for Goldman that we recently covered, which found that Plaintiffs had failed to show evidence that Goldman Sachs knew about the risks associated with the CDOs.  The settlement amount was not disclosed.  Settlement Announcement.

Second Circuit Holds that Trust Indenture Act Does Not Apply and Dismisses RMBS Investor Claims Against BNY Mellon

On December 23, the United States Court of Appeals for the Second Circuit dismissed claims against Bank of New York Mellon, as trustee, by four pension funds in a putative class action relating to 530 Countrywide RMBS trusts worth $424 billion. The Second Circuit affirmed the district court’s holding that the plaintiffs did not have standing to assert claims related to certificates issued by trusts in which no plaintiff ever invested. The court further held that the Trust Indenture Act (TIA) does not apply to the trusts because they are “certificate[s] of interest or participation in two or more securities having substantially different rights and privileges” and therefore within an exemption to the TIA. As a result, the court reversed the district court’s decision denying the bank’s motion to dismiss claims under the TIA.  Decision.

U.S. Bank Sues Citigroup in Connection with $528 Million of RMBS

On December 22 and 23, U.S. Bank National Association, as trustee for three RMBS trusts, filed three separate summonses with notice in the Supreme Court of the State of New York. U.S. Bank alleges that Citigroup misrepresented the quality of mortgage loans underlying $528 million in RMBS, and that it breached its duties as servicer by failing to notify the trustee of representation and warranty breaches that it discovered. The trustee seeks compensatory and rescissory damages, along with repurchase of loans not complying with the applicable representations and warranties.  Summons with Notice (2007-AMC2)Summons with Notice (2007-AHL2).  Summons with Notice (2007-AR7).