On August 26, 2011, Walnut Place Investors removed Bank of America’s proposed $8.5 billion settlement with holders of Countrywide Financial Corporation’s RMBS from New York State Court to the United States District Court for the Southern District of New York. The attorneys for Walnut Place Investors, Grais & Ellsworth, noted that the case is subject to federal jurisdiction as a mass action under the Class Action Fairness Act (“CAFA”). In a letter addressed to counsel for Bank of New York Mellon, Grais & Ellsworth argued that removal should not create any additional delay in ultimately settling the action. Grais & Ellsworth also represents several other parties that intervened in the proposed settlement including several Federal Home Loan Banks, pension funds, and private equity firms. Letter and Notice of Removal.
Class Action Fairness Act
State of Connecticut’s Action Against Ratings Agencies Remanded to State Court
On January 5, 2011, Federal District Court Judge Janet Bond Arterton of the District of Connecticut granted the State of Connecticut’s motion to remand its case back to state court. Defendants (Moody’s, McGraw Hill Co., and Standard & Poor’s) argued that the State was suing to benefit specific citizens, thus creating federal diversity jurisdiction. Judge Arterton concluded that the case, brought under the Connecticut Unfair Trade Practices Act, related to the State’s articulated interest in protecting all of its citizens from unfair practices, unique from the interests of individual investors, and therefore the State is a citizen of no state for diversity jurisdiction purposes. The court also found that the Class Action Fairness Act did not apply. Decision.