Boilermakers National Annuity Trust Fund v. WaMu Mortgage Pass Through Certificates
2:09-cv-00037
| W.D. Wash. | Jul 23, 2012Background
- Western District of Washington oversees WaMu MBS matter; Plaintiffs allege §11 misstatements in offering documents.
- WaMu lowered underwriting guidelines starting 2006 to boost loan production; exceptions and SISA loans increased.
- Underwriters had broad authority to grant exceptions; compensating factors used to price risk.
- Internal WaMu reviews indicated high underwriting error rates and fraud concerns at certain offices.
- Plaintiffs rely on expert Holt (re-underwriting of loans) and Dr. Cowan (sample analysis) to show material deviations.
- Court denies summary judgment and excluding motions; disputes on material facts persist.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether WaMu's underwriting deviations rendered disclosures misleading | WaMu masked guideline deviations | Disclosures adequately described exceptions | Denied; material facts in dispute |
| Whether expert reports (Holt, Cowan) are admissible | Experts reliable and helpful | Daubert concerns about methodology | Denied; no exclusion of experts |
| Whether loss causation defeats §11 claim | Pre-disclosure information supported causation | Loss caused by market factors; defense viable | Denied; loss causation not proven as a matter of law |
Key Cases Cited
- Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (Supreme Court 1993) (gatekeeping reliability of expert testimony)
- Celotex Corp. v. Catrett, 477 U.S. 317 (Supreme Court 1986) (summary judgment standard of review)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (Supreme Court 1986) (no genuine issue of material fact requires trial)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (Supreme Court 1986) (genuine dispute exists when evidence could lead rational jury)
- In re Oracle Corp. Sec. Litig., 627 F.3d 376 (9th Cir. 2010) (loss causation interplay with market information)
- Hemmings v. Tidyman’s Inc., 285 F.3d 1174 (9th Cir. 2002) (relevance and admissibility of expert testimony)
- Worlds of Wonder Sec. Litig., 35 F.3d 1407 (9th Cir. 1994) (affirmative defense burden on loss causation)