In Re IndyMac Mortgage-Backed Securities Litigation
793 F. Supp. 2d 637
S.D.N.Y.2011Background
- This securities class action arises from IndyMac MBS and related mortgage-backed certificates (the Certificates) and their Offering Documents.
- Wyoming State Treasurer was designated lead plaintiff in the consolidated action; Detroit petitioned to intervene as a class representative after consolidation.
- The Court had previously ruled that Wyoming’s standing is limited to offerings in which it purchased Certificates and dismissed claims otherwise.
- Intervention motions seek to add claims under Sections 11, 12(a)(2), and 15 on behalf of purchasers in various offerings.
- The court must decide on intervention timeliness, statutes of repose, and whether to amend the consolidated complaint to name Countrywide and Merrill Lynch as defendants.
- The court ultimately grants intervention in part for certain offerings and denies leave to amend the ACC in its entirety.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether statutes of repose bar movants’ claims and if tolling applies. | Movants contend American Pipe tolling preserves timely claims. | Defendants argue repose cannot be tolled and time-barred claims should be dismissed. | Some tolling applies to movants despite repose limits; repose cannot be avoided to save all claims. |
| Whether American Pipe tolling applies when the putative class representative lacked standing. | Movants rely on American Pipe to toll the limitations period. | Defendants contend tolling is unavailable where representative lacked standing. | American Pipe tolling applies in this context to preserve movants’ timely assertion of claims. |
| Whether Detroit’s post-consolidation standing affects intervention and timeliness. | Detroit seeks to pursue its own timely claims. | Consolidation and lack of standing foreclose assertion of those claims. | Detroit’s intervention to assert INDX 2007-AR5 claims is barred; Section 12(a)(2) claims may survive where timely. |
| Whether the ACC amendment to add Merrill Lynch/Countrywide is timely and proper. | Wyoming seeks to amend to include Merrill Lynch; related claims may relate back. | Amendment is barred by repose and Krupski requires proper claim pleading. | Leave to amend was denied due to time-barred claims; relation back does not save time-barred claims. |
Key Cases Cited
- American Pipe Construction Co. v. Utah, 414 U.S. 538 (1974) (class action tolling applies to later-intervening members)
- Krupski v. Costa Crociere S.p.A., 130 S. Ct. 2485 (2010) (replacing a named defendant requires showing mistake about identity; not mere awareness of existence)
- Korwek v. Hunt, 827 F.2d 874 (2d Cir. 1987) (American Pipe tolling context in Second Circuit; standing concerns addressed)
- Cullen v. Margiotta, 811 F.2d 698 (2d Cir. 1987) (American Pipe tolling in the Second Circuit; class action efficiency considerations)
- Dodds v. Cigna Securities, Inc., 12 F.3d 346 (2d Cir. 1993) (statutes of limitations and tolling considerations in securities cases)