43 F. Supp. 3d 309
S.D.N.Y.2014Background
- MF Global Plan Administrator sues PwC for alleged accounting malpractice relating to RTM transactions.
- PwC served as MF Global’s outside auditor/accountant; plaintiffs seek at least $1 billion in damages.
- Litigation arises from MF Global’s collapse and PwC’s accounting advice about RTM transactions.
- Court previously denied in pan delicto defense in the IPD Decision and ordered further briefing.
- Plan Administrator alleges claims are not barred by the Liquidation Plan’s exclusive authority to the Litigation Trustee.
- Court partly grants PwC’s motion: counts for breach of contract and unjust enrichment dismissed; standing, proximate cause, and ongoing allegations addressed on the merits are retained.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue PwC | Plan Administrator not barred by Liquidation Plan. | Litigation Trust claims overlap; trustee has exclusive authority. | Standing not barred; plan did not preclude filing. |
| Proximate cause sufficiency | PwC accounting advice was a substantial factor in MF Global’s harm. | Harm may be broader; causation too attenuated. | Plaintiff states a plausible proximate cause claim. |
| Statute of limitations (continuous representation) | Continuous representation extends limitations period. | Limitation period may have begun earlier. | Question of fact remains; not time-barred at this stage. |
| Redundancy of contract claim | Contract claim mirrors malpractice claim. | Duplicative and not based on a separate promise. | Count Two dismissed as redundant. |
| Unjust enrichment claim | Quasi-contract alternative to contract claim. | Existence of a valid contract precludes quasi-contract claim. | Count Three dismissed; contracts govern dispute. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (plausibility pleading standard)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (pleading must state plausible claim)
- In re Dynegy Inc., 486 B.R. 585 (Bankr.S.D.N.Y. 2013) (contract-law interpretation of plan; let contract govern)
- Shumsky v. Eisenstein, 96 N.Y.2d 164 (N.Y. 2001) (continuous representation doctrine)
- Williamson v. PricewaterhouseCoopers LLP, 9 N.Y.3d 1 (N.Y. 2007) (continuous representation accrual)
- Rothstein v. UBS AG, 708 F.3d 82 (2d Cir. 2013) (proximity and plausibility standards for causation)
- Anwar v. Fairfield Greenwich Ltd., 728 F. Supp. 2d 372 (S.D.N.Y. 2010) (continuous representation applicability)
- Diesel Props S.r.l. v. Greystone Bus. Credit II LLC, 631 F.3d 42 (2d Cir. 2011) (contract-specified limitations and enforceability)