White v. Countrywide Financial Corp.
277 F.R.D. 586
S.D. Cal.2011Background
- This is a MDL case consolidated into a FACAC for purposes of a nationwide class action against Countrywide and related entities.
- Plaintiffs allege a scheme to push borrowers into Pay Option and Subprime loans, which were securitized and sold on the market.
- The proposed class includes Pay Option loans with at least one minimum payment and certain subprime loans with front-end DTI >31% or back-end DTI >45%.
- Countrywide opposed class certification, arguing lack of common evidence and predominance due to division-specific practices and broker interactions.
- The court’s decision denies the motion, finding failure to show Rule 23(a) commonality/typicality/adequacy and Rule 23(b)(3) predominance across a diverse, non-uniform borrower population.
- The court also excludes the Peterson expert testimony under Daubert, affecting the RICO injury analysis.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether common issues predominate for RICO claim. | Size-more/Brown assert common scheme and reliance not required. | Predominance fails due to individualized proofs and non-uniform conduct. | No; predominance not shown for RICO. |
| Whether common issues predominate for UCL claim. | Uniform misrepresentations/omissions across class. | Disparate communications and broker interactions create individualized issues. | No; predominance not shown for UCL. |
| Whether the class satisfies Rule 23(a) numerosity, commonality, typicality, and adequacy. | Large national class with common theory. | Significant individualized inquiries predominate; lack of uniform conduct. | No; Rule 23(a) not satisfied. |
| Whether the class is superior under Rule 23(b)(3). | Class action would efficiently resolve central issues. | Not superior due to predominance issues and varied loans/divisions. | Not certified under Rule 23(b)(3). |
Key Cases Cited
- Wal‑Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541 (2011) (class-wide resolution requires common answers; not mere common questions)
- Gen. Tel. Co. v. Falcon, 457 U.S. 147 (1982) (rigorous analysis required; rules specific to class certification)
- Amchem Prod., Inc. v. Windsor, 521 U.S. 591 (1997) (predominance and superiority; cohesive class necessary)
- In re First Alliance Mortgage Co., 471 F.3d 977 (9th Cir. 2006) (centrally orchestrated scheme; uniform misrepresentations supported certification)
- Kaldenbach v. Mutual of Omaha Life Ins. Co., 178 Cal.App.4th 849 (2009) (no uniform conduct likely to mislead entire class; predominance lacking)