Class Action

Class Action Defense Cases—In re Fannie Mae: Judicial Panel On Multidistrict Litigation (MDL) Grants Defense Motion To Centralize Class Action Litigation In Southern District of New York

By Michael J. Hassen

Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Largely Unopposed by Class Action Plaintiffs, and Transfers Actions to Southern District of New York

Nineteen (19) class actions – 15 in New York and one each in the District of Columbia, Florida, New Jersey and Pennsylvania – were filed against the Federal National Mortgage Association (“Fannie Mae”) and numerous other defendants alleging that “Fannie Mae was undercapitalized during the relevant time period, and that defendants concealed this fact from investors in order to raise capital.” In re Fannie Mae Securities & Employee Retirement Income Security Act (ERISA) Litig., ___ F.Supp.2d ___ (Jud.Pan.Mult.Lit. February 11, 2009) [Slip Opn., at 1-2]. Two additional class actions were filed in the District of Columbia and in Florida, and the Judicial Panel treated these as potential tag-along actions. Id., at 2 n.3. Defense attorneys for Fannie Mae, with the consent of the other class action defendants, filed a motion with the Judicial Panel for Multidistrict Litigation (MDL) requesting centralization of the class actions pursuant to 28 U.S.C. § 1407 in the Southern District of New York; plaintiffs in both class actions supported the motion. Id., at 1. Plaintiffs in the District of Columbia class action did not oppose the motion; plaintiff in the New Jersey class action asked the Judicial Panel to delay transfer of his class action until a decision had been made on motion to remand the class action to state court. Id. The Judicial Panel granted the motion to centralize the class action lawsuits and agreed that the Southern District of New York was the appropriate transferee court, particularly as 15 class actions were already pending in that court and because “many of the corporate defendants are headquartered in New York.” Id., at 2. The Panel further ruled that the transferee court could hear the motion for remand to state court, id. Accordingly, the Panel transferred the class actions to the Southern District of New York, id.

Full post as published by Class Action Defense Blog on March 13, 2009 (boomark / email).