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Royal Park Invs. SA/NV v. Bank of America Corp.

United States District Court, S.D. New York

April 12, 2013

ROYAL PARK INVESTMENTS SA/NV, Plaintiff,
v.
BANK OF AMERICA CORPORATION, et al., Defendants. PHOENIX LIGHT SF LIMITED, et al., Plaintiffs,
v.
BANK OF AMERICA CORPORATION, et al., Defendants. SILVER ELMS CDO II LTD, et al., Plaintiffs,
v.
BANK OF AMERICA CORPORATION, et al., Defendants

For Plaintiffs: Anne W. Salisbury, Esq., Debra J. Guzov, Esq., David J. Kaplan, Esq., GUZOV, LLC, New York, NY.

For Countrywide Defendants: Daniel Roeser, Esq., Brian E. Pastuszenski, Esq., Inez H. Friedman-Boyce, Esq., GOODWIN PROCTOR LLP, Boston, MA.

OPINION

Page 368

ROBERT W. SWEET, U.S.D.J.

Defendants Countrywide Financial Corporation, Countrywide Securities Corporation, Countrywide Capital markets, LLC, Countrywide Home Loans, Inc., CWABS, Inc., CWALT, Inc. CWHEQ, Inc., and CWMBS, Inc. (collectively, " Countrywide" ), have moved to stay five related cases[1] pending a final determination by the Judicial Panel on Multi-District Litigation (the " JPML" ) on whether to centralize these cases with 34 other cases assigned to the Countrywide mortgage-backed securities (" MBS" ) multidistrict litigation, In re Countrywide Mortgage-backed Securities Litigation, Case No. 11-ML-02265-MRP-MAN (C.D. Cal.), pending in the Central District of California (the " Countrywide MBS MDL" ).

Plaintiffs have opposed the instant motion as well as the JPML's Conditional Transfer Order dated February 6, 2013 (the " CTO" ), and have filed their motion to vacate the CTO on February 27, 2013, in compliance with the JPML's briefing schedule. Under the JPML's procedures,

Page 369

Plaintiff's' motion to vacate will be fully submitted and considered at the next JPML hearing on May 30, 2013.

Upon the facts and conclusions set forth below, the Defendants' motion is granted.

I . Prior Proceedings and Facts

Plaintiffs commenced these five actions in the Supreme Court of the State of New York by filing a Summons with Notice pursuant to N.Y. Civ. Pract. L. & Rules § 305(b).

On August 15, 2011, the JPML formed the Countrywide MBS MDL to centralize Countrywide MBS cases that " involve common questions of fact arising out of allegations that Countrywide misrepresented to its investors origination practices for, and the credit quality of, the mortgage loans it originated from 2004 to 2007." In re Countrywide Fin. Corp. Mortg.- Backed Sec. Litig., 812 F.Supp.2d 1380, 1382 (J.P.M.L. 2011). The JPML selected the Central District of California as the most convenient forum for the Countrywide MBS MDL court because the " Countrywide parties, witnesses, and documents are located primarily in Calabasas, Agoura Hills or Westlake Village, California (within the Central District of California)." Id. at 1384. The JPML selected the Honorable Mariana R. Pfaelzer to oversee the Countrywide MBS MDL because " her knowledge of the factual issues in these cases developed from handling several Countrywide-related securities cases over the past three years" made her ''well-positioned to preside over this MDL." Id. Since the JPML's initial transfer order, final transfer orders have been issued in another 23 cases, including 12 cases then-pending in the Southern District of New York. In addition, a conditional transfer order has been issued for another seven cases (including the five present cases), all of which are related to each other and pending in the Southern District of New York. To date, 34 cases in all have been centralized in the Countrywide MBS MDL.

On January 20, 2013, Countrywide removed the present cases from New York state court on the bases of bankruptcy " related to" jurisdiction under 28 U.S.C. § 1452(a), Edge Act jurisdiction under 12 U.S.C. § 632, and diversity jurisdiction under 28 U.S.C. § 1332. See Royal Park I (Dkt. No. 1), Royal Park II (Dkt. No. 1), Phoenix Light I (Dkt. No. 1), Phoenix Light II (Dkt. No. 1), and Silver Elms (Dkt. No. 1).

On January 29, 2013, Countrywide notified the JPML that these cases were potential " tag-along" actions to the Countrywide MBS MDL, as both its counsel and Plaintiffs' counsel were required to do. See Notice of Related Actions (Jan. 29, 2013) (Roeser Decl. Ex. F).

On February 6, 2013, the JPML issued the CTO conditionally transferring all five cases to the Countrywide MBS MDL. See JPML Conditional Transfer Order (CTO-19) (Roeser Decl. Ex. A). After Plaintiffs opposed the CTO, the JPML issued a briefing schedule which directed Plaintiffs to file their motion to vacate on or before February 27, 2013, with Countrywide Defendants' opposition ...


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