Financial Services Litigation
Credit Suisse Securities (CS). Lead counsel for CS in RMBS cases in federal and state courts throughout the country, including in New York, Alabama, Massachusetts and Washington.
- U.S. Bank National Association, solely in its capacity as Trustee of the Home Equity Asset Trust 2006-8 (HEAT 2006-8) v. DLJ Mortgage Capital, Inc. (N.Y. Ct. App.) – Won a “Market Moving Reversal” from the New York Court of Appeals, that significantly reduces Credit Suisse’s damages exposure in RMBS litigation, and will shape how the future of RMBS claims play out. In a precedent-setting decision, the court correctly and emphatically rejected the plaintiff’s effort to rewrite the contract that these sophisticated parties agreed to and issued a complete victory to Credit Suisse on both the notice and damages issues. This decision vastly limits the scope of this action, likely reducing the loans at issue by over half. And it will have a similar monumental impact on much of the still-pending RMBS repurchase litigation in New York Courts. For work on this matter, Rich and team were named Litigators of the Week by The American Lawyer.
- MBIA Insurance Corporation v. Credit Suisse Securities (N.Y. Sup. Ct., N.Y. Cnty.) – Lead counsel in a 2-week trial in NY Supreme Court in a highly publicized case brought by MBIA seeking over $700 million in damages after ten years of litigation. Only 6 RMBS cases have gone to trial out of thousands filed since the global financial crisis of 2008, and MBIA is the most recent one to do so (July-August 2019).
- People v. Credit Suisse Securities (N.Y. Sup. Ct., N.Y. Cnty.) – Resolved the New York Attorney General’s $10 billion RMBS lawsuit for only $10 million, a resolution that reflected less than 0.1% of the damages alleged by the NYAG. As lead counsel, Rich personally negotiated the settlement with the NYAG in the latter half of 2019. All of the other major banks sued by the NYAG over RMBS settled cases with the NYAG for an average amount that was 25 times higher as a percentage of RMBS at issue.
- Grewal v. Credit Suisse Securities (N.J. Super. Ct. Ch. Div.) – Argued summary judgment in July 2020 regarding the scope of the New Jersey Uniform Securities Law, with $3 billion at issue on that motion.
- Federal Deposit Insurance Corporation v. Bear Stearns Asset Backed Securities (S.D.N.Y.); Federal Deposit Insurance Corporation v. Chase Mortgage Finance Corporation (S.D.N.Y.); Federal Deposit Insurance Corporation v. Banc of America Funding Corporation (Ala. Cir. Ct.) – Lead counsel in numerous RMBS cases brought by the FDIC as receiver for failed banks, including in Alabama and New York.
- Home Equity Mortgage Trust Series 2006-1 v. DLJ Mortgage Capital (N.Y. Sup. Ct., N.Y. Cnty.); Home Equity Mortgage Trust Series 2006-5 v. DLJ Mortgage Capital (N.Y. Sup. Ct., N.Y. Cnty.) – Petitioned to have the NY Court of Appeals hear an appeal on issues relating to permissibility of sampling in RMBS cases and pre-suit notice requirements, which have long been a major battleground in RMBS litigation. Only 0.3% of civil cases appealed to the intermediate appellate court are permitted to go on to the Court of Appeals. Lead counsel for CS on the appeal, to be argued in 2021.
- Rich is also lead counsel in actions brought by several federal home loan banks throughout the country, and in the six remaining breach of contract suits brought by US Bank, currently pending in NY Supreme Court.
Ocwen. Lead counsel for Ocwen for nearly a decade on matters concerning its servicing of loans in residential mortgage-backed securitizations, including 7 ongoing actions in federal and state courts across the country.
- Triaxx Prime CDO 2006-1, Ltd. v. Ocwen Loan Servicing (S.D. Fla.) – Lead counsel in the litigation, through appeal, of a suit brought by Triaxx entities (three CDOs and their collateral manager) in the Southern District of Florida alleging that Ocwen’s mortgage servicing practices caused Triaxx $175 million in losses. After obtaining two dismissals on the grounds that Triaxx had transferred its right to bring the lawsuit to an indenture trustee, Rich and his team convinced the 11th Circuit to adopt all of Ocwen’s arguments.
- Powell v. Ocwen Financial Corporation (S.D.N.Y.) – Lead counsel for Ocwen in a case of first impression, a massive ERISA class action in which the plaintiffs purport to represent a class of trustees of all ERISA benefit plans that held investments in securitized mortgages serviced by Ocwen over the past six years. Beyond its massive scale and the billions of dollars at stake, the case is the first seeking to hold the servicer of mortgages held by an RMBS Trust liable as a fiduciary under ERISA. If the plaintiffs prevail, it could represent a sea change in RMBS litigation. After the Court issued an opinion setting the stage for resolution of the entire case on summary judgment following narrow and expedited discovery, the parties fully briefed cross-motions for summary judgment, and a decision is forthcoming.
- Weiner v. Ocwen Financial Corporation (E.D. Cal.) – Lead counsel in a borrower class action in the Eastern District of California alleging numerous claims including RICO, California consumer protection statutes and fraud by fraudulently marking up the cost of Broker Price Opinions and Hybrid valuations. Ocwen has completed merits discovery, engaged in mediation, and developed an expert analysis showing that the damages were far less than the plaintiff anticipated – an argument confirmed by the Court on summary judgment. Rich will serve as lead trial counsel.
- Rhodeman v. Ocwen Loan Servicing (C.D. Cal.) – Lead counsel in a borrower class action pending in the Central District of California, alleging a series of claims based on improper valuation fees. Over the course of three amended complaints and four motions to dismiss, Ocwen has prevailed in dismissing most of the class action claims with prejudice, including all of the RICO claims and almost all of the fraud claims. This matter is still pending.
- Ocwen Loan Servicing v. Fidelity Information Services (Cal. Sup. Ct.) – Lead counsel in Ocwen’s hard-fought case against FIS, a California-appointed monitor, in California Supreme Court. Ocwen alleged rampant fraud and malfeasance by FIS. After successfully defeating three motions to dismiss, Ocwen filed and won five motions to compel, conducted depositions of numerous former and current FIS employees, and amended its complaint. Shortly thereafter, the parties settled.
Goldman Sachs. Lead counsel for Goldman Sachs in two actions pending in the United States District Court for the Southern District of New York concerning RMBS sponsored by Goldman. The plaintiff in both cases, the trustee for two RMBS trusts, alleges that Goldman breached representations and warranties made in the securitization documents for the deals concerning the characteristics of the securitized loans. The complaints seek repurchase by Goldman and damages for all purportedly breaching loans in the two trusts, which together had an original principal balance of over $1.5 billion. (GSAMP 2007-HE1 v. Goldman Sachs Mortg. Co. (S.D.N.Y.); GSAMP 2007-HE2 v. Goldman Sachs Mortg. Co. (S.D.N.Y.))
Jefferies. Lead counsel for Jefferies in a breach of contract action pending in the Commercial Division of New York State Supreme Court in which Jefferies seeks to enforce the obligation of several counterparties to close on a distressed debt trade for term loans in respect of a company going through a restructuring. This action has important repercussions for all financial institutions engaged in distressed debt trading and their ability to rely on binding trade confirmations.
Securities Industry and Financial Markets Association (SIFMA).
- Lead counsel for SIFMA as amicus in Ambac Assur. Corp. v. Countrywide Home Loans. In Ambac, on May 15, 2017, the New York Appellate Division, First Department, held that Insurance Law 3105 is inapplicable to a monoline insurer’s claim for monetary damages, and does not alter the insurer’s burden of proving the elements of justifiable reliance or causation – a substantial victory for the RMBS defense bar.
- Represented SIFMA as amicus curiae in MBIA v. Countrywide, an appeal before the New York Appellate Division, First Department, involving key issues relevant to the lawsuits brought by monoline insurers against issuers of residential mortgage-backed securities.
Citigroup Financial Products Inc. (CFPI). Lead counsel for CFPI in an action in the U.S. District Court for the Southern District of New York (SDNY) involving claims that CFPI’s counterparty refused to honor its contractual obligation to repurchase impaired bankruptcy claims it assigned to CFPI under an assignment agreement. (Citigroup Financial Products v. Plansee SE (S.D.N.Y.))
Other Commercial Litigation
- adMarketplace. Lead counsel for adMarketplace (AMP), a leading online search advertising marketplace, in multiple lawsuits in New York Supreme Court involving breach of contract and AMP’s claims of fraud and theft of trade secrets against multiple entities. (Trellian Pty v. adMarketplace (S.D.N.Y.), Bidtellect v. adMarketplace (N.Y. Sup. Ct., N.Y. Cty), adMarketplace v. John Doe No. 1 (N.Y. Sup. Ct., N.Y. Cty) (Ca. Sup. Ct., Marin Cty))
- Yugoimport. Represented Yugoimport, a foreign commerce enterprise based in Belgrade, Serbia, as lead counsel in an interpleader dispute with two successor nations to the former Socialist Federal Republic of Yugoslavia over ownership of Yugoimport's funds on deposit at the Bank of New York. (The Bank of New York v. Yugoimport (S.D.N.Y.))
- Microsoft Corp. Defended Microsoft in an action alleging negligent misrepresentation concerning the purchase and installation of accounting and budgeting software. Rich and the team successfully had the claims against Microsoft dismissed, and the dismissal was affirmed by the New York Appellate Division, First Department.
- Isochem North America LLC. Defended Isochem North America LLC, a subsidiary of SNPE, SA, a French Société Anonyme, in an action in the Federal District Court for the District of New Jersey. The case involved claims that Isochem breached a commission agreement with its North American distributor relating to the sale of a diesel fuel additive to ExxonMobil. Rich and the team won a complete victory for Isochem on summary judgment only three months after the close of discovery.
- Centre Vinicole – Champagne Nicolas Feuillatte (CV-CNF). Represented CV-CNF, the best-selling sparkling wine in France and the fifth-largest seller in the United States, in defeating successive applications by its former exclusive U.S. importer and distributor for a temporary restraining order and, after expedited discovery, preliminary injunction that threatened to cripple CV-CNF's entire U.S. sales and distribution. This complex contract dispute was then settled before trial on terms favorable to CV-CNF.
- Excite@Home. Member of the team, earlier in his career, that represented the company in a multibillion-dollar breach of fiduciary duty and theft of trade secrets lawsuit against AT&T Corp. and others arising from their roles as controlling shareholders in the first company to provide high-speed internet access via cable modem. The team obtained a $400 million settlement on the eve of trial.
- The Dow Chemical Co. Represented Dow in an action brought by the Suffolk County Water Authority in New York Supreme Court, Commercial Division, involving claims of groundwater contamination.
- Flexible Products. Served as a senior member of the trial team for Flexible Products, a Dow subsidiary, in a lawsuit in Tuscaloosa, Alabama, that was settled favorably. The plaintiffs were 1,400 coal miners who alleged respiratory injury from exposure to isocynate-containing products used in coal mines.
- Wyeth vaccine litigation. Served as a member of the Orrick team that was national counsel to Wyeth (now Pfizer) throughout the United States in its defense of hundreds of product liability litigations concerning neurological injuries (such as autism spectrum disorders) allegedly associated with the use of the preservative thimerosal in childhood vaccines.
- Palmer Cap-Chur Equipment Inc. Secured summary judgment for a tranquilizer gun manufacturer in New York State Supreme Court, Kings County, in what was truly a bet-the-company litigation for this Georgia company.
Rich has represented numerous companies and individuals before federal and state regulators and law enforcement agencies, including: the U.S. Securities and Exchange Commission, the U.S. Attorney for the Southern District of New York, the New York District Attorney’s Office, the New York Department of Taxation and Finance, the New York Board of Elections and the California Department of Business Oversight. For example:
- Lead counsel in representing a publicly traded owner and operator of fitness centers in its dispute with the New York Department of Taxation and Finance concerning tax treatment of captive insurers.
- Lead counsel for a leading New York political consulting firm in responding to subpoenas and inquiries from the U.S. Attorney for the Southern District of New York, the New York District Attorney's Office and New York Bureau of Elections concerning federal and state investigations into New York Mayor Bill DeBlasio’s fundraising activities.
- Represented a publicly traded biotech company and a number of its officers and directors before the SEC and the SDNY. The company was ultimately cleared of any civil and criminal liability.