Alison Frankel: The 2nd Circuit's abiding fascination with MBS class certification

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Alison Frankel: The 2nd Circuit’s abiding fascination with MBS class certification

Alison Frankel: The 2nd Circuit’s abiding fascination with MBS class certification

Reuters On The Case-

For investors, mortgage-backed securities class actions have, in the main, been a disappointment, with settlements in a half-dozen cases netting just pennies for every dollar of losses sustained by noteholders. But even as the last dozen or so pending MBS class actions plod toward a conclusion, the 2nd Circuit Court of Appeals remains compelled by the class certification issues the cases present.

In a one-page order Monday, a three-judge 2nd Circuit panel agreed to hear Credit Suisse’s interlocutory appeal of U.S. District Judge Lewis Kaplan’s grant of class certification to investors in an IndyMac MBS offering. Credit Suisse, which was IndyMac’s underwriter, argued in a brief filed back in July that Kaplan didn’t take account of investors’ varying knowledge of IndyMac’s underwriting standards when he certified a class of all investors in the $650 million offering. Kaplan, according to Credit Suisse’s lawyers at Gibson, Dunn & Crutcher, improperly shifted the burden on classwide predominance: Instead of insisting that class counsel at Wolf Popper show that investors uniformly relied on IndyMac’s representations, the judge said Credit Suisse hadn’t shown sufficient evidence that individual issues predominated over classwide reliance.

[REUTERS ON THE CASE]

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