The SDNY Blog is relaunching as a publication of Steptoe & Johnson LLP.  We expect to post several times a week on decisions and other developments in the Southern District of New York.  You can find us right here at, or follow us on Twitter or Facebook.

Here’s a quick summary of what’s been happening in the Southern District while we were away:

  • Judge Berman vacated the NFL’s four-game suspension of New England Patriots quarterback Tom Brady for his alleged role in deflating footballs used during the 2015 AFC Championship Game.  Judge Berman concluded that “Brady had no notice that he could receive a four-game suspension for general awareness of ball deflation by others or participation in any scheme to deflate footballs, and non-cooperation with the ensuing Investigation.”

Continue Reading SDNY Blog Returns as Steptoe Blog

In an opinion yesterday, Judge Oetken certified a class, for purposes of liability only, in a case alleging that certain JP Morgan mortgage-backed securites offering documents falsely represented (among other things) that the underlying loans complied with certain underwriting standards when, in fact, those standards were abandoned. Judge Oetken rejected JP Morgan’s argument (among many others) that there were too many underwriting standards — 8,196 according to JP Morgan — to address on a class wide basis:
Continue Reading Judge Oetken Certifies Liability-Only Class in MBS Case Against JP Morgan

In an opinion Friday, Judge Scheindlin dismissed as time-barred a case alleging that certain mortgage-backed securities were not as represented.  The plaintiff claimed that the statute of limitations did not begin to run until the defendant refused to repurchase or cure the defects, but Judge Scheindlin, relying largely on the First Department’s recent decision in ACE Sec. Corp. v. DB Structured Products (see here, starting at pg. 26), disagreed:
Continue Reading Judge Scheindlin Rules MBS Repurchase Suit is Time-Barred; Splits With Judge Hellerstein

In an opinion today, Judge Stein dismissed a case accusing Citibank of fraud and negligent misrepresentation for understating its exposure to mortgage-backed securities.  He dismissed the case because the plaintiffs were “holders” of the stock during the relevant time period (i.e., they did not buy at inflated prices and sell at a loss), and relied principally on a First Department decision in 2010, Starr v. AIG, which held that “holders” could not bring claims.  Judge Stein rejected the argument that Starr would not be adopted by the Court of Appeals:
Continue Reading Judge Stein Concludes Security “Holders” Cannot Bring Fraud Claims Under New York Law, Dismisses Case Against Citi

Judge Forrest, in an opinion today, denied class certification in a case accusing Deutsche Bank of misleading public statements concerning its exposure to mortgage-backed securities. The opinion was driven by Judge Forrest’s decision to disqualify the plaintiffs’ expert, Michael Marek, who testified that Deutsche Bank’s global registered shares (“GRSs”) traded on an efficient market.  She concluded he was not qualified to offer the opinions he offered, and that there were major methodological problems with his opinions:
Continue Reading Judge Forrest Denies Certification in Securities Class Action Against Deutsche Bank

In an opinion today, Judge Furman largely denied Wells Fargo’s motion to dismiss a government lawsuit relating to its underwriting of government-insured mortgage loans. Judge Furman joined Judges Rakoff and Kaplan in holding that the Financial Institutional Reform, Recovery, and Enforcement Act (“FIRREA”), which allows the government to pursue civil charges against those who commit crimes like mail or wire fraud “affecting a federally insured financial institution,” applies even where the conduct at issue is a bank “affecting” itself.  (See our prior posts on the issue here and here, and see here for a longer version of these posts at Columbia University’s CLS Blue Sky Blog). One of the predicate acts the government alleged against Wells Fargo involved alleged violations of paragraph 4 of 18 U.S.C. § 1005, which criminalizes receiving funds from a bank with the intent to defraud the government. Wells Fargo argued that paragraph 4 is limited to bank insiders, and a 2011 decision from Judge Marrero, United States v. Rubin/Chambers, supports that interpretation.  Judge Furman disagreed with the Rubin decision:
Continue Reading Judge Furman Joins Consensus Endorsing “Self-Affecting” Theory of FIRREA; Splits with Judge Marrero on Scope of Predicate Bank Fraud Law