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The Federal Housing Finance Agency (or “FHFA,” as conservator for Fannie Mae and Freddie Mac) sued 18 banks in 2011 for misrepresenting the quality of mortgage bonds. All but Nomura and RBS have settled, for a total of around $18 billion.  The trial against Nomura and RBS begins Monday before Judge Cote. It will be…

In an opinion today, Judge Rakoff rejected motions to set aside a jury verdict in the so-called “Hustle” case, in which the government accused Countrywide (later acquired by Bank of America) and an officer named Rebecca Mairone of a scheme to defraud Fannie Mae and Freddie Mac into buying faulty mortgages.  The jury had ruled against the defendants and Judge Rakoff then ordered damages of $1.3 billion (see our prior posts on the case here). The defendants sought to set aside the verdict by arguing “that the Government’s evidence did not establish that the HSSL loans were of lower quality than Fannie and Freddie could have reasonably expected, and therefore that they made no misrepresentations that were material,” but Judge Rakoff rejected the argument as “border[ing] on the frivolous”:
Continue Reading Judge Rakoff: Challenge to Countrywide “Hustle” Jury Verdict “Borders on the Frivolous”

In an opinion today, Judge Rakoff ordered Bank of America to pay $1.3 billion in the so-called “Hustle” case, in which a jury found that Countrywide (later acquired by Bank of America) and an officer named Rebecca Mairone engaged in a scheme to defraud Fannie Mae and Freddie Mac into buying faulty mortgages. Judge Rakoff rejected Bank of America’s argument that the statute at issue, FIRREA, required the penalties to be calculated by reference to the “net” gains or loss resulting from the alleged conduct:
Continue Reading Judge Rakoff Orders Bank of America to Pay $1.3 Billion in “Hustle” Case

In opinion today announcing findings from a bench trial, Judge Pauley rejected claims that American Express, Citi and Discover colluded to add arbitration clauses barring class actions to their standard card agreements. He found that the defendants acted individually, not collusively:
Continue Reading In Bench Trial, Judge Pauley Finds That Credit Card Issuers Did Not Collude to Adopt Class Action Waivers in Card Agreements

Judge Kaplan issued a 485-page opinion this morning siding with Chevron in its long-running challenge to a $19 billion Ecuadorian judgment against it. From the introduction of the opinion:

[T]he Court finds that Donziger began his involvement in this controversy with a desire to improve conditions in the area in which his Ecuadorian clients live. To be sure, he sought also to do well for himself while doing good for others, but there was nothing wrong with that. In the end, however, he and the Ecuadorian lawyers he led corrupted the Lago Agrio case. They submitted fraudulent evidence. They coerced one judge, first to use a court-appointed, supposedly impartial, “global expert” to make an overall damages assessment and, then, to appoint to that important role a man whom Donziger hand-picked and paid to “totally play ball” with the LAPs. They then paid a Colorado consulting firm secretly to write all or most of the global expert’s report, falsely presented the report as the work of the court-appointed and supposedly impartial expert, and told half-truths or worse to U.S. courts in attempts to prevent exposure of that and other wrongdoing. Ultimately, the LAP team wrote the Lago Agrio court’s Judgment themselves and promised $500,000 to the Ecuadorian judge to rule in their favor and sign their judgment. If ever there were a case warranting equitable relief with respect to a judgment procured by fraud, this is it. . . . .

Continue Reading In Trial Win For Chevron, Judge Kaplan Tells Donziger: “It is time to face the facts”

In the RICO litigation Chevron has brought to challenge an allegedly fraudulent multibillion dollar judgment against it in Ecuador, the defendants today moved to strike the testimony of an Ecuadorian judge who admitted to taking bribes from Chevron’s adversaries in the prior litigation in Ecuador. Chevron paid the judge to be relocated to the U.S., and the defendants argue that the payments were unlawful bribes:
Continue Reading Defendants Move to Strike Chevron’s Star Witness in RICO Trial Over Ecuadorian Judgment

Judge Carter on Tuesday ordered a new trial for the City of New York and two police officers after a jury had awarded a plaintiff more than $600,000 for unlawful arrest and excessive force. The basis for the reversal, which came after Judge Carter had denied the defendants’ motion for judgment as a matter of law: The plaintiff’s girlfriend, who had been a key witness corroborating the plaintiff’s version of events, sued the plaintiff in state court in the Bronx for breach of the contract they had signed promising her 20% of the verdict in return for her testimony.
Continue Reading Jury Verdict Thrown Out When Witness Sues Over Breach of Contract to Testify