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In re Countrywide Fin. Corp. Sec. Litig.

United States District Court for the Central District of California

December 1, 2008, Decided; December 1, 2008, Filed

Lead Case No. CV-07-05295-MRP (MANx)

Opinion

 [*1142]  OMNIBUS ORDER ON DEFENDANTS' MOTIONS TO DISMISS THE CONSOLIDATED AMENDED COMPLAINT AND ALL PENDING REQUESTS FOR JUDICIAL NOTICE

INTRODUCTION

This Court has consolidated numerous securities actions related to Countrywide Financial Corporation ("Countrywide") 1 into three cases pending before it. 2 The present case involves publicly traded equity securities and publicly traded, unsecured debt instruments that Countrywide used to raise capital from investors.

On August 14, 2007, George Pappas, on behalf of himself and all others similarly situated, filed suit against Countrywide and several individuals alleging securities law violations. On November 28, 2007, this Court consolidated the Pappas action with several other cases involving publicly traded Countrywide securities. The Court designated New York Funds ("NY Funds") 3 as lead plaintiffs. In this Order, "Plaintiffs" refers to all the named plaintiffs in this consolidated case; "NY Funds" is used when referring to the lead plaintiffs in particular.

Plaintiffs filed a 416-page Consolidated Amended Class Action Complaint ("CAC") on April 14, 2008. The CAC's proposed class period spans the nearly 4 years between March 12, 2004 and March 7, 2008.  [**10] The CAC contains 21 claims and names 50 defendants. Defendants now move to dismiss.

The Court feels obliged to issue this comprehensive--and regrettably long--Order to establish much of the law of the case, narrow the issues, and discourage some of the parties' more tenuous arguments. 4 This document shall guide the  [*1143]  parties and save the Court detailed expositions in future orders.

For reasons explained below, the motions are granted in part and denied in part. The Conclusion section of this Order summarizes which claims are dismissed.

TABLE OF CONTENTS

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588 F. Supp. 2d 1132 *; 2008 U.S. Dist. LEXIS 102000 **

IN RE COUNTRYWIDE FINANCIAL CORPORATION SECURITIES LITIGATION

Subsequent History: Motion granted by, Request granted, Request denied by, Motion denied by, Dismissed by, Motion granted by, in part, Motion denied by, in part In re Countrywide Fin. Corp. Sec. Litig., 2009 U.S. Dist. LEXIS 32951 (C.D. Cal., Apr. 6, 2009)

Related proceeding at Allstate Ins. Co. v. Countrywide Fin. Corp., 824 F. Supp. 2d 1164, 2011 U.S. Dist. LEXIS 123844 (C.D. Cal., Oct. 21, 2011)

Prior History: In re Countrywide Fin. Corp. Derivative Litig., 542 F. Supp. 2d 1160, 2008 U.S. Dist. LEXIS 29444 (C.D. Cal., Mar. 28, 2008)

CORE TERMS

allegations, underwriting, loans, mortgages, scienter, registration statement, disclosures, causation, practices, origination, misrepresentations, misleading, insiders, accounting-related, class period, omissions, corrective, borrower, particularity, strong inference, investors, trading, registration, accounting, damages, falsity, documentation, Defendants', Plaintiffs', motion to dismiss

Securities Law, Civil Liability Considerations, General Overview, Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Postoffering & Secondary Distributions, Securities Exchange Act of 1934 Actions, Heightened Pleading Requirements, Express Liabilities, Misleading Statements, Elements of Proof, Elements of Proof, Reliance, Truth on the Market, Pleadings, Heightened Pleading Requirements, Fraud Claims, Complaints, Requirements for Complaint, Securities Litigation Reform & Standards, Lead Plaintiff, Statute of Limitations, Initial Offerings, Registration of Securities, False Registration Statements, Securities Act Actions, Civil Liability, Justiciability, Standing, Communications & Prospectuses, Recordkeeping & Reporting Requirements, Issuers of Securities, GAAP & GAAS, Disclosures, Forward Looking Statements, Secondary Liability, Controlling Persons, Implied Private Rights of Action, Burdens of Proof, Standing, Materiality, Scienter, Recklessness, Relevant Factors, Insider Trading, Safe Harbor, Accountants & Auditors, Causation, Insider Trading, Contemporaneous Trading, Classical Theory, Misappropriation Theory