Mariana R. Pfaelzer

This case is a securities action in which Allstate Insurance and related entities allege federal Securities Act and Exchange Act violations, plus state-law fraud and related claims, arising from their purchases of Countrywide-issued residential mortgage-backed securities; the complaint also asserts successor-liability theories against Bank of America. The court addressed motions to dismiss after the case was transferred from the Southern District of New York. It held that Ninth Circuit precedent governs the federal claims and New York substantive law (including choice-of-law rules) governs the state claims; it further applied prior rulings from related actions to conclude that many claims were time-barred under the Securities Act’s three-year statute of repose because American Pipe tolling extended only to tranches actually purchased by the named plaintiffs in earlier putative class actions. The court additionally dismissed certain claims against Bank of America for failure to plead a de facto merger under Delaware law and resolved other pleading issues concerning scienter, falsity, and reliance.

business & regulatoryprocedure

This case involves institutional investors who purchased unregistered convertible debentures issued by Countrywide Financial Corporation in 2007, alleging that the Offering Memorandum contained materially false statements and omissions about the company's lending practices and financial condition in violation of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, as well as control-person liability under Section 20(a) against individual executives. The court had previously dismissed the initial complaint for inadequate pleading of transaction details and reliance but reviewed the second amended complaint after defendants moved to dismiss it for failure to adequately allege material misstatements, scienter, reliance, loss causation, and damages. The court denied the motions to dismiss, holding that plaintiffs had sufficiently pleaded the required elements with particularity under Rule 9(b) and the PSLRA, including specific transaction dates and amounts, and that issues such as loss causation presented factual questions not resolvable on a motion to dismiss.

business & regulatoryprocedure

This case involves a securities action filed by the Federal Home Loan Bank of Chicago in Los Angeles Superior Court, alleging that defendants made untrue or misleading statements in offering documents for over $880 million in private-label mortgage-backed securities, in violation of the Securities Act of 1933 and various state laws. Defendants removed the case to federal court, arguing that the bank's federal charter under 12 U.S.C. § 1432(a) conferred jurisdiction and that the action was related to a pending bankruptcy case involving indemnification claims. The court granted the plaintiff's motion to remand, holding that the charter does not create federal subject-matter jurisdiction and that, although "related to" bankruptcy jurisdiction under 28 U.S.C. § 1334(b) exists, equitable remand to state court is appropriate; it also noted that Securities Act claims are expressly non-removable.

business & regulatoryfederal powerprocedure

This case involves a securities lawsuit filed by a pension fund plaintiff in California state court against Countrywide and other defendants, alleging misrepresentations in offering documents for residential mortgage-backed securities under federal securities laws and state claims. The defendants removed the case to federal district court, arguing it was related to the bankruptcy of American Home Mortgage due to indemnification obligations under a loan purchase agreement. The court denied the plaintiff's motion to remand, holding that the action is "related to" the bankruptcy case under 28 U.S.C. § 1334 because it could affect the distribution of assets in the bankruptcy estate, and that equitable remand was not warranted given the circumstances.

procedurebusiness & regulatory

This case involves a putative class action brought by purchasers of mortgage-backed securities issued by Countrywide entities between 2005 and 2007, alleging that the offering documents contained materially false or misleading statements about the company's loan origination practices in violation of Sections 11, 12, and 15 of the Securities Act of 1933. The action was filed in federal court after a related state court case involving the same offerings was dismissed on jurisdictional grounds. The court dismissed the amended complaint without prejudice, finding that the named plaintiffs lacked standing to assert claims for offerings in which they did not purchase securities and that many claims appeared barred by the statute of limitations without adequate allegations of tolling from the prior state litigation. Plaintiffs were granted leave to amend to address these deficiencies by tracing their specific purchases and detailing the timeline of prior complaints.

business & regulatoryprocedure

Microsoft filed a declaratory judgment action against Phoenix Solutions seeking rulings of non-infringement and invalidity for fifteen patents related to speech recognition systems used in interactive voice response services provided to American Express. Phoenix moved to dismiss under Rules 12(b)(1) and 12(b)(6), arguing lack of subject-matter jurisdiction and insufficient pleading. The court denied the motion, holding that Phoenix's letter threatening action against American Express created an actual controversy conferring jurisdiction and that Microsoft's complaint adequately stated claims under applicable pleading standards. The court also established detailed requirements for the parties to exchange infringement and invalidity contentions.

procedurebusiness & regulatory

In this case, EcoDisc Technology AG sued the DVD Forum, a Japanese standard-setting organization, and DVDFLLC, the entity licensing the DVD Format and logo, alleging they conspired to exclude EcoDisc's thinner 0.6mm optical discs from the market through threats to licensees, false statements, and enforcement of DVD specifications. The claims included federal and state antitrust violations, false advertising under the Lanham Act, tortious interference, trade libel, and unfair business practices. The court granted DVDFLLC's motion to dismiss the antitrust claim under the Noerr-Pennington doctrine protecting petitioning activity and the false advertising claim for lack of particularity under Rule 9(b), declined supplemental jurisdiction over the state claims, and dismissed the claims against DVD Forum for lack of personal jurisdiction under Rule 12(b)(2) without leave to amend.

business & regulatoryprocedure

In this mortgage insurance dispute, United Guaranty sued Countrywide entities and BNY Trust over eleven master policies insuring first-lien mortgages in securitizations exceeding $13 billion, asserting contract claims along with tort claims for fraudulent inducement, negligent misrepresentation, and negligence, plus statutory claims for rescission and unfair competition under California law. Earlier motions had allowed the contract claims for breach and implied covenant to proceed but dismissed the others, primarily under the economic loss rule. The court granted the motions to dismiss the reasserted tort and statutory claims in the amended complaint with prejudice, holding that the economic loss rule barred the tort claims arising from contractual duties, that fraud and misrepresentation allegations lacked particularity and failed to show independent tort duties, that rescission was unavailable due to severability of coverage and lack of grounds like fraud, and that the unfair competition claim depended on the dismissed underlying claims.

business & regulatorytorts & liabilityprocedure

The case involves the Public Employees' Retirement System of Mississippi suing defendants over mortgage-backed securities, asserting only claims under the federal Securities Act of 1933 in California state court, after which defendants removed the action to federal court. Plaintiffs moved to remand, citing Ninth Circuit precedent barring removal of such claims, while defendants sought transfer to the Southern District of New York under 28 U.S.C. § 1404(a) and argued for jurisdiction under CAFA or bankruptcy-related provisions. The court granted the transfer motion without addressing the remand motion or the underlying jurisdictional disputes. It reasoned that a transfer decision does not require resolving questions of jurisdiction or removal because it is not a merits ruling, the case's operative facts have only a tenuous connection to California, and the Southern District of New York is a more appropriate forum that can decide the remand issues.

procedurebusiness & regulatory

This case consolidates multiple securities class actions brought by investors in Countrywide Financial Corporation's publicly traded equity and unsecured debt securities, alleging violations of Sections 11, 12, and 15 of the Securities Act of 1933 and Sections 10(b), 20(a), and 20A of the Securities Exchange Act of 1934. Plaintiffs claimed that Countrywide and its executives made false statements about the company's core mortgage origination, servicing, and securitization operations over a nearly four-year period ending in March 2008, which caused investment losses when those operations deteriorated. The court granted in part and denied in part the defendants' motions to dismiss after analyzing issues including standing, statute of limitations, truth-on-the-market, falsity, scienter, reliance, loss, and loss causation under the heightened pleading standards of the PSLRA. The order establishes much of the law of the case for remaining claims and narrows which allegations survive based on whether they adequately plead the required elements for each statutory provision.

business & regulatoryprocedure

The case involved multiple plaintiffs who purchased over-the-counter cough and cold medicines for children under age six and brought state-law consumer fraud, unjust enrichment, false advertising, and warranty claims seeking economic damages and injunctive relief, citing FDA advisory panel findings that the products were unsafe or ineffective for young children. The court granted the defendants' motion to dismiss under Federal Rule of Civil Procedure 12(b)(6). It held that the claims were expressly preempted by 21 U.S.C. § 379r because they would impose labeling, marketing, and packaging requirements different from or in addition to those in the FDA's OTC monograph regulations, and that the requested injunction would not constitute a permissible parallel state requirement.

business & regulatoryhealthcarefederal power

This case involves shareholder derivative claims brought by institutional investors against Countrywide Financial Corporation and its directors and officers, alleging breaches of fiduciary duty and violations of securities laws arising from the company's increased origination of high-risk non-conforming mortgages and related disclosures in proxy statements. Nominal defendant Countrywide moved to dismiss on grounds that plaintiffs failed to make pre-suit demand on the board or adequately plead demand futility, while individual defendants moved to dismiss under Rules 12(b)(6), 9(b), 8(a)(2), and the PSLRA for insufficient particularized pleading. The court granted in part and denied in part the motions to dismiss, applying the Rales test to evaluate demand futility and finding that certain claims against inside directors like Mozilo and Sambol were supported by particularized allegations of lack of independence and bad faith, while claims against outside directors and some securities claims failed to meet pleading standards. The decision also stayed related class action claims and dismissed specific claims against defendant Dougherty.

business & regulatoryprocedure

This case involves multiple motions in shareholder derivative and securities litigation against Countrywide Financial Corporation and its officers and directors, related to alleged breaches of fiduciary duties and securities violations amid a declining stock value and a proposed merger with Bank of America. The court granted defendants' motion to stay the merger-related class action claims in favor of parallel proceedings in Delaware Chancery Court under the Colorado River doctrine. It denied plaintiffs' requests for a constructive trust and preliminary injunction aimed at preserving their derivative standing post-merger, finding no irreparable harm or likelihood of success on the merits. The court also denied expedited discovery, holding that the PSLRA's discovery stay applies and plaintiffs failed to show undue prejudice.

business & regulatoryprocedure

The case involves a biotechnology company, MedImmune, that entered a license agreement with Genentech for a patent covering antibody therapies and continued paying royalties on its Synagis product under protest while seeking declaratory judgments that it owed no royalties, that the patent was invalid and unenforceable, and that Synagis did not infringe. After the Supreme Court reversed prior rulings and held that subject-matter jurisdiction existed without a breach of the license, the district court addressed cross-motions for summary judgment and dismissal. The court granted summary judgment to Genentech on the non-infringement claim for all but one patent claim based on an unconditional covenant not to sue, granted partial dismissal of certain claims, denied summary judgment on the contract and invalidity claims, and denied MedImmune's motion for a non-infringement ruling. It reasoned that a live contractual dispute existed over royalty obligations tied to the validity of claim 33, that licensee estoppel did not bar the invalidity challenge, and that the covenant resolved other infringement issues.

business & regulatoryprocedure

This case involved Aventis Pharma suing Amphastar Pharmaceuticals and Teva for patent infringement regarding a low molecular weight heparin formulation used as an anticoagulant. The court held a bench trial on the issue of inequitable conduct during patent prosecution and decided in favor of the defendants, finding that Aventis had engaged in inequitable conduct. The core reasoning was that Aventis failed to disclose the different dosages used in comparative half-life studies presented to the PTO, which made their product appear superior to prior art when equal doses showed no significant difference, and this omission, combined with knowledge of materiality, demonstrated intent to deceive.

business & regulatory

Nellcor sued Masimo for infringement of U.S. Patent No. 4,934,372, which covers methods in pulse oximetry equipment for processing signals to filter aperiodic noise from periodic waveforms and calculate blood oxygen saturation using maximum and minimum amplitudes of a composite waveform. Masimo moved for summary judgment of noninfringement, arguing its chirp-z routine in products like the Radical and Rad-9 oximeters does not match the patented process. The court construed the claims to require that aperiodic information be reduced and removed before calculation and that both maximum and minimum amplitudes be used after forming the composite, then compared Masimo's frequency-domain transformation and peak selection against those limitations. Finding no literal infringement or infringement under the doctrine of equivalents, the court granted summary judgment to Masimo and denied Nellcor's request for further discovery.

business & regulatoryprocedure

This case involves a patent infringement lawsuit in which Nellcor accused Masimo of infringing multiple patents related to pulse oximeter sensor probes and signal processing for measuring blood parameters. Masimo moved for summary judgment of noninfringement on two patents ('247 and '136), arguing that its Radical System did not meet specific claim limitations such as the location of a signal transformer on the sensor probe attached to the patient or the use of particular filter means for heart rate frequencies. The court applied its prior claim construction, which defined the sensor probe as components attached to tissue and required all limitations to be present, and examined the patent specifications, file history including species elections during prosecution, and the accused product's structure. It concluded that Masimo's device lacked the required elements under literal infringement and the doctrine of equivalents for the asserted claims, as the signal processing occurred outside the attached probe and the filter claims did not cover the product's design. The analysis relied on Federal Circuit precedents for claim construction, infringement, and summary judgment standards under Rule 56.

business & regulatoryprocedure

This case concerns patent disputes under the Hatch-Waxman Act framework, where ICN Pharmaceuticals sued generic manufacturers Geneva, Teva, and Three Rivers for alleged infringement of patents (the '097, '772, and '337 patents) claiming specific ribavirin dosing methods to promote Th1 immune responses and suppress Th2 responses in treating hepatitis C. The defendants filed joint motions for summary judgment of noninfringement and invalidity, arguing that the asserted claims were anticipated by prior art. The court reviewed the regulatory context of NDA and ANDA filings, Orange Book listings, and Paragraph IV certifications, then examined prior art references such as Brillanti that disclosed similar ribavirin administration protocols. It applied precedents like Cruciferous Sprout and Atlas Powder to conclude that the patents' claimed effects were inherent in the prior art and thus the claims were invalid as anticipated.

business & regulatoryhealthcareprocedure

In this patent infringement case, Nellcor sought a declaratory judgment that it owned Masimo's asserted patents by reviving a defunct company, Newport, where inventor Joe Kiani had worked and conceived ideas for adaptive filters in pulse oximeters before forming Masimo. Masimo moved for summary judgment, arguing primarily that a 1990 Mutual Release between Newport and Kiani resolved any ownership disputes in its favor. The court granted the motion, holding that the Mutual Release's terms gave Newport ownership only of physical products developed during Kiani's employment but not of the underlying ideas or technology, which remained available for Kiani's use. This interpretation reconciled the release provisions on competition and proprietary information, confirming that Newport had no claim to the patents now held by Masimo.

business & regulatorypropertyprocedure

This case is a class action securities lawsuit brought by purchasers of Lockheed Martin stock against the company and several officers and directors, alleging that statements made during an August to December 1998 class period about anticipated F-16 sales to the UAE and C-130J aircraft deliveries were false or misleading when made, artificially inflating the stock price. The plaintiffs claimed the defendants knew the forecasts were unrealistic due to technology transfer restrictions, certification delays, and testing issues, and that they had motives tied to a corporate acquisition and takeover defense. The court granted the defendants' motion to dismiss the consolidated third amended complaint, holding that the challenged statements were protected forward-looking statements under the PSLRA safe harbor and that the plaintiffs failed to plead particularized facts creating a strong inference that the statements were false when made or that the defendants acted with scienter. The Section 20(a) control-person claims were dismissed as moot following dismissal of the primary Section 10(b) claims.

business & regulatory