in the united states court of appeals - analysis &...

No. In The United States Court of Appeals

for the

Second Circuit __________________________________________

IN RE RBS SECURITIES INC. and RBS ACCEPTANCE INC.

Defendants-Petitioners __________________________________________

PETITION FOR WRIT OF MANDAMUS RELATING TO ORDERS OF THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF NEW YORK NO. 13 CIV. 6726

PETITION FOR WRIT OF MANDAMUS

ORAL ARGUMENT REQUESTED

R. Alexander Pilmer David I. Horowitz Tammy A. Tsoumas Derek M. Milosavljevic Gavin C.P. Campbell Kirkland & Ellis LLP 333 South Hope Street Los Angeles, California 90071 Tel: (213) 680-8400 Fax: (213) 680-8500 Counsel for Defendants-Petitioners RBS Securities Inc. and RBS Acceptance Inc.

RULE 26.1 CORPORATE DISCLOSURE STATEMENT

RBS Securities Inc. is a wholly-owned subsidiary of RBS Holdings USA

Inc., and an indirect wholly-owned subsidiary of the Royal Bank of Scotland

Group plc, a public company whose stock is traded on the London Stock

Exchange. No other publicly-held entities own more than 10 percent of the stock

of RBS Securities Inc.

RBS Acceptance Inc. is a wholly-owned subsidiary of RBS Holdings USA

Inc., and an indirect wholly-owned subsidiary of the Royal Bank of Scotland

Group plc, a public company whose stock is traded on the London Stock

Exchange. No other publicly-held entities own more than 10 percent of the stock

of RBS Acceptance Inc.

i

TABLE OF CONTENTS

Page

I. INTRODUCTION ......................................................................................... 1

II. STATEMENT OF ISSUES PRESENTED .................................................. 2

III. STATEMENT OF RELIEF REQUESTED ................................................ 2

IV. STATEMENT OF NECESSARY FACTS .................................................. 3

V. ARGUMENT ................................................................................................ 11

A. The District Court’s Order Disregards the Congressionally-Established Structure of the Federal District Courts and Represents a Usurpation of Judicial Authority. .................................. 12

1. No Statutory Authority Permits Judge Cote to Designate Herself for Service in Cases Outside This Circuit. ................... 13

2. The District Court Cannot Exceed Its Authority By Involving Itself in Cases Outside This Circuit. ........................ 19

B. Mandamus is Appropriate Here Because the Protocol Raises Novel and Important Questions Regarding District Courts’ Authority to Involve Themselves in Out-of-Circuit Cases and Issuing a Writ Will Aid In the Administration of Justice By Clarifying That Authority. ................................................................... 22

1. Resolution of the Issues Raised By This Petition Will Aid in the Administration of Justice. ............................................... 22

2. The District Court’s Order Raises Novel Questions of Law. ........................................................................................... 24

C. Because The Challenged Order Is a Discovery Order, RBS Lacks an Adequate Alternative to Mandamus Relief. ........................ 25

VI. CONCLUSION ............................................................................................ 28

ii

TABLE OF AUTHORITIES Page No(s).

Cases

Ankenbrandt v. Richards, 504 U.S. 689 (1992) .............................................................................................. 19

Armster v. U.S. Dist. Court, 806 F.2d 1347 (9th Cir. 1986) .............................................................................. 11

Borja v. U.S. Dist. Court, 919 F.2d 100 (9th Cir. 1990) ................................................................................ 24

Cary v. Curtis, 3 How. 236 (1845) ................................................................................................ 19

Cheney v. U.S. Dist. Court, 542 U.S. 367 (2004) .............................................................................................. 11

CitiFinancial Corp. v. Harrison, 453 F.3d 245 (5th Cir. 2006) ................................................................................ 20

Dhalluin v. McKibben, 682 F. Supp. 1096 (D. Nev. 1988) ........................................................................ 20

FTC v. MacArthur, 532 F.2d 1135 (7th Cir. 1976) .............................................................................. 17

Holmes v. Grubman, 315 F. Supp. 2d 1376 (M.D. Ga. 2004) ................................................................ 15

In re City of New York, 607 F.3d 923 (2d Cir. 2010) .................................................................... 12, 22, 26

In re Corrugated Container Antitrust Litig., 662 F.2d 875 (D.C. Cir. 1981) .............................................................................. 13

In re Flight Transp. Corp. Sec. Litig., 764 F.2d 515 (8th Cir. 1985) ................................................................................ 17

In re Int’l Bus. Machines Corp., 45 F.3d 641 (2d Cir. 1995) ................................................................................... 20

iii

In re Korean Air Lines Disaster of Sept. 1, 1983, 829 F.2d 1171 (D.C. Cir. 1987) ............................................................................ 21

In re McBryde, 117 F.3d 208 (5th Cir. 1997) ................................................................................ 26

In re Motor Fuel Temperature Sales Practices Litig., 711 F.3d 1050 (9th Cir. 2013) ................................................................. 14, 24, 26

In re Plumbing Fixture Cases, 298 F. Supp. 484 (J.P.M.L. 1968) .................................................................. 15, 17

In re Repetitive Stress Injury Litig., 11 F.3d 368 (2d Cir. 1993) ............................................................................ 18, 26

In re Roman Catholic Diocese of Albany, N.Y., Inc., 745 F.3d 30 (2d Cir. 2014) ............................................................................ 11, 12

In re S.E.C. ex rel. Glotzer, 374 F.3d 184 (2d Cir. 2004) .......................................................................... 22, 26

In re United States, 10 F.3d 931 (2d Cir. 1993) ................................................................................... 26

In re von Bulow, 828 F.2d 948 (2d Cir. 1987) ................................................................................. 27

In re Warrick, 70 F.3d 736 (2d Cir. 1995) ............................................................................ 17, 26

Kerr-McGee Corp. v. Ritter, 461 F.2d 1104 (10th Cir. 1972) ............................................................................ 26

La Buy v. Howes Leather Co., 352 U.S. 249 (1957) .............................................................................................. 11

Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998) ................................................................................................ 16

Ligon v. City of N.Y., 736 F.3d 118 (2d Cir. 2013) ................................................................................. 26

iv

Mallard v. U.S. Dist. Court, 490 U.S. 296 (1989) .............................................................................................. 19

McDowell v. United States, 159 U.S. 596 (1895) .............................................................................................. 13

Nguyen v. United States, 539 U.S. 69 (2003) ......................................................................................... 14, 15

Roche v. Evaporated Milk Ass’n, 319 U.S. 21 (1943) ............................................................................. 10, 11, 19, 23

Schlagenhauf v. Holder, 379 U.S. 104 (1964) .............................................................................................. 11

SG Cowen Sec. Corp. v. U.S. Dist. Court, 189 F.3d 909 (9th Cir. 1999) ................................................................................ 27

Stein v. KPMG, LLP, 486 F.3d 753 (2d Cir. 2007) .......................................................................... 19, 27

United States v. Coppa, 267 F.3d 132 (2d Cir. 2001) .......................................................................... 25, 26

United States v. Microsoft Corp., 147 F.3d 935 (D.C. Cir. 1998) .............................................................................. 27

United States v. O’Connor, 291 F.2d 520 (2d Cir. 1961) ................................................................................. 26

United States v. Roberts, 618 F.2d 530 (9th Cir. 1980) ................................................................................ 13

Utah-Idaho Sugar Co. v. Ritter, 461 F.2d 1100 (10th Cir. 1972) ............................................................................ 26

Statutes

28 U.S.C. § 292 ........................................................................................... 13, 14, 19

28 U.S.C. § 294 ........................................................................................................ 14

28 U.S.C. § 1291 ...................................................................................................... 25

v

28 U.S.C. § 1292 ...................................................................................................... 26

28 U.S.C. § 1294 ...................................................................................................... 23

28 U.S.C. § 1404 ............................................................................................... 13, 16

28 U.S.C. § 1406 ............................................................................................... 13, 16

28 U.S.C. § 1407 .............................................................................................. passim

28 U.S.C. § 1651 ...................................................................................................... 10

Other Authorities

Wright & Miller, 15 Fed. Prac. & Proc. Juris. § 3846 (4th ed.) .............................. 18

Rules

Fed. R. Civ. P. 77(b) ................................................................................................ 31

1

I. INTRODUCTION

This is one of three actions brought by the National Credit Union

Administration Board (“NCUA”) against Petitioners RBS Securities Inc. and RBS

Acceptance Inc. (“RBS”) in three different districts in three different circuits.

After the Judicial Panel on Multidistrict Litigation denied a motion to consolidate

these actions, the District Court for the Southern District of New York entered an

order purporting to enable a district judge in this Circuit to decide discovery

disputes in cases outside of this Circuit under the guise of a “Coordination Judge,”

even though there is no authority for such a procedure.1 The extraordinary nature

of mandamus relief is appropriate to correct this error for numerous reasons.

First, the District Court’s order was clearly erroneous because: (i) there is no

statutory authority for a judge in this Circuit to be involved in ruling in cases

outside of this Circuit and (ii) the order represents an improper usurpation of

judicial power.

Second, the District Court’s order interferes with the appellate jurisdiction of

two other Courts of Appeals and warrants this Court’s intervention to prevent a

1 The key “Coordination Judge” provision is Section 2 of the “Master Discovery Protocol” entered by the District Court. (Add. 4.) (All references to “Add.” are to the addendum to this petition.) As described below, this order was also entered in cases pending in the Central District of California and the District of Kansas. (PA 470, 540.) (All references to “PA” are to RBS’s concurrently-filed Petitioners’ Appendix.) RBS is simultaneously seeking writs of mandamus in the Ninth and Tenth Circuits.

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judge in this Circuit from exceeding the authority conferred on her by Congress.

By erroneously involving itself in cases outside of this Circuit, the District Court’s

order subjects RBS to the decisions of a court with no authority to issue them, and

this harm cannot be corrected on appeal.

Third, this petition presents novel questions about the authority of district

judges to create new procedures for consolidating cases in different circuits when

the Judicial Panel on Multidistrict Litigation has rejected consolidation. Indeed,

neither NCUA nor the District Court has identified any precedent for the

“Coordination Judge” provisions of the Master Discovery Protocol.

For all these reasons, RBS requests that this Court issue a writ of mandamus

directing the District Court to strike the “Coordination Judge” provisions of the

Master Discovery Protocol.

II. STATEMENT OF ISSUES PRESENTED

Whether a writ of mandamus is warranted to correct the District Court’s

clear error in entering an order that purports to allow the District Court to make or

be involved in making decisions in out-of-circuit cases not pending before it.

III. STATEMENT OF RELIEF REQUESTED

RBS respectfully petitions this Court for a writ of mandamus directing the

District Court to strike Section 2 of the Master Discovery Protocol and vacate all

3

orders entered in this case that purport to set forth obligations in cases outside the

Southern District of New York.

IV. STATEMENT OF NECESSARY FACTS

On March 20, 2009, NCUA placed U.S. Central FCU and WesCorp FCU,

the two largest corporate credit unions in the country, into conservatorship; in

September 2010, NCUA placed two other corporate credit unions, Southwest

Corporate FCU and Members United Corporate FCU, into conservatorship. (PA

13–14, 440, 492–93.)

On June 20, 2011, on behalf of U.S. Central, NCUA sued RBS in the

District of Kansas (U.S. Central was headquartered in Lenexa, Kansas), alleging

violations of Sections 11 and 12 of the Securities Act of 1933 and state Blue Sky

laws regarding the sale of approximately $1.7 billion of residential mortgage-

backed securities (“RMBS”). (See PA 429–65.) That case is pending before the

Honorable John W. Lungstrum.2 Soon after, on July 18, 2011, NCUA sued RBS

on behalf of WesCorp in the Central District of California (WesCorp was

headquartered in San Dimas, California) alleging the same federal claims (and

California Blue Sky claims) regarding approximately $1.6 billion in RMBS

2 The Honorable James P. O’Hara, Chief Magistrate Judge for the District of Kansas, is also actively involved in the case.

4

purchases. (See PA 484–512.) That case is pending before the Honorable George

H. Wu.

On September 2, 2011, after NCUA filed its Kansas and California cases

against RBS, the Federal Housing Finance Agency (“FHFA”)—a different federal

agency assigned as conservator for Fannie Mae and Freddie Mac—filed several

RMBS lawsuits in the Southern District of New York. Ultimately, the New York

FHFA cases were assigned to the Honorable Denise L. Cote, of the Southern

District of New York. RBS was named as a co-defendant in some of the New

York FHFA cases, and FHFA also sued RBS in the District of Connecticut. (See

Complaint, FHFA v. Royal Bank of Scotland Grp. PLC, No. 11-cv-01383 (D.

Conn. Sept. 2, 2011), ECF No. 1.)

After observing several plaintiff-favorable rulings by Judge Cote in the New

York FHFA cases, on September 23, 2013 (over two years after filing suit in

Kansas), NCUA brought this suit against RBS (located in Stamford, Connecticut)

in the Southern District of New York on behalf of Southwest (based in Plano,

Texas) and Members (based in Warrenville, Illinois). (See PA 5–146.) 3 NCUA’s

New York case against RBS involves roughly $300 million in RMBS purchases—

less than ten percent of the amount at issue in the California and Kansas cases.

3 On the same day NCUA sued RBS in New York, NCUA filed separate lawsuits (again on behalf of Southwest and Members) against Morgan Stanley, Goldman Sachs, Credit Suisse, UBS, and Wachovia.

5

NCUA also filed an “explanation of related case” claiming that this case is

“related” to the New York FHFA cases, even though: (1) FHFA’s main case

against RBS is pending in Connecticut, not New York; (2) the cases involved

different governmental entities acting as conservators for different types of entities

(government-sponsored Fannie and Freddie versus privately-owned credit unions);

and (3) out of the dozens of offerings at issue in these “related cases,” only four

actually overlapped. (See PA 1–4.)4 Over RBS’ objection, Judge Cote accepted

the cases as related. (See PA 147–51.)

On October 11, 2013, RBS joined a request to the Judicial Panel on

Multidistrict Litigation (“JPML”) to transfer all of the New York NCUA lawsuits

to the District of Kansas pursuant to 28 U.S.C. § 1407,5 based on both the factual

overlap between the cases and on several factors specific to the District of Kansas,

including Judge Lungstrum’s familiarity with the issues in the cases and the fact

that the Kansas actions were the first-filed actions (by two years). (PA 551–88.)6

4 NCUA claimed that the FHFA cases “involve similar allegations” and that NCUA “is similarly a governmental entity” (PA 4), but the relevant Southern District rule states that “[c]ivil cases shall not be deemed related merely because they involve common legal issues or the same parties.” S.D.N.Y. Rule for the Division of Business Among District Judges, Rule 13(a)(2)(A). 5 RBS filed a notice with the JPML that the California NCUA case was a potential tag-along action. (PA 589–92.) 6 Before NCUA even submitted its response to the MDL petition, Judge Cote sua sponte stated that she would be fully capable of handling such an MDL in her

6

NCUA opposed the MDL petition, arguing that “discovery is not common

across these cases and must be undertaken separately for the distinct Credit

Union(s) that purchased the distinct RMBS at issue in a specific case” and that

“NCUA will seek discovery specific to each RMBS offering.” (PA 605, 607.)7

NCUA also noted that “NCUA as liquidating agent represents different Credit

Unions, a key fact entirely ignored by Defendants. . . . Each of those Credit

Unions had different employees, documents, processes, relationship with the

Defendants, and transaction histories.” (PA 605.)8 Instead, NCUA urged that all

the cases be transferred to Judge Cote in the Southern District of New York. (PA

615–16.)9

court—stating that “[i]f the NCUA cases are litigated in this district before this Court they will be addressed promptly and efficiently.” (PA 157.) 7 Unless otherwise noted, all emphasis in the Petitioners’ Appendix is added by RBS. 8 The same critiques NCUA raised with respect to an MDL involving NCUA’s lawsuits would have applied a fortiori to its previous claim that cases a different plaintiff (FHFA) brought were somehow related to the NCUA cases. Comparing those cases, they also involved completely “different employees, documents, processes, relationship with the Defendants, and transaction histories.” Additionally, the types of entities involved (credit unions versus Fannie and Freddie) and the actual plaintiff (FHFA versus NCUA) were also completely different. 9 This position mirrors FHFA’s in the Connecticut case against RBS. There, the court noted that FHFA’s counsel “frequently conveys the impression that . . . they want the court to simply adopt, without critically evaluating, decisions made in the SDNY Actions.” (Order at 2, FHFA v. Royal Bank of Scotland Grp. PLC, No. 11-cv-01383 (D. Conn. Mar. 31, 2014), ECF No. 334.)

7

On February 12, 2014, the JPML denied the request for a transfer, accepting

NCUA’s argument that the cases did not share sufficient common questions to

warrant consolidation under 28 U.S.C. § 1407, and noting that “different

representations made to different purchasers of RMBS will be at issue, involving

different discovery and motion practice.” (PA 654.) Upon receiving the order

rejecting consolidation, Judge Cote “immediately . . . reached out to Judges

Lungstrum and Wu and introduced [her]self, and . . . began a conversation with

them about working to coordinate our litigation.” (PA 164.) Although the JPML

rejected the idea of an MDL in one district before one judge, Judge Cote stated

that: “It seems to me that we should certainly manage [this] litigation . . . as if all

the litigations were managed in one district before one judge.” (PA 165.)

Furthering her apparent goal of assuming the role of “Coordination Judge,”

Judge Cote required RBS and the other parties in the New York NCUA actions to

submit letters regarding whether they agreed that a “master discovery protocol”

should be entered across all three sets of actions. (PA 184.) But before the parties

filed their submissions, Judge Cote entered an order noting that “this Court

conferred” with Judges Lungstrum, Wu, and O’Hara, and purporting to limit

RBS’—and all other parties’—arguments regarding “any discovery dispute in the

New York, Kansas, or California actions” to a two-page submission to Judge Cote

and the other judges. (PA 187–88.) Later that day, the parties submitted a joint

8

letter, noting that they agreed, in the abstract, to “the entry of some form of . . . a

master discovery protocol,” but noting that the defendants “have issues, to varying

degrees, with the scope and content of the proposals made by plaintiff.” (PA 189.)

NCUA—in contrast to the positions it took before the JPML—argued that

“it would be most efficient to present pre-trial disputes to a single judge,” and

therefore “proposed that all three judges designate a coordination judge to decide

all pre-trial disputes in the first instance, with all judges taking appropriate steps to

ensure that any rulings are binding in all Courts.” (PA 241.) NCUA provided no

authority for a procedure whereby one judge would make rulings that other Article

III judges would effectively enter as clerks of the “Coordination Judge.”

Over RBS’ objection,10 on April 2, 2014, at a joint hearing across all three

cases, Judge Cote announced that the judges had tentatively agreed to a

“Coordination Judge,” and that she was “pleased to be serving in that role for you.”

(PA 341.) A formal Master Discovery Protocol (the “Protocol”) was entered in

this case on April 9, in the Kansas case on April 10—and in the California case on

June 12. (See Add. 1–11; see also PA 467–77; 537–50.) Section 2 of the Protocol

purports to impose a “Procedure for Presenting Discovery Dispute[s]” whereby:

Judge Cote is designated as the “Coordination Judge” for all Actions. All discovery applications and disputes shall be brought to the Coordination Judge in the form of a two-page letter, with copies

10 (PA 208–15; see also PA 225.)

9

simultaneously provided to the other three Judges. Following consultation with Judges Lungstrum and/or O’Hara, and Judge Wu, the Coordination Judge will endeavor to respond promptly.

All applications and disputes regarding discovery in any Action will be filed in the lead case pending in the Southern District of New York . . . . If the application or dispute applies to fewer than all Actions, then the submission should be filed as well in the Action or Actions to which it applies. The discovery parameters and limitations set forth in the ruling by the Coordination Judge on the application or dispute will be given effect in all Actions, unless the ruling indicates otherwise.

(Add. 4.)11 Judge Cote confirmed that discovery disputes, even those arising solely

in the California or Kansas actions, would be submitted to her, and she would

make the ruling:

11 This is not the first time RBS has faced attempts to substitute Judge Cote in the place of an assigned judge. In the FHFA cases, discovery was coordinated across the 17 New York cases and the single Connecticut case brought against RBS. (Joint Order, FHFA v. Royal Bank of Scotland Grp. PLC, No. 11-cv-01383 (D. Conn. Nov. 1, 2012), ECF No. 91.) The coordination order in that case did not allow Judge Cote to resolve discovery disputes in the Connecticut case, but in late January 2014, FHFA urged “further coordination” of the cases—namely, to have Judge Cote oversee the remaining discovery and trial in the Connecticut case. (See FHFA Mot. for Further Coordination, FHFA v. Royal Bank of Scotland Grp. PLC, No. 11-cv-01383 (D. Conn. Jan. 29, 2014), ECF Nos. 288 & 288-1.) RBS noted in opposition that there was no authority for such a transfer of substantive rulings to take place, and that FHFA was attempting to judge-shop to ensure that Judge Cote’s favorable rulings in the New York FHFA cases were imposed in the Connecticut case. (See RBS Opp’n to FHFA Mot. for Further Coordination at 10–13, FHFA v. Royal Bank of Scotland Grp. PLC, No. 11-cv-01383 (D. Conn. Feb. 7, 2014, ECF No. 293.) Judge Thompson denied FHFA’s request for further coordination based on “substantially the reasons set forth by the defendants in their opposition memoranda.” (Order at 2, FHFA v. Royal Bank of Scotland Grp. PLC, No. 11-cv-01383 (D. Conn. Mar. 31, 2014), ECF No. 334.)

10

I plan to consult with my fellow judges before ruling on any matter of substance so that the parties can be assured that any ruling I make is supported by all of us . . . . Therefore, we would want all submissions, even though I am the coordination judge, to be served simultaneously on each of my colleagues . . . . I would be the coordination judge. I would give you the ruling, but it would be after I have consulted with my colleagues.

(PA 341, 343.)

Since April 9, 2014, Judge Cote has issued several orders as “Coordination

Judge” pertaining to RBS in the California and Kansas actions, sometimes just one

or two business days after the parties submitted dozens of pages of briefing,

without any indication of how the judges consulted or their views on the dispute.

(See PA 387–89, 414–428.) Not until after RBS brought the issues with the

“Coordination Judge” proceedings to the attention of Judge Lungstrum and Judge

Wu were the orders modified to bear their signatures. (See id.)

On April 23, 2014, RBS moved to have the Coordination Judge provisions

stricken in both the District of Kansas and the Central District of California. Judge

Lungstrum and Judge Wu denied the motions on May 27 and June 2, respectively.

(PA 478–83, 528.) Judge Lungstrum’s opinion provided no authority for the

provisions, and Judge Wu “agree[d] that there is no applicable, binding law that

specifically provides for” a “Coordination Judge.” (PA 536.) But both judges

nonetheless refused to strike the provisions of the Protocol requiring (1) disputes in

11

the California and Kansas cases to be submitted to Judge Cote and (2) that rulings

in the California and Kansas cases are to be made by Judge Cote.

V. ARGUMENT

This Court has jurisdiction over this petition pursuant to the All Writs Act,

which authorizes the Courts of Appeals to issue extraordinary writs “in aid of their

respective jurisdictions.” 28 U.S.C. § 1651(a); Roche v. Evaporated Milk Ass’n,

319 U.S. 21, 25 (1943). The “traditional” use of the extraordinary writs is “to

confine an inferior court to a lawful exercise of its prescribed jurisdiction or to

compel it to exercise its authority when it is its duty to do so,” and “to remove

obstacles to appeal.” Roche, 319 U.S. at 26. The Supreme Court has endorsed the

broader exercise of mandamus powers—sometimes termed “supervisory” and

“advisory” powers—“to correct established practices of the district court” or “to

review important and novel questions.” Armster v. U.S. Dist. Court, 806 F.2d

1347, 1352 (9th Cir. 1986); see Schlagenhauf v. Holder, 379 U.S. 104 (1964); La

Buy v. Howes Leather Co., 352 U.S. 249 (1957).

Three conditions are required for a writ to issue: “(1) the party seeking

issuance of the writ must have no other adequate means to attain the relief it

desires; (2) the issuing court, in the exercise of its discretion, must be satisfied that

the writ is appropriate under the circumstances; and (3) the petitioner must

demonstrate that the right to issuance of the writ is clear and indisputable.” In re

12

Roman Catholic Diocese of Albany, N.Y., Inc., 745 F.3d 30, 35 (2d Cir. 2014)

(internal quotation and alteration marks omitted) (quoting Cheney v. U.S. Dist.

Court, 542 U.S. 367, 380–81 (2004)).

A. The District Court’s Order Disregards the Congressionally-Established Structure of the Federal District Courts and Represents a Usurpation of Judicial Authority.

A petitioner’s right to the issuance of a writ is “clear and indisputable”

where the district court abuses its discretion by (1) basing its ruling on an

erroneous view of the law, (2) making a clearly erroneous assessment of the

evidence, or (3) rendering a decision that cannot be located within the range of

permissible decisions. See In re Roman Catholic Diocese of Albany, 745 F.3d at

37; In re City of New York, 607 F.3d 923, 943 (2d Cir. 2010). Judge Cote’s order

here was both based on an erroneous view of the law and not within the range of

permissible decisions because (1) it designates herself as a judge in two out-of-

circuit courts and involves herself in resolving disputes in those cases, (2) it

partially transfers elements of the California and Kansas cases to New York, and

(3) it usurps the limited jurisdiction of the federal district courts.

13

1. No Statutory Authority Permits Judge Cote to Designate Herself for Service in Cases Outside This Circuit.

The Protocol’s requirement that discovery disputes be submitted to Judge

Cote is clearly erroneous and without authority.12 Congress has established a

comprehensive system for transferring judges and cases between federal district

courts.13 “In our federal judicial system, judges of a particular district court may

exercise their authority only within that district except under specific limited

designations permitted by statute.” In re Corrugated Container Antitrust Litig.,

662 F.2d 875, 879 (D.C. Cir. 1981).14 28 U.S.C. § 292 governs the designation of

district judges for service in other courts, and 28 U.S.C. §§ 1404, 1406, and 1407

govern the transfer of cases. None of these statutes have been followed here;

instead, the Protocol is an unrecognizable variant of any Congressionally-

authorized means of “coordinating” cases.

12 Judge Wu acknowledged the absence of authority for the “Coordination Judge” provisions. (PA 536.) And NCUA has never cited any authority, other than the Manual for Complex Litigation (which is not authority) and the JPML’s Order denying the one-judge-in-one-district approach the Protocol requires. 13 28 U.S.C §§ 291–297 (Chapter 13, “Assignment of Judges to Other Courts”); id. §§ 1390–1413 (Chapter 87, “District Courts; Venue”). 14 See also United States v. Roberts, 618 F.2d 530, 546 (9th Cir. 1980) (Wyatt, D.J., dissenting) (“That district courts may act only within their respective districts seems self-evident and has been assumed since the Judiciary Act of 1789. Congress, however, has not hesitated to make it emphatic. . . . The Supreme Court has said: ‘District Courts are solely the creation of statute, and the place in which a judge thereof may exercise jurisdiction is subject absolutely to the control of Congress’.” (quoting McDowell v. United States, 159 U.S. 596, 598–99 (1895))).

14

a. The Protocol Does Not Comply With 28 U.S.C. § 292(d).

For Judge Cote to serve on a district court outside of this Circuit, under

§ 292(d), she must be designated to do so by the Chief Justice of the United States.

Before such a designation is made, the Chief Judge of that Circuit must present a

“certificate of necessity” to the Chief Justice certifying the need for an out-of-

circuit judge to serve within this Circuit. 28 U.S.C. § 292(d).15 The Chief Justice’s

authority to designate a judge for such service is exclusive. See generally In re

Motor Fuel Temperature Sales Practices Litig., 711 F.3d 1050, 1052–54 (9th Cir.

2013). Ninth Circuit Chief Judge Kozinski has explained that a necessity will be

certified only where there is “severe or unexpected over-burdening, as happens

when a judge dies or retires, when the district is experiencing a judicial emergency

or when all the judges are recused because of a conflict,” and “even then,” the first

option is to find a judge from within the circuit. Id. at 1053. In fact, in In re Motor

Fuel, Chief Judge Kozinski refused to certify a necessity where an out-of-circuit

judge “graciously” volunteered to serve in a case—as Judge Cote has done here—

but where there was no need for such service. Id. at 1052–54.

At bottom, Judge Cote had no authority to sua sponte designate herself for

service, the Chief Judges of the Ninth and Tenth Circuits never issued certificates 15 Because Judge Cote is a senior judge, she may be subject instead to § 294(d), which still requires that the Chief Judge of this Circuit present the same “certificate of necessity” to the Chief Justice of the United States. 28 U.S.C. § 294(d).

15

of necessity, and Chief Justice Roberts never designated Judge Cote for service in

the California and Kansas actions. The Protocol is therefore a clearly erroneous

attempt to avoid the normal restrictions on judicial designation.16

b. The Protocol Is Not Authorized By 28 U.S.C. § 1407.

Consolidation under § 1407 allows for the transfer of pretrial proceedings

from multiple districts to a single district if the JPML determines that the cases

share common questions of fact sufficient to warrant such consolidation. Multi-

district consolidation, however, never involves the contemporaneous exercise of

authority by multiple district courts—during pretrial proceedings in an MDL, “the

jurisdiction of the transferor court ceases.” In re Plumbing Fixture Cases, 298 F.

Supp. 484, 496 (J.P.M.L. 1968). In any event, the JPML, which has the exclusive

authority to order consolidation, refused to do so.17

16 The Supreme Court has reversed designations not authorized by Title 28. In Nguyen v. United States, 539 U.S. 69 (2003), the Court held that an improper designation under § 292(a) required vacating the judgments of a panel of the Ninth Circuit, and noted that the statute “embodies weighty congressional policy concerning the proper organization of the federal courts.” Id. at 74–76, 79–80. While Nguyen involved an Article IV judge, the case was not based on “structural constitutional guarantees embodied in Article III.” Id. at 76 n.9. Instead, the Court found it “unnecessary to discuss the constitutional questions because the statutory violation is clear.” Id. The statutory violation is also clear here, and the fact that Judge Cote is an Article III judge is of no import. 17 District courts have no power to consolidate proceedings themselves. See 28 U.S.C. § 1407(a)–(c) (transfer for coordinated or consolidated proceedings “shall be made by the [JPML],” such proceedings “shall be conducted by a judge or judges to whom such actions are assigned by the [JPML],” and only a party or the JPML may initiate transfer); Holmes v. Grubman, 315 F. Supp. 2d 1376, 1380

16

c. The Protocol Is Not Authorized By Any Other Recognized Transfer Mechanism.

For the California and Kansas cases to have been transferred to Judge Cote

outside of the multi-district litigation process, a transfer could have been made

under § 1404(a) if deemed necessary “[f]or the convenience of the parties and

witnesses, in the interest of justice,” or under § 1406 if venue was improper.

Along with MDL consolidation under § 1407, these are the exclusive procedures

for transferring cases between different district courts; district courts may not

create new procedures for transferring or consolidating cases outside of those

authorized by Congress. See Lexecon Inc. v. Milberg Weiss Bershad Hynes &

Lerach, 523 U.S. 26, 40–41 (1998) (district courts cannot self-assign MDL cases).

The hybrid proceedings created by the Protocol have no foundation in these

statutes. Nor do the proposed proceedings before a “Coordination Judge” resemble

what would have happened had a proper transfer occurred. If the case had been

transferred under either § 1404 or § 1406, it would have ended the jurisdiction of

the transferor courts and Judge Wu and Judge Lungstrum would no longer have the

cases on their dockets. See Wright & Miller, 15 Fed. Prac. & Proc. Juris. § 3846

(4th ed.) (“When a motion for transfer . . . is granted . . . the transferor court and

the appellate court for the circuit in which that court sits lose jurisdiction over the

(M.D. Ga. 2004) (“[T]he Court notes its inability and lack of authority to transfer this action to the Southern District of New York [pursuant to 28 U.S.C. § 1407].”).

17

case and may not proceed further with regard to it.”). And if transfer had taken

place pursuant to § 1407, then all pretrial proceedings would be consolidated in a

single district court with exclusive jurisdiction, not distributed across three districts

in three circuits.

This Court has held that mandamus may be used to challenge improper

transfer orders,18 but the Protocol is not even a recognizable “transfer order”—it

creates a novel type of partial “transfer,” whereby RBS must bring its disputes in

the California and Kansas cases to Judge Cote, who will issue rulings that Judges

Wu and Lungstrum will then enter in their cases. Other ‘partial transfer’ orders

have been the subject of successful mandamus petitions in other Courts of Appeals.

For example, in In re Flight Transportation Corporation Securities Litigation, 764

F.2d 515 (8th Cir. 1985), the district court had received numerous cases as part of

MDL proceedings, but required the parties to continue filing all documents before

it, despite ordering the trials transferred to another district (just as RBS must file all

documents before Judge Cote). Id. at 516. The Eighth Circuit granted a petition

for mandamus, holding that “[s]ince the District Court’s order attempts both to

transfer the cases . . . and to retain jurisdiction . . . it exceeds the transfer power

conferred under § 1404(a)” and noted that “no case has ever interpreted [§ 1404(a)]

to authorize the sort of ‘transfer’ at issue here.” Id. at 516–17. The JPML has also

18 See, e.g., In re Warrick, 70 F.3d 736, 740 (2d Cir. 1995).

18

stated “[t]wo courts of exclusive different jurisdictions, or venues, cannot exercise

control over the same single claim for relief at the same time.” In re Plumbing

Fixture Cases, 298 F. Supp. at 495; see also FTC v. MacArthur, 532 F.2d 1135,

1143 (7th Cir. 1976) (“[A]n action should not be split between two districts.”).

This Court has also deemed mandamus relief appropriate where judges have

improperly consolidated cases. In In re Repetitive Stress Injury Litigation, 11 F.3d

368 (2d Cir. 1993), reh’g denied in part, 35 F.3d 637 (2d Cir. 1994), reh’g denied

35 F.3d 640 (2d Cir.), a district court consolidated forty-four cases before it under

Rule 42, despite recognizing that “the factual or legal issues of the various cases

were not identical.” Id. at 371. The plaintiffs separately moved to consolidate all

similar proceedings nationwide under § 1407, but the request was denied because

the JPML did not find sufficient common questions of fact. Id. at 372. This Court

held that “substitut[ing] a discussion of so-called mass torts for precise findings as

to what are the ‘common question[s] of law or fact’ justifying consolidation” was

clearly erroneous and warranted the issuance of a writ. Id. at 373. It noted that

“[w]ith regard to issues of law, the plaintiffs come from a variety of jurisdictions

and rely for their claims on the law of different states. An order that merges all

discovery and court proceedings and requires the participation of all counsel

simply has no basis in Rule 42.” Id. Repetitive Stress involved consolidation

within one district—under an identifiable Federal Rule of Civil Procedure—and

19

never conceived of the kind of impromptu consolidation of power in a

“Coordination Judge” across multiple districts without statutory authority that is at

issue in this case. Mandamus is even more necessary here.

2. The District Court Cannot Exceed Its Authority By Involving Itself in Cases Outside This Circuit.

The Protocol also represents a usurpation of judicial power by Judge Cote,

and a writ of mandamus is the appropriate vehicle to seek relief.

The traditional use of the writ in aid of appellate jurisdiction both at common law and in the federal courts has been to confine an inferior court to a lawful exercise of its prescribed jurisdiction or to compel it to exercise its authority when it is its duty to do so.

Mallard v. U.S. Dist. Court, 490 U.S. 296, 308 (1989) (quoting Roche, 319 U.S. at

26) (emphasis added); see Stein v. KPMG, LLP, 486 F.3d 753, 759 (2d Cir. 2007)

(same). The Supreme Court has also explained the limited jurisdiction of the lower

federal courts:

[T]he judicial power of the United States . . . depend[s] for its distribution and organization, and for the modes of its exercise, entirely upon the action of Congress, who possess the sole power of creating the tribunals (inferior to the Supreme Court) . . . and of investing them with jurisdiction either limited, concurrent, or exclusive, and of withholding jurisdiction from them in the exact degrees and character which to Congress may seem proper for the public good.

Ankenbrandt v. Richards, 504 U.S. 689, 698 (1992) (quoting Cary v. Curtis, 3

How. 236, 245 (1845)) (emphasis added).

20

In this Congressionally-established system, Judge Cote’s judicial authority is

limited to the Southern District of New York. Judge Cote has no authority, absent

designation under 28 U.S.C. § 292(d), to render decisions in a case outside her

district, and this Court is tasked with the authority and obligation supervise the

district courts within the Second Circuit. See In re Int’l Bus. Machines Corp., 45

F.3d 641, 645 (2d Cir. 1995) (“Our decision to issue mandamus in this instance is

re-enforced by our responsibilities in the exercise of our supervisory authority over

the administration of justice in the district courts.”). This Court should exercise

that authority and prevent Judge Cote from involvement in a case outside of her

district and outside of this Circuit. While Judge Cote may believe that NCUA’s

lawsuits “should” be treated “as if all the litigations were managed in one district

before one judge,” requiring such treatment is impermissible and should be

corrected.

Notably, Judge Lungstrum and Judge Wu attempted to assuage RBS’

concerns in their May 27 and June 10 opinions by stating, respectively, that “[t]he

[Protocol] expressly requires Judge Cote to consult with a judge from this district

on any discovery dispute” and “Judge Cote cannot and will not rule on the motions

without consultation with the other judicial officers.” (PA 480, 533.) But there is

simply no authority for Judge Cote to play any role in those cases—either with or

21

without consulting the presiding judges.19 Judges Wu and Lungstrum must decide

all the disputes in their cases independently, just as Judge Cote must in this case.

Cf. In re Korean Air Lines Disaster of Sept. 1, 1983, 829 F.2d 1171, 1176 (D.C.

Cir. 1987) (R.B. Ginsburg, J.) (“The federal courts spread across the country owe

respect to each other’s efforts and should strive to avoid conflicts, but each has an

obligation to engage independently in reasoned analysis.”).

Nor would it make sense for Judge Cote to be involved in rendering

decisions in the California and Kansas cases, when there are significant differences

between those cases and this case. For example, in this case, NCUA has no federal

securities claims remaining, and Judge Cote has ruled that NCUA’s remaining

state law claims are not subject to a loss causation defense. (PA 396–407.) But in

the California and Kansas cases, NCUA has federal securities claims that are

subject to a loss causation defense. There is no reason why Judge Cote should

participate in deciding what discovery is needed to support loss causation defenses

that only apply in cases not pending before her. Nor should Judge Cote have any

19 Indeed, the Protocol’s call for some undefined “consultation” among Article III judges is contrary to the principle that “[t]he structure of the federal courts does not allow one judge of a district court to rule directly on the legality of another district judge's judicial acts or to deny another district judge his or her lawful jurisdiction.” Dhalluin v. McKibben, 682 F. Supp. 1096, 1097 (D. Nev. 1988); see also CitiFinancial Corp. v. Harrison, 453 F.3d 245, 251 (5th Cir. 2006) (“[A] district court judge, whether as a matter of respect and institutional orderliness, if not jurisdiction, should shy from involvement in a case proceeding before another Article III judge.”).

22

say in the scope of discovery RBS may seek in other cases against NCUA, on

behalf of WesCorp or U.S. Central, when the case pending before Judge Cote does

not relate to those entities. 20 RBS cannot be forced to submit to the “Coordination

Judge” a dispute that is not at issue in the New York case. Any twisting of the

principles of federal jurisdiction to involve a different court in those decisions

further crystallizes the impropriety of the challenged provisions.

B. Mandamus is Appropriate Here Because the Protocol Raises Novel and Important Questions Regarding District Courts’ Authority to Involve Themselves in Out-of-Circuit Cases and Issuing a Writ Will Aid In the Administration of Justice By Clarifying That Authority.

In determining whether mandamus is “appropriate” to address discovery

orders, this Court looks “primarily for ‘the presence of a novel and significant

question of law . . . and . . . the presence of a legal issue whose resolution will aid

in the administration of justice.’” In re City of New York, 607 F.3d at 939 (quoting

In re S.E.C. ex rel. Glotzer, 374 F.3d 184, 187 (2d Cir. 2004)). Mandamus is

appropriate here for both reasons.

1. Resolution of the Issues Raised By This Petition Will Aid in the Administration of Justice.

The Protocol interferes with federal law and the appellate jurisdiction of

other Courts of Appeals. Resolving these issues by striking the Coordination

20 As NCUA’s counsel put it to the JPML at oral argument, “[t]here is not a single claim in New York that pertains to securities purchased by [U.S. Central or WesCorp].” (PA 645.)

23

Judge” provisions of the Protocol will aid the administration of justice by ensuring

that Judge Cote’s actions are consistent with federal law and affirming this Court’s

respect for the jurisdiction of the Ninth and Tenth Circuit Courts of Appeals.

First, the District Court’s order muddies the water of any appeal in this case

and thereby threatens this Court’s appellate jurisdiction. This Court’s mandamus

power “extends to those cases which are within its appellate jurisdiction although

no appeal has been perfected,” and “a function of mandamus . . . is to remove

obstacles to appeal.” Roche, 319 U.S. at 25–26. Appeals are to be heard “[f]rom a

district court of the United States to the court of appeals for the circuit embracing

the district.” 28 U.S.C. § 1294. But if rulings in the California case are made by

Judge Cote, are appeals from those orders to be heard before this Court or the

Ninth Circuit? May the same order be appealable in all three involved Courts of

Appeals, thus exposing every discovery order to appeal in the Second, Ninth, and

Tenth Circuits, and creating the possibility of a circuit split on the same discovery

ruling? If the Courts of Appeals involved were to split on the validity of a

discovery ruling, yet that ruling purports to apply across all cases, how would the

parties comply? These questions are avoided if this Court strikes the improper

provisions of the Protocol, but even if not, mandamus relief would remain

appropriate to clarify the avenues of appeal from orders made pursuant to the

challenged provisions of the Protocol—mandamus is “especially appropriate”

24

where it “will quickly settle a jurisdictional dispute between two courts.” Borja v.

U.S. Dist. Court, 919 F.2d 100, 101 (9th Cir. 1990).

Second, the District Court’s order interferes with the Congressionally-

established system for having the Courts of Appeals manage which judges serve

within the circuit, and having the Chief Justice of the United States control the

transfer of judges between circuits. See supra at 14–15. As noted in In re Motor

Fuel, even where an out-of-circuit judge “graciously” volunteers for service in this

Circuit, that judge may only serve “with the approval of the Chief Justice of the

United States,” 711 F.3d at 1052, whose own “Guidelines for the Intercircuit

Assignment of Article III Judges” stress that “no judge should take any official

action in a case in another circuit in the absence of a completed intercircuit

assignment.” Id. at 1057 (guideline 13). And those same guidelines would have

required Judge Cote to consult with Chief Judge Katzmann before serving in the

California and Kansas actions. Id. at 1058 (“[S]enior judges are to consult with

their chief circuit judges . . . before formally consenting to an intercircuit

assignment . . . .”). The assignment of Judge Cote here circumvents the certificate

of necessity requirement.

2. The District Court’s Order Raises Novel Questions of Law.

The question here—whether a court may make a new coordination

procedure out of whole cloth—is both “novel and significant.” To RBS’

25

knowledge, this petition (along with the petitions simultaneously filed in the Ninth

and Tenth Circuits) is the first test of such an order in this Court (or in any federal

court). This Court has found a question of law to be “novel and significant” where

no Court of Appeals case—and only a few district court cases—address the

question. United States v. Coppa, 267 F.3d 132, 138 (2d Cir. 2001). NCUA has

been unable to point to a single time an order containing anything like the

“Coordination Judge” provisions at issue here has been entered, let alone been

challenged. As discussed above, this order raises questions concerning this Court’s

appellate jurisdiction, this Court’s obligation to supervise the courts within the

Circuit, and the ability of Article III judges to act outside their district by

effectively self-designating themselves as judges of out-of-circuit district courts or

self-transferring out-of-circuit cases to themselves. All of these issues carry great

“significance” to the structure of the federal courts, and warrant mandamus relief.

C. Because The Challenged Order Is a Discovery Order, RBS Lacks an Adequate Alternative to Mandamus Relief.

The District Court’s order, as discussed in detail above, is unprecedented.

There is thus no guidance on how such an order would be challenged—although

there is no doubt that the Protocol, which only enables a process for making

decisions, is not a “final” order, and thus not appealable under 28 U.S.C. § 1291.

The Protocol is best regarded as a discovery order because it relates solely to the

procedures for resolving discovery disputes, and because “prompt appellate review

26

of this [discovery] order would not speed the District Court’s consideration of the

merits of the parties’ claims or defenses,” certification under § 1292(b) is not

available. See In re City of New York, 607 F.3d at 933–34. This Court has held

that such interlocutory discovery orders are properly subject to challenge by

mandamus. See, e.g., id. at 933–35; Glotzer, 374 F.3d at 187–88. In fact, this

Court has treated mandamus as a proper method of challenging orders analogous to

the Protocol, including scheduling orders,21 orders to transfer, 22 orders

consolidating cases within a district,23 and orders referring disputes to special

masters or magistrate judges.24 And mandamus has been used by other Courts of

Appeals in situations involving the improper assignment of cases.25

A final appeal is not an adequate means for RBS to obtain the relief it seeks.

RBS will suffer direct prejudice in every decision made pursuant to the

21 See, e.g., Coppa, 267 F.3d at 138–39. 22 See, e.g., In re Warrick, 70 F.3d at 740. 23 See, e.g., In re Repetitive Stress Injury Litig., 11 F.3d at 373–74. 24 See, e.g., In re United States, 10 F.3d 931, 933–34 (2d Cir. 1993) (magistrate judge); United States v. O’Connor, 291 F.2d 520, 523 (2d Cir. 1961) (special master). 25 See, e.g., In re McBryde, 117 F.3d 208, 222–25, 229–31 (5th Cir. 1997); Utah-Idaho Sugar Co. v. Ritter, 461 F.2d 1100, 1102–1104 (10th Cir. 1972); Kerr-McGee Corp. v. Ritter, 461 F.2d 1104, 1105 (10th Cir. 1972); cf. Ligon v. City of N.Y., 736 F.3d 118, 125–26 & n.17, 130 (2d Cir. 2013) (noting concern with manipulation of related-case assignments); In re Motor Fuel, 711 F.3d at 1052–54 (expressing concern with “interfer[ing] with the random assignment of cases,” or “removing the judges to whom the cases were originally assigned and transferring them to an out-of-circuit judge”).

27

“Coordination Judge” provisions. Being subject to the rulings of a judge without

any authority to enter them is a harm not correctable on appeal. This Court has

held that appeal from a final judgment is not an adequate alternative to mandamus

relief where—as here—the district court creates “an entirely sui generis

proceeding” with “an ad hoc mix” of procedural rules that “is governed by no

express statutory authority.” Stein, 486 F.3d at 761–62; see also United States v.

Microsoft Corp., 147 F.3d 935, 954 (D.C. Cir. 1998) (“[A]t least at some point,

even the temporary subjection of a party to a Potemkin jurisdiction so mocks the

party’s rights as to render end-of-the-line correction inadequate.”). Whenever an

order in this case is issued by a judge in a different court, RBS has been harmed.26

And if the Protocol is not challenged now, RBS’ objections may be mooted by

compliance with Judge Cote’s orders. See In re von Bulow, 828 F.2d 94, 98 (2d

Cir. 1987) (“Compliance with the order destroys the right sought to be

protected.”); SG Cowen Sec. Corp. v. U.S. Dist. Court, 189 F.3d 909, 914 (9th Cir.

1999) (“Compliance with a discovery order moots an appeal of that order.”).

26 Federal Rules of Civil Procedure 77(b) also prohibits the District Court from conducting a hearing “outside the district unless all the affected parties consent,” but any time a judge in New York holds a hearing on issues in the Central District of California, that rule is violated.

28

VI. CONCLUSION

The Coordination Judge provisions have no basis in federal law and

contradict principles of jurisdiction. A writ should issue to strike these provisions

of the Protocol and vacate all orders entered pursuant to those provisions that

purport to apply in cases outside the Southern District of New York.

DATED: July 24, 2014 Respectfully Submitted,

/s/ R. Alexander Pilmer R. Alexander Pilmer David I. Horowitz Tammy A. Tsoumas Derek M. Milosavljevic Gavin C.P. Campbell KIRKLAND & ELLIS LLP 333 South Hope Street Los Angeles, CA 90071 Telephone: (213) 680-8400 Facsimile: (213) 680-8500 [email protected] [email protected] [email protected] [email protected] [email protected]

Counsel for Defendants-Petitioners RBS Securities Inc. and RBS Acceptance Inc.

STATEMENT REGARDING ORAL ARGUMENT

Oral argument is requested. This petition involves an unprecedented

procedural order that affects cases against RBS in three different circuits where

billions of dollars are at issue. Multiple other cases not involving RBS are

currently subject to the same order. Given the novel and important questions

raised by this petition, RBS would appreciate the opportunity to address any

questions from the Court.

CERTIFICATE OF COMPLIANCE

I certify that this petition complies with the page limitations of Fed. R. App.

21(d), and that this petition complies with the typeface requirements of Fed. R.

App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6)

because it has been prepared in a proportionally spaced typeface using Microsoft

Word in 14-point Times New Roman style.

/s/ R. Alexander Pilmer

R. Alexander Pilmer

CERTIFICATE OF SERVICE

I hereby certify that I electronically filed the foregoing petition with the Clerk of the Court for the United States Court of Appeals for the Second Circuit by using the appellate CM/ECF system on July 24, 2014.

In addition, I hereby certify that on July 24, 2014, I served the foregoing document on the counsel listed below as indicated:

David H Wollmuth Frederick R. Kessler Steven S. Fitzgerald Ryan A. Kane Alexis Castillo WOLLMUTH MAHER & DEUTSCH LLP 500 Fifth Avenue, Suite 1200 New York, NY 10110 (212) 382-3300 Fax: (212) 382-0050 [email protected] [email protected] [email protected] [email protected] [email protected] [via email]

David C. FrederickScott K. Attaway Gregory G. Rapawy Wan Joo Kim Andew C. Shen KELLOGG, HUBER, HANSEN, TODD, EVANS & FIGEL LLC Sumner Square 1615 M. Street, N.W. Suite 400 Washington, DC 20036-3209 [email protected] [email protected] [email protected] [email protected] [email protected] [via email and U.S. Mail]

Stephen M. Tillery Michael E. Klenov Tamara M. Spicer Greg G. Gutzler Richard M. Elias Steven M. Berezney Giuseppe Giardina KOREIN TILLERY LLC 505 North 7th Street Suite 3600 St Louis, MO 63101-1625 [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [via email]

George A. ZelcsKOREIN TILLERY LLC 205 N. Michigan Ave., Suite 1950 Chicago, IL 60601 [email protected] [via email]

Counsel for Plaintiff National Credit Union Administration Board

I further certify that on July 24, 2014, a copy of the foregoing document was served on the following by U.S. Mail:

The Honorable Denise L. Cote United States District Court Judge United States District Court for the Southern District of New York Daniel Patrick Moynihan U.S. Courthouse 500 Pearl Street New York, NY 10007

On this 24th day of July 2014,

/s/ R. Alexander Pilmer R. Alexander Pilmer

TABLE OF CONTENTS FOR ADDENDUM

April 9, 2014 - Master Discovery Protocol (13-cv-6726; ECF No. 100)

Add. 1 - 11

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

NATIONAL CREDIT UNION ADMINISTRATION BOARD, etc., Plaintiff, v.

MORGAN STANLEY & CO., et al., Defendants.

And other NCUA Actions.

Case No. 13-cv-6705 (DLC) Case No. 13-cv-6719 (DLC) Case No. 13-cv-6721 (DLC) Case No. 13-cv-6726 (DLC) Case No. 13-cv-6727 (DLC) Case No. 13-cv-6731 (DLC) Case No. 13-cv-6736 (DLC)

UNITED STATES DISTRICT COURT DISTRICT OF KANSAS

NATIONAL CREDIT UNION ADMINISTRATION BOARD, etc., Plaintiff,

v.

RBS SECURITIES, INC., f/k/a GREENWICH CAPITAL MARKETS, INC., et al., Defendants. And other NCUA Actions.

Case No. 11-cv-2340 & 2649 (JWL) Case No. 12-cv-2591 (JWL) Case No. 12-cv-2648 (JWL) Case No. 13-cv-2418 (JWL)

Case 1:13-cv-06726-DLC Document 100 Filed 04/09/14 Page 1 of 11

Add.1

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

WESTERN DIVISION

NATIONAL CREDIT UNION ADMINISTRATION BOARD, etc., Plaintiff,

v. RBS SECURITIES, INC., f/k/a GREENWICH CAPITAL MARKETS, INC. et al., Defendants. And other NCUA Action.

Case No. 11-cv-5887 (GW) Case No. 11-cv-6521 (GW)

MASTER DISCOVERY PROTOCOL

HON. DENISE COTE, HON. JOHN W. LUNGSTRUM, and HON. GEORGE H. WU, District

Judges; and HON. JAMES P. O’HARA, Magistrate Judge:

WHEREAS, Plaintiff the National Credit Union Administration Board, as liquidating agent

for four failed corporate credit unions1 (the “credit unions”) (“NCUA”), is pursuing the above-

captioned actions in the Southern District of New York (the “SDNY Actions”), the District of

Kansas (the “Kansas Actions”), and the Central District of California (the “California Actions” and,

collectively with the SDNY Actions and Kansas Actions, the “Actions”), pertaining to the purchase

by the credit unions of residential mortgage-backed securities (“RMBS”);

WHEREAS, the S.D.N.Y. Actions are assigned to and are being coordinated by the

Honorable Denise Cote;

1 The four failed corporate credit unions are: Western Corporate Federal Credit Union; U.S. Central Corporate Credit Union; Southwest Corporate Federal Credit Union; and Members United Corporate Federal Credit Union.


Add.2

WHEREAS, the Kansas Actions are assigned to and are being coordinated by the

Honorable John W. Lungstrum and the Honorable James P. O’Hara;

WHEREAS, the California Actions are assigned to and are being coordinated by the

Honorable George H. Wu;

WHEREAS, discovery orders have been entered in some of the Actions but discovery

remains in its initial stages;

WHEREAS, the parties conferred but did not reach agreement on a proposed coordination

order among the Actions, and on March 28 and on April 4, 2014 made written submissions;

WHEREAS, the question of coordination was discussed at an April 2, 2014 videoconference

in the Actions;

WHEREAS, it appearing that the Actions share common issues and overlapping parties and

will involve common discovery, and that pretrial proceedings in all Actions should be coordinated to

avoid unnecessary conflicts and expense, conserve judicial resources, and secure the just, speedy, and

inexpensive disposition of all Actions;

WHEREAS, it is necessary and expected that all parties will confer in good faith with each

other whenever required by the Court to do so, and where it will promote the efficient management

of the Actions;

WHEREAS, it is necessary and expected that all of the Defendants will confer in good faith

with each other and make an effort to agree upon a joint course of action whenever required by the

Court to do so, and where it will promote the efficient management of the Actions;

IT IS HEREBY ORDERED, for all Actions, as follows:

1. Superseding Effect of this Master Discovery Protocol Order

This Master Discovery Protocol Order shall serve as the discovery protocol in all Actions,

and thereby shall supersede any previous discovery order entered in any Action. Any party may seek


Add.3

permission to deviate from the provisions in this Order upon a showing of good cause by following

the procedure set forth in Section 2 below. This Order does not affect any stay of discovery entered

in any Action. E.g., NCUA v. RBS Securities Inc., et al., 11-cv-2340 & 2649 (JWL)(JPO) (D. Kan.

Oct. 24, 2013); NCUA v. Goldman Sachs & Co., et al., 11-cv-6521 (GW) (C.D. Cal. Sept. 5, 2013).

To the extent that any discovery is proceeding in an Action, however, it shall proceed under the

protocol set forth here.

2. Procedure for Presenting Discovery Dispute

To avoid unnecessary conflicts and inconsistencies in the rulings in the Actions, Judge Cote

is designated as the “Coordination Judge” for all Actions. All discovery applications and disputes

shall be brought to the Coordination Judge in the form of a two-page letter, with copies

simultaneously provided to the other three Judges. Following consultation with Judges Lungstrum

and/or O’Hara, and Judge Wu, the Coordination Judge will endeavor to respond promptly.

All applications and disputes regarding discovery in any Action will be filed in the lead case

pending in the Southern District of New York (currently 13 Civ. 6705). If the application or dispute

applies to fewer than all Actions, then the submission should be filed as well in the Action or

Actions to which it applies. The discovery parameters and limitations set forth in the ruling by the

Coordination Judge on the application or dispute will be given effect in all Actions, unless the ruling

indicates otherwise.

3. Protective Order

A Master Protective Order, which has been separately entered into and approved, will

govern these Actions.

4. Electronic Discovery


Add.4

The parties shall produce and exchange documents in the Actions pursuant to the Protocol

for the Production of Data and the Protocol for the Production Format of Loan Files, which have

been separately entered into and approved.

5. Procedures for Loan File Reunderwriting

The parties shall cooperate in the production and reunderwriting of the loan files, as set

forth in the Loan File Reunderwriting Protocol, which has been separately entered into and

approved.

6. Document Production and Written Discovery

a) Documents produced in any Action will be treated as though produced in all Actions.

b) Written discovery (e.g., interrogatory responses and responses to requests for admission)

produced in any Action will be treated as though produced in all Actions.

c) Notwithstanding the above, the use of such discovery in the prosecution or defense of

any Action is subject to a decision by the judge presiding over the Action.

7. Interrogatories2

a) NCUA may serve up to 25 interrogatories on each Defendant Group across the

Actions involving that Defendant Group.

2 “Defendant Group” refers to any of the following groups of defendants: Barclays Defendant (Barclays Capital Inc.); Credit Suisse Defendants (Credit Suisse Securities (USA) LLC and Credit Suisse First Boston Mortgage Securities Corp.); Goldman Sachs Defendants (Goldman, Sachs & Co. and GS Mortgage Securities Corp.); Morgan Stanley Defendants (Morgan Stanley & Co., Inc., n/k/a Morgan Stanley & Co. LLC and Morgan Stanley Capital I Inc.); RBS Defendants (RBS Securities, Inc. f/k/a RBS Greenwich Capital Markets, Inc., RBS Acceptance, Inc., f/k/a Greenwich Capital Acceptance Inc., and Financial Asset Securities Corp.); UBS Defendant (UBS Securities, LLC); Wachovia Defendants (Wachovia Capital Markets, LLC, n/k/a Wells Fargo Securities, LLC, and Wachovia Mortgage Loan and Trust, LLC); Nomura Defendants (Nomura Asset Acceptance Corp. and Nomura Home Equity Loan, Inc.); and NovaStar Defendant (NovaStar Mortgage Funding Corp.).


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b) Defendants may collectively serve up to 25 interrogatories directed at each credit union

and 10 interrogatories directed at NCUA across the Actions. Interrogatory responses

may be used by any party across the Actions.

c) Any interrogatories served before March 28, 2014 in any of the Actions shall remain

active and valid and shall count against the totals set forth in Sections 7(a) and 7(b)

above.

8. Requests for Production

a) For any requests for production that pertain to a liquidated credit union, Defendants

will collaborate and serve one set of requests for documents on NCUA across the

Actions involving that liquidated credit union. For any requests for documents that

pertain to a Defendant Group, NCUA will serve consolidated requests for production

on each Defendant Group across the Actions.

b) By April 18, 2014, NCUA and each Defendant Group shall use best efforts to agree on

a set of search terms and relevant time periods that each Defendant Group will employ

to locate and gather electronic documents for the Actions to which that Defendant

Group is party. Also by that date, NCUA and all Defendants shall use best efforts to

agree on a set of search terms and relevant time periods that NCUA will employ to

locate and gather the electronic documents of each credit union and for NCUA for all

Actions. The Parties shall inform all Judges of any agreement, or their respective

positions in the event of any disagreement, on April 18, 2014.

c) By April 18, 2014, NCUA and each Defendant Group shall use best efforts to agree on

a list of custodians and electronic and hard-copy repositories that each Defendant

Group will search for relevant documents. Also by that date, NCUA and all

Defendants shall use best efforts to agree on a list of custodians and electronic and


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hard-copy repositories that NCUA will search for relevant documents from NCUA and

each credit union. The Parties shall inform all Judges of any agreement, or their

respective positions in the event of any disagreement, on April 18, 2014.

d) Parties may request, and negotiate in good-faith, the supplementation of search terms,

time periods, custodians, and repositories during the course of discovery.

e) The parties agree to confer in good faith regarding how to identify non-privileged,

responsive documents, subject to asserted objections, that are not amenable to

identification through electronic searches using search terms, custodians, and

repositories, or that are amenable to being identified categorically.

f) Any requests for production served before March 28, 2014 in any of the Actions shall

remain active and valid.

9. Requests for Admission

a) NCUA may serve up to 50 requests for admission on each Defendant Group across the

Actions.

b) Defendants may collectively serve up to 25 requests for admission on each credit union

and 10 requests for admission on NCUA across the Actions.

c) The limitation on the number of requests for admission does not apply to requests for

admission regarding the existence, non-existence, authenticity, or foundation for the

admissibility of any document.

10. Fact Depositions

a) The parties shall confer and attempt to reach agreement on the number of fact

depositions. Their proposals regarding any limitations on fact depositions shall be

submitted by September 19, 2014. There shall be no limit on the number of Rule


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30(b)(6) depositions. The parties shall meet and confer regarding Rule 30(b)(6)

depositions and may proceed with such depositions at any time.

b) Fact depositions of a party witness taken in any of the above-captioned cases will be

deemed to have been taken in all of the above-captioned cases in which that party is a

plaintiff or defendant. The fact deposition of a party witness will be deemed to have

been taken in actions involving another Defendant Group (1) where the other

Defendant Group is also a defendant for an RMBS at issue in the fact deposition and

NCUA provides notice of such fact deposition to the other Defendant Group; (2) by

agreement of the parties; or (3) upon a showing of good cause. Fact depositions of

non-party witnesses will be deemed to have been taken in all of the above-captioned

cases across all of the Actions.

c) No fact deponent shall be required to be deposed more than once across all of the

Actions, except by agreement of the parties or a judicial Order.

d) All parties shall produce the transcripts of testimony and affidavits/affirmations,

including all exhibits, from any and all RMBS matters, including all civil, criminal, or

regulatory matters, in which it or one of its officers or employees was a party. The

testimony shall be treated as if taken in the Actions. The parties shall endeavor to not

subject witnesses to the same questioning for which a transcript was previously

provided. Each party shall produce existing transcripts and affidavits/affirmations,

including all exhibits, by May 15, 2014, and future transcripts and

affidavits/affirmations, including all exhibits, within two weeks after a final transcript of

a deposition is available, and two weeks after a witness has signed an

affidavit/affirmation.


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e) The parties shall agree in advance on a system of numbering deposition exhibits to

ensure that they employ unique exhibit numbers across the Actions suitable for use at

trial and in all motion papers and other submissions to the various Courts.

f) In any Action, all parties to that Action shall have the right to depose any witness who

has not previously been deposed, and who is designated to testify at trial, before the

witness begins testifying at trial.

g) Any deposition limits that will be set will apply to depositions of party fact witnesses

only, and do not apply to expert depositions, Rule 30(b)(6) depositions, or depositions

of non-parties. NCUA and Defendants shall work together to minimize the scope and

burden associated with such depositions.

h) Nothing in this order shall preclude any party or third-party from seeking a protective

order or other relief with respect to the deposition of any individual witness.

11. Expert Disclosures

a) Expert disclosures shall take place after the applicable fact discovery period, with

submissions of expert reports by the party bearing the burden of proof on an issue on

August 14, 2015, rebuttal expert reports on October 16, 2015, and any reply expert

reports on November 20, 2015.

b) If Defendants have re-underwritten any set of loans other than the sampled loans

identified by NCUA, Defendants shall submit any expert reports regarding that re-

underwriting on August 14, 2015.

c) If Defendants have re-underwritten the NCUA sampled loans, Defendants shall submit

any expert reports regarding that re-underwriting on October 16, 2015.

d) Expert reports shall be produced separately in each Action, absent agreement of the

parties or leave of the Court.


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12. Pre-Trial Schedule

The following pre-trial schedule shall apply to each of the Actions, vacating any prior

schedules in any particular Action:

a) Fact discovery to be completed by July 17, 2015. Each party shall make a significant

document production by June 6, 2014 and shall substantially complete its document

production by October 31, 2014. Depositions as to party fact witnesses may begin on

October 31, 2014. Party Rule 30(b)(6) depositions and non-party depositions may

proceed before October 31, 2014.

b) Expert discovery to be completed by January 15, 2016.

c) Any summary judgment motions are to be filed separately in an Action no later than

February 5, 2016, and fully submitted by March 25, 2016.

13. Trial Schedule

a) The SDNY trials shall proceed in two tranches, the first occurring in June 2016, and

the second in September 2016. All counsel will reserve both of these trial dates.

b) Case assignment into the two SDNY trial tranches shall await the completion of fact

discovery. A conference shall be scheduled for September 2015 to make case

assignments. Defense counsel may, however, at any time prior to the completion of

fact discovery, make a request for case assignment into the two trial tranches.


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c) In the Kansas and California Actions, trial dates shall await the completion of fact

discovery, provided that all trials shall be completed by March 2017. Conferences will

be scheduled for September 2015 in the Kansas and California Actions to discuss a

schedule for trials in those Actions.

SO ORDERED:

Dated: April 9, 2014 /s/ Denise Cote

United States District Court Judge

Dated: April 9, 2014 /s/ George H. Wu


Dated: April 9, 2014 /s/ John W. Lungstrum


Dated: April 9, 2014 /s/ James P. O’Hara

United States Magistrate Judge


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