A California appellate court reinstated a lawsuit filed by several pension funds, among other plaintiffs, against Countrywide Financial and several of its subsidiaries and other financial institutions, claiming the mortgage company misled investors into buying risky mortgage-backed securities, according to a copy of the court’s ruling obtained by P&I Daily.
The lead plaintiffs in the class-action suit include the $2.9 billion Vermont Pension Investment Committee, Washington State Plumbing & Pipefitting Pension Trustand $10.6 billion Maine State Retirement System. The size of the pipefitting pension trust couldn’t be learned by press time.
The appeals court in San Francisco ruled that Los Angeles County Superior Court Judge Emilie H. Elias erred last year when she dismissed the case citing lack of subject matter jurisdiction, which means the case should have been brought in federal and not state court.
The California Court of Appeals is now expected to send the case back to the Los Angeles County Superior Court, stated Ivan Alexander, spokesman for the plaintiffs’ law firm, Kessler Topaz Meltzer & Check.