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Reversed - David H. Luther et al. v. Country Wide Financial Corporation et al.

Reversed - David H. Luther et al. v. Country Wide Financial Corporation et al.

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Published by Foreclosure Fraud
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Categories:Types, Research, Law
Published by: Foreclosure Fraud on May 20, 2011
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05/20/2011

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Filed 5/18/11
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIASECOND APPELLATE DISTRICTDIVISION FIVEDAVID H. LUTHER et al.,Plaintiffs and Appellants,v.COUNTRYWIDE FINANCIALCORPORATION et al.,Defendants and Respondents.B222889(Los Angeles CountySuper. Ct. No. BC380698)APPEAL from a judgment of the Superior Court of Los Angeles County.Emilie H. Elias, Judge. Reversed.Robbins Geller Rudman & Dowd, Spencer A. Burkholz, Kevin K. Green, ThomasE. Egler, Scott H. Saham; Barroway Topaz Kessler Meltzer & Check, Andrew L. Zivitz,Lauren W. Pederson, Jennifer L. Joost for Plaintiffs and Appellants.Goodwin Procter, Lloyd Winawer, Joshua S. Lipshutz, Brian E. Pastuszenski, InezH. Friedman-Boyce for Defendants and Respondents Countrywide Financial Corporation,Countrywide Home Loans, Inc., CWALT, Inc., CWMBS, Inc., CWABS, Inc., CWHEQ,Inc., Countrywide Capital Markets, Countywide Securities Corporation, N. Joshua Adler.Paul, Hastings, Janofsky & Walker, William F. Sullivan, Joshua G. Hamilton, D.Scott Carlton, Peter Y. Cho for Defendants and Respondents Ranjit Kripalani, Jennifer S.Sandefur.Orrick, Herrington & Sutcliffe, Michael C. Tu, Michael D. Torpey, PenelopeGraboys Blair for Defendant and Respondent David Sambol.
 
 2Gibson, Dunn & Crutcher, Dean J. Kitchens, Alexander K. Mircheff forDefendants and Respondents Banc of America Securities LLC, Barclays Capital Inc., J.P.Morgan Securities LLC, BNP Paribas Securities Corp., Citigroup Global Markets Inc.,Credit Suisse Securities (USA) LLC, Edward D. Jones & Co., L.P., Deutsche Bank Securities Inc., Goldman, Sachs & Co., RBS Securities Inc., HSBC Securities (USA)Inc., Merrill Lynch, Pierce, Fenner & Smith, Incorporated, Morgan Stanley & Co.Incorporated, UBS Securities LLC.Bingham McCutchen, Jennifer M. Sepic for Defendant and Respondent David A.Spector.Caldwell Leslie & Proctor, Christopher G. Caldwell, David C. Codell, Jeffrey M.Hammer for Defendant and Respondent Stanford L. Kurland.DLA Piper, Shirlie Fabbri Weiss, David Priebe, Nicolas Morgan for Defendantand Respondent Eric P. Sieracki._______________This case presents a single issue of statutory interpretation. The federal SecuritiesAct of 1933 ("the 1933 Act"), as amended by the Securities Litigation Uniform StandardsAct ("SLUSA"), provides for concurrent jurisdiction for cases asserting claims under the1933 Act, except as specifically provided with regard to certain class actions.Defendants contend, and the trial court found, that the exception includes thiscase, which is, in the parlance of the statute, a "covered class action" bringing causes of action under federal law in connection with "non-covered" securities. Plaintiffs argue tothe contrary. We agree with plaintiffs, and thus reverse the judgment.Factual and Procedural SummaryThe case, and its procedural history, can be briefly described. Plaintiffs andappellants are David Luther and a number of pension funds and other institutionalinvestors. Defendants are Countrywide Financial Corporation and several of its
 
 3subsidiaries, several individuals, and several financial institutions.
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The complaintalleged that defendants issued, and plaintiffs bought, mortgage-backed securities,between 2005 and 2007. These securities were subject to the rules and regulationspromulgated under the 1933 Act, but were not listed on a national exchange.The complaint brought causes of action under the Securities Act of 1933, andimportantly, included no state law causes of action. Factual allegations includedallegations of false and misleading registration statements and prospectus supplements.The action was brought on behalf of all persons and entities who bought thosesecurities from defendant in that time period.Defendants demurred on the ground that the state court had no jurisdiction underthe 1933 Act, as amended by the SLUSA. Those demurrers were sustained, and the casedismissed.DiscussionOur review is de novo, both because this is an appeal from judgment after ademurrer was sustained (
 McCall v. PacifiCare of California, Inc.
(2001) 25 Cal.4th 412,415) and because the sole issue is one of statutory interpretation. (
 Regents of Universityof Cal. v. Superior Court 
(1999) 20 Cal.4th 509, 531.)The rules governing our review are well established. When reviewing a demurrer,we assume that all facts pleaded in the complaint are true. (
Cantu v. Resolution Trust Corp.
(1992) 4 Cal.App.4th 857, 877.)The rules of federal statutory interpretation are much the same as those used whenconstruing California statutes. (
 Black v. Department of Mental Health
(2000) 83Cal.App.4th 739.) "[I]n interpreting a statute a court should always turn first to one,cardinal canon before all others. . . . courts must presume that a legislature says in astatute what it means and means in a statute what it says there. [Citations.] When the
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All have joined in Countrywide's brief.

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