Weil, Gotshal & Manges LLP

Weil Secures Significant Victory for Washington Mutual, Inc. Before Second Circuit

(November 27, 2012, Weil News)


Weil obtained a significant victory on behalf of our client Washington Mutual, Inc. (“WMI”) on November 20, 2012, when the United States Court of Appeals for the Second Circuit affirmed the final approval of a nationwide class action settlement in Cassese et al. v. Washington Mutual Inc., et al., and held, inter alia, that the class action settlement notice mailed to more than 5.7 million class members satisfied both Fed. R. Civ. P. 23(h) and due process.

Following oral argument on certain objectors’ appeals of the approval of the nationwide class settlement, the Second Circuit agreed with WMI’s arguments and rejected the objectors’ challenges to the timing, form, and content of the class notice in the nationwide class settlement that had been approved by the United States District Court for the Eastern District of New York (Spatt, J.) and the United States Bankruptcy Court for the District of Delaware (Walrath, J.). The Second Circuit further agreed that the United States Court of Appeals for the Ninth Circuit’s decision in In re Mercury Interactive Corps. Secs. Litig. regarding Fed. R. Civ. P. 23(h) and due process, which objectors relied heavily on and argued mandated a contrary result, was distinguishable based on the facts of the instant case.

In the District Court, Weil had achieved a very favorable nationwide settlement for WMI of numerous claims alleging that WMI was directly and indirectly liable for the acts of its former subsidiaries, including Washington Mutual Bank (“WMB”), for charging certain fees prior to the satisfaction and settlement of class members’ home loans, mortgage loans, co-op loans, home equity loans, or home equity lines of credit. Nationwide class actions had been certified against WMB and WMI (prior counsel handled the class certification motions). After Weil was retained as counsel for WMI, Weil engaged in extensive dispositive motion practice, and ultimately filed a Rule 23(f) petition with the Second Circuit seeking to de-certify the nationwide class against WMI in October 2010. Following protracted settlement negotiations while the Rule 23(f) petition was pending, Weil achieved the settlement of the nationwide class claims during the trial of the confirmation of WMI’s plan of reorganization in the United States Bankruptcy Court for the District of Delaware in December 2010. The Bankruptcy Court subsequently approved the nationwide class settlement on May 2, 2011 (after the District Court’s preliminary approval on March 10, 2011), and the District Court granted final approval of the settlement on September 21, 2011. Certain objectors appealed to the Second Circuit, which has affirmed the District Court’s final approval order in its entirety.

The Weil team was led by partners John P. Mastando III and Gregory Silbert in New York, and included associates Vanessa W. Chandis, Rachel Barish Swartz, and Luna Ngan in New York.
   
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