Blackrock Balanced Capital Portfolio (Fi) vs. Deutsche Bank Trust Company Americas

Motion to Compel

Cal. Super. - 4th Dist.March 25, 2016

MORGAN, LEWIS Bockius LLP ATTORNEYS AT LAW OFFICE ADDRESS ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 & MORGAN, LEWIS & BOCKIUS LLP Rollin B. Chippey, II, Bar No. 107941 rollin.chippey @morganlewis.com Elizabeth A. Frohlich, Bar No. 195454 elizabeth.frohlich@morganlewis.com Joseph E. Floren, Bar No. 168292 joseph.floren @morganlewis.com Phillip J. Wiese, Bar No. 291842 phillip.wiese @morganlewis.com Cristina A. Ashba, Bar No. 294065 cristina.ashba@morganlewis.com One Market, Spear Street Tower San Francisco, CA 94105-1596 Tel: +1.415.442.1000; Fax: +1.415.442.1001 Attorneys for Defendant DEUTSCHE BANK NATIONAL TRUST COMPANY and DEUTSCHE BANK TRUST COMPANY AMERICAS ELECTRONICALLY FILED Superior Court of Califomia, County of Orange 12/07/2017 at 04:20:00 PM Clerk of the Superior Court By Olga Lopez, Deputy Clerk SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF ORANGE BLACKROCK BALANCED CAPITAL PORTFOLIO (FI), ET AL., Plaintiff, VS. DEUTSCHE BANK NATIONAL TRUST COMPANY and DEUTSCHE BANK TRUST COMPANY AMERICAS, Defendants. Case No. 30-2016-00843062-CU-BC-CXC CLASS ACTION DEFENDANTS DEUTSCHE BANK NATIONAL TRUST COMPANY AND DEUTSCHE BANK TRUST COMPANY AMERICAS’ NOTICE OF MOTION TO COMPEL FURTHER RESPONSES TO FIRST SET OF SPECIALLY- PREPARED INTERROGATORIES AND SECOND SET OF REQUESTS FOR PRODUCTION OF DOCUMENTS AND THINGS; MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF Date: January 2, 2018 Time: 9:00 a.m. Dept.: CX-103 Judge: Hon. Ronald L. Bauer Trial Date: Not Set Action Filed: March 26, 2015 Case No. 30-2016-00843062-CU-BC-CXC DB1/94563413.9 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL 1 || TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on January 2, 2018 at 9:00 a.m. in Department CX103 of the above-entitled Court, located at 751 W. Santa Ana Blvd., Santa Ana, California 92701, Defendants Deutsche Bank National Trust Company and Deutsche Bank Trust Company Americas (the “Trustees”) will, and hereby do, move, pursuant to California Code of Civil Procedure sections 2030.300 and 2031.310, for an order compelling Plaintiffs to further respond ~N O Y a B A W to the Trustees’ First Set of Specially-Prepared Interrogatories dated October 20, 2017 (the 8 || “Interrogatories”) and to produce documents responsive to the Trustees’ Second Set of Requests 9 || for Production of Documents and Things dated October 20, 2017 (“Second Set of RFPs”) within 10 || five days of the Court’s order. 11 Good cause exists to grant the relief requested by the Trustees on the grounds that 12 || (1) Plaintiffs’ responses to the Interrogatories are neither complete nor straightforward, do not 13 || contain factual information, and do not comply with Plaintiffs’ obligations under Sections 14 || 2030.210 and 2030.220 of the Code of Civil Procedure; (2) Plaintiffs’ responses to the vast 15 || majority of the Interrogatories purport to rely upon Section 2030.230 of the Code of Civil 16 || Procedure but do not satisfy its terms, make no specification of any documents containing the 17 || responsive information as to each Plaintiff, and refer only generally to unidentified documents, 18 || which have not been produced or otherwise made available; (3) the Interrogatories seek relevant 19 || information pertaining to: (a) whether Plaintiffs are the real parties in interest here, including 20 || whether the claims at issue here did in fact transfer to Plaintiffs; (b) Plaintiffs’ claims in the case, 21 || including alleged breaches of representations and warranties regarding the mortgage loans in the 22 || Trusts, defects in mortgage loan files, and alleged Events of Default and other purported servicer 23 || violations, and the Trustees’ alleged discovery or knowledge thereof; (c) whether the Trustees’ 24 || purported breaches caused Plaintiffs’ damages; and (d) what damages, if any, have been suffered; 25 || and (4) the documents responsive to the Second Set of RFPs seek documents supporting 26 || Plaintiffs’ responses to the Interrogatories and are relevant for the same reasons the 27 || Interrogatories are relevant. 28 MORGAN, LEWIS & Bockius LLP ATIORNRS ATLA 1 Case No. 30-2016-00843062-CU-BC-CXC OFFICE ADDRESS DB1/94563413.9 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL MORGAN, LEWIS Bockius LLP ATTORNEYS AT LAW OFFICE ADDRESS ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 & The Trustees, through their counsel, made a reasonable and good faith effort to meet and confer with Plaintiffs regarding Plaintiffs’ deficient responses to the Interrogatories and Second Set of RFPs. Declaration of Joseph E. Floren dated December 5, 2017, 9, Ex. 6. Plaintiffs ignored multiple requests to meet and confer and then brushed off a third written request for a meet and confer conference. This Motion is based upon this Notice of Motion, the Memorandum of Points and Authorities herein, the accompanying Separate Statement in Support of the Motion, the Declaration of Joseph E. Floren and exhibits thereto, all pleadings and documents on file in this action, all other matters of which this Court may take judicial notice, and on such other matters as may be presented to the Court at, or prior to, the hearing on this Motion. Dated: December 7, 2017 MORGAN, LEWIS & BOCKIUS LLP By /s/Joseph E. Floren Joseph E. Floren Attorneys for Defendants DEUTSCHE BANK NATIONAL TRUST COMPANY and DEUTSCHE BANK TRUST COMPANY AMERICAS 2 Case No. 30-2016-00843062-CU-BC-CXC DB1/94563413.9 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 MORGAN, LEWIS 2 8 Bockius LLP ATTORNEYS AT LAW SAN FRANCISCO TABLE OF CONTENTS Page LL. INTRODUCTION ...outiiiiiiiiiiitit ieee eects sects seas saber ese saaesebeeae esses sree ean 1 IL. STATEMENT OF RELEVANT FACTS conus suse a cama avsnnn ss susnses awsssan sn census avsasss is sasssn is 2 III. ARGUMENT «cetera sree saben estes sae sane eens 4 A. Legal ‘STATAATAS : cs: cama vsssn so susnzes acuss nan sssunss svmssis gs essa 55s 55 45 35881558 3055545 58 SAE 53 SERRE 30.52 4 B. Plaintiffs’ Interrogatory Responses Referencing Unproduced, Unidentified Documents "Violate ihe Rules «wmmmemmmmmmsssmansmmesmmsenrmsmmersmmmms: 9 C. The Interrogatories Seek Information Critically Relevant to the Claims and Defenses in This Action, as Well as to Class Certification.............cccccooveveveeeeennn.... 7 I. Requests Pertaining to the Chain of Transfer of Certificates Between Investors in January 2009 to the Present Are Relevant to Standing, the Claims and Defenses, and Class Certification...................... 7 2. Requests Pertaining to Plaintiffs’ Claims at Issue in This Litigation Are Relevant to the Merits and Class Certification ........c..cceceeeveereennenne 11 3. Requests Pertaining to Purchases, Sales, and Valuations of Plaintiffs’ CettifiCatES uu suse su zamssn svmussn seuss somssn su sumsusi sss ss i sasass swarm 14 D. Good Cause Exists to Compel Production of Documents Requested in the LrusiEes” Set SECO BF TRIP PE x uwsmmmmmesssmmsmmssmmssmms mms S rs 15 IV. CONCLUSION .....ooititet eects eects sete eects sate sete ease estes sees sane eseenneens 15 i Case No. 30-2016-00843062-CU-BC-CXC DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL 1 TABLE OF AUTHORITIES 2 Page(s) 3 || Cases 4 | Blackrock Allocation Target Shares: Series S Portfolio v. Wells Fargo Bank, Nat’l Ass'n, > No. 14-cv-9371, et al., 2017 WL 3610511 (S.D.N.Y. Aug. 21, 2017) cccceevreierieeieeeniieeie 13 6 Blackrock Balanced Capital Portfolio FI, et al. v. Deutsche Bank Nat'l Tr. Co., 7 et al. INO. 14-CV-9307 (SDNY) titties steer t eesti eee ete e abe sateen sees s ee saee eens 2 8 9 Blackrock Balanced Capital Portfolio FI, et al. v. Deutsche Bank Nat’l Tr. Co., etal. 10 No. 651865/2014 (N.Y. SUP. Ct. N.Y. CLY.) eieeiieieiiiesiie cites ete esate evere ee seas 2 11 || Bronx Entm’t, LLC v. St. Paul’s Mercury Ins. Co., 265 F. Supp. 2d 359 (S.D.NLY. 2003)... ueieiieeiieeieeeieesiie eit e estes sass aie e e 10, 14 12 Burke v. Superior Court, 13 TL Call, 2d) ZG 1D mavens owns tasssas es sss SO A SHAG 12 14 cashcall, Inc. v. Superior Court, 15 159 Cal. App. 4th 273 (2008)... .eecueiieeieitie etter teste eisai ete e sates tte eee e tee stbeesbe eae e esas esas esse anneas 9 16 Commerzbank AG v. Deutsche Bank Nat'l Trust Co., 15-cv-10031, 2017 WL 564089 (S.D.N.Y. Feb. 10, 2017) cceveeviieeieeeieeeeeeeeeeeeie vee 11 17 Connelly v. State Farm Mut. Auto. Ins. Co., 18 135 A3d 1271 (DEL. 2016) «eevee c ases eee sees sbee ssa ese e en aesbae eens 14 19 || In re Countrywide Fin. Corp. Mortg.-Backed Sec. Litig., 20 2:11-ML-02265-MRP, 2014 WL 3529677 (C.D. Cal. July 14, 2014) ....cooveerieeieeeeeieee 11 71 De Martino v. Rivera, 148 AJ. 20 S68 (NY ADE. DIV TOBY) sosumusi swmsnn oo sums sss. o6 55055 55555515 5555558 5455055.50 55555508 S55555738 55 13 22 Deyo v. Kilbourne, 23 84 Cal. App. 3d 771 (1978), superseded on other grounds by statute as stated in Guzman v. Gen. Motors Corp., 154 Cal. App. 3d 438 (1984) ......cevriiiiniiiniiiiieeenieeee, 5,7 24 Diesel Props S.r.l. v. Greystone Bus. Credit Il LLC, 25 631 F.3d 42 (2d Cit. 2011) ieee sess ese 13 2 Fixed Income Shares: Series M v. Citibank N.A., 27 130 FE. Supp. 3d. 842, 851, 854 (SB. DDIN.Y: ZOE Juans sumsnsnmsansn.s sms coves in sasns sovasss oo ams558 555553855 13 MORGAN, LEWIS 2 8 Bockius LLP ATICRNEEAT LAW ii Case No. 30-2016-00843062-CU-BC-CXC DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MORGAN, LEWIS & Bockius LLP ATTORNEYS AT LAW San Francia 0 TABLE OF AUTHORITIES (continued) Page(s) Gluck v. Amicor, Inc., 487 F. Supp. 608 (S. DN.Y. 1980) ....uiiitieeiiieieeetieiie eects ete se s este e eee ee eee 11 Hughes Elect. Corp. v. Citibank Delaware, 120 Cals Appi. AH. ZN (ZOOL Ys usm. orn osmmnse cosas ss mss 555555.56 50505555 555555508 5555557 SAVR035.50 35555508 SRH553855 11 IKB Int’l S.A. v. Bank of Am., 12 Civ. 4036, 2014 WL 1377801 (S.D.N.Y. Mar. 31, 2014)..cccceviieiiaiiiiieie eee 11 Kirkland v. Superior Court, 05 Cal. APP. 4th 92 (2002)...cceeieeeieeieeetieeiie eee tte eee se s sbae sabe st stes esas esse anne esas ssee eens 15 Phx. Light SF Ltd. v. Bank of N.Y. Mellon, No. 14-cv-10104-VEC, 2017 WL 3973951 (S.D.N.Y. Sept. 7, 2017) ccceeevreeiiiiieiienie een 12 Phx. Light SF Ltd. v. Deutsche Bank Nat’l Tr. Co., 172 F. Supp. 3d 700, 713 (SDNY. 2016) ..uuiiiiiiieeiie c tes cease site severe seas 13 Poldon Eng’g & Mfg. Co. v. Zell Elec. Mfg. Co., I Misc. 2d, 155 NLUY.S. 2d 115 (1955) cneieiie cease eee 10, 14 Ret. Bd. of the Policemen’s Annuity & Benefit Fund of the City of Chi. v. Bank of N.Y. Mellon, TT8 Faddl 152 (020 CIB, ZA csrusmenssonss owns sss omnis oss ass sos sass ah sss (6S AS SHAG 12 Reznick v. Bluegreen Resorts Mgmt., Inc., 62 N.Y.S.3d 460 (N.Y. APP. DIV. 2017) covets sees teste sees seas 14 Royal Park Invs. SA/NV v. Bank of N.Y. Mellon, No. 14-cv-6502, 2016 WL 899320 (S.D.N.Y. Mar. 2, 2016) .....ceecueeiiiiiiiiieeie eee 13 Royal Park Invs. SA/NV v. Bank of N.Y. Mellon, No. 14-cv-6502, 2017 WL 3835339 (S.D.N.Y. Aug. 30, 2017) eeeviieiiaiieiienie cece 8 Royal Park Invs. SA/NV v. HSBC Bank USA, Nat’l Ass'n, 109 F. Supp. 3d 587, 601 (S.D.N.Y. 2015) icici eee eee 13 RPIv. DBNTC, 2017 WIL, 1331288 (SD INY 5 ZOLT) i550 ssn sss aston assis sos assis 50505545 50550855 955355 58 53 8,9 Said v. Jegan, 146 Cal. App. 4th 1375 (2007) ..eecueeeiiieiieeiie eee steers te eateries sees sabesebe esse e esas eaae anne 10 Sharma v. Skaarup Ship Mgm’t Corp., 016 F.2d 820 (2d Cir. 1990) .....eieieieeiietietie eects se s sate siete tee sta e beara esas ene eene 13 iii Case No. 30-2016-00843062-CU-BC-CXC DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL 1 TABLE OF AUTHORITIES (continued) 2 Page(s) 3 || Stout St. Fund I, L.P. v. Halifax Grp., LLC, 4 48 N.Y.S. 3d 438 (N.Y. APP. Div. 2017) ceeieeiiiieee ects eee 10 5 TPZ Corp. v. Dabbs, 808 N.Y.5. 2d 746 (N.Y, APD. Di. ZOOGY sxsu swsssn.sn msn suessns swam oss 65555558 55555555 5555550 5455555.5855 10 6 Universal Underwriters Ins. Co. v. Superior Court, 7 250 Cal. APP. 2d 722 (1967) ceeeeeeeeeeeeeeeeeeeeeeete e e eaeee st eesa ee sate e e ee eae eee 12 8 || Wash. Mut. Bank v. Superior Court, 5 24 Cal. 4th 906 (2001) eee ects eee eee eee eee eee e seer ae ee erate ee ee nate e ee earae ae eans 13, 14 10 Wells Fargo Bank N.A. v. Sovereign Bank, N.A., 44 F, Supp. 3d 394, 408 (5. DN.Y 201A), sucasssssonmsssnsnsssanssmmnssnemmnsessumsssssnsns a e smasesn ns esame 10 11 Williams v. Superior Court, 12 3 Cal. 5th 531, 541 (2017) uueeeeeeieeee eee eee eee eects eee eee ae eee aae eee e sabre e ee earae ee ean 4,5,6 13 || Yelp Inc. v. Superior Court, 14 17 Cal. APP. Sth 1 (2017) cenit eters eae eaters bee sateenbe enna saan 4,5 5 Statutes 16 Cal. Civ. Proc. Code § 2030.2200(Q) vvvveeeeerreieeeeieee eect eee eee eee eee eee ae eee tee a er-ae ae eeaa-t ae eeeaeae ee earae ae eearaeteeeearaeeeann 5 17 § 2030.220(D) cu eeeriereee ieee eee eee e eee eee e eee essere area ae ee ee ebab be ae ae ae ee eitarbraeaeaeeeenaans 5 § 2030.230 cee eee ee esas err bree tees eee bb arte tees an anan 5,6,7,15 18 § 203 1.310 i eee rete esas erate te te eee e eat ar arte ee seen sraraeae reas 15 19 || Rules and Regulations 20 || New York Civil Practice Law and RUIES 202 .......v.ovveooeeooeeoeoeeeeeee eee eee eee eee ee sees sos 11 21 Other Authorities 22 1 Witkin, Summary of Cal. Law 11th (Contracts) § 95 (2017) c..ceveuieriiiiiiiiiiiieieneeeeeeeieeeieene 9 23 24 25 26 27 28 Mogens, [neste i Case No. 30-2016-00843062-CU-BC-CXC i DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL MORGAN, LEWIS Bockius LLP ATTORNEYS AT LAW OFFICE ADDRESS ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 & MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Defendants Deutsche Bank National Trust Company and Deutsche Bank Trust Company Americas (the “Trustees”) bring this motion to compel Plaintiffs to provide full and complete substantive responses to the Trustees’ First Set of Specially-Prepared Interrogatories to Plaintiffs dated October 20, 2017 (the “Interrogatories”) and the Trustees’ Second Set of Requests for Production of Documents and Things dated October 20, 2017 (“Second Set of RFPs”). Plaintiffs will soon seek to certify an unprecedented class action in this case involving potentially thousands of disparate investors in relation to over 450 separate contracts. Each of these contracts concerns a separate and distinct Trust organized by third parties to hold thousands of residential mortgages-in which Plaintiffs claim thus far wholly unspecified interests in Certificates allegedly issued by such trusts.! Plaintiffs claim that the Trustees breached obligations as indenture trustee under the contracts governing each of the Trusts, but Plaintiffs do not claim to have owned the unidentified Certificates at the times of such (unspecified, but supposedly occurring in about January 2009) breaches. Plaintiffs, however, have failed to respond substantively to a single special interrogatory or identify a single document regarding issues crucial to the claims and defenses in this case, including their own alleged interests in this suit, as well as class certification. Notably, although Plaintiffs first sued on these claims over three years ago, Plaintiffs have yet to identify a single specific instance of alleged breach of contract by either Trustee. Making matters worse, while Plaintiffs purport to assert the claims and damages of investors who held the Certificates at issue in this case in January 2009, Plaintiffs have provided literally no information regarding who those investors are, when they bought the Certificates at issue, the price at which such Certificates were bought or sold, or what losses were allegedly incurred. Plaintiffs have not even provided information regarding their own ownership of the unidentified Certificates upon which they sue. Each trust issued numerous, usually more than a dozen, different classes of Certificates having different rights. Plaintiffs would no doubt prefer to conceal such information ! Such Certificates are commonly known as Residential Mortgage-Backed Securities or “RMBS.” 1 Case No. 30-2016-00843062-CU-BC-CXC DB1/94563413.9 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL MORGAN, LEWIS Bockius LLP ATTORNEYS AT LAW OFFICE ADDRESS ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 & in this case as long as possible; the Trustees have strong reason to believe that most or all of them purchased their Certificates only recently, years after the alleged breaches, at prices yielding handsome profits. These facts will show that most or all Plaintiffs have not only failed to suffer a single penny of purported loss, but have actually profited massively from their investments. The discovery sought by the Trustees pertains directly to Plaintiffs’ standing to pursue the claims in this case or lack thereof, as well as issues of causation, damages and statutes of limitations related to these aged claims. These issues, in turn, pertain directly to Plaintiff’s rapidly approaching class certification motion, currently due on December 17, 2017. The Trustees have made every effort to meet and confer regarding their deficient discovery responses, but Plaintiffs ignored the Trustees repeated requests for a meet and confer conference, and have stated only that they would willing to meet and confer at some unidentified “appropriate time” in the future. It is essential that the Trustees receive Plaintiffs’ responses to the requested discovery well before the Trustees file their opposition to Plaintiffs’ anticipated class certification motion, with sufficient time to provide the Court with a detailed analysis in that opposition that the Trustees expect will (a) show that Plaintiffs lack standing to sue; and (b) demonstrate a blizzard of individualized issues precluding class certification, among other things. The Trustees respectfully request an order compelling Plaintiffs to provide responses to each of the Trustees’ discovery requests within five days of an order by this Court. II. STATEMENT OF RELEVANT FACTS Plaintiffs initially sued the Trustees on these claims on June 18, 2014 in New York state court. See Blackrock Balanced Capital Portfolio FI, et al. v. Deutsche Bank Nat’l Tr. Co., et al., No. 651865/2014 (N.Y. Sup. Ct. N.Y. Cty.), Dkts. #1, 2. On November 24, 2014, Plaintiffs moved to voluntarily dismiss their case without prejudice (Dkts. #32-36) and then filed a new complaint against the Trustees in the United States District Court for the Southern District of New York. See Blackrock Balanced Capital Portfolio FI, et al. v. Deutsche Bank Nat’l Tr. Co., et al., No. 14-cv-9367 (S.D.N.Y.), Dkt. #1. After the federal court dismissed Plaintiffs’ complaint with respect to hundreds of Trusts (see Dkt. #127), Plaintiffs filed a complaint in this Court with respect to most of those Trusts on March 25, 2016. See Dkt. #1 herein. 2 Case No. 30-2016-00843062-CU-BC-CXC DB1/94563413.9 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL MORGAN, LEWIS Bockius LLP ATTORNEYS AT LAW OFFICE ADDRESS ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 & On April 25, 2017, the Trustees served their First Set of Requests for Production of Documents and Things to Plaintiffs (the “First Set of RFPs”). See Declaration of Joseph E. Floren filed concurrently herewith (“Floren Decl.”), {[3. Plaintiffs have yet to produce any documents in this case responsive to those initial requests. Id. On October 20, 2017, the Trustees served the Interrogatories and Second Set of RFPs on Plaintiffs. Floren Decl., |] 4-5, Exs. 1, 2. The Trustees also served their First Set of Requests for Admission and Form Interrogatories (together with the Interrogatories, the “October 20 Discovery Requests”). In the Interrogatories, the Trustees sought information regarding three general categories of information: e Plaintiffs’ contentions in the case and identification of all alleged breaches of contract asserted in this case, including all alleged breaches of representations and warranties (“R&W breaches”) regarding the mortgage loans in the Trusts, all defects in mortgage loan files, and all alleged Events of Default (“EODs”) and other purported servicer violations, as well as when and how the Trustees allegedly discovered or obtained actual knowledge of such breaches; e Information regarding Plaintiffs’ standing to sue for alleged breaches of contract allegedly accruing as early as 2009, including information regarding Plaintiffs’ ownership of the Certificates at issue, when Plaintiffs purchased and sold the Certificates, the purchase and sale prices of Certificates, the terms by which they acquired the Certificates, information about the persons from whom Plaintiffs purchased their Certificates, and similar information for each owner in the entire chain of transfer from the time of the first alleged breaches on which Plaintiffs are now suing to the present; and e Information relating to potential damages of the Certificates, including any valuations Plaintiffs had performed on their Certificates. The Second Set of RFPs requested production of all documents identified in the Interrogatories and Form Interrogatories. See RFP Nos. 180-81. 3 Case No. 30-2016-00843062-CU-BC-CXC DB1/94563413.9 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL MORGAN, LEWIS Bockius LLP ATTORNEYS AT LAW OFFICE ADDRESS ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 & On November 21, 2017, Plaintiffs served their Responses and Objections to the Trustees’ Interrogatories (the “Interrogatory Responses”) and certain other requests. Floren Decl., q 6, Ex. 3. Plaintiffs failed to provide virtually any information. Instead, in the vast majority of the Interrogatory Responses, Plaintiffs only referred generically to “documents produced or to be produced” that are responsive to certain requests in the Trustees’ First Set of RFPs. Plaintiffs, however, have not produced documents responsive to those requests; nor have they produced anything in response to the Second Set of RFPs; nor have Plaintiffs identified any such documents in any other manner. See Floren Decl., {{ 6-9, Exs. 3-5. Nor do their Interrogatory Responses establish why Plaintiffs would be entitled to force the Trustees to pick through documents rather than providing the requested information about Plaintiffs’ own alleged claims. Counsel for the Trustees attempted repeatedly to meet and confer with counsel for Plaintiffs regarding their deficient responses, sending email correspondence on November 22, 2017 and November 28, 2017, see Floren Decl., 9, Ex. 6. Counsel for Plaintiffs ignored these requests. Id. After a third written request, Counsel for Plaintiffs stated only that they would meet and confer at some unidentified “appropriate time” in the future. Id. Plaintiffs’ Counsel also ignored the Trustees’ request for a stipulated agreement to extend the class certification deadline, to provide the parties further time to informally resolve these discovery issues. Plaintiff’s class certification motion is currently due on December 17, 2017, and the Trustees’ opposition due on February 1, 2018. The Trustees have filed a concurrent request for a case management conference to extend these deadlines in light of the circumstances. III. ARGUMENT A. Legal Standards As the Supreme Court recently reiterated, “[i]n the absence of [a] contrary court order, a civil litigant’s right to discovery is broad.” Williams v. Superior Court, 3 Cal. 5th 531, 541 (2017); see also Yelp Inc. v. Superior Court, 17 Cal. App. 5th 1, at *8 (2017). “‘[A]ny party may obtain discovery regarding any matter, not privileged, that is relevant to the subject matter involved in the pending action . . . if the matter either is itself admissible in evidence or appears reasonably calculated to lead to the discovery of admissible evidence.” Williams, 3 Cal. 5th at 4 Case No. 30-2016-00843062-CU-BC-CXC DB1/94563413.9 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL MORGAN, LEWIS Bockius LLP ATTORNEYS AT LAW OFFICE ADDRESS ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 & 541 (quoting Cal. Civ. Proc. Code § 2017.010). California statutes governing discovery “‘must be construed liberally in favor of disclosure unless the request is clearly improper by virtue of well-established causes for denial.” Id. (quoting Greyhound Corp. v. Superior Court, 56 Cal. 2d 355, 377 (1961)); see also Yelp, 17 Cal. App. Sth at *8. Thus, “‘disclosure is a matter of right unless statutory or public policy considerations clearly prohibit it.””” Williams, 3 Cal. 5th at 541 (quoting Greyhound, 56 Cal. 2d at 378); see also Yelp, 17 Cal. App. Sth at *8. B. Plaintiffs’ Interrogatory Responses Referencing Unproduced, Unidentified Documents Violate the Rules All of Plaintiffs’ Interrogatory Responses are facially deficient because they fail to provide any substantive responses and instead refer to general categories of unproduced and unidentified documents. Under California law, a responding party’s responses to interrogatories must be “as complete and straightforward as the information reasonably available to the responding party permits,” and to the extent an interrogatory cannot be answered completely, the responding party must answer “to the extent possible.” Cal. Civ. Proc. Code § 2030.220(a), (b). Further, a responding party may respond to an interrogatory by referencing certain documents only under specific circumstances enumerated in Section 2030.230, where: (1) the response to the interrogatory “would necessitate the preparation or the making of a compilation, abstract, audit, or summary of or from the documents of the party to whom the interrogatory is directed,” and (2) “the burden or expense of preparing or making it would be substantially the same for the party propounding the interrogatory as for the responding party.” Id. § 2030.230. Importantly, the law also requires that any response ‘“‘specify[ing] the writings from which the answer may be derived or ascertained” must “be in sufficient detail to permit the propounding party to locate and to identify, as readily as the responding party can, the documents from which the answer may be ascertained.” Id. Further, where an interrogatory “require[s] the responding party to make reference to a pleading or document, the pleading or document should be identified and summarized so the answer is fully responsive to the question.” Deyo v. Kilbourne, 84 Cal. App. 3d 771, 784 (1978), superseded on other grounds by statute as stated in Guzman v. Gen. Motors Corp., 154 Cal. App. 3d 438 (1984). 5 Case No. 30-2016-00843062-CU-BC-CXC DB1/94563413.9 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL MORGAN, LEWIS Bockius LLP ATTORNEYS AT LAW OFFICE ADDRESS ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 & Importantly, the party propounding interrogatories does not bear the burden of demonstrating that “an interrogatory seeks relevant, discoverable information.” Williams, 3 Cal. Sth at 541. Rather, the party resisting the interrogatories bears the burden of justifying its failure to provide the requested information. Specifically, the party propounding interrogatories: is entitled to demand answers to its interrogatories, as a matter of right, and without a prior showing, unless the party on whom those interrogatories are served objects and shows cause why the questions are not within the purview of the code section. While the party propounding interrogatories may have the burden of filing a motion to compel if it finds the answers it receives unsatisfactory, the burden of justifying any objection and failure to respond remains at all times with the party resisting an interrogatory. Id. (emphasis added and citations and quotations omitted). Here, Plaintiffs fail utterly to meet the requirements of the law. To start, Plaintiffs have failed to provide complete and straightforward interrogatory responses, leaving the Trustees with no further information than they had before propounding the Interrogatories. Further, Plaintiffs cannot show that the burden or expense in preparing responses to the Interrogatories would be the same for both parties. It is clear that requiring the Trustees to guess the exact contours of Plaintiffs’ claims would be much more burdensome for the Trustees than for the Plaintiffs simply to enumerate their claims and contentions, and would do nothing to pin down Plaintiffs’ contentions to prevent sandbagging at trial. For example, a number of interrogatories seek information regarding Plaintiffs’ contentions regarding such things as when the Trustees allegedly discovered R&W breaches or document defects in mortgage loan files. See, e.g., Interrogatory Nos. 47, 51. It is impossible for the Trustees to attempt to glean from a document whether Plaintiffs contend that the Trustees discovered alleged R&W breaches on the date of the specified document or some other date. Similarly, as to alleged EODs and other purported servicing failures, it is undoubtedly more burdensome, if not impossible, for the Trustees to surmise, for example, “all facts supporting [Plaintiffs’] contention that the TRUSTEES had . . . ACTUAL KNOWLEDGE or WRITTEN NOTICE” of such EODs. Interrogatory No. 53. Further, Plaintiffs’ generic references to unproduced, unidentifiable categories of documents plainly fail to meet the specificity requirements of Section 2030.230. Their general 6 Case No. 30-2016-00843062-CU-BC-CXC DB1/94563413.9 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL MORGAN, LEWIS Bockius LLP ATTORNEYS AT LAW OFFICE ADDRESS ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 & references to “documents produced or to be produced” signifies nothing, as Plaintiffs have not produced any documents in this litigation. But even after such production, documents must at least be identified by Bates Number and summarized to meet the requirements of Section 2030.230. See Deyo, 84 Cal. App. 3d at 784 (Where an interrogatory “require[s] the responding party to make reference to a pleading or document, the pleading or document should be identified and summarized so the answer is fully responsive to the question.”). Each of Plaintiffs’ Interrogatory Responses that purports to reference documents (the vast majority of them) is facially deficient under Cal. Civ. Proc. Code § 2030.230 and requires further supplementation. C. The Interrogatories Seek Information Critically Relevant to the Claims and Defenses in This Action, as Well as to Class Certification 1. Requests Pertaining to the Chain of Transfer of Certificates Between Investors in January 2009 to the Present Are Relevant to Standing, the Claims and Defenses, and Class Certification The most significant category of requests at issue are those seeking information regarding the entire chain of transfer of the Certificates from investors who held the Certificates at the time of the Trustees’ alleged breaches on which Plaintiffs are suing, to present.” This information is critical to determine Plaintiffs’ claimed standing as real parties in interest, as well as to adjudicating issues regarding statutes of limitations, causation, damages and class certification. Plaintiffs’ claims in this case are for breaches of contract by the Trustees allegedly occurring in January 2009, which Plaintiffs admit in response to the Form Interrogatories is before many of the named Plaintiffs purchased any Certificates at issue in this case. See Floren Decl., {[8, Ex. 5 [Response to Form Rog 9.1]. For any Certificates purchased after January 2009, Plaintiffs necessarily assert most or all of their claims in this case as alleged assignees of others who held the Certificates at the time of the alleged breaches.® Id. Plaintiffs, however, have provided no information regarding their own ownership of the 2 See, e.g., Interrogatory Nos. 7-33, 56-57. 3 Plaintiffs’ breach of contract claims are predicated on their argument that “Certificateholders” are third party beneficiaries of the Governing Agreements. Amended Complaint, {q 2, 191. As Plaintiffs do not provide any evidence or information that they were “Certificateholders” in January 2009, they would necessarily assert claims as alleged assignees of the purported Certificateholders in January 2009. 7 Case No. 30-2016-00843062-CU-BC-CXC DB1/94563413.9 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL MORGAN, LEWIS Bockius LLP ATTORNEYS AT LAW OFFICE ADDRESS ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 & Certificates, let alone the chain of transfer of the Certificates from the original investors in January 2009, to the present. Plaintiffs, in effect, seek to stand in the shoes of those prior investors to assert their alleged claims and recover their alleged losses, but without providing any information regarding who those prior investors are. Plaintiffs have thus far provided no facts that could support a claim that they are real parties in interest of the claims asserted in this case. Further, Plaintiffs’ sole legal basis for alleging standing to bring claims originally belonging to investors who owned a Certificate in January 2009 has been expressly and repeatedly rejected by New York courts. Plaintiffs argue that the litigation claims of all prior investors automatically transferred with every sale of any Certificates through operation of New York law, which Plaintiffs argue applies to this case because of the New York choice-of-law provisions in the Governing Agreements. Floren Decl., | 8, Ex. 5 [Response to Form Rog 17.1]. But in a recent RMBS investor putative class action case on all fours with this case, Royal Park Investments SA/NV v. Deutsche Bank National Trust Co. (“RPI v. DBNTC”), the court expressly rejected this argument, holding that the New York choice of law provision in the Governing Agreements has no application to the entirely separate transactions between investors buying and selling Certificates on the secondary market. RPI v. DBNTC, 2017 WL 1331288, *7 (S.D.N.Y. 2017) (rejecting Plaintiff’s argument that the New York choice of law provision in the PSAs “would operate to bind independent assignment contracts” between the buyers and sellers of Certificates) (citing Semi-Tech Litig., LLC v. Bankers Trust Co., 272 F. Supp. 2d 319, 330 (S.D.N.Y. 2003) (indenture’s governing law clause had ‘no relevance to the question whether the contracts of sale of notes operated to assign certain rights of action’-[a] question . . . controlled, as to each sale, by New York choice of law principles”); also citing In re Nucorp. Energy Sec. Litig., 772 F.2d 1486, 1492 (9th Cir. 1985) (“the provisions of the indenture have no relevance to the question whether the contracts of sale between the class members and the Phelps Committee operated to assign certain rights of action.”)); see also Royal Park Invs. SA/NV v. Bank of N.Y. Mellon, No. 14-cv-6502, 2017 WL 3835339, at *4-5 (S.D.N.Y. Aug. 30, 2017) (relying on RPI v. DBNTC to deny certification, emphasizing that “when a certificate holder acquired or sold its interests in its certificates will have an impact on whether or not it has a claim in this case”). 8 Case No. 30-2016-00843062-CU-BC-CXC DB1/94563413.9 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL MORGAN, LEWIS Bockius LLP ATTORNEYS AT LAW OFFICE ADDRESS ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 & Rather, as explained by the court in RPI v. DBNTC, determining whether litigation claims transferred with any sale of the Certificates requires a two-part factual and legal choice-of-law analysis: “[f]irst, it would be necessary to determine, based on New York's fact-intensive ‘grouping of contracts’ choice-of-law framework, which jurisdiction’s law governs the relevant assignment (or assignments, if the ownership chain includes multiple links). And, second, the Court would have to apply that law to determine whether claims were assigned along with the Certificates or retained by the seller.” Id. at 7. The court specifically noted that this choice-of- law analysis could be outcome-determinative of the issue of standing because the laws of certain jurisdictions, like California, do not provide for automatic transfer of litigation claims with the transfer of securities, while New York law is unique in providing for automatic transfers. Id. (citing Racepoint Partners LLC v. JPMorgan Chase Bank, 06-cv-2500, 2006 WL 3044416, *4 (S.D.N.Y. Oct. 26, 2006) (“To the knowledge of the parties, New York is the only state [to] have enacted such provision for the automatic assignment of bondholders’ claims.”)). While the court in RPI v. DBNTC applied New York choice of law rules (as a federal court sitting in diversity), California’s choice of law rules likewise requires consideration of the same types of facts that the RPI v. DBNTC held were relevant to determining and then applying the law governing whether litigation claims transferred with a sale of the Certificates. Facts relevant to this issue under California law include the identity of each buyer and seller in the entire chain of transfers of each Certificate from January 2009 to the present, and the place of performance of the contract. See, e.g., 1 Witkin, Summary of Cal. Law 11th (Contracts) § 95 (2017) (under California choice of law rules, state where assignment took place is generally found to be state of most significant relationship to the assignment, particularly if both assignor and assignee were in that state when assignment was made). Information regarding the full chain of transfer of Certificates from the original investors in January 2009 to the Plaintiffs is thus necessary to determine whether Plaintiffs have standing to sue as real parties in interest. Id. Further, standing is a threshold issue that must be resolved before any merits-based determinations, including decisions on certifying a class. CashCall, Inc. v. Superior Court, 159 Cal. App. 4th 273, 286 (2008) (“In general, a named plaintiff must have 9 Case No. 30-2016-00843062-CU-BC-CXC DB1/94563413.9 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL MORGAN, LEWIS Bockius LLP ATTORNEYS AT LAW OFFICE ADDRESS ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 & standing to pursue an action. Standing is typically treated as a threshold issue, in that without it no justiciable controversy exists.” (internal citations omitted)); Said v. Jegan, 146 Cal. App. 4th 1375, 1382 (2007) (“Standing is a party’s right to make a legal claim and is a threshold issue to be resolved before reaching the merits of an action”). Identification of the persons whose claims Plaintiffs are asserting in this case is likewise essential to determine Plaintiffs’ ability to prove their claims, as well as to the Trustees’ defenses. Under New York law, which governs Plaintiffs’ substantive breach of contract claims pursuant to the New York choice of law provisions under the Governing Agreements,* all defenses against the assignor are good against the assignor. See Stout St. Fund I, L.P. v. Halifax Grp., LLC, 48 N.Y.S. 3d 438, 441 (N.Y. App. Div. 2017) (“An assignee stands in the shoes of the assignor and takes the assignment subject to any preexisting liabilities” (citations and quotations omitted)); TPZ Corp. v. Dabbs, 808 N.Y.S. 2d 746, 749 (N.Y. App. Div. 2006) (“[A]n assignee never stands in any better position than his assignor and takes an assignment subject to any pre-existing liabilities. This includes all defenses and counterclaims that can be asserted against the assignor . ....” (citations and quotations omitted)); see also Wells Fargo Bank N.A. v. Sovereign Bank, N.A., 44 F. Supp. 3d 394, 408 (S.D.N.Y. 2014) (assignee is subject to same defenses as assignor). Consistent with this rule, Plaintiffs may not recover more in damages than could have been recovered by the original assignor. Bronx Entm’t, LLC v. St. Paul’s Mercury Ins. Co., 265 F. Supp. 2d 359, 361 (S.D.N.Y. 2003) (assignee can only assert damages of assignor incurred before assignment, not its own damages after transfer, based on “elementary ancient law that an assignee never stands in a better position than his assignor.”); Poldon Eng’g & Mfg. Co. v. Zell Elec. Mfg. Co., 1 Misc. 2d, 1016, 1018, 155 N.Y.S. 2d 115, 117 (1955) (plaintiff, as an assignee, “may not recover from the defendant any damages arising out of a breach of contract which it, the plaintiff, sustained; it is limited to those which [the assignor] suffered . . .”). Finally, under New York law, each of Plaintiffs’ breach of contract claims is governed by the statute of limitations of the residence of the original assignor of that claim. See, e.g., * The GAs governing the 465 Trusts at issue in this case all contain choice-of-law clauses; 449 of them are governed by New York law, and the other sixteen are governed by Delaware law. 10 Case No. 30-2016-00843062-CU-BC-CXC DB1/94563413.9 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL MORGAN, LEWIS Bockius LLP ATTORNEYS AT LAW OFFICE ADDRESS ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 & Commerzbank AG v. Deutsche Bank Nat’l Trust Co., 15-cv-10031, 2017 WL 564089 (S.D.N.Y. Feb. 10, 2017) (applying statute of limitations of original assignor’s residence, Germany, to investor claims against indenture trustee); see also Gluck v. Amicor, Inc., 487 F. Supp. 608, 613 (S.D.N.Y. 1980) (if plaintiff asserts an assigned claim, statute of limitations of assignor’s residence applies); In re Countrywide Fin. Corp. Mortg.-Backed Sec. Litig., 2:11-ML-02265- MRP, 2014 WL 3529677 (C.D. Cal. July 14, 2014) (dismissing claims pursuant to three-year statute of limitations of assignor of plaintiff’s claims under New York borrowing statute); /KB Int’l S.A. v. Bank of Am., 12 Civ. 4036, 2014 WL 1377801, at *6 (S.D.N.Y. Mar. 31, 2014).> The Trustee thus must have discovery regarding the identity and domiciles of the original investors whose claims Plaintiffs assert to (1) determine damages of the original investors, including whether they suffered an injury in fact in the first instance; and (2) to identify the law of the state whose statute of limitations will apply to the assigned claims. These matters are also crucial to class certification. 2. Requests Pertaining to Plaintiffs’ Claims at Issue in This Litigation Are Relevant to the Merits and Class Certification A number of the Trustees’ Interrogatories also pertain to Plaintiffs’ core claims at issue in this litigation, which have yet to be fleshed out with any specifics whatsoever, such as: e The specific EODs that Plaintiffs allege occurred with respect to each Trust, when the Trustees allegedly obtained actual knowledge and/or written notice of those EOD:s (so as to trigger alleged obligations), and the facts and documents evincing such actual knowledge and/or written notice (Interrogatory Nos. 1, 52-55); e Each loan-specific R&W breach, the loans affected, the specific R&Ws allegedly breached, the facts underlying such alleged breaches, and who Plaintiffs contend > California courts apply the New York statute of limitations to claims arising out of a contract with a New York choice of law provision, including New York’s “borrowing statute,” New York Civil Practice Law and Rules 202. Hughes Elect. Corp. v. Citibank Delaware, 120 Cal. App. 4th 251, 258-259 (2004). That statute provides that the statute of limitations is the shorter of New York’s six-year statute of limitations, or the statute of limitations of the state where the cause of action accrued. Id. at 250. As discussed above, causes of action accrue under New York law where the plaintiff resides at the time of breach, or in the case of an assigned claim, where the assignor resided at the time of breach. See, e.g., Commerzbank, 2017 WL 564089. 11 Case No. 30-2016-00843062-CU-BC-CXC DB1/94563413.9 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL MORGAN, LEWIS Bockius LLP ATTORNEYS AT LAW OFFICE ADDRESS ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 & are liable for such alleged breaches (Nos. 3-6); e Which alleged R&W breaches Plaintiffs contend the Trustees discovered or received written notice about, including the specific loans and R&Ws at issue, and the supporting facts and documents behind such contentions (Nos. 41-48); and e Information and documents evincing the Trustees’ alleged discovery of purported defects in mortgage loan files (Interrogatory Nos. 49-51). The law is clear that interrogatories that seek to clarify what an opponent’s claims are and the facts on which the opponent relies are “not only proper but desirable.” See Universal Underwriters Ins. Co. v. Superior Court, 250 Cal. App. 2d 722, 728-29 (1967) (“We are of the opinion that an interrogatory calling on one’s adversary to state whether or not he makes a particular contention, either as to the facts or as to the possible issues in the case, is not only proper but desirable. The contention of an adversary which relates to its claim or defense is certainly a matter, not privileged, which is relevant to the subject matter involved in the pending action. . . . Liberal use of interrogatories for the purpose of clarifying and narrowing the issues made by the pleadings should be permitted and encouraged by the courts.” (citations and quotations omitted)); see Burke v. Superior Court, 71 Cal. 2d 276, 281 (1969) (“Discovery necessarily serves the function of ‘testing the pleadings,’ i.e., enabling a party to determine what his opponent’s contentions are and what facts he relies upon to support his contentions.”). Such information not only pertains to Plaintiffs’ claims and contentions, but is crucial to Plaintiffs’ efforts to certify a class. For example, understanding whether Plaintiffs assert a dozen, hundreds, thousands, or even tens of thousands of breaches of contract in this case will have major implications for all aspects of class certification, including whether individualized issues predominate over common issues, and whether Plaintiffs can possibly meet their burden of demonstrating that a trial of this case can be managed as a class action. This is particularly true given the consensus among New York courts that any claim for breach of contract against the Trustees must be proven loan-by-loan and trust-by-trust. See, e.g., Ret. Bd. of the Policemen’s Annuity & Benefit Fund of the City of Chi. v. Bank of N.Y. Mellon, 775 F.3d 154, 162 (2d Cir. 2014); Phx. Light SF Ltd. v. Bank of N.Y. Mellon, No. 14-cv-10104-VEC, 2017 WL 3973951, at 12 Case No. 30-2016-00843062-CU-BC-CXC DB1/94563413.9 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL MORGAN, LEWIS Bockius LLP ATTORNEYS AT LAW OFFICE ADDRESS ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 & *9 (S.D.N.Y. Sept. 7, 2017). New York law further provides that both damages and statute of limitations must be determined as of the time of breach. See Sharma v. Skaarup Ship Mgm’t Corp., 916 F.2d 820, 825 (2d Cir. 1990) (“It is a fundamental proposition of contract law, including that of New York, that the loss caused by a breach is determined as of the time of breach.”); De Martino v. Rivera, 148 A.D.2d 568, 570 (N.Y. App. Div. 1989) (residency, for purposes of determining statute of limitations under New York’s borrowing statute, is determined at the time the cause of action accrued, not when the action was commenced). Given this law, it is necessarily the case that each alleged breach Plaintiffs assert will implicate an individualized constellation of legal and factual issues regarding, among other things, (1) each Plaintiff’s standing to sue on the claim of each specific assignor who owned each Certificate at the time of each breach of contract, based on the choice of law rules governing each transfer of each breach claim; (2) the particularized analysis needed to determine the statutes of limitations governing the assigned claims, and the individualized issues resulting from application of different jurisdictions’ statute of limitations; and (3) determining each Assignors’ causation and damages for each breach asserted. Thus, for purposes of defending class certification, it is essential to understand how many alleged breaches Plaintiffs assert, when each of those breaches occurred, and who owned the purported claims at the time of breach, to have any understanding of what a trial of this case might possibly look like. See, e.g. Wash. Mut. Bank v. Superior Court, 24 Cal. 4th 906, 924 (2001) (“class action proponents should not expect the court to ferret through, disseminate, and craft manageable schemes from such materials when that burden clearly rests with the proponents”) (internal citations omitted); id. at 923 (the named Plaintiffs’ 6 See also Blackrock Allocation Target Shares: Series S Portfolio v. Wells Fargo Bank, Nat'l Ass'n, No. 14-cv-9371, et al., 2017 WL 3610511, at *7 (S.D.N.Y. Aug. 21, 2017); Phx. Light SF Ltd. v. Deutsche Bank Nat’l Tr. Co., 172 FE. Supp. 3d 700, 713 (S.D.N.Y. 2016); Royal Park Invs. SA/NV v. Bank of N.Y. Mellon, No. 14-cv-6502, 2016 WL 899320, at *4 (S.D.N.Y. Mar. 2, 2016); Fixed Income Shares: Series M v. Citibank N.A., 130 F. Supp. 3d 842, 851, 854 (S.D.N.Y. 2015); Royal Park Invs. SA/NV v. HSBC Bank USA, Nat'l Ass’n, 109 F. Supp. 3d 587, 601 (S.D.N.Y. 2015). 7 This information is also central to Plaintiffs’ burden to prove causation, a necessary element of Plaintiffs’ claims in this case. See, e.g., Diesel Props S.r.l. v. Greystone Bus. Credit Il LLC, 631 F.3d 42, 52-53 (2d Cir. 2011) (““Causation is an essential element of damages in a breach of contract action; and, as in tort, a plaintiff must prove that a defendant’s breach directly and proximately caused his or her damages.’”). 13 Case No. 30-2016-00843062-CU-BC-CXC DB1/94563413.9 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL MORGAN, LEWIS Bockius LLP ATTORNEYS AT LAW OFFICE ADDRESS ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 & case for class certification “must be sufficient to permit the district court, at the time of certification, to make a detailed assessment of how the difficulties posed by the variations in state law will be managed at trial.”); id. at 924 (“[t]he Court cannot accept ‘on faith’ an assertion that variations in state laws relevant to the case do not exist or are insignificant; rather, the party seeking certification must affirmatively demonstrate the accuracy of the assertion.”). Plaintiffs should be ordered to provide the requested discovery. 3. Requests Pertaining to Purchases, Sales, and Valuations of Plaintiffs’ Certificates Finally, a number of the Trustees’ Interrogatories request information pertaining to Plaintiffs’ purchases, sales, and valuations of the Certificates at issue in this case, as well as the prices at which the Certificates were bought and sold by Plaintiffs and the prior investors whose claims Plaintiffs purport to assert in this case. See, e.g., Interrogatory Nos. 11-12, 15-18, 20, 30, 31, 32, 34-40. These Interrogatories pertain to Plaintiffs’ alleged damages in this case (or lack thereof), another essential element of Plaintiffs’ breach of contract claims. See Reznick v. Bluegreen Resorts Mgmt., Inc., 62 N.Y.S.3d 460, 462 (N.Y. App. Div. 2017) (“The essential elements of a breach of contract cause of action are the existence of a contract, the plaintiff’s performance pursuant to the contract, the defendant’s breach of his or her contractual obligations, and damages resulting from the breach.” (citations and quotations omitted)); Connelly v. State Farm Mut. Auto. Ins. Co., 135 A.3d 1271, 1279 (Del. 2016) (under Delaware law, “a cause of action for breach of contract includes damages as an element”). As discussed above, both damages and causation must be determined as of the date of each breach, and named Plaintiffs cannot recover more in damages than could have been recovered by the original owner of the litigation claim. Bronx, 265 F. Supp. 2d at 361; Poldon, 155 N.Y.S.2d at 117. Thus, to determine damages, the Trustees must have discovery regarding when those prior investors bought and sold the Certificates, and the prices at which the Certificates were bought and sold. Such discovery is essential in part because many of the Trusts did not suffer any realized losses until well after the alleged breaches-meaning that investors did not miss any distribution payments until after the alleged breaches. If an investor bought a 14 Case No. 30-2016-00843062-CU-BC-CXC DB1/94563413.9 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL MORGAN, LEWIS Bockius LLP ATTORNEYS AT LAW OFFICE ADDRESS ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 & Certificate at a particular price, missed no distribution payments, and then sold at a profit, this information would be obviously relevant to the purported damages of that investor, and whether the investor suffered any injury in fact at all. Plaintiffs simply cannot assert the claims and damages of these prior investors, but provide no information whatsoever from which it can be determined whether those investors suffered any injury in the first instance. The same is true of Plaintiffs’ own ownership of Certificates, which the Trustees believe has been profitable for them. D. Good Cause Exists to Compel Production of Documents Requested in the Trustees’ Set Second of RFPs There is good cause to compel production of the documents requested in the Trustees’ Second Set of RFPs. Those RFPs simply request all documents identified in Plaintiffs’ responses to the Trustees’ Interrogatories and Form Interrogatories. With respect to motions to compel productions of documents, while California law requires that a motion “set forth specific facts showing good cause justifying the discovery sought by the demand” (Cal. Civ. Proc. Code § 2031.310), once the demanding party has established good cause, the burden shifts to the responding party to justify its objections. See Kirkland v. Superior Court, 95 Cal. App. 4th 92, 98 (2002). Here, good cause exists because Plaintiffs must furnish this information pursuant to Section 2030.230, and because the documents the Trustees seek are clearly relevant for all the reasons set forth in Section III.C, supra. IV. CONCLUSION For the foregoing reasons and for good cause shown, the Trustees respectfully request that the Court grant this Motion and issue an order compelling Plaintiffs to further respond to the Interrogatories and Second Set of RFPs within five days of the Court’s order. Dated: December 7, 2017 MORGAN, LEWIS & BOCKIUS LLP By /s/Joseph E. Floren Joseph E. Floren Attorneys for Defendants DEUTSCHE BANK NATIONAL TRUST COMPANY and DEUTSCHE BANK TRUST COMPANY AMERICAS 15 Case No. 30-2016-00843062-CU-BC-CXC DB1/94563413.9 DEFENDANTS’ NOTICE OF MOTION AND MOTION TO COMPEL