McGraw Hill Financial Inc. and its Standard & Poor’s unit won a bid to move to federal court in New York lawsuits filed by 14 states accusing the businesses of inflating mortgage-backed securities ratings.
The U.S. Judicial Panel on Multidistrict Litigation today granted the companies’ request, concluding that consolidation of the cases for pre-trial proceedings such as the disclosure of evidence was the most efficient way to proceed.
“S&P has its principal place of business in this district and the witnesses and evidence relating to the states’ claims may be found there,” the six-judge panel said in its order. “New York is also where some of the alleged misconduct occurred.”
Almost all of the state lawsuits faced by New York-based McGraw Hill and S&P were filed in February and timed to coincide with the U.S. Justice Department’s filing of a lawsuit in Santa Ana, California, that raised similar allegations. The 15 cases moved to federal court in New York today include one filed by the District of Columbia.
In March, the companies filed for removal of state court cases filed by Arizona, Colorado, Delaware, Maine, Missouri, North Carolina, South Carolina, Washington and other states to corresponding federal court districts as a prelude to the defense request for pre-trial consolidation in New York.
At a May 30 hearing in federal court in Louisville, Kentucky, attorneys for the states objected to S&P’s relocation bid, arguing the cases concern state laws being enforced by state attorneys general.
Connecticut, which filed suit in 2010, and Illinois, which sued the companies in 2012, won federal court orders returning their cases to the state courts where they were first filed.
Judges in each case concluded the defense had waited too long to transfer the matters to U.S. court.
“We are pleased that this panel of federal judges agreed with us and granted our motion to consolidate these 15 cases before one federal court in the Southern District of New York,” Edward Sweeney, an S&P spokesman, said in an e-mail.