State of California ex. Rel. Roger Hayes et al. v. UBS Securities LLC et al.

California False Claims Act (qui tam)

San Francisco County

Superior Court Judge Mary E. Wiss

Defense lawyers: Wilmer Cutler Pickering Hale and Dorr LLP, Jonathan G. Cedarbaum, Matthew D. Benedetto, Jonathan E. Paikin, Justin Baxenberg, Kevin Gallagher; Sidley Austin LLP, Ryan M. Sandrock; Keesal Young & Logan PC, Peter R. Boutin, Christopher A. Stecher; Paul, Weiss, Rifkind, Wharton & Garrison LLP, Luke X. Flynn-Fitzsimmons, Susanna M. Buergel; Marino, Tortorella & Boyle PC, Kevin H. Marino, John D. Tortorella, Erez J. Davy; O'Melveny & Myers LLP, Matthew D. Powers, Damali A. Taylor; Winston & Strawn LLP, Joseph L. Motto, Robert Y. Sperling, Dana L. Cook-Milligan; Harrison Law LLC, Holly A. Harrison, David G. Jorgensen

Matthew D. Benedetto and Jonathan G. Cedarbaum were the Wilmer Cutler Pickering Hale and Dorr LLP partners who worked as lead counsel in defending Bank of America in a whistleblower case alleging fraud in the municipal bond industry. The relators, who filed identical cases in other states, alleged that defendant banks provided underwriting services and fraudulently underpriced hundreds of municipal bond offerings over a decade. They sought hundreds of millions of dollars in damages, which could have been tripled by statute. The WilmerHale team secured a significant win for BofA by persuading San Francisco County Superior Court Judge Mary E. Wiss to dismiss the case with prejudice at the demurrer stage. State of California ex re. Hayes v. UBS Securities LLC, CGC-09-494352 (S.F. Super. Ct., filed Nov. 10, 2009).

Peter Boutin

Benedetto, who argued the successful demurrer, said, "This was a complaint with serious allegations. It's exceptionally rare to prevail at the pleading stage, given the liberal pleading standards in California. Our winning approach was to focus on California's requirement that fraud be pleaded with particularity, where their complaint made only general allegations."

Cedarbaum added, "The thrust of our argument was that their allegations rested on statistical analysis. We drove home the argument that that was insufficient to meet the pleading standards, in part because the information their analysis was based on was publicly available."

Benedetto and Cedarbaum said the defendant banks were able to leverage the court's ruling in other jurisdictions. "We let the judges in other states know, and all the cases have now been dismissed except for one," Benedetto said.

Lawyers for the plaintiffs and for the California attorney general did not return messages seeking comment.

--John Roemer