Capital One 2013 Annual Report Download - page 275

CAPITAL ONE FINANCIAL CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
consolidated for all purposes, and a consolidated amended complaint was filed alleging violations of federal
statutes and state law. The amended complaint requests civil monetary damages, which could be trebled, and
injunctive relief. In November 2007, the court dismissed the amended complaint. Plaintiffs appealed that order to
the Ninth Circuit Court of Appeals. The plaintiffs’ appeal challenges the dismissal of their claims under the
National Bank Act, the Depository Institutions Deregulation Act of 1980 and the California Unfair Competition
Law (the “UCL”), but not their antitrust conspiracy claims. In January, 2014, the Ninth Circuit affirmed the
lower court’s dismissal of the case.
Credit Card Interest Rate Litigation
The Capital One Bank Credit Card Interest Rate Multi-district Litigation matter was created as a result of a June
2010 transfer order issued by the United States Judicial Panel on Multi-district Litigation (“MDL”), which
consolidated for pretrial proceedings in the U.S. District Court for the Northern District of Georgia two pending
putative class actions against COBNA-Nancy Mancuso, et al. v. Capital One Bank (USA), N.A., et al., (E.D.
Virginia); and Kevin S. Barker, et al. v. Capital One Bank (USA), N.A., (N.D. Georgia), A third action, Jennifer
L. Kolkowski v. Capital One Bank (USA), N.A., (C.D. California) was subsequently transferred into the MDL.
In August 2010, the plaintiffs in the MDL filed a Consolidated Amended Complaint. The Consolidated Amended
Complaint alleges in a putative class action that COBNA breached its contractual obligations, and violated the
Truth in Lending Act (“TILA”), the California Consumers Legal Remedies Act, the UCL, the California False
Advertising Act, the New Jersey Consumer Fraud Act, and the Kansas Consumer Protection Act when it raised
interest rates on certain credit card accounts. The MDL plaintiffs seek statutory damages, restitution, attorney’s
fees and an injunction against future rate increases. Fact discovery is now closed. In August 2011, Capital One
filed a motion for summary judgment, which remains pending with the court. In July 2013, the MDL plaintiffs
filed a supplemental opposition to Capital One’s motion for summary judgment. As a result of a settlement in
another matter, the California-based UCL and TILA claims in the MDL are extinguished.
Mortgage Repurchase Litigation
In February 2009, GreenPoint was named as a defendant in a lawsuit commenced in the New York County
Supreme Court, by U.S. Bank, N. A., Syncora Guarantee Inc. and CIFG Assurance North America, Inc. (the
“U.S. Bank Litigation”). Plaintiffs allege, among other things, that GreenPoint breached certain representations
and warranties in two contracts pursuant to which GreenPoint sold approximately 30,000 mortgage loans having
an aggregate original principal balance of approximately $1.8 billion to a purchaser that ultimately transferred
most of these mortgage loans to a securitization trust. Some of the securities issued by the trust were insured by
two of the plaintiffs: Syncora and CIFG. Plaintiffs seek unspecified damages and an order compelling
GreenPoint to repurchase the entire portfolio of 30,000 mortgage loans based on alleged breaches of
representations and warranties relating to a limited sampling of loans in the portfolio, or, alternatively, the
repurchase of specific mortgage loans to which the alleged breaches of representations and warranties relate. In
March 2010, the court granted GreenPoint’s motion to dismiss with respect to plaintiffs Syncora and CIFG and
denied the motion with respect to U.S. Bank. GreenPoint subsequently answered the complaint with respect to
U.S. Bank, denying the allegations, and filed a counterclaim against U.S. Bank alleging breach of covenant of
good faith and fair dealing. In February 2012, the court denied plaintiffs’ motion for leave to file an amended
complaint and dismissed Syncora and CIFG from the case. Syncora and CIFG appealed their dismissal to the
New York Supreme Court, Appellate Division, First Department (the “First Department”), which affirmed the
dismissal in April 2013. Syncora and CIFG have appealed the First Department’s decision to the New York
Court of Appeals.
In September 2010, DB Structured Products, Inc. (“DBSP”) named GreenPoint in a third-party complaint, filed
in the New York County Supreme Court, alleging breach of contract and seeking indemnification (the “DBSP
Litigation”). In the underlying suit, Assured Guaranty Municipal Corp. (“AGM”) sued DBSP for alleged
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