INSURANCE—French Firm Seeks Consolidation of Insurer Litigation

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In what may be the largest fraud litigation in California history, attorneys representing French bank Credit Lyonnais last week filed a motion in U.S. District Court to have one of three related cases transferred from San Francisco to Los Angeles, where it could be consolidated with the other two cases.

All three cases allege that various individuals and business entities, including Credit Lyonnais, conspired to commit a multibillion-dollar fraud in acquiring defunct Executive Life Insurance Co. in 1991.

The case Credit Lyonnais is seeking to have transferred to Los Angeles was filed this summer by the state Attorney General’s Office. The other primary case was filed in 1999 by the California Insurance Commission.

Officials at the Attorney General’s Office were not available for comment last week.

But Gary Fontana, lead attorney on the insurance commission’s case, characterized last week’s filing as part of an ongoing attempt by defense attorneys to indefinitely delay the cases from being consolidated and sent to trial.

“Their every waking moment is spent on how to delay the trial,” Fontana said.

A hearing on the motion to transfer venue is scheduled for Oct. 4 in San Francisco, but that hearing would not be necessary if the Attorney General’s Office agrees to the L.A. transfer. If the Oct. 4 hearing does take place, the defendants would likely use the occasion to press for a postponement of the previously scheduled Oct. 15 trial-setting hearing in Los Angeles, Fontana said.

An attorney for Credit Lyonnais, Catherine A. Stone in the downtown L.A. office of White & Case, declined to comment on her firm’s filing last week, or on any other aspect of the legal strategy.

The filing itself asserts that the San Francisco case should be transferred to L.A. because “the actions already pending before Judge (A. Howard) Matz (in Los Angeles) involve substantially the same defendants, the same facts and common legal issues. In addition, the cases seek several billion dollars in damages. It would be unfair to force the defendants to litigate such massive cases in multiple forums when essentially identical allegations of wrongdoing are at issue.”

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