Reuters: Regulatory News: UPDATE 1-U.S. says states' lawsuits vs S&P belong in state courts

Reuters: Regulatory News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 1-U.S. says states' lawsuits vs S&P belong in state courts Aug 2nd 2013, 23:29 Fri Aug 2, 2013 7:29pm EDT * U.S. says federal court lacks jurisdiction * S&P accused of inflating ratings to win business By Jonathan Stempel Aug 2 (Reuters) - The U.S. government, which is pursuing a $5 billion lawsuit accusing Standard & Poor's of misleading investors by inflating its credit ratings, on Friday asked a federal judge to move similar cases by 15 U.S. states and the District of Columbia back to state courts. In a filing in the U.S. District Court in Manhattan, where the state lawsuits are now being handled, the U.S. Department of Justice said federal courts do not have jurisdiction because the cases turn on alleged violations of state laws against unfair consumer practices or deceptive business practices. The Justice Department said S&P had argued that the cases belong in federal court because they touch on the meaning of the First Amendment to the U.S. Constitution and a 2006 federal law governing credit rating agencies. But it said these issues touch on potential federal defenses to the states' claims, and are not inherent in the claims themselves. "Assertions of federal defenses cannot provide a basis for removal of properly pleaded state-law claims," the Justice Department said. Catherine Mathis, an S&P spokeswoman, said the Justice Department had previously made similar arguments in an earlier unsuccessful effort to return these cases to state courts. "This offering is no more persuasive," she said. S&P is a unit of McGraw Hill Financial Inc. U.S. District Judge Jesse Furman in Manhattan has scheduled an Oct. 4 hearing over the states' effort to move their lawsuits back to various state courts, and S&P's effort to dismiss the states' litigation altogether. Consolidating the state cases may help S&P avoid multiple judgments or conflicting rulings, and reduce its legal bills. The state lawsuits were consolidated before Furman in June, and represent most of the lawsuits that state attorneys general have filed against S&P over its ratings. Many were filed six months ago, on the same day that the Justice Department sued S&P for $5 billion. Last month, U.S. District Judge David Carter in Santa Ana, California allowed the government to continue pursuing that case. S&P has said statements about the integrity of its ratings are "puffery" that cannot be a basis for the fraud lawsuit. The cases are In re: Standard & Poor's Rating Agency Litigation, U.S. District Court, Southern District of New York, No. 13-md-02446; and U.S. v. McGraw-Hill Cos et al, U.S. District Court, Central District of California, No. 13-00779. Link this Share this Digg this Email Reprints

You are receiving this email because you subscribed to this feed at blogtrottr.com. If you no longer wish to receive these emails, you can unsubscribe from this feed, or manage all your subscriptions