Class-action suit against Centex Homes alleging that company engaged in misconduct that contributed to the mortgage crisis dismissed with prejudice, says PulteGroup
BLOOMFIELD HILLS, Michigan
April 7, 2010
– The following is a statement by PulteGroup, Inc.: On March 31, 2010, the United States District Court for the Central District of California dismissed with prejudice a putative class action lawsuit filed against Centex Homes. The lawsuit alleged, among other things, that Centex engaged in misconduct that contributed to the mortgage crisis. The Court simultaneously dismissed seven other identical class actions that the same plaintiff law firm filed against seven other large homebuilders.
According to press releases issued by plaintiffs’ attorneys (McCune Wright, LLP) at the time the eight class actions were originally filed, the suits were based on reports issued by the Laborer’s International Union of North America (“LiUNA”) that attempt to blame large homebuilders for the nationwide mortgage crisis.
According to PulteGroup, Inc. (Centex is a subsidiary of PulteGroup), for some time, LiUNA and other union groups have engaged in an intimidation campaign against PulteGroup in order to coerce the Company to force its independent trade partners to sign union agreements. As part of that campaign, these union groups have been behind false claims that PulteGroup and other residential homebuilders engaged in improper practices with respect to the sale of homes. They have pressed these same false claims through official-looking, but misleading, reports, lawsuits, media articles and testimony before various State and Federal regulatory and rulemaking proceedings.
The Court found that the injuries alleged by the plaintiffs were speculative and could not be linked to the alleged misconduct of the homebuilders. The Court concluded that factors beyond the control of the homebuilders such as rising unemployment in the region, changes in the housing market, and the general economic downturn, all contributed to plaintiffs’ claims of injury.
The swift dismissals, which came only six months after the cases were filed, were all with prejudice, meaning that the plaintiff’s attorneys cannot amend their complaints. With these eight decisions, there have now been a total of eleven cases in which courts have dismissed lawsuits that attempt to blame the mortgage crisis on homebuilders. A copy of the final order can be found here.
Centex is a wholly owned subsidiary of PulteGroup, Inc. In August, 2009, Centex Corp. and Pulte Homes, Inc. merged to become one of the largest homebuilders in America. Serving the first-time and value-conscious homebuyer segments, Centex homes provide smart design at affordable prices.
PulteGroup, Inc. (NYSE: PHM - News) based in Bloomfield Hills, Mich., is one of America’s largest home building companies with operations in 69 markets, 29 states and the District of Columbia. The Company has an unmatched capacity to meet the needs of all buyer segments through its brand portfolio that includes Pulte Homes, Centex Homes and Del Webb. In 2009, PulteGroup brands received more top rankings than any other homebuilder in the annual J.D. Power and Associates 2009 New-Home Builder Customer Satisfaction Studysm. Pulte Mortgage LLC is a nationwide lender offering PulteGroup customers a variety of loan products and superior service.
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