Julie G. Reiser

Who Owns the Claim

Countrywide and Alphabet began with institutional investors, yet the claims belonged to different parties. In the Countrywide mortgage-backed-securities action, Iowa Public Employees’ Retirement System and other purchasers alleged that offering documents misstated or omitted material facts about Countrywide’s loan-origination practices. They sought relief under Sections 11, 12, and 15 of the Securities Act for investors who bought certificates in 427 offerings. In Alphabet, pension funds sued derivatively: the stockholders asserted claims on the company’s behalf and sought relief for injury they alleged the directors and officers had caused Alphabet.

Julie G. Reiser served as lead attorney for IPERS in Countrywide after the court appointed the pension system lead plaintiff. In Alphabet, she served as plaintiffs’ co-lead counsel. Retired Judge James Kleinberg selected Reiser and Frank Bottini for the California plaintiffs’ working group during mediation, and Reiser signed the final stipulation for Northern California Pipe Trades Pension Plan and Teamsters Local 272 Labor Management Pension Fund.

Those assignments required different uses of shareholder law. Countrywide concerned disclosure duties to purchasers and allocation of a common recovery. Alphabet was a derivative action seeking corporate reforms on behalf of the company. The Countrywide settlement directed money to class members; the Alphabet settlement imposed spending, reporting, and employment obligations within the company.

What the Record Had to Establish

Countrywide’s scale came from repetition across separate securities. From 2005 through 2007, the company originated or purchased residential mortgages, pooled loans, and sold interests in the pools as mortgage-backed certificates. The investors alleged that offering documents for 427 offerings contained materially untrue or misleading statements or omissions about the practices used to originate those loans. The complaint therefore had to connect named plaintiffs, purchased certificates, offering documents, and statutory deadlines across a large set of transactions.

The standing dispute followed the transactions. Similar language across many certificates did not allow a named investor to challenge every offering; the court examined whether that investor had purchased or could trace its purchase to the particular offering under attack. Timeliness posed a second transaction-level question because the federal action followed earlier state litigation and reached back to offerings made years before. The November 2010 order required an amended pleading that addressed both defects rather than allowing the size of the alleged program to substitute for a plaintiff with a timely claim.

Alphabet required access to records held inside the company. Before the consolidated California complaint, plaintiffs’ co-lead counsel reviewed about 1,900 pages that Alphabet produced in response to stockholder inspection demands. The production included board and committee minutes, agendas, board materials, internal policies, executive employment and termination agreements, and director and officer questionnaires. The stockholders alleged that directors and officers had permitted or concealed sexual harassment and discrimination by senior executives. Their complaint also alleged that Alphabet failed to disclose a Google+ data breach.

In Countrywide, public offering documents supported only claims tied to securities a named plaintiff had standing to challenge and filed within the governing time. In Alphabet, internal board records supported derivative allegations, while defendants challenged demand futility and wrongful refusal. Reiser represented the lead investor in Countrywide and served as co-lead counsel for the pension funds in Alphabet.

The limits were substantial and public. In November 2010, Judge Mariana Pfaelzer dismissed the Countrywide complaint without prejudice on standing and statute-of-limitations grounds, gave the plaintiffs thirty days to amend, and reserved other issues. In Alphabet, the individual defendants denied any breach, wrongdoing, or harm. They also maintained that some stockholders could not plead demand futility and that others could not plead wrongful refusal of a board demand. The Alphabet stipulation stated that the settlement was not an admission, while the stockholders’ counsel acknowledged the cost, delay, and uncertainty of continued litigation.

Two Ways Through Litigation Risk

Countrywide proceeded through pleading, amendment, consolidation, and settlement approval. The threshold dismissal forced the plaintiffs to address standing and timeliness before the merits could advance. By September 2013, Reiser had filed a declaration supporting final approval, the allocation plan, and the request for fees and expenses. Her submission formed part of a larger plaintiffs’ record built across hundreds of offerings.

Alphabet moved through stockholder inspections, proceedings in three jurisdictions, a special litigation committee, and negotiated corporate terms. Before formal mediation, plaintiffs’ co-lead counsel attended presentations about Alphabet’s governance controls, workplace policies, and privacy program. A two-day mediation began on January 22, 2020. Kleinberg then placed Reiser and Bottini in a working group that met with company and defense counsel, consulted experts, considered candidates for an outside advisory council, and exchanged proposals over the next three months.

The parties signed a memorandum of understanding on April 20, 2020. Counsel then reviewed more than 5,300 additional pages and interviewed a lawyer for Alphabet’s special litigation committee as part of confirmatory work. Both settlements resolved litigation risk without a trial finding that the defendants had committed the alleged violations.

Money Paid Out, Money Committed

Countrywide’s settlement created a $500 million cash fund. On December 5, 2013, Judge Pfaelzer granted final approval, approved the plan for allocating proceeds, overruled objections, and awarded fees and expenses. On December 17, the court entered final judgment. The judgment certified the class for settlement purposes, appointed IPERS and other institutions as class representatives, appointed Cohen Milstein and two other firms as class counsel, and dismissed the settled claims with prejudice. The judgment placed a defined pool of money under a court-approved plan for investor claims.

One appeal was voluntarily dismissed in November 2014. The Ninth Circuit dismissed the remaining consolidated appeals with prejudice in May 2016 on the parties’ joint motion. In October 2016, after the administrator finished reviewing claims, the district court ordered the fund distributed to eligible class members.

Alphabet’s $310 million served a different beneficiary and purpose. The company agreed to spend that amount over as many as ten years on workplace initiatives, including expanding opportunities for underrepresented technologists, hiring and retaining underrepresented employees, fostering respectful workplaces, and supporting participation in the digital economy. The settlement also required Alphabet to maintain a Diversity, Equity, and Inclusion Advisory Council for at least five years. Its members included senior company officials. The outside specialists were jointly selected by the company and plaintiffs’ co-lead counsel.

The money came with reporting duties. Alphabet’s chief diversity officer had to track past and planned spending, report annually to the board’s Leadership Development and Compensation Committee, and report to the advisory council. The council had to meet at least quarterly and deliver written reports to the chief executive and board committee every quarter for the first three years; the council could later vote unanimously to report annually. Google also had to publish annual updates about the council’s work and a high-level account of workplace-initiative spending in its diversity report.

Other terms addressed the practices underlying the stockholders’ allegations. Alphabet extended its waiver of mandatory arbitration to harassment, discrimination, and retaliation disputes involving employees and members of the extended workforce at its other businesses. Google agreed to preserve limits on confidentiality provisions so complainants could discuss the underlying facts and reporting process. Board committees received defined oversight duties, quarterly compliance reports, information about serious complaints involving senior executives, and annual reporting on harassment, discrimination, retaliation, training, and workplace culture.

The settlement also changed where compliance information traveled. Alphabet agreed to rename the board’s Audit Committee as the Audit and Compliance Committee and amend its charter to state responsibility for legal and regulatory compliance, including data privacy. The committee would hold four separate mid-quarter meetings each year, receive reports from management and a rapid-response team handling specified serious matters, and report quarterly to the full board. Senior compliance and investigations officials received a formal route to bring concerns directly to the committee, including concerns involving senior executives.

Terms That Had to Work

After the parties fixed the cash amount, the allocation plan determined which recognized losses would share in the net fund. The appeals postponed payment, and the district court released the money only after they ended and the administrator completed claim review. The order distributed a negotiated settlement; it made no finding that every allegation in the offering-document complaint was true.

Alphabet depended on continued performance inside a company. The board could modify a settlement term only after a good-faith determination, advice from outside counsel, written reasons, approval of a narrowly tailored change, and notice to stockholders’ counsel at least thirty days before the change took effect. Those provisions allowed corporate directors to discharge their continuing duties while preserving a record of any departure from the agreed terms. The reporting calendar gave the advisory council, chief executive, board committee, and public recurring information about implementation.

Countrywide assigned administration to class representatives, class counsel, a claims process, appellate review, and a federal judge who retained authority through distribution. Alphabet assigned recurring duties to corporate officers, board committees, outside advisory-council members, and stockholders’ counsel entitled to notice of proposed changes. Reiser supported the Countrywide approval and allocation plan and signed the Alphabet agreement specifying who would spend, meet, report, review, and disclose.

BP and the Damages Question

Reiser also worked on the BP securities litigation, in which Cohen Milstein served as co-lead counsel for the New York State Common Retirement Fund. Investors alleged two groups of misstatements: statements about safety before the Deepwater Horizon explosion and statements about the oil-flow rate afterward. The plaintiffs sought certification of separate pre-spill and post-spill investor classes.

The Fifth Circuit affirmed different results for the two classes. The post-spill investors presented a stock-price-inflation model tied to alleged corrections when information about the spill reached the market; the court held that the district court did not abuse its discretion by certifying that class. The pre-spill theory sought the stock-price decline attributed to the materialization of safety risks. The court affirmed refusal to certify that class because the plaintiffs had not supplied a common damages model satisfying Comcast.

After a mixed summary-judgment ruling in May 2016, the post-spill class settled for $175 million, and the district court granted final approval in February 2017. The recovery remained confined to purchasers of BP American Depositary Shares from April 26 through May 28, 2010. The accepted damages model defined both the class and the settlement, just as Countrywide and Alphabet tied relief to the party that legally owned the asserted injury.

Current Securities and ERISA Practice

Reiser is a partner in Cohen Milstein’s Washington office and co-chairs its Securities Litigation & Investor Protection practice. Her work also includes ERISA and employee-benefits matters. She earned her J.D. from the University of Virginia School of Law in 1997 and her B.A., with honors, from Vassar College in 1992. She is admitted in the District of Columbia and Washington.