Judge Refuses to Drop Rep. Cox as First Pension Suit Defendant

An Orange County judge ruled Thursday that Rep. Christopher Cox must remain a defendant in a lawsuit by investors who lost $136 million in the 1994 collapse of scandal-ridden First Pension Corp.

Superior Court Judge Francisco F. Firmat, sticking with a tentative decision he issued last month, overruled efforts by the Newport Beach Republican and other defendants to dismiss four claims, including fraud and misrepresentation.

The judge threw out two other counts, which alleged malpractice and fraud by active concealment, but he gave investors 30 days to amend their complaint.

Firmat’s ruling also applies to former state Corporations Commissioner Gary Mendoza and the law firm of Latham & Watkins, where Cox and Mendoza once handled First Pension legal work.

The lawsuit stems from a long-running fraud perpetrated by William E. Cooper, First Pension’s founder. Cooper, once a major Orange County GOP campaign fund-raiser, is now serving 10 years in prison for swindling investors out of their retirement savings.

The plaintiffs have accused Cox and Mendoza of helping cover up fraudulent activities at First Pension when they handled corporate work as attorneys at Latham in the 1980s. Cox and the other defendants have denied any wrongdoing.

Cox’s lawyer, George Link, said after the preliminary ruling last month that the judge’s decision to throw out two counts would eliminate a “good chunk” of the investors’ case. He said he doubts the plaintiffs can fix the defects in their pleadings.

But Michael Aguirre, lawyer for the investors, had said his clients were pleased with the rulings. “They’ve been waiting a long time, and they’re starting to see some justice in the case,” Aguirre said.

On Wednesday, the judge threw out fraud and malpractice allegations filed against Cox and others in a separate suit by a court-appointed receiver for First Pension Corp. The receiver has 30 days to amend the action.