Case MDL No. 2797 Document 2 Filed 08/02/17 Page 1 of 11 BEFORE THE UNITED STATES JUDICIAL PANEL ON MULTIDISTRICT LITIGATION IN RE: WELLS FARGO AUTO INSURANCE LITIGATION MDL NO. BRIEF IN SUPPORT OF PLAINTIFF S MOTION TO TRANSFER ACTIONS PURSUANT TO 28 U.S.C. 1407 Pursuant to 28 U.S.C. 1407 and Rule 6.2 of the Rules of Procedure of the Judicial Panel on Multidistrict Litigation, Katherine Jacob, Plaintiff in the action styled Jacob v. National General Insurance Co., et al., No. 1:17-cv-05806-AT (S.D.N.Y. July 31, 2017) (the Jacob Action ), ( Plaintiff ), respectfully submits this brief in support of her motion to transfer all currently filed federal cases concerning the same common questions of fact as alleged in the Jacob Action, and any subsequent tag-along actions involving similar claims, to the Southern District of New York for coordinated or consolidated pretrial proceedings. Transfer is necessary for consistency in rulings, efficiency, and judicial economy. Transfer will also lessen the strain on all parties, counsel, and witnesses, many of whom otherwise would face substantial inconvenience in separately pursuing or defending these actions. Further, the Southern District of New York is an appropriate and convenient forum to handle this litigation given that one of the Defendants is located just steps from the courthouse, and the judge in the Jacob Action is well-suited to oversee these actions as her inaugural multidistrict case. I. BACKGROUND This transfer motion involves three class actions pending in two different federal jurisdictions; however, Plaintiff reasonably anticipates multiple other actions in multiple federal jurisdictions
Case MDL No. 2797 Document 2 Filed 08/02/17 Page 2 of 11 will soon be filed. In these actions, Plaintiffs purchased automobiles on which Defendants placed unwanted and unneeded insurance in order to steal hundreds of millions of dollars from Plaintiffs. Defendant Wells Fargo Bank, N.A. ( Wells Fargo ) lured in consumers for auto financing, and during this process, Wells Fargo would send the borrower s information to its cohort, National General Insurance Company ( National General ), to tack on additional collateral protection insurance, which was sold by, of course, National General. In doing so, National General generated hundreds of millions of dollars of fraudulent proceeds. Wells Fargo benefited in kickbacks from National General, higher interest costs, and collecting additional fees and costs when automobiles were unlawfully repossessed. These actions seek relief for the hundreds of thousands of victims of the Defendants nationwide scheme. A. Plaintiffs and Current Actions Plaintiff filed her class action on July 31, 2017 in the Southern District of New York: Jacob v. National General Insurance Co., et al., No. 1:17-cv-05806-AT. Two other class actions were filed in the Northern District of California: Hancock v. Wells Fargo & Co., et al., No. 3:17-cv-04324- MEJ was filed on July 30, 2017 by Plaintiff Paul Hancock; and Preston v. Wells Fargo & Co., et al., No. 4:17-cv-04346-HSG, was filed on July 31, 2017 by Plaintiff Keith Preston. Each of these cases presents a common set of facts outlining Defendants unlawful scheme and the harm resulting therefrom. These actions were recently filed and have not advanced to discovery; thus, transfer would not be unduly prejudicial or inefficient. B. Defendants The common Defendant in each of these actions is Wells Fargo Bank, N.A., a South Dakota corporation, doing business as Wells Fargo Dealer Services. Its parent company, Wells Fargo & 2
Case MDL No. 2797 Document 2 Filed 08/02/17 Page 3 of 11 Company, a Delaware corporation headquartered in San Francisco, California, is also named as a Defendant in the California actions. 1 Defendant National General is headquartered in New York City, mere steps from the Southern District of New York courthouse. While not named as a defendant in the California actions, National General is undoubtedly a key defendant, and Plaintiff anticipates it will be a common defendant in additional actions. Moreover, both California actions expressly recognize National General s role in this litigation. For example, the Hancock complaint states, For more than a decade, Defendants, together with auto insurance giant National General Insurance Company ( National General ), engaged in a scheme to bilk millions of dollars from unsuspecting customers who were forced to pay for auto insurance they did not need or want Defendants formed an unlawful enterprise with National General. Likewise, the Preston complaint notes that Wells Fargo acted in coordination with National General and received kickbacks from National General. II. ARGUMENT Transfer to the Southern District of New York is warranted. The Scheduled Actions are based upon an identical, nationwide scheme, which results in common questions of fact. Section 1407 authorizes the transfer of two or more civil actions, pending in different districts, for coordinated or consolidated pretrial proceedings, when (1) the actions involv[e] one or more common questions of fact; (2) transfer will be for the convenience of parties and witnesses; and (3) transfer will promote the just and efficient conduct of such actions. 28 U.S.C. 1407. Because of the glaring similarities in these actions, consolidation promotes convenience, efficiency, and 1 But, see infra Sec. II regarding Wells Fargo. 3
Case MDL No. 2797 Document 2 Filed 08/02/17 Page 4 of 11 just litigation. Thus, the Scheduled Actions meet the requirements for consolidation under 1407. Further, the Southern District of New York provides a convenient forum associated with the litigation. A. Common Questions of Fact Exist The Scheduled Actions assert overlapping claims based on common set of allegations and will involve common defenses. This Panel has noted that Section 1407 does not require a complete identity or even a majority of common factual or legal issues as a prerequisite to transfer. In re Keurig Green Mountain Single-Serve Coffee Antitrust Litig., --- F. Supp. 2d ----, 2014 WL 2547817, at *1 (J.P.M.L. June 3, 2014) (quotation omitted). The allegations in these actions, however, are consistent and identical: Defendants concocted an unlawful, nationwide scheme of placing unwanted and unnecessary insurance on automobiles purchased by Plaintiffs, which caused them significant harm. Wells Fargo lured in consumers for auto financing; then, as a part of the auto financing, Wells Fargo would send the borrower s information to its cohort, National General, to tack on additional collateral protection insurance, sold by, of course, National General. Defendants added this insurance without notifying consumers. In doing so, National General generated hundreds of millions of dollars of fraudulent proceeds. Wells Fargo also fraudulently generated significant financial benefit in kickbacks from National General, higher interest costs, and collecting additional fees and costs when automobiles were unlawfully repossessed. The New York Times discovered Defendants rampant misconduct, and Wells Fargo admitted, albeit vaguely, it takes full responsibility for its actions. This common scheme affected more than 800,000 customers across the United States between 2012 and 2016. These allegations provide the basis of each of the Scheduled Actions. As such, common questions of fact for each of the actions include: 4
Case MDL No. 2797 Document 2 Filed 08/02/17 Page 5 of 11 (a) Whether Defendants concealed or failed to properly disclose collateral protection insurance; (b) Whether Defendants concealed or failed to properly disclose payments related to collateral protection insurance; (c) Whether Defendants were participants in the alleged conspiracy; (d) Whether Defendants omitted material facts in documents and statements provided to Plaintiffs and the other class members; (e) Whether Plaintiffs and the other class members paid for unnecessary or unneeded auto insurance; (f) (g) (h) (i) Whether Defendants benefited from their fraudulent scheme; Whether Defendants engaged in a pattern or practice of racketeering; Whether Defendants conduct was unfair, deceptive, or misleading; and Whether Plaintiffs and the other class members are entitled to relief. Further, each of the constituent actions contains similar theories of recovery. While additional causes of action based on the same scheme exist in the complaints, all complaints assert common causes of action for violation of Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962, et al. and consumer protection laws, and common law claims. As such, common questions of law also exist among the cases. Given the common questions of law and fact, transfer and consolidation is appropriate. B. Transfer Promotes Convenient, Efficient, and Just Litigation Transferring these actions to a single court for coordinated and consolidated pretrial proceedings promotes efficiency and convenience for both Plaintiffs and Defendants. Transfer and coordination or consolidation under a single judge for pretrial proceedings promotes consistency in the legal rulings and the discovery process. The purpose of the multidistrict 5
Case MDL No. 2797 Document 2 Filed 08/02/17 Page 6 of 11 litigation process is to eliminate the potential for contemporaneous pretrial rulings by coordinating district and appellate courts in multidistrict related civil actions. In re Multidistrict Private Civ. Treble Damages Litig., 298 F. Supp. 484, 491-92 (J.P.M.L. 1968). The Panel echoes this same sentiment in cases involving putative class actions by noting the importance of avoiding inconsistent class certification rulings. Id. at 493; see, e.g., In re: Caterpillar, Inc., C13 & C15 Engine Prod. Liab. Litig., --- F. Supp. 2d ----, 2014 WL 2616818, at *1 (J.P.M.L. June 11, 2014) ( Centralization will... prevent inconsistent pretrial rulings (particularly as to class certification).... ); In re Sugar Indus. Antitrust Litig., 395 F. Supp. 1271, 1273 (J.P.M.L. 1975) ( We have consistently held that transfer of actions under Section 1407 is appropriate, if not necessary, where the possibility of inconsistent class determination exists. ). This consideration weighs strongly in favor of transferring these cases to a single court, as requested herein. The convenience of the parties and prevention of duplicative discovery are also important factors that favor transfer here. See 28 U.S.C. 1407. These cases, and additional cases filed based on material identical theories, will undoubtedly have overlapping discovery and repetitive depositions. Although there are currently only three pending actions, though Plaintiff anticipates many more, transfer is beneficial because the actions are based on identical conduct. See In re First Nat l Collection Bureau, Inc., Tel. Consumer Prot. Act (TCPA) Litig., 11 F. Supp. 3d 1353, 1354 (J.P.M.L. Apr. 8, 2014) ( Although there are relatively few parties and actions at present, efficiencies can be gained from having these actions proceed in a single district, such as eliminat[ing] duplicative discovery; prevent[ing] inconsistent pretrial rulings... and conserv[ing] the resources of the parties, their counsel and the judiciary. ); In re Nutramax Cosamin Mktg. & Sales Practices Litig., 988 F. Supp. 2d 1371, 1371 72 & n.2 (J.P.M.L. 2013) (creating multidistrict litigation for three pending actions); In re: Zurn Pex Plumbing Products Liability Litigation, 572 6
Case MDL No. 2797 Document 2 Filed 08/02/17 Page 7 of 11 F. Supp. 2d 1380, 1381 (J.P.M.L. 2008) (granting transfer and consolidation of three cases and six potential tag-alongs because of the overlapping and, often, nearly identical factual allegations that will likely require duplicative discovery and motion practice). Consolidation benefits all parties from duplicating discovery, and especially benefits Defendants from producing witnesses for depositions multiple times. Transferring these actions to a single court for coordinated or consolidated pretrial proceedings these actions for pretrial proceedings conserves time, expenses, and judicial resources. Therefore, transfer of these actions is appropriate to promote judicial efficiency, ensure consistent and just litigation, and provide convenience for both Plaintiffs and Defendants. C. The Southern District of New York is the Appropriate Forum The Panel balances a number of factors in determining the transferee forum, including: the experience, skill and caseloads of the available judges; the number of cases pending in the jurisdiction; the convenience of the parties; the location of the witnesses and evidence; and the minimization of cost and inconvenience to the parties. See In re: Preferential Drugs Prods. Pricing Antitrust Litig., 429 F. Supp. 1027, 1029 (J.P.M.L. 1977); In re: Tri-State Crematory Litig., 206 F. Supp. 1376, 1378 (J.P.M.L. 2002). The Southern District of New York best meets the objective of a forum that advances the convenience of the parties with respect to these actions. The Southern District of New York already has one of the currently filed actions and National General, a key Defendant, is located in the Southern District of New York. Wells Fargo also regularly conducts business throughout New York. Further, the Southern District of New York is convenient for litigants and witnesses, easily accessible, and possesses ample experience in multidistrict litigation. 7
Case MDL No. 2797 Document 2 Filed 08/02/17 Page 8 of 11 The key Defendants in this litigation are National General and Wells Fargo Bank, N.A., a South Dakota corporation, because they are the entities that concocted and conducted the fraudulent scheme. Significantly, although named in other actions, Wells Fargo & Company is simply a parent company holding corporation, and its location in San Francisco, California is irrelevant to where the cases should proceed. See Rouse v. Wachovia Mortgage, FSB, 747 F.3d 707, 709 (9th Cir. 2014) (finding that a district court in California had diversity jurisdiction because a national bank is a citizen only of the state in which its main office is located. Hence... Wells Fargo [is] a citizen of South Dakota and not California, when plaintiffs sought to bring an action in California state court). Between the locations of the key Defendants, New York where the decisions of Defendant National General were made and where a portion of the fraud was developed is certainly more appropriate and more convenient for all parties. Convenience of parties and witnesses includes consideration of the accessibility to the transferee jurisdiction to counsel from multiple jurisdictions. See, e.g., In re Polyester Staple Antitrust Litig., 259 F. Supp 2d. 1376 (J.P.M.L. 2003); See also Gregory Hansel, Extreme Litigation: An Interview with Judge Wm. Terrell Hodges, Chairman of the Judicial Panel on Multidistrict Litigation, 19 Me. B.J. 16, 19 (2004) ( [W]e take into account the accessibility of the court, particularly air travel in selecting a transferee district. ). The Southern District of New York provides a central and easily accessible location for all parties. Traveling to New York is both convenient and efficient. The Southern District of New York s courthouse is in close proximity to LaGuardia, JFK, and Newark airports, and is also readily accessible by various forms of mass transit and commuter rail service, thus making the Southern District of New York an appropriate transferee venue for this multidistrict litigation on convenience grounds as well, a fact this Panel regularly recognizes. See, e.g., In re: Kind LLC (All Nat.) Litig., 118 F. Supp. 3d 1380, 8
Case MDL No. 2797 Document 2 Filed 08/02/17 Page 9 of 11 1381 (J.P.M.L. 2015) (centralizing actions from California, Illinois, and New York in Southern District of New York because it is both convenient and accessible for the parties and witnesses ); In re: Keurig Green Mountain Single-Serve Coffee Antitrust Litig., 24 F. Supp. 3d 1361, 1363 (J.P.M.L. 2014) (noting that Southern District of New York is conveniently located for this nationwide litigation ). Additionally, the Southern District of New York has significant experience handling multidistrict litigation. The district has handled more than 160 prior MDLs, thus demonstrating it undoubtedly has the resources, experience, and capability to manage this litigation. 2 Importantly, however, transferring these cases, and other tag along cases, to the Southern District of New York also allows the Panel to advance its interest in reaching out to newer judges and expanding the judiciary s MDL experience. Indeed, in 2016 along, the Panel transferred cases to fifteen firsttime MDL judges. In recognition of the Panel s effort to engage newer judges in the MDL process, Judge Breyer pointedly noted that: [y]ou need a skill set in order to handle very large cases, but the only way you acquire that skill set is through experience. 3 The case currently pending in the Southern District of New York is before Judge Analisa Torres, who took the bench in 2013, and, despite her stellar reputation and experience has not yet had the opportunity to oversee an MDL. Judge Torres is an excellent and capable choice for overseeing this litigation and advancing the Panel s interests in expanding both diversity and MDL experience. Given all of these factors, the Southern District of New York is the best choice for this litigation. 2 See U.S. Judicial Panel on Multidistrict Litigation, Multidistrict Litigation Terminated through September 30, 2016, at 6-11 (listing 161 previous MDLs in Southern District of New York as of September 30, 2016), available at: http://www.jpml.uscourts.gov/sites/jpml/files/jpml_terminated_litigations-fy- 2016_0.pdf. 3 Amanda Bronstad, Rookie Judges Start to Wrangle MDL Dockets, Law.Com (April 20, 2017). 9
Case MDL No. 2797 Document 2 Filed 08/02/17 Page 10 of 11 III. CONCLUSION For each of the foregoing reasons, Plaintiff respectfully requests this Panel transfer the scheduled actions and any additional tag-along actions to the Southern District of New York for coordinated or consolidated pretrial proceedings before Judge Analisa Torres. Dated: August 1, 2017 Respectfully submitted, By: /s/ Adam J. Levitt Adam J. Levitt Amy E. Keller Daniel R. Ferri DICELLO LEVITT & CASEY LLC Ten North Dearborn Street, Eleventh Floor Chicago, Illinois 60602 Telephone: (312) 214-7900 alevitt@dlcfirm.com akeller@dlcfirm.com dferri@dlcfirm.com W. Daniel Dee Miles, III C. Lance Gould Leslie L. Pescia BEASLEY ALLEN CROW METHVIN PORTIS & MILES, P.C. 218 Commerce Street Montgomery, Alabama 36103 Telephone: (334) 269-2343 Dee.Miles@beasleyallen.com Lance.Gould@beasleyallen.com Leslie.Pescia@beasleyallen.com Richard M. Elias Greg G. Gutzler Tamara M. Spicer ELIAS GUTZLER SPICER LLC 130 South Bemiston Avenue, Suite 302 St. Louis, Missouri 63105 Telephone: (314) 274-3311 relias@egslitigation.com ggutzler@egslitigation.com tspicer@egslitigation.com 10
Case MDL No. 2797 Document 2 Filed 08/02/17 Page 11 of 11 Stephen J. Fearon, Jr. (NY Bar No. 2432474) SQUITIERI & FEARON, LLP 32 East 57th Street, 12th Floor New York, New York 10022 Tel: (212) 421-6492 Fax: (212) 421-6553 stephen@sfclasslaw.com Attorneys for Plaintiff Katherine Jacob 11