Opinion
13-CV-1913 (TPG) (JLC)
2016-08-31
UNITED STATES of America EX REL. Michael J. FISHER, Reginald McPhaul, Paul Taylor, and Chris Herrera, and Michael Fisher Individually, Reginald McPhaul Individually, Paul Taylor Individually, and Chris Herrera Individually, Plaintiffs/Relators, v. BANK OF AMERICA, N.A. and Bank of America, National Association f/k/a BAC Home Loans Servicing, LP, Defendants.
Samuel L Boyd, Samuel L. Boyd, P.C., Dallas, TX, Stephen A. Weiss, Seeger Weiss LLP, Jason Louis Lichtman, Lieff Cabraser Heimann & Bernstein, LLP, New York, NY, for Plaintiffs/Relators. Isaac S. Greaney, Sidley Austin LLP, New York, NY, for Defendants.
Samuel L Boyd, Samuel L. Boyd, P.C., Dallas, TX, Stephen A. Weiss, Seeger Weiss LLP, Jason Louis Lichtman, Lieff Cabraser Heimann & Bernstein, LLP, New York, NY, for Plaintiffs/Relators.
Isaac S. Greaney, Sidley Austin LLP, New York, NY, for Defendants.
MEMORANDUM ORDER
JAMES L. COTT, United States Magistrate Judge
In this action brought under the False Claims Act, 31 U.S.C. §§ 3729 et seq., qui tam Plaintiffs/Relators have moved to transfer venue from the Southern District of New York to the Eastern District of Texas after the United States of America declined to intervene in the suit. Relators state that they seek to transfer venue pursuant to 28 U.S.C. § 1404(a) because (1) they could have brought the case in the Eastern District of Texas, as Defendants are subject to service of process there under Rule 4 of the Federal Rule of Civil Procedure, and (2) transfer is appropriate for the convenience of the parties and witnesses and is in the interest of justice. Defendant Bank of America, N.A. opposes Relators' motion. For the reasons set forth below, the motion is denied. I. BACKGROUND
Because a motion to transfer venue is non-dispositive, this Court, to whom the motion was referred by Judge Griesa as a "specific non-dispositive motion" (Dkt. No. 34), will adjudicate it by order pursuant to 28 U.S.C. § 636(b)(1)(A) (rather than by issuing a report and recommendation). See, e.g., Adams v. Barnhart, No. 03–CV–1362 (KMW) (GWG), 2003 WL 21912543, at *1 (S.D.N.Y. Aug. 8, 2003) ; Michelli v. City of Hope, No. 93–CV–7582 (KMW) (THK), 1994 WL 410964, at *1 n. 1 (S.D.N.Y. Aug. 4, 1994). Under Rule 72(a), a district judge may modify or set aside any portion of a magistrate judge's non-dispositive order only if it is found to be "clearly erroneous or contrary to law." Fed R. Civ. P. 72(a) ; 28 U.S.C. § 636(b)(1)(A).
Relator Michael J. Fisher filed this False Claims Act ("FCA") action against Defendant Bank of America, N.A. ("the Bank") in March 2013 and the Court immediately sealed the case. Order to Seal Case, March 21, 2013, Dkt. No. 1. In or before June, 2014, the Government notified the Court that it would not intervene and the Court subsequently ordered that Relator's Complaint be unsealed within 30 days of June 13, 2014, after which service upon Defendant would be authorized. Order, June 13, 2014, Dkt. No. 8. The Complaint and the Government's Notice of Decision to Decline Intervention were placed on the docket on August 6, 2014. Dkt. Nos. 9–10.
Fisher filed under seal a First Amended Complaint dated August 17, 2014, which added Reginald McPhaul as a second Relator. First Amended Complaint ("FAC"), August 17, 2014, Dkt. No. 18. Several sealed documents were thereafter filed with the Court from August 18, 2014 until March 29, 2016. Among these was a Second Amended Complaint dated August 13, 2015, which added Paul Taylor and Chris Herrera as additional Relators. Second Amended Complaint ("SAC"), August 13, 2015, Dkt. No. 19. On March 29, 2016, the Court noted that the Government had again declined to intervene on the claims raised in both the First and the Second Amended Complaints and ordered that these documents be unsealed by April 29, 2016. Order Extending the Seal, March 29, 2016, Dkt. No. 17. The Court unsealed Relators' complaints on May 2, 2016 and authorized service upon the Bank as of that date. See Id.
On May 12, 2016, Relators filed a motion to transfer venue to the Eastern District of Texas, Sherman Division. Motion to Transfer ("Motion"), May 12, 2016, Dkt. No. 20. The Motion contended that transfer was warranted because "the case could have been brought in the EDTX Sherman Division and transfer is appropriate for the convenience of the parties and witnesses and is in the interest of justice." Motion, at 1-2. Relators supported this argument by specifically alleging that 1) "Relators' choice of forum is rational, legitimate, and entitled to significant weight"; 2) "[28 U.S.C.] Section 1404(a) provides for transfer upon a motion by a party at the discretion of the court to another district or division where the civil action might have been brought"; 3) "the Eastern District of Texas, Sherman Division, is more convenient for Relators, their counsel and the witnesses"; and 4) "the Department of Justice and the U.S. Attorney for the Southern District of New York ... have declined to intervene in the case, and ... are unopposed to the requested transfer of venue. ..." Motion, at 2. The following day, the Government filed a letter stating that it had declined to intervene and did not oppose Relators' Motion. Government's Letter, at 1, May 13, 2016, Dkt. No. 21.
On May 13, the Bank filed a letter to notify the Court that it did not consent to the transfer, opposed the Motion, and would file an opposition in accordance with the Court's local rules. Defendant's Letter, May 13, 2016, Dkt. No. 23. The Bank thereafter submitted its opposition to Relators' Motion on May 31, 2016. Memorandum of Law in Opposition to Motion to Transfer ("Def.'s Mem."), May 31, 2016, Dkt. No. 25. In its opposition papers, the Bank made the following arguments: (1) ex parte motions are improper; (2) if Relators wished to change venue, they could exercise their right to voluntarily dismiss and re-file their claims; (3) Relators had not identified changed circumstances that would justify giving them a second chance to select venue; (4) Relators' newfound preference to litigate this case in the Eastern District of Texas was not entitled to weight; (5) transfer to the Eastern District of Texas was not in the interest of justice; and (6) in the alternative, the case should be transferred to the District Court for the District of Columbia. Def.'s Mem., at 7-18. The Bank simultaneously filed a letter-motion with the Court requesting oral argument on Relators' Motion. Defendant's Letter, May 31, 2016, Dkt. No. 26. Relators submitted reply papers on June 7, 2016. Reply in Support of Motion to Transfer ("Reply"), June 7, 2016, Dkt. No. 27.
The parties thereafter exchanged six letters supplementing their respective submissions. (Dkt. Nos. 28–33). Relators filed a letter opposing the Bank's request for oral argument on June 7, 2016. Relators' Letter, June 7, 2016, Dkt. No. 28. On June 10, 2016, the Bank filed a letter contending that a forum-selection clause in Servicer Participation Agreements ("SPAs"), which the Bank had entered into with Fannie Mae as an agent of the Government, laid venue for this action exclusively in the District Court for the District of Columbia. Defendant's Letter, June 10, 2016, Dkt. No. 29. Relators replied, contesting this claim, on June 14, 2016. Relators' Letter, June 14, 2016, Dkt. No. 30.
On June 16, 2016, Relators filed a "Notice Regarding Similar Cases Transferred to the E.D. Tex." Relators' Notice, June 16, 2016, Dkt. No. 31. The notice listed two "similar cases brought by co-relators including Michael Fisher" that courts in the Southern District of New York had transferred to the Eastern District of Texas "in the interest of justice and for the convenience of the parties, witnesses and counsel." Id. (citing United States of America, ex rel. Michael J. Fisher v. JPMorgan Chase Bank, N.A., No. 13–CV–6920 (JPO) (case transferred June 6, 2016); United States of America, ex rel. Michael J. Fisher v. Wells Fargo, No. 13–CV–1460 (LTS) (case transferred May 23, 2016)). The parties' most recent letters disputed the relevance of both the forum-selection clause allegedly placing venue in the District Court for the District of Columbia and the "similar cases" recently transferred to the Eastern District of Texas. Relators' Letter, June 14, 2016, Dkt. No. 30; Defendant's Letter, June 17, 2016, Dkt. No. 32; Relators' Letter, June 17, 2016, Dkt. No. 33.
II. DISCUSSION
A. Applicable Legal Standards
Rule 5 of the Federal Rules of Civil Procedure provides that "a written motion, except one that may be heard ex parte, " must "be served on every party." Fed. R. Civ. P. 5(a)(1)(D). Under Rule 4(m), the time limit for service on a defendant is 90 days after the complaint is filed. Fed. R. Civ. P. 4(m).
Venue for FCA actions is governed by 31 U.S.C. § 3732(a). See United States ex rel. Thistlethwaite v. Dowty Woodville Polymer, Ltd., 110 F.3d 861, 865–66 (2d Cir.1997). An FCA action may be brought "in any judicial district in which the defendant ... resides, transacts business, or in which any act proscribed by section 3729 occurred." 31 U.S.C. § 3732(a).
Under 28 U.S.C. § 1404(a), "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). "The statute has a broad purpose: to prevent the waste of time, energy and money and to protect litigants, witnesses and the public against unnecessary inconvenience and expense." Schoenefeld v. New York, No. 08–CV–3269 (NRB), 2009 WL 1069159, at *2 (S.D.N.Y. Apr. 16, 2009) (internal quotation marks omitted) (quoting Van Dusen v. Barrack, 376 U.S. 612, 616, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964) ; Continental Grain Co. v. Barge FBL – 585, 364 U.S. 19, 26, 80 S.Ct. 1470, 4 L.Ed.2d 1540 (1960) ). "While unusual, it is not unknown for a plaintiff to seek relief under Section 1404(a) ; and there are no policy reasons that militate against such a motion." Harry Rich Corp. v. Curtiss – Wright Corp., 308 F.Supp. 1114, 1118 (S.D.N.Y.1969) (collecting cases); see also Atl. Mut. Ins. Co. v. CSX EXPEDITION, No. 00–CV–7668 (LMM), 2003 WL 21756414, at *2 (S.D.N.Y. July 30, 2003) (a plaintiffs motion to transfer under 1404(a) is "unusual, but not unique"); Trehern v. OMI Corp., No. 98–CV–0242, 1999 WL 47303 (RWS), at *2 (S.D.N.Y. Feb. 1, 1999) ("While this is unusual, a plaintiff is not barred from seeking transfer even though he had the original choice of forum."). However, "[b]ecause a plaintiff has already had the opportunity to choose the forum when filing the action," courts in this District have historically required plaintiffs "to demonstrate a ‘change in circumstances' that has taken place since the filing of suit in order to prevail." Atl. Mut. Ins. Co., 2003 WL 21756414, at *2 (collecting cases); Trehern, 1999 WL 47303, at *3 (describing showing of change in circumstances as "[t]he threshold question when deciding a § 1404(a) motion by a plaintiff"). Accordingly, "plaintiffs face a heavier burden than defendants" in moving for transfer. Washington Nat. Life Ins. Co. of New York v. Morgan Stanley & Co. Inc., 974 F.Supp. 214, 224 (S.D.N.Y.1997). The "usual presumptions as to a plaintiffs choice of forum are not appropriate" in this posture. Trehern, 1999 WL 47303, at *2 ; Anglo Am. Ins. Grp., P.L.C. v. CalFed Inc., 916 F.Supp. 1324, 1327–28 (S.D.N.Y.1996).
Courts assessing this threshold question in plaintiffs' motions to transfer have required plaintiffs to identify a new development that "warrants transferring the action to the transferee forum." Ferrostaal, Inc. v. Union Pacific R. Co., 109 F.Supp.2d 146, 151 (S.D.N.Y.2000) (denying motion to transfer where plaintiff failed to explain "why knowledge of the existence of the [changed circumstance] would have caused plaintiff to file suit initially in Texas, nor why the [changed circumstance's] existence now militates towards a Texas forum"). This change must have "taken place since the filing of [the] suit." Harem – Christensen Corp. v. M. S. Frigo Harmony, 477 F.Supp. 694, 698 (S.D.N.Y.1979) (declining to find changed circumstances were established by plaintiff's mistake in forum selection, which occurred before filing but realized later); Crane v. Metro – N. Commuter R.R., No. 87–CV–2876 (MJL), 1989 WL 74954, at *3 (S.D.N.Y. June 26, 1989) (denying plaintiff's motion to transfer because, "[t]o the extent other circumstances exist which might possibly warrant transfer, those circumstances were also in existence at the time plaintiff initially selected this forum").
Circumstances that were "known or should have been known to plaintiff long before the lawsuit" accordingly will not support a plaintiff's motion to transfer. Ferrostaal, Inc. v. M/V EAGLE, No. 02–CV–1887 (NRB), 2003 WL 21496689, at *2 (S.D.N.Y. June 30, 2003) (rejecting plaintiff's claim that circumstances changed after plaintiff learned that defendant planned to blame the damage at issue on plaintiff's employee who was based in another district because plaintiff already had information that "indicated the possibility of improper handling of the cargo" by that employee); Atl. Mut. Ins. Co., 2003 WL 21756414, at *3 (rejecting plaintiff's claim of "recently discovered evidence" of defendant's personal jurisdiction in the transferee district where plaintiff "was well aware" of this evidence long before bringing the motion to transfer). Conversely, courts have found that changes warranting transfer include, but are not limited to, (1) a state court ruling that made defendant amenable to suit in a more convenient transferee district, Harry Rich Corp., 308 F.Supp. at 1118 ; (2) a plaintiffs addition of a defendant that is more amenable to suit in the transferee district, Cremin v. Canadian Nat'l Ry. Co., No. 84–CV–8770 (LLS), 1986 WL 4065, at *4 (S.D.N.Y. Apr. 3, 1986) ; and (3) plaintiffs filing of a pending related action in the transferee district, Fairfax Dental (Ireland) Ltd. v. S.J. Filhol Ltd., 645 F.Supp. 89, 92–93 (E.D.N.Y.1986).
Despite the "long history in this [D]istrict of requiring a plaintiff to demonstrate a ‘change in circumstances' ... the Second Circuit has not yet ruled on this test." Atl. Mut. Ins. Co., 2003 WL 21756414, at *2. In fact, in Corke v. Sameiet M. S. Song of Norway, the Second Circuit granted a plaintiff's motion to transfer without mention of any such requirement. 572 F.2d 77, 80 (2d Cir.1978). The Second Circuit found that transfer was "in the interest of justice" because "refusal to transfer would severely prejudice" the plaintiff since the statute of limitations would bar his filing a new action in the transferee venue (and the transfer would cause no harm to defendants). Id.
Several courts in this District consequently have found that "a showing of changed circumstances is not required if transfer is in the interests of justice." Posven, C.A. v. Liberty Mut. Ins. Co., 303 F.Supp.2d 391, 407 (S.D.N.Y.2004) (collecting cases). Courts taking this approach generally have applied it to facts analogous to those in Corke or where there would be other severe prejudice to a plaintiff. See, e.g., id. (granting plaintiffs motion to transfer to allow related claims to remain together, where one defendant in the case would otherwise be dismissed on personal jurisdiction grounds); Atl. Mut. Ins. Co., 2003 WL 21756414, at *2 (analyzing the motion to transfer under both the change of circumstances test and whether the action "is barred by any applicable statute of limitations that would result in severe Corke- like prejudice"); Crane v. Metro – N. Commuter R.R., No. 87–CV–2876 (MJL), 1989 WL 74954, at *3 (S.D.N.Y. June 26, 1989) (the change of circumstances "rule is not without its exceptions... [but] where the Court disregarded the absence of changed circumstances, denial of the transfer motion would have resulted in severe prejudice to the plaintiff"); Gipromer v. SS Tempo, 487 F.Supp. 631, 633 (S.D.N.Y.1980) (finding grant of plaintiff's motion to transfer would serve the interests of justice because dismissal would subject plaintiff to a statute of limitations bar in Maine).
Upon finding that plaintiff has established the necessary change in circumstances or that a motion to transfer would be in the interests of justice by avoiding severe prejudice to plaintiff, courts then "turn [their] attention to the merits of the motion." Harry Rich Corp., 308 F.Supp. at 1118. Under § 1404(a), "the moving party bears the burden of establishing (1) that the action is one that ‘might have been brought’ in the district to which the movant seeks to have it transferred, and (2) that transfer is appropriate based on the convenience of the parties, the convenience of witnesses and the interests of justice." Posven, C.A., 303 F.Supp.2d at 400–01 (internal quotation marks omitted). When deciding whether transfer is appropriate for the convenience of parties and witnesses and in the interest of justice, courts consider the following factors: "(1) the convenience of the parties; (2) the convenience of the witnesses; (3) the relative means of the parties; (4) the locus of the operative events; (5) the relative ease of access to sources of proof; (6) the weight accorded to plaintiff's choice of forum; (7) the availability of process to compel unwilling witnesses; (8) the forum's familiarity with the governing law; and (9) trial efficacy and the interests of justice based upon the totality of the circumstances." Schoenefeld, 2009 WL 1069159, at *2 (collecting cases). "District courts have broad discretion in making determinations of convenience under Section 1404(a) and notions of convenience and fairness are considered on a case-by-case basis." D.H. Blair & Co. v. Gottdiener, 462 F.3d 95, 106 (2d Cir.2006)
B. The Court Will Not Deny the Motion to Transfer on the Basis that it was Filed Ex Parte
The Bank contends preliminarily that Relators improperly filed this Motion ex parte. Def.'s Mem., at 7. Rule 5 states that a "written motion, except one that may be heard ex parte ," must "be served on every party." Fed. R. Civ. P. 5(a)(1)(D). Relators maintain that Rule 5(a)(1)(D) does not apply because, at the time of the motion, the Bank "was not yet a ‘party’ over which the Court's jurisdiction had been obtained by service of process." Reply, at 5. Here, because the Court unsealed Relators' complaints on May 2, 2016, the deadline for service of process on Defendant was July 31, 2016. Relators consequently filed their motion to transfer venue within the 90-day time limit for service. The Bank counters that Relators' "tactical choice" to "seek transfer before serving the complaint ... does not excuse Relator[s'] failure to serve their motion" under Rule 5(a)(1)(D). Defendant's Letter, June 10, 2016, at 1.
Relators also referred to the issue of service when they filed the Motion, noting that "[a]s Defendants have not been served with the extant complaint in this matter ... this motion is being brought early enough to avoid prejudice to Defendants." Motion, at 4.
The deadline for service in this case has since been extended until September 14, 2016. See Order, July 27, 2016, Dkt. No. 37.
While the Court recognizes that, generally, "[e ] x parte motions ... are disfavored," U.S. ex rel. Lafond v. L – 3 Commc'ns SSG Tinsley, Inc., No. 09–10231, 2013 WL 1414235, at *1 (D.Mass. Apr. 8, 2013), it has not found and the Bank does not cite any precedent for precluding an ex parte motion to transfer that was filed before defendants were served. Moreover, in light of the fact that the Bank was made aware of the Motion (albeit not by Relators' service of the summons and complaint) and thus had an opportunity to file its opposition in response, the Court finds, as a practical matter, that these proceedings have "allow[ed] both sides to have their say" and do not pose the "threat to the adversary system" of which the Bank warns in its opposition. Def.'s Mem., at 8 (citing U.S. ex rel. Lafond, 2013 WL 1414235, at *1 ).
Instead, the Court notes that the Bank's memorandum of law (at pages 7-8) cited a number of cases that provide general propositions about ex parte motions but that are not analogous to this case for several reasons, including that none addresses situations in which an ex parte motion to transfer was filed before defendants were served.
The Court accordingly declines to decide this Motion based on any alleged procedural flaws and will not reach the question as to whether the Bank should not be considered a party to the case (and thus deemed outside Rule 4's service requirement) by virtue of its not having been served.
C. Relators Have Not Demonstrated Changed Circumstances or Severe Prejudice Warranting Transfer of this Case
In their Motion, Relators state that they seek a transfer to the Eastern District of Texas because, following the Government's decision not to intervene in the case, "the [Southern District of New York] is no longer sufficiently convenient for a case focused upon actions and omissions occurring in the North Texas area." Motion, at 7. They "originally selected venue in this Court ... because of the outstanding reputation of the [Southern District of New York] in financial litigation and the interest of the U.S. Attorney's Office for the Southern District of New York in pursuing such cases." Id. at 6–7. Relators explain that, even though Relators' counsel and the majority of Relators and their witnesses live or work within driving distance of the Eastern District of Texas, the "significant costs of conducting litigation in New York City could have been justified" if the "government had intervened" in the case. Id. They consequently argue that they have established "changed circumstances" warranting transfer of venue because "[t]heir hope that the interest of the United States Attorney for the Southern District of New York would result in a government intervention in the case was not fulfilled, and as a result the convenience of the parties is amply better served in the Eastern District of Texas." Reply, at 7-8.
The Bank counters that Relator Fisher was well aware of his, his witnesses', and his counsel's proximity to the Eastern District of Texas when he originally filed the action in the Southern District of New York in March 2013. Def.'s Mem., at 11-12. The Bank proffers that "the government's lack of interest was reasonably foreseeable at the time [Relators] filed suit" and the "expertise of this forum does not in any way depend on the government's participation." Id. at 12. Accordingly, the Bank concludes that, "[h]aving taken the long odds on intervention, Relators must live with the consequences of their wager." Id.
This Court finds that the Government's decision not to intervene in this qui tam action cannot amount to changed circumstances warranting transfer to the Eastern District of Texas. Relators have provided no authority to support their claim that such a development would militate in favor of transfer and the Court has uncovered none. Moreover, all of the factors on which Relators base their changed circumstances argument were known or should have been known to Relators when they filed this action in 2013.
In particular, Relators should have been aware when they filed this action that there was a significant possibility that the Government would decline to intervene. While the Government's intervention was by no means certain, Relators chose this venue with this understanding and assumed a calculated risk. In this sense, this case is at least somewhat analogous to Ferrostaal, Inc. v. M/V EAGLE, in which plaintiff claimed that it established a change in circumstances meriting transfer after it learned that defendant planned to blame one of plaintiff's employees (who was based in the transferee district) for the damage at issue in the case. 2003 WL 21496689, at *2. The Ferrostaal court declined to recognize a change in circumstances on this basis, finding that even though defendant's strategy was not certain at the time of filing, plaintiff knew or should have known of the possibility that the employee could be blamed for improperly handling the property. Id. Likewise, this case is less analogous to the line of cases granting transfer where plaintiffs encounter developments that make a different venue newly possible (and more convenient), Harry Rich Corp., 308 F.Supp. at 1118 ; newly necessary (because a portion of the case now would otherwise be dismissed), Cremin, 1986 WL 4065, at *4 ; or significantly more desirable (for efficiency purposes), Fairfax Dental (Ireland) Ltd, 645 F.Supp. at 92–93.
In the Court's view, the primary changed circumstance may in fact be that Relators' attorneys will now be the principal counsel having to make appearances in the Southern District of New York, which they must do while litigating several other qui tam cases that Relator Fisher has pending against other financial institutions in the Eastern District of Texas. However, convenience of counsel is not "an appropriate factor" that courts may consider in assessing a motion to transfer. Fuji Photo Film Co. Ltd. v. Lexar Media, Inc., 415 F.Supp.2d 370, 374 (S.D.N.Y.2006). The Court recognizes that basing litigation in a district that necessitates travel for at least some of plaintiffs' attorneys may, in some cases, impact the convenience of their clients by incurring greater legal expenses and costs. Nevertheless, Relators have not alleged such a "financial burden" in this case and in fact should have been aware of any such burden when they initially filed qui tam lawsuits in both the Eastern District of Texas and the Southern District of New York. See Def.'s Mem., at 5. Nor have Relators identified any other unforeseen inconvenience or inefficiencies that would arise from litigating these cases in separate districts. Accordingly, any new interest in streamlining the qui tam cases that Fisher has brought against several different financial institutions does not constitute a changed circumstance warranting transfer of venue.
The Bank reports that Fisher "filed identical complaints against six other financial institutions," bringing the first two in the Eastern District of Texas and the remaining five (including this action) in the Southern District of New York. Def.'s Mem., at 5. Fisher has not identified all of the lawsuits that he has filed with similar claims. Relators have informed the Court, however, that two "similar cases" brought by Relators against two separate financial institutions (one of which was already identified in Defendant's response) were transferred from the Southern District of New York to the Eastern District of Texas. Pls.' Letter, June 16, 2016, Dkt. No. 31. The Court has examined the dockets of the cases cited by the parties and notes that the present case is the only one that remains in the Southern District of New York of the five commenced this District. Two of these cases were transferred to the Eastern District of Texas upon relators' ex parte motions for transfer. See Order, United States of America, ex rel. Michael J. Fisher v. JPMorgan Chase Bank, N.A., No. 13–CV–6920 (JPO), June 6, 2016, Dkt. No. 16. (case transferred June 6, 2016); United States of America, ex rel. Michael J. Fisher v. Wells Fargo, No. 13–CV–1460 (LTS) (case transferred May 23, 2016 without order instructing transfer filed on the docket). Fisher filed notices of voluntary dismissal without prejudice in all of the other cases filed in this District. See Notice of Voluntary Dismissal, United States of America, ex rel. Michael J. Fisher v. Saxon Mortgage Services, Inc., No. 12–CV–8717, August 20, 2014, Dkt. No. 13; Order of Dismissal, United States of America, ex rel. Michael J. Fisher v. Litton Loan Servicing, Lp, No. 12–CV–8915, August 22, 2014, Dkt. No. 13; Order of Dismissal without Prejudice, United States of America, ex rel. Michael J. Fisher v. OneWest Bank, FBS, No. 12–CV–9352, January 9, 2015, Dkt. No. 21.
Both New York-based counsel as "local" counsel and Texas-based counsel have appeared for the Relators in this action.
While Relators advised the Court that the cases pending in the Eastern District of Texas are "similar" to this case, they do not argue that they are newly pending or related, so as to warrant transfer on this basis. Pls. Letter, June 16, 2016, Dkt. No. 31; cf. Fairfax Dental (Ireland) Ltd., 645 F.Supp. at 92 ("Considerations of judicial economy strongly suggest that this case should be transferred to the district in which a related case is pending."). Even if Relators had raised this issue, they have presented no facts to indicate that the pending cases in the Eastern District of Texas have sufficiently overlapping issues, facts, or parties with this case that would merit their transfer to a shared venue. See, e.g., Ahmed v. T.J. Maxx Corp., 777 F.Supp.2d 445, 452 (E.D.N.Y.2011) (finding that "the parties and underlying issues in the instant action and the ... actions [in the transferee venue] are sufficiently different, so that any benefit gained by transferring this action would be minimal" where the two cases were brought against the same defendants and brought several of the same claims); Connors v. Lexington Ins. Co., 666 F.Supp. 434, 455 (E.D.N.Y.1987) (granting motion to transfer where a case was pending in the transferee venue involving "the same issues, the same allegedly fraudulent transactions, the same defendants ... as well as additional defendants, and the same proposed class"). Here, the cases in the Eastern District of Texas are all brought against different financial institutions and presumably involve separate SPAs between those institutions and the Government as well as different alleged violations of those agreements. Relators thus could not justify change of venue on this ground.
Even if the "changed circumstances" standard were not applied here, Relators have also failed to demonstrate that they will face severe prejudice if the Court declines to grant their motion. Indeed, Relators are free to voluntarily dismiss the present case and re-file it in the Eastern District of Texas if they wish to change venue. Relators do not specifically argue that an action in the Eastern District of Texas would be "barred by any applicable statute of limitations that would result in severe Corke -type prejudice," thereby constraining them from voluntarily dismissing and refiling this case in the Eastern District of Texas. Atl. Mut. Ins. Co., 2003 WL 21756414, at *2. Instead, Relators suggest only that they may be prejudiced because "[d]ismissal and refiling here could affect the number of claims and damages recoverable by the United States, and could also risk the action being supplanted by an unknown action filed in the timeframe between the filing in the Southern District of New York and re-filing in the Eastern District of Texas." Reply, at 7. While the Court acknowledges that 31 U.S.C. § 3730(b)(5) bars the filing of new qui tam actions that are "based on the facts underlying [a] pending action," Relators' apparent concern is purely speculative and does not rise to the level of severe prejudice that would merit transfer.
In sum, as Relators have identified neither a change in circumstances nor severe prejudice that would warrant transfer to the Eastern District of Texas, they have failed to satisfy their burden on this threshold question. Accordingly, the Court need not reach the factors involved in evaluating the merits of their motion to transfer. Moreover, the Court concludes that it would be an unwise precedent to allow a relator to file a suit in one district, wait to see whether the Government intervened, and then if it did not, seek an immediate transfer to another court. Some would fairly categorize such maneuvers as forum shopping, which cannot be countenanced.
D. The Court Need Not Reach the Issue as to Whether Venue Lays Exclusively in the U.S. District Court for the District of Columbia
In its response to Relators' motion, the Bank argues in the alternative that this case should be transferred to the District Court for the District of Columbia because it is related to and intertwined with a National Mortgage Settlement that was documented in a consent judgment in the District Court for the District of Columbia. Def.'s Mem., at 16-18. The Bank contends that the District Court for the District of Columbia is thus best suited to interpret and adjudicate Relators' claims. Id. at 17–18. Additionally, in letters filed after it had submitted its opposition to Relators' motion to transfer, the Bank argued for the first time that, "if the case is transferred anywhere," a forum-selection clause in SPAs between the Bank and an agent for the government laid venue for the action "exclusively" in the District Court for the District of Columbia. Defendant's Letter, June 10, 2016, at 2. Specifically, the Bank argued that "the forum selection clause should be dispositive" because "Relators ‘stand[ ] in the shoes of the government,’ ... and bring suit as its ‘partial assignee[s].’ " Defendant's Letter, June 17, 2016, at 1-2, (quoting U.S. ex rel. Kreindler & Kreindler v. United Technologies Corp., 985 F.2d 1148, 1154 (2d Cir.1993) ; Vermont Agency of Natural Resources v. U.S. ex rel. Stevens, 529 U.S. 765, 773 n. 4, 120 S.Ct. 1858, 146 L.Ed.2d 836 (2000) ).
The clause at issue reads: "Any and all disputes between the parties that cannot be settled by mutual agreement shall be resolved solely and exclusively in the United States Federal courts located within the District of Columbia. Both parties consent to the jurisdiction of venue of such courts and irrevocably waive any objections thereto." SAC, August 13, 2015, Ex. 1 at 111(A), Dkt. No. 19–1; SAC Exhibit 2 at ¶ 11(A) (same quote).
Relators oppose this claim. They argue that, despite the lack of any authority precisely on point, Relators "in a non-intervened FCA case [should not be] bound by a forum and venue selection clause in the contract under which the Defendant provided goods or services to the United States." Relator's Letter, June 14, 2016, at 2. They contend that their position is supported by the fact that (1) Relators do not enjoy the same rules or rights that inure to the United States in qui tam actions, (2) a qui tam action is brought in the name of the Government, which remains a nominal party in the case unless it intervenes, and (3) "Relators are not ordinary assignees but a unique kind of partial assignee of claims of the Government." Id. ; Relators' Letter, June 17, 2016, at 1-2.
As the parties did not fully brief the issue of whether Relators should be held to a forum-selection clause that was entered into between the Government and the Bank and as a fuller record would be necessary for any decision on this matter, the Court will not reach the question of whether the forum-selection clause lays venue for this case exclusively in the District Court for the District of Columbia. Moreover, the Bank repeatedly framed its argument regarding the forum-selection clause in the alternative and the Court has denied Relators' motion to transfer, obviating any need for the Court to address this issue at this time. The Bank may renew this argument once it has been served, if appropriate, at which time the Court will require the parties to develop a fuller record and will give the Government an opportunity to be heard on this issue.
III. CONCLUSION
For the foregoing reasons, Relators' motion to transfer venue from the Southern District of New York to the Eastern District of Texas, Sherman Division, is denied.
The Clerk of the Court is directed to close Docket Numbers 20 and 26.