BAEC Bulletin | November/December 2021 | 37
of the referral order for non-dispositive pretrial matters, notwithstanding the view of some courts that such a motion was dispositive. The Court then applied the two part test under 28 U.S.C. §1404(a) that asks whether the action might have been brought in the proposed transferee forum and, if so, whether the transfer promotes convenience and justice. The parties did not dispute, and the Court held, that the action could have been brought in the Northern District of Texas. The Court, though, concluded defendant had not made a strong showing in favor of transfer. The Court considered nine factors, none of which was considered determinative, and held that the balance of those factors supported denying the motion. The lone factor in favor of transfer was the locus of operative facts. Yet five factors weighed against transfer, including deference to plaintiff’s choice of forum, the convenience of witnesses and parties, the availability of process to compel the attendance of unwilling witnesses, and the relative means of the parties, and three other facts were neutral, including the location of relevant documents, the forum’s familiarity with the governing law, and the interest of justice and judicial economy. Arbitration In Morrison v. Midland Funding, LLC, et al ., 20-cv-6468-FPG (June 21, 2021), one defendant acquired all rights, title and interest in plaintiff’s account from a non-party credit card company, filed an action against plaintiff seeking to collect on the outstanding credit card debt, obtained a default judgment in its favor, and attempted to collect on the judgment by filing an income execution. Plaintiff sued defendant, its affiliate and its attorneys, individually and on behalf of two classes, alleging that defendants violated the Fair Debt Collection Practices Act and New York’s General Business Law because the income execution allegedly contained false statements and failed to comply with various requirements of the New York State Consumer Protection Law. In response, defendants filed a motion to compel arbitration and dismiss the complaint, based on an arbitration provision found in the credit card agreement between plaintiff and the credit card company. Plaintiff asserted that arbitration of her claim was improper because, under the so-called merger doctrine, the underlying debt merged with the state court judgment, extinguishing the debt, the credit card agreement, and the arbitration provision contained therein. The Court disagreed, ruling that the credit card debt might merge into the court judgment debt, but that merger does not extinguish the underlying contract and the rights and obligations therein, including those that govern the manner in which any debt may be collected. Moreover, the Court found the underlying credit card agreement contained clear language predicting the circumstances presented here, in which a lawsuit might be filed to collect on the debt and, if plaintiff responded by claiming wrongdoing, plaintiff could be compelled to arbitrate that claim. The Court also rejected plaintiff’s argument that the right to compel arbitration in the credit card agreement was unique to the credit card company, and not one that could be assigned to defendant or asserted by its affiliate or attorney/agent. The Court held that defendants stepped into the shoes of the credit card company when they purchased “all rights, title and interest in the account” and, therefore, their right to compel arbitration was clear. Permissive Joinder and Remand In Barber v. Somal Logistics, Ltd. , No. 20-cv-00854-WMS (May 27, 2021)—an action arising out of a motor vehicle collision that was originally commenced in New York State Supreme Court but removed based on diversity of citizenship—plaintiff sought
permissive joinder of two additional defendants she sued in a separate state court action for injuries allegedly suffered in a different motor vehicle accident that occurred nine months after the accident giving rise to this action. Because joinder of the additional defendants would eliminate diversity of citizenship, plaintiff also sought remand to state court. In support of her motion, plaintiff argued that the extent to which each accident caused her injuries is a factual question central to both actions, “making the two actions part of the same series of occurrences, and sharing common questions of law and fact.” Defendants opposed, contending that joinder was sought only to defeat diversity and secure remand to state court. Observing that joinder “is generally favored,” the Court undertook a two- part analysis to determine: (i) whether joinder is permissible under Fed. R. Civ. P. 20(a)(2); and (ii) if it is fundamentally fair to defendants to permit “diversity-destroying” joinder. In answering both questions in the affirmative, the Court first found that the two accidents “constitute a series of occurrences” giving rise to common questions of fact regarding the cause of plaintiff’s injury and the extent of her damages. As for the latter, the Court determined that defendants were not prejudiced because: (i) plaintiff did not delay in seeking to join the additional defendants; (ii) a joint trial would result in no prejudice given the fact that the case “is in its early stages and no discovery has yet taken place;” and (iii) “joinder and remand would reduce the chance of multiple litigation and potentially inconsistent outcomes.” As a result, plaintiff’s motion was granted and the case was remanded to state court where presumably, but not necessarily, it will be consolidated with the non-removed action that plaintiff commenced against the defendants who were joined in the federal action prior to its remand. Intervention in Qui Tam Action In U.S. ex rel. Ross v. Independent Health Corp. , 12-cv-00299- WMS (Aug. 9, 2021), a qui tam action brought under the False Claims Act in which the plaintiff/relator alleges that defendants submitted false and inflated claims for reimbursement to the federal Medicare program, the United States government moved to intervene seven years after its initial deadline to do so. Specifically, under the False Claims Act, the government had 60 days to determine whether it would intervene, but rather than make the election at the outset, it began requesting (and receiving) 180-day extensions while investigating the relator’s allegations. After obtaining 15 such extensions, the government eventually elected not to intervene, but noted that its investigation remained ongoing. The relator then amended her complaint and defendants moved to dismiss it. The day the motion to dismiss was fully briefed, the government moved to intervene, arguing there was good cause to allow its untimely intervention. The Court agreed, finding first that the public “The public interest is best protected by allowing the government to bring ‘its considerable expertise and resources to bear against those alleged to have defrauded it.’”
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