In re Customs & Tax Admin. of the Kingdom of Den. (Skat) Tax Refund Scheme Litig.

338 F. Supp. 3d 1347

Opinion

SARAH S. VANCE, Chair

Before the Panel :

Footnotes

•

* The Customs and Tax Administration of the Kingdom of Denmark (SKAT), the common plaintiff, moves under 28 U.S.C. § 1407 to centralize this litigation in the Southern District of New York. This litigation now consists of 140 actions pending in 11 districts, as listed on Schedule A. Defendants in 104 actions support centralization in the Southern District of New York. The Tew defendants¹ in 15 actions in the Eastern District of Kentucky oppose inclusion of their actions in the proposed MDL. Defendants in the remaining actions, as well as the the non-Tew defendants in six Eastern District of Kentucky actions, did not file responses.

On the basis of the papers filed and the hearing session held, we find that these actions involve common questions of fact, and that centralization will serve the convenience of the parties and witnesses and promote the just and efficient conduct of this litigation. The actions share complex factual questions arising from plaintiff SKAT's allegation that the defendants - 141 U.S. retirement and pension plans and their alleged representatives and agents - engaged in a fraudulent scheme to obtain tax refunds from SKAT utilizing the services of overlapping individuals and firms that served as their authorized representatives, payment agents, and broker-custodians, following the same pattern of conduct in each action. In particular, SKAT alleges that, in all actions, defendants falsely represented that the plans owned shares in Danish companies, that taxes had been withheld on the dividends, and as tax-exempt entities, they were entitled to refunds under a double taxation treaty between Denmark and the United States. One of four payment agents allegedly was *1349involved in all of the tax refund applications, and these agents in turn allegedly used one of nine broker custodians to provide false documentation of stock ownership and related tax information. The record indicates that discovery is likely to be international in scope and will include a significant number of nonparties. Centralization will eliminate duplicative discovery; prevent inconsistent pretrial rulings, especially with respect to dispositive motions and discovery disputes; and conserve the resources of the parties, their counsel, and the judiciary.

The sole opposition to centralization is from the Tew defendants, who argue only against inclusion of the Eastern District of Kentucky actions. They argue that their actions focus on Kentucky-based individuals and entities that have nothing to do with the other actions in this litigation. But the record before the Panel does not support their contention. SKAT alleges that the tax refund claims in the Kentucky actions were part of the alleged common scheme at issue in the broader litigation. Moreover, the brokerage firm allegedly supplying false documentation for the claims at issue in the Kentucky actions is the same firm allegedly involved in 14 actions in six other districts. Thus, we decline the Tew defendants' request to exclude the Eastern District of Kentucky actions.²

We conclude that the Southern District of New York is an appropriate transferee district for this litigation. The majority of actions are concentrated in or near this district, and it is conveniently located for this nationwide litigation. Judge Lewis A. Kaplan is an experienced transferee judge, and he is familiar with the issues raised in this litigation. We are confident he will steer this matter on a prudent course.

IT IS THEREFORE ORDERED that the actions listed on Schedule A and pending outside the Southern District of New York are transferred to the Southern District of New York and, with the consent of that court, assigned to the Honorable Lewis A. Kaplan for coordinated or consolidated pretrial proceedings.

SCHEDULE A

MDL No. 2865 - IN RE: CUSTOMS AND TAX ADMINISTRATION OF THE KINGDOM OF DENMARK (SKAT) TAX REFUND SCHEME LITIGATION

District of Connecticut

SKAT v. TVETER LLC PENSION PLAN, ET AL., C.A. No. 3:18-00985

SKAT v. VALERIUS LLC SOLO 401K PLAN, ET AL., C.A. No. 3:18-00987

Southern District of Florida

SKAT v. THE FWC CAPITAL LLC PENSION PLAN, ET AL., C.A. No. 1:18-21801

SKAT v. THE RDL CONSULTING GROUP LLC PENSION PLAN, ET AL., C.A. No. 1:18-22070

Northern District of Illinois

SKAT v. COLE ENTERPRISES USA RETIREMENT PLAN & TRUST, ET AL., C.A. No. 1:18-03206 *1350SKAT v. BLUE OCEAN EQUITY LLC RETIREMENT PLAN, ET AL., C.A. No. 1:18-03207

SKAT v. KK LAW FIRM RETIREMENT PLAN TRUST, ET AL., C.A. No. 1:18-04082

Eastern District of Kentucky

SKAT v. SRH FARMS LLC 401(K) PLAN, ET AL., C.A. No. 5:18-00395

SKAT v. MGH FARMS LLC 401(K) PLAN, ET AL., C.A. No. 5:18-00396

SKAT v. JSH FARMS 401(K) PLAN, ET AL., C.A. No. 5:18-00397

SKAT v. TRITON FARMS LLC 401(K) PLAN, ET AL., C.A. No. 5:18-00398

SKAT v. KRH FARMS LLC 401(K) PLAN, ET AL., C.A. No. 5:18-00399

SKAT v. TEW, LP RETIREMENT PLAN, ET AL., C.A. No. 5:18-00400

SKAT v. TEW ENTERPRISES, LLC RETIREMENT PLAN, ET AL., C.A. No. 5:18-00401

SKAT v. INDUSTRIAL PENSIONS GROUP TRUST, ET AL., C.A. No. 5:18-00402

SKAT v. CASTING PENSIONS GROUP TRUST, ET AL., C.A. No. 5:18-00403

SKAT v. SV HOLDINGS, LLC RETIREMENT PLAN, ET AL., C.A. No. 5:18-00404

SKAT v. CENTRAL TECHNOLOGIES PENSIONS GROUP TRUST, ET AL., C.A. No. 5:18-00405

SKAT v. BLUEGRASS RETIREMENT GROUP TRUST, ET AL., C.A. No. 5:18-00406

SKAT v. BLUEGRASS INVESTMENT MANAGEMENT, LLC RETIREMENT PLAN, ET AL., C.A. No. 5:18-00407

SKAT v. AUTOPARTS PENSIONS GROUP TRUST, ET AL., C.A. No. 5:18-00408

SKAT v. MSJJ RETIREMENT GROUP TRUST, ET AL., C.A. No. 5:18-00409

District of Massachusetts

SKAT v. THE 78 YORKTOWN PENSION PLAN, ET AL., C.A. No. 1:18-10890

SKAT v. THE CAMBRIDGE TOWN LINE PENSION PLAN, ET AL., C.A. No. 1:18-10891

SKAT v. THE DIAMOND SCOTT CAPITAL PENSION PLAN, ET AL., C.A. No. 1:18-10892

SKAT v. THE HOTEL FROMANCE PENSION PLAN, ET AL., C.A. No. 1:18-10893

SKAT v. THE MOUNTAIN AIR LLC 401K PLAN, ET AL., C.A. No. 1:18-10894

SKAT v. THE SKSL LLC PENSION PLAN, ET AL., C.A. No. 1:18-10895

SKAT v. THE SNOW HILL PENSION PLAN, ET AL., C.A. No. 1:18-10896

SKAT v. THE WESTRIDGE AVE LLC 401K PLAN, ET AL., C.A. No. 1:18-10897

SKAT v. THE SHAPIRO BLUE MANAGEMENT LLC 401K PLAN, ET AL., C.A. No. 1:18-11008

SKAT v. THE PATRICK PARTNERS CONGLOMERATE PENSION PLAN, ET AL., C.A. No. 1:18-11011

SKAT v. CSCC CAPITAL PENSION PLAN, ET AL., C.A. No. 1:18-11012

District of New Jersey

SKAT v. THE CARDINAL CONSULTING PENSION PLAN, ET AL., C.A. No. 3:18-08878 *1351SKAT v. THE EGRET ASSOCIATES LLC 401K PLAN, ET AL., C.A. No. 3:18-08880

SKAT v. THE CROW ASSOCIATES PENSION PLAN, ET AL., C.A. No. 3:18-08881

SKAT v. THE HERON ADVISORS PENSION PLAN, ET AL., C.A. No. 3:18-08882

SKAT v. THE HOBOKEN ADVISORS LLC 401K PLAN, ET AL., C.A. No. 3:18-08883

SKAT v. THE JAYFRAN BLUE PENSION PLAN, ET AL., C.A. No. 3:18-08884

SKAT v. THE JT HEALTH CONSULTING LLC 401K PLAN, ET AL., C.A. No. 3:18-08885

SKAT v. THE LAKEVIEW ADVISORS 401K PLAN, ET AL., C.A. No. 3:18-08886

SKAT v. THE OSPREY ASSOCIATES LLC 401K PLAN, ET AL., C.A. No. 3:18-08887

SKAT v. THE SANDPIPER PENSION PLAN, ET AL., C.A. No. 3:18-08888

SKAT v. THE ZEN TRAINING LLC 401(K) PLAN, ET AL., C.A. No. 3:18-08889

SKAT v. THE EVERYTHING CLEAN LLC 401K PLAN, ET AL., C.A. No. 3:18-09439

SKAT v. THE JUMP GROUP LLC 401K PLAN, ET AL., C.A. No. 3:18-09442

SKAT v. THE OAKS GROUP PENSION PLAN, ET AL., C.A. No. 3:18-09444

SKAT v. THE WAVE MAVEN LLC 401K PLAN, ET AL., C.A. No. 3:18-09445

SKAT v. THE BALMORAL MANAGEMENT LLC 401K PENSION PLAN, ET AL., C.A. No. 3:18-10098

SKAT v. THE BEECH TREE PARTNERS 401K PLAN, ET AL., C.A. No. 3:18-10108

SKAT v. THE BLACKBIRD 401K PLAN, ET AL., C.A. No. 3:18-10109

SKAT v. THE CHAMBERS PROPERTY MANAGEMENT LLC 401K PLAN, ET AL., C.A. No. 3:18-10110

SKAT v. FIFTYEIGHTSIXTY LLC SOLO 401K PLAN, ET AL., C.A. No. 3:18-10111

SKAT v. THE HAWK GROUP PENSION PLAN, ET AL., C.A. No. 3:18-10112

SKAT v. THE HIBISCUS PARTNERS LLC 401K PLAN, ET AL., C.A. No. 3:18-10113

SKAT v. THE MAPLE ADVISORS LLC 401K PLAN, ET AL., C.A. No. 3:18-10114

SKAT v. ONEZEROFIVE LLC SOLO 401K PLAN, ET AL., C.A. No. 3:18-10115

SKAT v. THE ROBIN DANIEL PENSION PLAN, ET AL., C.A. No. 3:18-10116

SKAT v. THE SEA BRIGHT ADVISORS LLC 401K PLAN, ET AL., C.A. No. 3:18-10117

SKAT v. THE TAG REALTY ADVISORS LLC 401K, ET AL., C.A. No. 3:18-10118

SKAT v. THE THROCKMORTON REALTY ADVISORS 401K PLAN, ET AL., C.A. No. 3:18-10119

SKAT v. ACORN CAPITAL CORPORATION EMPLOYEE PROFIT SHARING PLAN, ET AL., C.A. No. 3:18-10464

SKAT v. CAMBRIDGE WAY LLC 401K PROFIT SHARING PLAN, ET AL., C.A. No. 3:18-10465 *1352SKAT v. THE DINK14 LLC 401K PLAN, ET AL., C.A. No. 3:18-10466

SKAT v. JML CAPITAL LLC 401K PLAN, ET AL., C.A. No. 3:18-10468

SKAT v. NATOLI MANAGEMENT PENSION PLAN, ET AL., C.A. No. 3:18-10469

SKAT v. NOVA FONTA TRADING LLC 401K PLAN, ET AL., C.A. No. 3:18-10470

SKAT v. THE SKYBAX LLC 401K PLAN, ET AL., C.A. No. 3:18-10592

Southern District of New York

IN RE SKAT TAX REFUND SCHEME LITIGATION, C.A. No. 1:18-04047

SKAT v. THE DMR PENSION PLAN, ET AL., C.A. No. 1:18-04049

SKAT v. THE HOUSTON ROCCO LLC 401K PLAN, ET AL., C.A. No. 1:18-04050

SKAT v. THE PROPER PACIFIC LLC 401K PLAN, ET AL., C.A. No. 1:18-04051

SKAT v. THE LBR CAPITAL PENSION PLAN, ET AL., C.A. No. 1:18-04052

SKAT v. THE ATLANTIC DHR 401K PLAN, ET AL., C.A. No. 1:18-04430

SKAT v. THE STOR CAPITAL CONSULTING LLC 401K PLAN, ET AL., C.A. No. 1:18-04434

SKAT v. THE BUSBY BLACK 401K PLAN, ET AL., C.A. No. 1:18-04522

SKAT v. THE CANADA ROCK LLC 401K PLAN, ET AL., C.A. No. 1:18-04531

SKAT v. THE ISDB PENSION PLAN, ET AL., C.A. No. 1:18-04536

SKAT v. THE MONIN AMPER PENSION PLAN, ET AL., C.A. No. 1:18-04538

SKAT v. THE NYC STANISMORE PENSION PLAN, ET AL., C.A. No. 1:18-04541

SKAT v. THE TEXAS ROCCO LLC 401K PLAN, ET AL., C.A. No. 1:18-04543

SKAT v. SANFORD VILLA PENSION PLAN, ET AL., C.A. No. 1:18-04767

SKAT v. THE ASTON ADVISORS LLC 401K PLAN, ET AL., C.A. No. 1:18-04770

SKAT v. THE SECTOR 230 LLC 401K PLAN, ET AL., C.A. No. 1:18-04771

SKAT v. RAUBRITTER LLC PENSION PLAN, ET AL., C.A. No. 1:18-04833

SKAT v. THE M2F WELLNESS LLC 401K PLAN, ET AL., C.A. No. 1:18-04890

SKAT v. THE MPQ HOLDINGS LLC 401K PLAN, ET AL., C.A. No. 1:18-04892

SKAT v. STERLING ALPHA LLC 401K PROFIT SHARING PLAN, ET AL., C.A. No. 1:18-04894

SKAT v. THE TKKJ LLC 401K PLAN, ET AL., C.A. No. 1:18-04896

SKAT v. NYCATX LLC SOLO 401K PLAN, ET AL., C.A. No. 1:18-04898

SKAT v. SANDER GERBER PENSION PLAN, ET AL., C.A. No. 1:18-04899

SKAT v. ACKVIEW SOLO 401K PLAN, ET AL., C.A. No. 1:18-04900

SKAT v. THE DOSMON BLY PENSION PLAN, ET AL., C.A. No. 1:18-05045

SKAT v. THE GOLDSTEIN LAW GROUP PC 401(K) PROFIT SHARING PLAN, ET AL., C.A. No. 1:18-05053

SKAT v. THE INDIA BOMBAY LLC 401K PENSION PLAN, ET AL., C.A. No. 1:18-05057 *1353SKAT v. THE ARIA PENSION PLAN, ET AL., C.A. No. 1:18-05147

SKAT v. THE BELFORTE PENSION PLAN, ET AL., C.A. No. 1:18-05150

SKAT v. THE BRAVOS ADVISORS 401K PLAN, ET AL., C.A. No. 1:18-05151

SKAT v. THE COSTELLO ADVISORS PENSION PLAN, ET AL., C.A. No. 1:18-05158

SKAT v. THE ESKIN PENSION PLAN, ET AL., C.A. No. 1:18-05164

SKAT v. THE FIELDCREST PENSION PLAN, ET AL., C.A. No. 1:18-05180

SKAT v. THE WESTPORT ADVISORS LLC 401K PLAN, ET AL., C.A. No. 1:18-05183

SKAT v. THE KODIAK CAPITAL PENSION PLAN, ET AL., C.A. No. 1:18-05185

SKAT v. THE KYBER PENSION PLAN, ET AL., C.A. No. 1:18-05186

SKAT v. THE LERICI CAPITAL PENSION PLAN, ET AL., C.A. No. 1:18-05188

SKAT v. THE LUDLOW HOLDINGS 401K PLAN, ET AL., C.A. No. 1:18-05189

SKAT v. THE REGOLETH PENSION PLAN, ET AL., C.A. No. 1:18-05190

SKAT v. THE SABA CAPITAL LLC 401K PLAN, ET AL., C.A. No. 1:18-05192

SKAT v. THE WEST RIVER PENSION PLAN, ET AL., C.A. No. 1:18-05193

SKAT v. THE STARK PENSION PLAN, ET AL., C.A. No. 1:18-05194

SKAT v. THE PETKOV PARTNERS PENSION PLAN, ET AL., C.A. No. 1:18-05299

SKAT v. THE PETKOV MANAGEMENT LLC 401K PLAN, ET AL., C.A. No. 1:18-05300

SKAT v. THE SVP 401K PLAN, ET AL., C.A. No. 1:18-05305

SKAT v. THE KRABI HOLDINGS LLC 401K PLAN, ET AL., C.A. No. 1:18-05307

SKAT v. THE SPKK LLC 401K PLAN, ET AL., C.A. No. 1:18-05308

SKAT v. THE KASV GROUP PENSION PLAN, ET AL., C.A. No. 1:18-05309

SKAT v. DEL MAR ASSET MANAGEMENT SAVING & RETIREMENT PLAN, ET AL., C.A. No. 1:18-05374

SKAT v. HEADSAIL MANUFACTURING LLC ROTH 401K PLAN, ET AL., C.A. No. 1:18-7824

SKAT v. EDGEPOINT CAPITAL LLC ROTH 401K PLAN, ET AL., C.A. No. 1:18-7827

SKAT v. AEROVANE LOGISTICS LLC ROTH 401K PLAN, ET AL., C.A. No. 1:18-7828

SKAT v. RANDOM HOLDINGS 401K PLAN, ET AL., C.A. No. 1:18-7829

SKAT v. FEDERATED LOGISTICS LLC 401K, ET AL., C.A. No. 1:18-08655

Southern District of Ohio

SKAT v. THE BELLA CONSULTANTS PENSION PLAN, ET AL., C.A. No. 1:18-00309

SKAT v. THE MUELLER INVESTMENTS PENSION PLAN, ET AL., C.A. No. 1:18-00310

SKAT v. THE GREEN GROUP SITE PENSION PLAN, ET AL., C.A. No. 1:18-00311

SKAT v. THE SINCLAIR PENSION PLAN, ET AL., C.A. No. 1:18-00351

*1354Eastern District of Pennsylvania

SKAT v. NEWSONG FELLOWSHIP CHURCH 401K PLAN, ET AL., C.A. No. 5:18-02459

Southern District of Texas

CUSTOMS AND TAX ADMINISTRATION OF THE KINGDOM OF DENMARK v. BLACKRAIN PEGASUS LLC SOLO 401K PLAN, ET AL., C.A. No. 4:18-01889

CUSTOMS AND TAX ADMINISTRATION OF THE KINGDOM OF DENMARK v. GYOS 23 LLC SOLO 401K PLAN, ET AL., C.A. No. 4:18-01895

CUSTOMS AND TAX ADMINISTRATION OF THE KINGDOM OF DENMARK v. THE OAK TREE ONE 401K PLAN, ET AL., C.A. No. 4:18-01897

CUSTOMS AND TAX ADMINISTRATION OF THE KINGDOM OF DENMARK v. THE JOANNE E. BRADLEY SOLO 401K PLAN, ET AL., C.A. No. 4:18-01898

CUSTOMS AND TAX ADMINISTRATION OF THE KINGDOM OF DENMARK v. DELGADO FOX LLC SOLO 401K PLAN, ET AL., C.A. No. 4:18-01899

CUSTOMS AND TAX ADMINISTRATION OF THE KINGDOM OF DENMARK v. PEGASUS FOX 23 LLC SOLO 401K PLAN, ET AL., C.A. No. 4:18-01900

District of Utah

SKAT v. DW CONSTRUCTION, INC. RETIREMENT PLAN, ET AL., C.A. No. 2:18-00452

SKAT v. KAMCO INVESTMENTS, INC. PENSION PLAN, ET AL., C.A. No. 2:18-00454

SKAT v. KAMCO LP PROFIT SHARING PENSION PLAN, ET AL., C.A. No. 2:18-00455

SKAT v. LINDEN ASSOCIATES DEFINED BENEFIT PLAN, ET AL., C.A. No. 2:18-00456

SKAT v. MOIRA ASSOCIATES LLC 401K PLAN, ET AL., C.A. No. 2:18-00458

SKAT v. RIVERSIDE ASSOCIATES DEFINED BENEFIT PLAN, ET AL., C.A. No. 2:18-00460

SKAT v. AMERICAN INVESTMENT GROUP OF NEW YORK, L.P., ET AL., C.A. No. 2:18-00678

Judge Charles A. Breyer, Judge Lewis A. Kaplan, and Judge Ellen Segal Huvelle took no part in the decision of this matter.

1

The Tew defendants are Bernard Tew; Andrea Tew; Stephanie Tew; Vincent Tew; Bluegrass Investment Management, LLC; Tew, LP Retirement Plan; Tew Enterprises, LLC Retirement Plan; Industrial Pensions Group Trust; Casting Pensions Group Trust; SV Holdings, LLC Retirement Plan; Central Technologies Pensions Group Trust; Bluegrass Retirement Group Trust; Bluegrass Investment Management, LLC Retirement Plan; and Autoparts Pensions Group Trust.

2

The Tew defendants also argue that they will suffer prejudice from centralization because their case-specific facts will be "lost in the mix" with hundreds of other defendants. These are essentially case management concerns that transferee judges routinely are called upon to address. Additionally, to the extent they are concerned about confusion of the issues at trial, we note that centralization is solely for pretrial purposes. Once discovery and other pretrial proceedings related to the common issues have been completed, the transferee judge may suggest Section 1407 remand of actions to their transferor courts for more individual discovery and trial, if necessary.