In Re Diversified Lending Group, Inc., Securities Litigation

732 F. Supp. 2d 1377, 2010 U.S. Dist. LEXIS 85946, 2010 WL 3270231

• Court: United States Judicial Panel on Multidistrict Litigation
• Decided: August 17, 2010
• Docket: MDL No. 2617
• Status: Published

Opinion

ORDER DENYING TRANSFER

JOHN G. HEYBURN II, Chairman.

Before the entire Panel: Common defendant Jackson National Life Insurance Company (Jackson National) has moved, pursuant to 28 U.S.C. § 1407, for coordinated or consolidated pretrial proceedings of this litigation in the Central District of California. Plaintiffs in two Central District of California actions support the motion. Plaintiffs in one Central District of California action and the Middle District of Florida and Western District of Michigan actions oppose centralization. In the alternative, the Western District of Michigan plaintiff suggests centralization in the Western District of Michigan.

This litigation currently consists of five actions listed on Schedule A and pending in three districts as follows: three actions in the Central District of California and one action each in the Middle District of Florida and the Western District of Michigan.

The Panel considers many factors in deciding whether to centralize a particular set of actions. The question of whether to centralize these actions is a close one. Like other dockets in which the Panel’s precedent does not clearly dictate a particular result, the Panel weighs all the factors both for and against centralization. No party disputes that common questions of fact predominate here, as all actions arise out of an alleged fraud perpetrated by Diversified Lending Group. In that respect, these actions are somewhat similar to those presented in In re Medical Capital Securities Litigation, which the Panel recently centralized. See 706 F.Supp.2d 1378 (J.P.M.L.2010). However, here, unlike in In re Medical Capital, only one of the actions contains a demand for class certification and it is already pending in the Central District of California, where movant has requested centralization. Consequently, the Panel sees virtually no possibility for inconsistent pretrial class certification rulings.

Plaintiffs in three actions, including the two actions pending outside the Central District of California and one action pending within that district, do vigorously oppose centralization. On the other hand, several parties have stated their willingness to cooperate and informally coordinate discovery among the actions. Given that three of five actions are already pending in the same district and Jackson National is the only defendant common to all actions, such voluntary cooperation may be the best way to minimize the potential for duplicative discovery and/or inconsistent pretrial rulings. See, e.g., In re Eli Lilly and Company (Cephalexin Monohydrate) Patent Litigation, 446 F.Supp. 242, 244 (J.P.M.L.1978); see also Manual for Complex Litigation, Fourth, § 20.14 (2004).

Given the limited number of cases and their concentration in the Central District of California, coordination of the litigation among various judges should not be difficult. On balance, the Panel’s judgment is that Section 1407 centralization is not necessary for the convenient and efficient conduct of this litigation.

IT IS THEREFORE ORDERED that the motion, pursuant to 28 U.S.C. § 1407, for centralization of these actions is denied.

SCHEDULE A

MDL No. 2177 — IN RE: DIVERSIFIED LENDING GROUP, INC., SECURITIES LITIGATION

Central District of California

Martin L. Markowitz, et al. v. Diversified Lending Group, Inc., et al., C.A. No. 2:09-483

Steven B. Soltman, et al. v. Jackson National Life Insurance Co., et al, C.A. No. 2:10-612

David A. Gill, etc. v. Bruce F. Friedman, et al., C.A. No. 2:10-1554

Middle District of Florida

Kenneth Mirfield, etc. v. Jackson National Life Insurance Co., et al., C.A. No. 6:09-1905

Western District of Michigan

Kraig S. Ivie v. Diversified Lending Group, Inc., et al., C.A. No. 1:09-751