Lothian Cassidy, LLC v. Lothian Exploration & Development II, L.P.

89 F. Supp. 3d 599, 2015 U.S. Dist. LEXIS 21912, 2015 WL 756667
CourtDistrict Court, S.D. New York
DecidedFebruary 20, 2015
DocketNo. 12 Civ. 710(VM)
StatusPublished
Cited by5 cases

This text of 89 F. Supp. 3d 599 (Lothian Cassidy, LLC v. Lothian Exploration & Development II, L.P.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lothian Cassidy, LLC v. Lothian Exploration & Development II, L.P., 89 F. Supp. 3d 599, 2015 U.S. Dist. LEXIS 21912, 2015 WL 756667 (S.D.N.Y. 2015).

Opinion

DECISION AND ORDER

VICTOR MARRERO, District Judge.

Lothian Cassidy, LLC and Israel Gross-man (“Grossman,” and collectively, “Plaintiffs”) filed an Amended Verified Complaint (the “Amended Verified Complaint”) in New York State Supreme Court, New York County (the “State Court”), Index No. 600586/2009, against Lothian Exploration & Development II, L.P. (“LEAD II”), Lothian Energy PLC, Michael Raleigh, Paul B. Loyd, Jr., Belridge Energy Advis-ors, L.P., Peninsula Catalyst Fund (QP) L.P., JVL Global Energy, L.P., JVL Global Energy (QP) L.P., Navitas Fund, L.P., and Nawab Energy Partners, L.P. (“Na-wab,” and collectively, “Defendants”). LEAD II and Lothian Energy PLC excluded, the remaining defendants (collectively, the “Belridge Group,”) removed the action to this court pursuant to 28 U.S.C. §§ 1334, 1446, and 1452. (Dkt. No. 1.) Plaintiffs moved to remand to the State Court (Dkt. No. 28), while the Belridge Group moved for the matter to be transferred to the United States District Court for the Western District of Texas (the “Texas Court”). (See Dkt. Nos. 9, 31.) In a Decision and Order dated January 28, 2013 (the “January 28 Order”), this Court denied Plaintiffs’ motion to remand to the State Court and granted the Belridge Group’s motion to transfer this action to the Texas Court (the “Transfer Order”). (See Dkt. No. 35.) The Court denied the Plaintiffs’ subsequent motion for reconsideration. (See Dkt. No. 44.) The Second Circuit dismissed Plaintiff’s appeal of the January 28 Order (Dkt. No. 49) and the case was transferred to the Texas Court in December of 2013. (See Dkt. Minute Entries dated December 20, 2013 and December 26, 2013.)

On January 30, 2015, Plaintiffs made another motion to this Court requesting reconsideration of the January 28 Order or alternatively certification for interlocutory appeal. (See Dkt. Nos. 51, 52.) The Bel-ridge Group opposed the motion on February 4, 2015 (Dkt. No. 53) and the Plaintiffs replied on February 11, 2015 (“PL Reply”). (Dkt. No. 55.) The Court held a telephone conference between the parties on February 5, 2015 to discuss the motion. (See Dkt. Minute Entry for February 5, 2015.)

Upon consideration of the parties’ submissions and arguments, the Court DENIES Plaintiffs’ motion for reconsideration of the January 28 Order and alternatively for certification for interlocutory appeal.

I. BACKGROUND

This matter has a complicated factual background that this Court laid out in the January 28 Order. (See Dkt. No. 35.) The Court will assume familiarity with the background as stated there.

II. DISCUSSION

A. Legal Standard

When a district court transfers a case to another district court, the transfer- [601]*601or court loses its jurisdiction over the case once the files are physically transferred to the receiving court. See Drabik v. Murphy, 246 F.2d 408 (2d Cir.1957); 15 Charles A. Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3846 (3d ed. 2008) (“When a motion for transfer ... has been granted, and the papers lodged with the clerk of the transferee court, it is well settled that the transferor court ... loses all jurisdiction over the case and may not proceed further with regard to it.”).

However, if the order transferring the action is void, then the transferor court retains its jurisdiction. See Farrell v. Wyatt, 408 F.2d 662 (2d Cir.1969). Therefore the question of whether a transferor court can reconsider a transfer order that has already been effectuated turns on whether that order is void.

B. Application

This Court lost its jurisdiction over this matter when it ordered the case transferred to the Texas Court and the case files were physically transferred. (See Dkt. Minute Entries dated December 20, 2013 and December 26, 2013.)

Plaintiffs contend that this Court’s Transfer Order was void, and that it therefore continues to have jurisdiction over the case to rescind the transfer and adjudicate the merits of the underlying dispute.

Plaintiffs’ argument that the Transfer Order is void rests on the theory that the transfer “effectuated a significant and substantial change in law.” (PI. Reply 5.) This case was transferred pursuant to 28 U.S.C. § 1412, for which a court considers the same factors as for a transfer pursuant to 28 U.S.C. § 1404(a). See Official Comm, of Asbestos Claimants of G-I Holding, Inc. v. Heyman, 306 B.R. 746, 749 (S.D.N.Y.2004); see also McHale v. Citibank, N.A., No. 09 CV 6064, 2009 WL 2599749, at *5 (S.D.N.Y. Aug. 24, 2009). Such transfers are merely “judicial housekeeping measure[s]” that allow for a change of courtrooms but not of law. See Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964). The Plaintiffs argue that the State Court where this action originated would have applied New York’s six year statute of limitations for contract and fraud claims instead of the Texas four year statute of limitations applied by the Texas Court. (PI. Rep. 6.) A change in venue altering the applicable substantive law violates the principles first laid down in Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). (PL Rep. 6.) Since the Transfer Order changed the applicable substantive law, according to the Plaintiffs, the Order is actually void, which means this Court maintains the power to declare the transfer void. However, the Court is not persuaded that the Transfer Order is void.

The Plaintiffs’ argument fails because this Court’s Transfer Order did not in any way embody a determination of the applicable substantive law. When a transfer from one federal district to another occurs, the transferee court must apply the state law that would have been applied by the transferor court. See Ferens v. John Deere Co., 494 U.S. 516, 531, 110 S.Ct. 1274, 108 L.Ed.2d 443 (1990) (“[W]e again conclude that the transferor law should apply regardless of who makes the § 1404(a) motion.”); see also Van Dusen v. Barrack, 376 U.S. 612, 636, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964) (“We conclude ... the transferee district must be obligated to apply the state law that would have been applied if there had been no change of venue.”) Plaintiffs even cite this precedent in their papers. (Pl. Rep. 7.) And they state conclusively that the New York statute of limitations would have applied [602]

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89 F. Supp. 3d 599, 2015 U.S. Dist. LEXIS 21912, 2015 WL 756667, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lothian-cassidy-llc-v-lothian-exploration-development-ii-lp-nysd-2015.