Lane et al v. Wells Fargo Bank NA

Filing 166

ORDER DENYING Transfer MDL 2466. (dtmS, COURT STAFF) (Filed on 8/8/2013)

Case MDL No. 2466 Document 57 Filed 08/07/13 Page 1 of 4

UNITED STATES JUDICIAL PANEL
on
MULTIDISTRICT LITIGATION

IN RE: WELLS FARGO BANK, N.A.,
MORTGAGE CORPORATION FORCE-PLACED
HAZARD INSURANCE LITIGATION

MDL No. 2466

ORDER DENYING TRANSFER

Before the Panel: Pursuant to 28 U.S.C. § 1407, plaintiffs in one action move to centralize
this litigation in the Southern District of Illinois or, alternatively, in the Northern District of
California, and request separation and remand of claims concerning unrelated insurance products and
one insurer defendant.1 This litigation currently consists of six actions pending in six districts as listed
on Schedule A. The actions involve allegedly abusive practices in the unilateral “forced” placement
of hazard insurance by Wells Fargo2 and Assurant3 on borrowers with mortgages serviced by Wells
Fargo. Defendants Wells Fargo and Assurant oppose centralization, as do plaintiffs in the Southern
District of Florida and Northern District of California actions. Plaintiffs in the Southern District of
New York and District of New Jersey actions support centralization.
Less than a year ago, the Panel denied a motion to centralize force-placed insurance litigation
against eight major mortgage lenders – including Wells Fargo – on an industry-wide basis. See In re:
Mortgage Lender Force-Placed Ins. Litig., 895 F. Supp. 2d 1352, 1353-54 (J.P.M.L. 2012). At that
time, the Panel also determined that centralization on a lender-specific basis was not warranted. See
id. at 1353 & n.2.
Movants contend that centralization of the six actions listed on Schedule A is now appropriate
because common factual and legal issues are raised by plaintiffs’ claims that Wells Fargo and Assurant
improperly place one type of insurance – hazard insurance – at excessive premiums and fees, and
engage in other abuses in violation of numerous laws. Movants argue that (1) unlike the motion the

1

This motion was heard with three related motions at the same hearing session. The related
motions concern centralization of force-placed hazard insurance litigation against three other banks
and the insurance companies they utilize to place such insurance. See MDL No. 2464, In re: HSBC
Mortg. Corp. Force-Placed Hazard Ins. Litig.; MDL No. 2465, In re: JPMorgan Chase Bank, N.A.,
Mortg. Corp. Force-Placed Hazard Ins. Litig.; MDL No. 2467, In re: Bank of America, N.A.,
Mortg. Corp. Force-Placed Hazard Ins. Litig.
2

3

“Wells Fargo”refers to Wells Fargo Bank, N.A., and Wells Fargo Insurance, Inc.

“Assurant” refers to Assurant, Inc.; American Security Insurance Company; and Standard
Guaranty Insurance Company.

Case MDL No. 2466 Document 57 Filed 08/07/13 Page 2 of 4

-2Panel denied last year, the current motion focuses on a single lender – Wells Fargo – and a single
category of insurance; and (2) centralization is necessary to address the difficulties in coordinating
the litigation with the competing group of plaintiffs’ counsel.
On the basis of the papers filed and the hearing session held, we will deny the motion.
Although all six actions concern alleged abuses by Wells Fargo and Assurant with respect to their
force-placed hazard insurance practices, the Panel is not persuaded that Section 1407 centralization
is necessary for the convenience of the parties and witnesses or for the just and efficient conduct of
this litigation. The Panel previously denied centralization on a lender-specific basis, finding, inter
alia, that individualized discovery and legal issues were likely to be numerous and substantial in light
of the variation in the mortgage contracts on key issues.4 That earlier denial does not preclude the
Panel from reaching a different result here, but the Panel grants reconsideration “only rarely … where
a significant change in circumstances has occurred.” See In re Plavix Mktg., Sales Practices &
Prods. Liability Litig. (No. II), — F. Supp. 2d —, 2013 WL 565971, at *1 (J.P.M.L. Feb. 12, 2013).
Having reviewed the updated record, we do not find any new circumstances that warrant
reconsideration. As defendants point out, the pending actions involve different originating lenders,
mortgage agreements with materially different terms concerning force-placed insurance, and differing
disclosures to borrowers at the time the force-placed insurance policies were placed. Thus,
individualized discovery and legal issues still will be substantial. Furthermore, the number of actions
against Wells Fargo has decreased since the Panel’s decision, due largely to voluntary consolidation
by various plaintiffs, indicating that the alleged need for centralization has diminished.5
Additionally, the MDL proposed by the movants would be inefficient in significant respects.
In two of the six actions, movants propose that numerous claims would be separated and remanded
to ensure that unrelated claims concerning flood insurance and an unrelated insurer would remain in
the transferor courts. Furthermore, in the Northern District of California action, class certification
proceedings have been largely completed, which resulted in conditional certification of a state class
on the unrelated flood insurance claims two months ago. In these circumstances, we encourage the
parties to continue to employ alternatives to transfer which may minimize the risk of duplicative
discovery and inconsistent pretrial rulings.
IT IS THEREFORE ORDERED that the motion pursuant to 28 U.S.C. § 1407, for
centralization of these actions is denied.

4

5

Fargo.

See In re: Mortgage Lender Force-Placed Ins. Litig., 895 F. Supp. 2d at 1353 & n.2.
The opposing plaintiffs note that last year’s motion encompassed 16 actions against Wells

Case MDL No. 2466 Document 57 Filed 08/07/13 Page 3 of 4

-3PANEL ON MULTIDISTRICT LITIGATION

John G. Heyburn II
Chairman
Kathryn H. Vratil
Marjorie O. Rendell
Lewis A. Kaplan

Paul J. Barbadoro
Charles R. Breyer
Sarah S. Vance

Case MDL No. 2466 Document 57 Filed 08/07/13 Page 4 of 4

IN IN RE: WELLS FARGO BANK, N.A.,
MORTGAGE CORPORATION FORCE-PLACED
HAZARD INSURANCE LITIGATION

MDL No. 2466

SCHEDULE A

Northern District of California
Danny Lane, et al. v. Wells Fargo Bank, N.A., C.A. No. 3:12-04026
Southern District of Florida
Ira M. Fladell, et al. v. Wells Fargo Bank, N.A., et al., C.A. No. 0:13-60721
Southern District of Illinois
Debra Simpkins, et al. v. Wells Fargo Bank, N.A., et al., C.A. No. 3:12-00768
Northern District of Indiana
Judith Hallie v. Wells Fargo Bank, N.A., et al., C.A. No. 2:12-00235
District of New Jersey
Anthony Kite v. Wells Fargo Bank, N.A., et al., C.A. No. 3:13-02075
Southern District of New York
Wayne Miller v. Wells Fargo Bank, N.A., et al., C.A. No. 7:13-01541