MCINTIRE et al v. Mariano et al

Filing 89

ORDER ON MOTION TO INTERVENE AND TRANSFER re: 50 Motion to Intervene. Signed by Judge Beth Bloom on 12/28/2018. See attached document for full details. (jao)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 18-cv-60075-BLOOM/Valle
ARIC MCINTIRE, et al.,
Plaintiffs,
v.
STEVEN M. MARIANO, et al.,
Defendants.
__________________________________/
ORDER ON MOTION TO INTERVENE AND TRANSFER
THIS CAUSE is before the Court upon Intervenors ODS Capital LLC, Barry A. Smith,
and Sunil Shah (collectively referred to as the “Intervenors”) Motion to Intervene and Transfer
(the “Motion”), ECF No. [50]. The Court has reviewed the Motion, all supporting and opposing
submissions, the record and applicable law, and is otherwise fully advised. For the reasons that
follow, the Motion is granted.
I.

BACKGROUND
On March 14, 2017, Plaintiff Anthony L. Gingello, filed a class action on behalf of

himself and others similarly situated, Gingello v. Patriot National, Inc., Case No. 1:17-cv-01866
(the Gingello Action”), in the Southern District of New York. ECF No. [50], at 3. The Gingello
Action alleged claims against Defendants Patriot National, Inc., Steven M. Mariano and Thomas
Shields under Sections 10(b) and 20(a) of the Exchange Act on behalf of a class of persons and
entities that purchased Patriot National securities between August 15, 2016, and March 3, 2017.
Id. at 5. The Gingello Action alleged that the defendants failed to disclose that Patriot National
was being run primarily for Defendant Mariano’s benefit rather than for the benefit of
shareholders. Id. at 5.

Case No. 18-cv-60075-BLOOM/Valle
Specifically, a “special committee” of Patriot National’s Board of Directors rejected a
buyout offer from Ebix, Inc. (“Ebix”), even though it was beneficial to shareholders, because the
offer cut against Defendant Mariano’s personal interests. Id. On August 1, 2016, Patriot
National announced that it agreed to consider an “enhanced offer” from Ebix. Id. On August 15,
2016, Patriot National represented that “a special committee of independent directors” was
“continuing to explore other strategic alternatives” to maximize shareholder value. Id. at 5-6.
On November 8, 2016, Patriot National announced that it had rejected a $475 million offer from
Ebix because it was “not the best alternative to maximize value for Patriot National’s
shareholders.” Id. On March 3, 2017, however, Patriot National disclosed that the true reason it
rejected the Ebix offer was because it was not in the best interest of Defendant Mariano and his
business, Guarantee Insurance Group (“GIG”). Id. Patriot National then announced that it
entered into an agreement with GIG and Defendant Mariano regarding service agreements
between Patriot National and GIG’s wholly-owned subsidiary, Guarantee Insurance Company
(“GIC”). Id. In the agreement, Patriot National agreed to pay GIG $30 million. Id. On March
6, 2017, Patriot National investors were injured when Patriot National’s stock price fell to
16.4%, on unusually heavy trading volume, to close at $3.67 per share on March 6, 2017. Id. 
The same day that the Gingello Action was filed, counsel for Gingello published a notice
on Business Wire, announcing that a securities class action had been initiated against the
defendants. Id. at 3. Pursuant to the Private Securities Litigation Reform Act (“PSLRA”) the
lead plaintiff‘s motion deadline was set in the Gingello Action for May 15, 2017. Id. Several
members of the purported class filed motions requesting appointment as lead plaintiff pursuant to
the PSLRA. Id. at 3-4.

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On August 11, 2017, counsel for the Plaintiffs in the instant action filed a Second
Amended Complaint in a derivative action on behalf of Patriot National, with Plaintiffs McIntire
and Wasik as Plaintiffs, against Defendants Mariano and Shields in the Delaware Court of
Chancery, Wasik v. Mariano, Case No. 12953-VCL, (the “Derivative Action”). Id. at 4.
On September 20, 2017, Plaintiff Adam Kayce (“Kayce”) filed another securities fraud
class action complaint in the Southern District of New York, Kayce v. Patriot National, Inc., et
al., No. 17-cv-07164 (the “Kayce Action”). Id. at 4. The Kayce complaint asserted claims on
behalf of investors who purchased shares of Patriot National during the class period of March 3,
2016 through November 14, 2016, and asserted claims against the defendants for violations of
federal securities laws. Id. at 6. On October 12, 2017, the Court consolidated the Kayce Action
with the Gingello Action, designating the Gingello Action as the lead case. Id.
On November 28, 2017, Patriot National announced an anticipated Chapter 11 filing with
a plan of reorganization as part of a restructuring support agreement with its lenders. Id.
Accordingly, Patriot National’s direct and indirect U.S.-based subsidiaries were to file voluntary
petitions for relief under Chapter 11 of the U.S. Bankruptcy Code. Id.
On January 12, 2018, the Plaintiffs Aric McIntire and Henry Wasik (the “McIntire
Plaintiffs”) filed the instant action in the Southern District of Florida (the “McIntire Action”).
ECF No. [1]. The McIntire Action alleged Defendants Mariano and Shields violated federal
securities laws, and alleged claims on behalf of all purchasers of Patriot National common stock
from January 15, 2015 to November 22, 2017. See generally ECF No. [1]. The Intervenors
assert that, like the Gingello Action, the McIntire Action focuses in part on misconduct related to
the Patriot’s dealings with GIG and GIC, and alleges that Patriot National put Defendant
Mariano’s interests before the interests of its shareholders. ECF No. [50], at 7.

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On January 30, 2018, Patriot National officially filed for bankruptcy. ECF No. [50], at
4. On February 2, 2018, the Court ordered the Gingello Action to be stayed pursuant to 11
U.S.C. § 362. Id. On February 25, 2018, the McIntire Plaintiffs submitted a letter to the judge
presiding over the Gingello Action contending that the McIntire Plaintiffs had “the greatest
financial interest in this case, have the only ability to bring all claims on behalf of the plaintiff
class, and have shown the greatest vigor and interest in acting to protect the class’s interest.
There can be no question that the class is best represented by Wasik and McIntire rather than
ODS or any other competing movant.” ECF No. [51-1], at 7. On February 27, 2018, the Court
temporarily lifted the stay to appoint the Intervenors as Co-Lead Plaintiffs in the Gingello
Action. Id. This decision was reached despite receiving the objection on behalf of the McIntire
Plaintiffs. ECF No. [50], at 4. After appointing the Intervenors as Co-Lead Plaintiffs, the stay
was re-imposed “without prejudice to future requests to lift the stay following the Bankruptcy
Court’s ruling on Patriot’s stay application and any mediation that may follow.” Id. at 4-5.
On February, 28, 2018, the Bankruptcy Court entered an order staying related litigation
(the “Bankruptcy Stay”) and ordering mediation for parties whose claims may be covered by the
existing D&O policies. Id. at 5. On March 6, 2018, an Order staying the case was issued in the
McIntire Action. ECF No. [42].

The Bankruptcy Court ordered that the stay of this action

continue through August 10, 2018, and mandated that all parties with an interest in claims that
may be covered by the existing D&O policies continue to mediation. ECF No. [43-1], at 2.
On April 12, 2018, Intervenors,as Co-Lead Plaintiffs in the Gingello Action, submitted
their confidential mediation statement in connection with the April 18-19, 2018 mediation (the
“Mediation”). Id. at 7.

In the mediation statement, the Intervenors claim they detailed

preliminary damages estimates in connection with both Exchange Act claims and Securities Act

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claims. Id. Exhibits to the mediation statement included the Southern District of New York’s
February 27, 2018 Order, appointing the Intervenors as Co-Lead Plaintiffs, and a draft of the
Gingello proposed Amended Class Action Complaint. Id. The Intervenors represent that the
proposed Amended Class Action Complaint combined the claims and allegations asserted by the
Gingello Action and the Kayce Action, as well as those in the McIntire Action, and expanded the
class period and added additional defendants. Id. The mediation resulted in an agreement in
principle to settle the securities law claims on behalf of the entire class. Id.
On August 14, 2018, after the Bankruptcy Stay had expired, the McIntire Plaintiffs filed
their Motion for Appointment as Lead Plaintiffs and Approval of Their Selection of Counsel,
which is presently pending before this Court. See ECF No. [46]. On September 5, 2018, the
same day Intervenors filed their Motion to Intervene and Transfer, counsel for the McIntire
Plaintiffs filed “a duplicative case before a different judge in the Southern District of Florida,”
Kaniki v. Mariano, et al., No. 18-cv-62097 (the “Kaniki Action”). ECF No. [60], at 1. Two
days later, counsel for McIntire Plaintiffs moved for transfer and centralization of the
consolidated Gingello Action pending in the Southern District of New York. The two Southern
District of Florida cases, the Kaniki Action and the McIntire Action, were consolidated pursuant
to 28 U.S.C. § 1407 in the United States Judicial Panel on Multidistrict Litigation (“JPML”), In
re Patriot National, Inc., Securities Litigation, MDL No. 2870. Id. In their motion for transfer
and centralization filed before the JPML (the “JPML Motion”), the McIntire Plaintiffs argued
that transfer and centralization was appropriate because that “[t]he multiple proceedings in
multiple venues has led to a disorganized and inefficient prosecution of the securities class
claims.” Id.; In re Patriot National, Inc., Securities Litigation, MDL No. 2870, ECF No. [56-1],
at 2. The McIntire Plaintiffs argued in their JPML Motion that “[c]entralization is appropriate

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where, as here, the various complaints present common factual allegations that will likely require
duplicative motion practice and, if motions to dismiss are denied, discovery.” ECF No. [60], at 2.
The JPML Motion argued that the four class action complaints (the Gingello Action, the Kayce
Action, the McIntire Action, and the Kaniki Action) raised similar factual and legal issues. Id.
Additionally, the McIntire Plaintiffs argued that
[c]entralization in a single district before a single judge will also serve ‘the
convenience of parties and witnesses.’ All four securities class actions contain
allegations regarding the operation of Patriot National during 2016 and 2017.
Proof of these allegations will involve the same evidence and testimony from the
same witnesses. Centralization will promote the just and efficient conduct of the
actions because of the shared factual and legal issues. It will eliminate the need
for the parties in the four securities class actions to make and respond to multiple
motions and discovery requests, and prevent all parties and witnesses from being
forced to travel across the country to appear in duplicative proceedings.
Id. On December 6, 2018, the JPML Motion was denied. See In re Patriot National, Inc.,
Securities Litigation, MDL No. 2870, ECF No. [27].
Should the relief requested by the Intervenors’ Motion be granted by this Court, the
Intervenors represent that in order to facilitate the resolution of this matter, they will file a
consolidated amended complaint in the Gingello Action and adjourn certain defendants’
(including Defendants Patriot National, Mariano, and Shields) obligation to respond to the
consolidated amended complaint to allow them time to memorialize their agreement with CoLead Plaintiffs to settle the claims against them. ECF No. [50], at 7-8.
Intervenors now move to intervene in the above-styled action, arguing both that
intervention is appropriate as a matter of right under federal rule of civil procedure 24(a) and
permissively under federal rule of civil procedure 24(b). Intervenors also move to have the
instant matter transferred to the Southern District of New York so that it may be consolidated
there under the existing leadership structure that has previously been appointed by that court.

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Intervenors argue, inter alia, that the McIntire Plaintiffs’ Motion for Appointment as Lead
Plaintiffs and Approval of Their Selection of Counsel, ECF No. [46], pending before this Court
is an “attempted end run by lawyers that . . . already unsuccessfully objected to the appointment
of lead plaintiff and lead counsel in the existing Gingello action.” ECF No. [50], at 2.
II.

LEGAL STANDARD
To intervene of right under Rule 24(a)(2), a party must establish that “(1) his application

to intervene is timely; 2) he has an interest relating to the property or transaction which is the
subject of the action; (3) he is so situated that disposition of the action, as a practical matter, may
impede or impair his ability to protect that interest; and (4) his interest is represented
inadequately by the existing parties to the suit.” Fox v. Tyson Foods, Inc., 519 F.3d 1298, 1302–
03 (11th Cir. 2008) (citing Chiles v. Thornburgh, 865 F.2d 1197, 1213 (11th Cir. 1989)
(citing Athens Lumber Co. v. FEC, 690 F.2d 1364, 1366 (11th Cir. 1982)).
The court may permit anyone to intervene permissively under Rule 24(b) where upon
timely motion a party “has a claim or defense that shares with the main action a common
question of law or fact.” Fed. R. Civ. P. 24(b). When exercising its discretion, a district court
“can consider almost any factor rationally relevant but enjoys very broad discretion in granting
or denying the motion [to intervene].” Daggett v. Comm’n on Governmental Ethics & Election
Practices, 172 F.3d 104, 113 (1st Cir. 1999).
III.

ANALYSIS

The Intervenors moves to intervene as a matter of right, pursuant to Federal Rule of Civil
Procedure 24(a), or alternatively, under the standard for permissive intervention contained
in Federal Rule of Civil Procedure 24(b).

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a. Intervention by Right
A district court, whether considering intervention as of right or by permission, must
consider four factors in assessing timeliness, including:
(1) the length of time during which the would-be intervenor knew or reasonably
should have known of his interest in the case before he petitioned for leave to
intervene; (2) the extent of prejudice to the existing parties as a result of the
would-be intervenor's failure to apply as soon as he knew or reasonably should
have known of his interest; (3) the extent of prejudice to the would-be intervenor
if his petition is denied; and (4) the existence of unusual circumstances militating
either for or against a determination that the application is timely.
United States v. Jefferson Cty., 720 F.2d 1511, 1516 (11th Cir. 1983).
This case was initially filed on January 12, 2018. ECF No. [1]. Litigation was stayed for
many months due to the Bankruptcy Stay. Once the Bankruptcy Stay expired, Plaintiffs filed
their Motion for Appointment as Lead Plaintiffs and Approval of Their Selection of Counsel,
ECF No. [46], on August 22, 2018. Intervenors filed their Motion to Intervene and Transfer on
September 5, 2018, ECF No. [50]. Given that Intervenors filed the instant Motion within 14 days
of the filing of the McIntire Plaintiffs’ motion, ECF No. [46], it is clear to the Court that
Intervenors filed the Motion within a reasonable time after knowing they had an interest in the
above-styled action.

The Court also notes that the Plaintiffs do not contest Intervenors’

argument that the Motion was timely brought in their Response in Opposition to the Motion
(“Opposition”). See generally ECF No. [59]. Accordingly, it appears that the Motion is timely.
Further, the Court finds that the existing parties would not be significantly prejudiced by
intervention as neither substantial litigation nor settlement negotiations have taken place.
Hollywood Cmty. Synagogue, Inc. v. City of Hollywood, 254 Fed. App’x 769, 771 (11th Cir.
2007) (finding motion to intervene would practically undue a consent decree after twenty-two
months of litigation and settlement negotiations). The record establishes that the majority of the

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litigation that has taken place in the instant action has revolved around Intervenors’ Motion. The
Court finds that intervention would cause minimal, if any, prejudice to the existing parties. Nor
does the Court find any unusual circumstances militating against intervention.
Next, Intervenors argue that they have an interest relating to the property or transaction
that is the subject of the McIntire Action because 1) the McIntire Action alleges claims under
Sections 10(b) and 20(a) of the Exchange Act against Mariano and Shields, 2) the McIntire
Action class period encompasses the Gingello and Kayce consolidated class period, and 3) the
McIntire Action alleges the same fundamental legal theory as the Gingello and Kayce
Consolidated Action. ECF No. [50], at 9. In their Opposition, the McIntire Plaintiffs argue that
the existing complaint in Gingello is much more limited than the Complaint filed in the instant
action, in that it includes different claims under the Securities Act of 1933 and covers a much
more limited class period. ECF No. [59], at 6. The McIntire Plaintiffs also argue that the
discovery will be far more extensive in the instant action and that the legal theories alleged in the
Complaint in this action are more comprehensive and developed than those alleged in the
Gingello Action. Id.
The Court agrees with the Intervenors that the fact that the McIntire Action alleges claims
under the Securities Act of 1933 in addition to claims under the Exchange Act does not preclude
consolidation. In In re Century Aluminum Co. Sec. Litig., the district court granted a party’s
motion to consolidate several cases and rejected a party’s argument that although the cases arose
out of the same facts as the other cases, they should not be consolidated because the case alleged
additional claims under the Exchange Act. In re Century Aluminum Co. Sec. Litig., No. C 091001 SI, 2009 WL 2905962, at *2 (N.D. Cal. Sept. 8, 2009). In that case, the Court noted that
while there were some legal differences between the Securities Act and Exchange Act claims,

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the similarities were far greater because the claims in all the cases revolved around the same
questions of fact, and that consolidation would promote the interests of efficiency.
Here, the Court also notes that the factual similarities, which both parties agree arise from
the exact same set of facts, are far greater than the differences the McIntire Plaintiffs’ attempt to
highlight in their Opposition. Further, Intervenors represent that they will amend their complaint
to include the additional securities claims asserted in the McIntire Action, in the event the Court
grants their Motion. Accordingly, the Court is unpersuaded by the McIntire Plaintiffs’ argument
that the presence of the additional securities claims should prohibit the relief sought in the
Intervenors’ Motion.
Secondly, the McIntire Action class period (January 15, 2015 – November 22, 2017)
encompasses the consolidated Gingello Action’s class period (August 15, 2016 - November 14,
2016) and courts have previously consolidated cases where actions contain overlapping class
periods. Kadel v. Flood, No. 07-61753-CIV, 2008 WL 11333160, at *1 (S.D. Fla. Mar. 18,
2008) (consolidating two class actions where the cases alleged violations of securities laws
during overlapping time periods). Consolidation is often warranted where multiple securities
fraud class actions “are based on the same ‘public statements and reports.”’ Werner v. Satterlee,
Stephens, Burke & Burke, 797 F. Supp. 1196, 1211 (S.D.N.Y. 1992) (quoting Lloyd v. Indus.
Bio-Test Labs., Inc., 454 F. Supp. 807, 812 (S.D.N.Y. 1978)); see also In re Telxon Corp. Sec.
Litig., 67 F. Supp. 2d 803, 806 (N.D. Ohio 1999) (consolidating multiple class actions that allege
essentially similar, but not identical, securities claims). “Significantly, the existence of slight
differences in class periods, parties, or damages among the suits does not necessarily
defeat consolidation where the essential claims and factual allegations are similar.” In re

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MicroStrategy Inc. Secs. Litigation, 110 F. Supp. 2d 427, 431 (E.D. Va. 2000) (citing In re
Cendant Corp. Litig., 182 F.R.D. 476, 479 (D.N.J. 1998); Werner, 797 F. Supp. at 1211).
Lastly, the Court rejects the McIntire Plaintiffs’ arguments that “the discovery involved
in this proceeding will, accordingly, be far more extensive than that needed by the initial
Gingello complaint. The legal theories alleged in the Complaint are also far more comprehensive
and developed than those alleged in the Gingello complaint and include allegations under the
Securities Act that are entirely absent from Gingello.” The Court notes that this argument is
inconsistent with the representations made to the United States Judicial Panel on Multidistrict
Litigation in the JPML Motion. See In re Patriot National, Inc., Securities Litigation, MDL No.
2870, ECF No. [56-1] (“. . . the various complaints present common factual allegations that will
likely require duplicative motion practice and, if motions to dismiss are denied, discovery. Here,
the four complaints raise similar factual and legal issues . . . proof of these allegations will
involve the same evidence and testimony from the same witnesses.”). Accordingly, the Court
finds that Intervenors have proffered a compelling showing that they have an interest related to
the property or transaction that is the subject of the present action.
Intervenors also argue that they “are so situated that disposition of this action, as a
practical matter, may impair or impede their ability to protect that interest.” ECF No. [50], at
11. The Intervenors claims that the disposition of the McIntire Action will affect the funds
available to compensate shareholders, would create undue burdens and cost for the Defendants,
and may create conflicting opinions and findings. Id. Further, the Intervenors argue that if the
actions are not consolidated, the “plaintiff class would be vulnerable to conflicting legal and
factual findings in two different District Courts,” and the continued separate prosecution of the
McIntire Action “would jeopardize the proposed class settlement with the D&O Defendants.” Id.

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The McIntire Plaintiffs do not challenge this position in their Opposition. See generally ECF No.
[59]. Accordingly, the Court agrees with the Intervenors that the disposition of the present
action may impair or impede their ability to protect their interests, especially in light of the
settlement status in the Gingello Action.
Next, Intervenors argue that the McIntire Plaintiffs and their counsel inadequately
represent the investors’ interests relating to the property or transaction that is the subject of the
action. This is because the district court in the Southern District of New York has already
determined that the Intervenors are the most capable of adequately representing the interests of
class members over the McIntire Plaintiffs’ objection. ECF No. [60], at 5-6. Intervenors argue
that “by definition [] McIntire and Wasik cannot provide the best representation and therefore do
not adequately represent those interests.” ECF No. [60], at 6. And further that the filing of the
instant action, was an “attempted end-run around the PSLRA lead plaintiff process” because the
McIntire Plaintiffs “had the opportunity to move for appointment as lead plaintiff and lead
counsel in the Gingello Action.” ECF No. [50], at 12. In their Opposition, the McIntire
Plaintiffs argue that this assertion is “simply untrue,” and that neither of the McIntire Plaintiffs
had an opportunity to move for the appointment for lead plaintiff and lead counsel in the
Gingello Action because neither plaintiff purchased Patriot National shares during the class
period asserted by the Gingello Action, and therefore they were ineligible to move for
appointment of lead counsel. ECF No. [59], at 7. In their Reply, the Intervenors respond that the
McIntire Plaintiffs could have attempted to participate in the Gingello Action by filing an
additional complaint and then moving for lead plaintiff appointment and consolidation, but chose
not to take such action. ECF No. [60], at 8.

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The Court is unpersuaded by the McIntire Plaintiffs’ assertions that it was powerless to
participate in the lead plaintiff process in the Gingello Action. Indeed, the McIntire Plaintiffs
were not “deliberately excluded” nor prevented from filing an action in the Southern District of
New York, but apparently chose not to. Further, “[t]he Private Securities Litigation Reform Act
of 1995 (“PSLRA”) provides that within 90 days after publication of notice, the court must
consider any motion made by a class member and appoint as Lead Plaintiff the member or
members of the class that the court determines to be most capable of adequately representing the
interests of the class members.” Miller v. Dyadic Int'l, Inc., No. 07-80948CIV, 2007 WL
4754041, at *2 (S.D. Fla. Dec. 14, 2007); 15 U.S.C. § 78u-4(a)(3)(B)(i). The intent of the
PSLRA was “to have lead plaintiffs appointed as soon as practicable” and avoid the potential
indefinite delay caused by later-filed complaints. Lax v. First Merchants Acceptance Corp.,
1997 WL 461036, at *4 (N.D. Ill. Aug. 11, 1997); Cheney v. Cyberguard Corp., 213 F.R.D. 484,
503 (S.D. Fla. 2003) (“It is widely recognized that the intent of the PSLRA is “to have the ‘most
adequate lead plaintiffs’ appointed as soon as practicable in the litigation”); see also In re
Sunbeam Sec. Litig., No. 98-8258-CIV, 1998 WL 1990884, at *2 (S.D. Fla. Dec. 4, 1998)
(recognizing that the PSLRA intended to have the “most adequate lead plaintiffs” appointed as
soon as practicable in the litigation.).
Here, the Southern District of New York has already appointed the Intervenors as the CoLead Plaintiffs in the Gingello Action, and has determined that they are the most capable of
adequately representing the interest of the class members. Denying the Intervenors’ Motion
would undermine the lead plaintiff process.

Moreover, having both cases proceed would

promote dueling plaintiff counsel interests in different districts and would circumvent the

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protections instituted by the PSLRA. Therefore, the Court agrees with the Intervenors that their
interests would be inadequately represented in the instant action.
Accordingly, the Court finds that all required conditions have been met for the
Intervenors to intervene in this action as of right pursuant to Fed. R. Civ. P. 24(a).
b. Permissive Intervention
By contrast, to permissibly intervene, the intervenor must show that “(1) his application
to intervene is timely; and (2) his claim or defense and the main action have a question of law or
fact in common.” Chiles, 865 F.2d at 1213.
“The ‘claim or defense’ portion of the rule has been construed liberally, and indeed the
Supreme Court has said that it ‘plainly dispenses with any requirement that the intervenor shall
have a direct personal or pecuniary interest in the subject of the litigation.’” In re Estelle, 516
F.2d 480, 485 (5th Cir. 1975) (quoting Sec. & Exch. Comm’n v. U.S. Realty & Imp. Co., 310
U.S. 434, 459 (1940)). The intervening party, however, “must demonstrate more than a general
interest in the subject matter of the litigation before intervention should be allowed.” Alexander
v. Hall, 64 F.R.D. 152, 157 (D.S.C. 1974). In exercising its discretion, a district court “can
consider almost any factor rationally relevant but enjoys very broad discretion in granting or
denying” a motion to intervene. Daggett, 172 F.3d at 113.
The Court also finds that the Intervenors have also met their burden to demonstrate
permissive intervention, and would also permit them to intervene on this basis. As essentially
conceded by the McIntire Plaintiffs in their JPML Motion, the legal and factual commonalities
between the two actions are undeniable. Further, the lack of prejudice to the existing parties is a
factor that weighs in favor of permissive intervention. See Mt. Hawley Ins. Co. v. Sandy Lake
Props., Inc., 425 F.3d 1308, 1312 (11th Cir. 2005) (“Permissive intervention under Fed. R. Civ.

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Proc. 24(b) is appropriate where a party’s claim or defense and the main action have a question
of law or fact in common and the intervention will not unduly prejudice or delay the adjudication
of the rights of the original parties.”). The Intervenors have represented that they would act
expeditiously in including the McIntire Plaintiffs’ interests should the Court grant their Motion.
Therefore, there will be no delay in the adjudication of the rights of the parties, and the Court has
no reason to believe otherwise. See generally ECF No. [50], at 16.
c. Transfer Under § 1404(a)
The Intervenors also request that the instant action be transferred pursuant to 28 U.S.C. §
1404(a). ECF No. [50], at 16. A motion to transfer venue is governed by 28 U.S.C. § 1404(a),
which states “[f]or the convenience of the parties and witnesses, in the interest of justice, a
district court may transfer any civil action to any other district or division where it might have
been brought.” 28 U.S.C. § 1404(a). “The standard for transfer under 28 U.S.C. § 1404(a)
leaves much to the broad discretion of the trial court.” Gonzalez v. Pirelli Tire, LLC, No. 0780453-CIV, 2008 WL 516847, at *1 (S.D. Fla. Feb. 22, 2008). Congress authorized courts to
transfer the venue of a case in order to avoid unnecessary inconvenience to litigants, witnesses,
and the public and to conserve time, energy, and money. Van Dusen v. Barrack, 376 U.S. 612,
616 (1964). The Court has broad discretion under 28 U.S.C.§ 1404(a) to transfer any civil action
to another federal district court for the convenience of the parties and witnesses, and in the
interest of justice.
Here, the transfer of the above-styled action satisfies “the policy of statutory transfer,
which is to avoid duplicative litigation, inconvenience, and unnecessary expenses.” Meterlogic,
Inc. v. Copier Sols., Inc., 185 F. Supp. 2d 1292, 1303 (S.D. Fla. 2002). As represented by the
McIntire Plaintiffs in their JPML Motion, the McIntire Action and the consolidated Gingello

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Action have “common factual allegations . . . [and the] complaints raise similar factual and legal
issues . . . contain allegations regarding the operation of Patriot National during 2016 and 2017.”
See In re Patriot National, Inc., Securities Litigation, MDL No. 2870, ECF No. [56-1]. Further,
“[p]roof of these allegations will involve the same evidence and testimony from the same
witnesses.”

Id.    Accordingly, the legal and factual commonalities in the McIntire Action

substantially intertwine and overlap in many key respects with the Gingello Action. Both cases
allege claims under Sections 10(b) and 20(a) of the Exchange Act, and allege the same core legal
theory—that the Patriot National’s Board was operating Patriot National for the benefit of
Defendant Mariano, rather than for the benefit of its shareholders. To allow this case and the
case first-filed in the Southern District of New York to proceed simultaneously would
contravene the policy of statutory transfer, which is to avoid duplicative litigation,
inconvenience, and unnecessary expenses.
The Supreme Court has held that “to permit a situation in which two cases involving
precisely the same issues are simultaneously pending in different District Courts leads to the
wastefulness of time, energy and money that § 1404(a) was designed to prevent.” Ferens v. John
Deere Co., 494 U.S. 516, 531, 110 S. Ct. 1274, 1284, 108 L.Ed. 2d 443 (1990) (internal citation
omitted). There is an identical factual nexus as to parties situated in both the McIntire Action
and the Gingello Action. If the issues in this case were to be litigated in two separate courts,
there would be an unnecessary waste of time, energy, and money. See Van Dusen, 376 U.S. at
615 (noting the purpose of section 1404 is to avoid unnecessary waste).
Given the substantial concerns with the same issues, facts and parties simultaneously
pending before two district courts, the Court will exercise its broad discretion and transfer the
instant action to the Southern District of New York.

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Case No. 18-cv-60075-BLOOM/Valle
IV.

CONCLUSION
The Court finds that all required conditions have been met for ODS Capital LLC, Barry

A. Smith, and Sunil Shah to intervene in this action pursuant to Fed. R. Civ. P. 24(a) and 24(b),
and that transfer of this action is further warranted pursuant to 28 U.S.C. § 1404(a).
Accordingly, it is ORDERED and ADJUDGED as follows:
1. The Motion to Intervene and Transfer, ECF No. [50], is GRANTED. The Clerk
of Court is hereby directed to TRANSFER this case to the United States District
Court for the Southern District of New York.
2. To the extent not otherwise disposed of, any scheduled hearings are
CANCELED, all pending motions are DENIED as moot, and all deadlines are
TERMINATED.
3. The Clerk of the Court is further directed to CLOSE this case.
DONE AND ORDERED in Miami, Florida, this 28th day of December, 2018.

_________________________________
BETH BLOOM
UNITED STATES DISTRICT JUDGE
Copies to:
Counsel of Record

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