Le et al v. Lease Finance Group, LLC. et al

Filing 61

ORDER AND REASONS denying 52 Motion for Reconsideration. Signed by Judge Lance M Africk on 7/7/2017. (blg)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
HA THI LE ET AL.

CIVIL ACTION

VERSUS

No. 16-14867

LEASE FINANCE GROUP, LLC ET AL.

SECTION I

ORDER AND REASONS
Before the Court is a motion 1 filed by defendants First Data Global Leasing,
First Data Merchant Services LLC, and First Data Corporation (collectively, the
“First Data defendants”), asking the Court to reconsider its previous Order and
Reasons 2 denying the First Data defendants’ request to transfer this action to the
U.S. District Court for the Eastern District of New York pursuant to a forum selection
clause. Plaintiffs oppose 3 the motion.
For the following reasons, the Court DENIES the First Data defendants’
motion for reconsideration.
I.
The Court assumes familiarity with the factual allegations in the amended
complaint. 4
Each individual plaintiff entered into a contractual relationship with the First
Data defendants through a Merchant Processing Application and Agreement

R. Doc. No. 52.
R. Doc. No. 47.
3 R. Doc. No. 54.
4 See R. Doc. No. 4; see also R. Doc. No. 54, at 1-4 (summarizing the factual allegations
in the amended complaint).
1
2

(“MPAA”). 5 Plaintiffs and the First Data defendants used the MPAAs to contract for
debit and credit card transaction processing services, which the First Data
defendants provided to plaintiffs’ businesses.

The MPAA incorporates a forum

selection clause by reference to a separate Program Guide. 6 This forum selection
clause provides that “[t]he exclusive venue for any actions or claims arising under or
related to [the MPAA] shall be in the appropriate state or federal court located in
Suffolk County, New York.” 7
On May 9, 2017, the Court denied 8 the First Data defendants’ request to
enforce this forum selection clause. The Court explained that “even if [the MPAA
forum selection clause] is valid, the Court may nevertheless decline to transfer under
[28 U.S.C. § 1404(a)] in certain circumstances.” 9 Assuming arguendo that the clause
was valid and enforceable—and therefore that the private interests of the parties
“weigh[ed] in favor of severance and transfer” as a matter of law 10—the Court
nevertheless declined to transfer the action to the Eastern District of New York based

See, e.g., R. Doc. No. 18-2.
R. Doc. No. 18-5.
7 Id. § 32.2.
8 R. Doc. No. 47.
9 Id. at 15 (citing In re Rolls Royce Corp., 775 F.3d 671, 678 (5th Cir. 2014)).
10 Id. at 16. See Atlantic Marine Constr. Co., Inc. v. U.S. Dist. Court for the W. Dist.
of Tex., 134 S. Ct. 568, 582 (2013) (“When parties agree to a [valid] forum-selection
clause, they waive the right to challenge the preselected forum as inconvenient or less
convenient for themselves or their witnesses, or for their pursuit of the litigation. A
court accordingly must deem the private-interest factors to weigh entirely in favor of
the preselected forum.”).
5
6

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on public interest considerations, including avoiding “duplicitous litigation and a
waste of judicial resources.” 11
The First Data defendants now ask 12 the Court to reconsider its denial of their
request to transfer. Plaintiffs object. 13
II.
Rule 54(b) of the Federal Rules of Civil Procedure provides that “any order or
other decision . . . may be revised at any time before the entry of a judgment
adjudicating all the claims and all the parties’ rights and liabilities.” Under Rule
54(b), a district court may “reconsider and reverse its decision for any reason it deems
sufficient, even in the absence of new evidence or an intervening change in or
clarification of the substantive law.” Austin v. Kroger Texas, L.P., No. 16-10502, 2017
WL 2413815, at *9 (5th Cir. 2017) (per curiam).
Compared with Rule 59(e) of the Federal Rules of Civil Procedure—which
governs motions to alter or amend final judgments—Rule 54(b) has been described
by the Fifth Circuit as permitting a “more flexible” inquiry.

Austin, 2017 WL

2413815, at *9. That inquiry includes consideration of “the interests of justice.” Id.
at *10. However, district courts exercise their power under Rule 54(b) “sparingly in
order to forestall the perpetual reexamination of orders and the resulting burdens
and delays”—consequences that disserve the interests of justice. Castrillo v. Am.

Id.
R. Doc. No. 52.
13 R. Doc. No. 54.
11
12

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Home Mortg. Servicing Inc., No. 09-4369, 2010 WL 1424398, at *3 (E.D. La. Apr. 5,
2010) (Vance, J.).
District courts have generally considered a number of factors when engaging
in a Rule 54(b) analysis, including whether the party moving the district court to
reconsider an interlocutory order “demonstrates the motion is necessary to correct
manifest errors of law or fact upon which the judgment is based,” whether an
“intervening change in the controlling law” has occurred, whether the moving party
presents the district court with new evidence that had been previously unavailable
to the party, and “whether the motion is necessary in order to prevent manifest
injustice.” Id. at *4 (considering Rule 59(e) factors while performing the Rule 54(b)
inquiry).
III.
The First Data defendants argue 14 that “previously unavailable” evidence
demonstrates that the Court’s Order and Reasons was based on factual errors. The
First Data defendants also argue 15 that the Order and Reasons results in a “manifest
injustice”—namely, the First Data defendants’ inability to litigate this action in the
forum designated by the forum selection clause.
A.
The First Data defendants offer two “new” pieces of evidence in support of their
motion for consideration: a copy of the Preferred Card Processing Agreement

14
15

R. Doc. No. 52-1 at 9-12.
Id. at 12-19.
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(“Processing Agreement”), 16 and a copy of the Merchant Services and Equipment
Purchase Order (“Equipment Order”). 17 According to the First Data defendants,
these agreements “directly contradict” the allegations in the complaint regarding the
First Data defendants’ involvement in any conspiratorial or concerted misconduct 18—
allegations that the Court considered in its public interest analysis in its Order and
Reasons. 19
Yet these supposed smoking guns against plaintiffs’ allegations of conspiracy
are nothing new: both were previously available to the First Data defendants.
Plaintiffs submitted the Equipment Order to the Court along with their
memorandum in opposition to the First Data defendants’ motion to change venue. 20
If the Equipment Order was available to the Court at the time, then it was also
available to the First Data defendants—and if it was available to the First Data

R. Doc. No. 52-3. The First Data defendants allege that the Processing Agreement
strictly “governed” their relationship with co-defendant Payment Systems, Inc.
(“PSI”). R. Doc. No. 52-1, at 2, 11. In this relationship, PSI would “board[]”
merchants—such as the plaintiffs in this case—to the First Data defendants’ credit
and debit card transaction processing systems. Id. at 5. The First Data defendants
would then “pay PSI a fixed amount for each transaction” sent through their systems
by merchants that PSI had boarded. Id. The First Data defendants’ Processing
Agreement with PSI purported to bar PSI from misrepresenting information on First
Data’s behalf, and to require compliance with laws and regulatory requirements. R.
Doc. No. 52-1, at 5 (citing R. Doc. No. 52-3, §§ 2, 8.4).
17 R. Doc. No. 52-4. The Equipment Orders between each individual plaintiff and PSI
provided that “the purchase or lease of equipment is a separate and independent
transaction from [plaintiffs] desire for credit and debit card processing services.” R.
Doc. No. 21-7, at 1. The Equipment Orders made PSI a party to the MPAAs and
integrated their terms. See id. at 3.
18 R. Doc. No. 52-1, at 12.
19 See R. Doc. No. 47, at 15-18.
20 See, e.g., R. Doc. No. 21-7.
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defendants, then the First Data defendants could have incorporated it into their
arguments in support of their motion to change venue. Yet despite filing a reply 21 to
plaintiffs’ memorandum in opposition to the motion, the First Data defendants did
not do so.
With regards to the Processing Agreement, the First Data defendants refer to
and quote from the Processing Agreement at length in their answer. 22 As such, the
Processing Agreement was certainly available to the First Data defendants at the
time the Court considered their motion to change venue. However, as with the
Equipment Order, the First Data defendants offered no arguments based on the
Processing Agreement at the time that the Court considered their motion to change
venue.

The First Data defendants did not even mention it in either their

memorandum in support of motion to change venue or their reply to plaintiffs’
memorandum in opposition to the motion. 23
While permitting a “more flexible” inquiry than Rule 59, Rule 54 nevertheless
“should not be used to relitigate old matters, raise new arguments, or submit evidence
that could have been presented earlier in the proceedings.” Hill v. New Orleans City,
No. 13-2463, 2016 WL 4180809, at *9 (E.D. La. Aug. 8, 2016) (Lemelle, J.). Such
motions waste the parties’ time and resources—and the Court’s.
The First Data defendants are using “evidence that could have been presented
earlier in the proceedings” to “relitigate old matters.” In its Order and Reasons

See R. Doc. No. 27.
See R. Doc. No. 19, at 28-30.
23 See R. Doc. No. 18-1; R. Doc. No. 27.
21
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denying the First Data defendants’ motion to change venue, the Court assumed
arguendo that the forum selection clause—incorporated by reference into the
MPAA—was valid; therefore, the Court weighed the parties’ private interests in favor
of transfer as a matter of law. See Atlantic Marine, 134 S. Ct. at 582. Then, the Court
considered whether public interest considerations—argued by plaintiffs in their
memorandum in opposition 24 to the motion to change venue, and to which the First
Data defendants had an opportunity to respond in their reply 25—outweighed the
private interests and favored maintaining the case in the Eastern District of
Louisiana, rather than transferring the case to the forum specified in the clause. 26
The Court concluded that the public interests (i.e., “judicial economy, combined with
the unique and interrelated nature of the allegations in the complaint”) sufficiently
outweighed the private interests (i.e., the forum selection clause) to deny enforcement
of the forum selection clause. 27
The First Data defendants have now dug up evidence alleged to be previously
unavailable and are using it as grounds to contest the Court’s public interest analysis.
The “interests of justice” weigh against reconsideration based on such evidence.
Austin, 2017 WL 2413815, at *10.
B.

See R. Doc. No. 21.
See R. Doc. No. 27.
26 R. Doc. No. 47, at 15-18.
27 Id. at 18.
24
25

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Likewise, the First Data defendants attempt to “relitigate old matters” with
their argument that the Court’s Order and Reasons denying their motion to change
venue results in a manifest injustice. Hill, 2016 WL 4180809, at *9. “Manifest
injustice is ‘[a]n error in the trial court that is direct, obvious, and observable[.]’”
Rocha v. CCCF Admin., No. 09-1432, 2010 WL 1333138, at *2 (D. Colo. Apr. 2, 2010)
(Arguello, J.) (quoting Black’s Law Dictionary 436 (2d pocket ed. 2001)) (alteration in
original). “A showing of manifest injustice requires there be a fundamental flaw in
the Court’s decision that would lead to an inequitable result that is not in line with
public policy absent correction.”

Vineyard v. Knox Cnty., No. 13-634, 2014 WL

11638564, at *1 (E.D. Tenn. Nov. 6, 2014) (Reeves, J.).
The First Data defendants have not pointed to a “fundamental flaw” in the
Court’s Order and Reasons. Vineyard, 2014 WL 11638564, at *1. In the Order and
Reasons, the Court observed that an inquiry into private and public interests
structures a § 1404(a) analysis. 28 The Court then assumed the validity of the forum
selection clause between plaintiffs and the First Data defendants—although, to be
clear, the Court did not hold that the clause is indeed valid—and as a matter of law
weighed the private interests in favor of severance and transfer to the Eastern
District of New York. 29 Nevertheless, the Court concluded that this is a rare case
where the public interests outweigh the private interests to a sufficient degree to
warrant a refusal to enforce the forum selection clause. 30

Id. at 15.
Id. at 15-16.
30 See id. at 16-18.
28
29

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The First Data defendants object to how the Court weighed the public
interests. 31 They allege that severance and transfer pursuant to the forum selection
clause would not hinder judicial economy to the extent that the Court concluded and
therefore such considerations cannot overcome the clause. In short, the “manifest
injustice” identified by the First Data defendants is their disagreement with the
Court’s analysis and conclusion in its Order and Reasons.

However, “mere

disagreement with the decision” of the Court does not work a manifest injustice.
United States v. Hildenbrand, 376 Fed. App’x 466, 466 (5th Cir. 2010). The First
Data defendants have not demonstrated to the Court that its Order and Reasons
works a manifest injustice.
C.
The Court concludes that reconsideration of its Order and Reasons is not
warranted. The evidence—and facts and arguments drawn therefrom—that the First
Data defendants now offer the Court were previously available to them. Yet the First
Data defendants put this evidence forward only now. Moreover, the First Data
defendants have not shown that the Court’s Order and Reasons results in manifest
injustice.

See R. Doc. No. 52-1, at 12-19. The First Data defendants also put forward a
parade-of-horribles argument: the Court’s previous Order and Reasons will
encourage undesirable behavior among litigants. See id. at 19. The Court has
confidence that district courts will be able to avoid this sort of manipulation.
Moreover, if litigants provide the district courts with any relevant evidence or
arguments to smoke out such undesirable behavior by other parties, then this alleged
danger should greatly diminish.
31

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In the Order and Reasons, the Court concluded that enforcement of the forum
selection clause between plaintiffs and the First Data defendants was not
warranted—a conclusion that, the Court points out, in no way impairs the First Data
defendants’ ability to argue the merits on the case. Cf. Austin, 2017 WL 1379453, at
*2 (noting that the district court’s refusal to consider evidence affected summary
judgment).

Rather, the Court’s conclusion simply means that the First Data

defendants will have to argue the merits in Louisiana rather than in New York.
IV.
For the foregoing reasons,
IT IS ORDERED that the First Data defendants’ motion for reconsideration
is DENIED.

New Orleans, Louisiana, July 7, 2017.

_______________________________________
LANCE M. AFRICK
UNITED STATES DISTRICT JUDGE

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