GASTINEAU v. GIFFORD et al

Filing 27

Judge Rya W. Zobel: ORDER entered granting (7) Motion to Transfer Case; denying (10) Motion to Stay as moot; denying (12) Motion to Consolidate Cases in case 1:11-cv-11096-RWZ as moot; granting (6) Motion to Transfer Case; denying (7) Motion to Stay in case 1:11-cv-11312-RWZ as moot Associated Cases: 1:11-cv-11096-RWZ, 1:11-cv-11312-RWZ(Urso, Lisa) [Transferred from Massachusetts on 9/21/2011.]

UNITED STATES DISTRICT COURT
DISTRICT OF MASSACHUSETTS

CIVIL ACTION NO. 11-11096-RWZ
DORIS GASTINEAU, an individual
V.
CHARLES K. GIFFORD, THOMAS J. MAY, BRIAN T. MOYNIHAN,
CHARLES O. HOLLIDAY, JR., MUKESH D. AMBANI, SUSAN S. BIES,
FRANK P. BRAMBLE, SR., VIRGIS W. COLBERT, D. PAUL JONES, JR.,
MONICA C. LOZANO, DONALD E. POWELL, CHARLES O. ROSSOTTI,
ROBERT W. SCULLY, WILLIAM P. BOARDMAN, BARBARA J. DESOER,
KENNETH D. LEWIS AND BANK OF AMERICA CORPORATION
***********
CIVIL ACTION NO. 11-11312-RWZ
JOHN H. COTTRELL, an individual
V.
CHARLES K. GIFFORD, THOMAS J. MAY, BRIAN T. MOYNIHAN,
CHARLES O. HOLLIDAY, JR., MUKESH D. AMBANI, SUSAN S. BIES,
FRANK P. BRAMBLE, SR., VIRGIS W. COLBERT, D. PAUL JONES, JR.,
MONICA C. LOZANO, DONALD E. POWELL, CHARLES O. ROSSOTTI,
ROBERT W. SCULLY, WILLIAM P. BOARDMAN, BARBARA J. DESOER,
KENNETH D. LEWIS AND BANK OF AMERICA CORPORATION

ORDER
September 19, 2011
ZOBEL, D. J.
On August 8, 2011, Nominal Defendant Bank of America (the “Bank”) filed
motions in both of the above captioned cases to transfer venue to the Southern District
of New York pursuant to 28 U.S.C. § 1404(a) on the grounds that a previously filed
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shareholder derivative suit captioned Cinotto v. Noski, Civ. A. No. 11-024575-WHP
(filed in the Southern District of New York), alleges the same or substantially similar
claims against the Bank. It contemporaneously moved to stay the proceedings here
pending resolution of the venue transfer motion. Plaintiffs have moved to consolidate
both actions (the “Boston Actions”) and for the appointment of co-lead counsel.1
Under 28 U.S.C § 1404(a), “[f]or the convenience of 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.” “Obvious concerns arise when actions
involving the same parties and similar subject matter are pending in different federal
district courts: wasted resources because of piecemeal litigation, the possibility of
conflicting judgments, and a general concern that the courts may unduly interfere with
each other's affairs. To resolve such tensions, court\s rely primarily on common sense
and historical practice.” TPM Holdings, Inc. v. Intra-Gold Industries, Inc., 91 F.3d 1, 4
(1st Cir. 2000). The court must be mindful “to prevent the waste of time, energy and
money and to protect litigants, witnesses and the public against unnecessary
inconvenience and expense.” Wiley v. Gerber Products Co., 667 F. Supp. 2d 171, 172
(D. Mass. 2009). It is not necessary to have “100% overlap” or a precise “mirror image”
between two cases to transfer. (See Wiley, 667 F. Supp. 2d at 172 (granting transfer
motion in deceptive packaging matter where both cases were “nearly identical” despite
invoking the laws of different states and the inclusion in one action of additional

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Mr. Cottrell has joined in Ms. Gastineau’s briefing to the Bank’s motion;
therefore, they will be referred to jointly as the “plaintiffs.”
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claims); Biolitec v. AngioDynamics, Inc., 581 F. Supp. 2d 152, 158 (D. Mass. 2008)
(granting transfer motion where “the claims in the two cases are not mirror images of
one another ... [b]ut the essence of Plaintiff's position in the two suits - is identical”);
Pure Distributors, Inc. v. Baker, No. CIV. 99–412–M, 2000 WL 1499472, at *2 (D.N.H
2000) (granting motion to transfer because the related actions “involve[d] many of the
same witnesses and documentary exhibits,” and finding “it would be both inconvenient
to those witnesses and an inefficient use of judicial resources to allow substantially
similar actions to proceed in different forums.”)).
Here, the Boston Actions and Cinotto are substantially similar matters as to the
parties, underlying facts, claims and requested relief. Plaintiffs argue that the cases
are significantly divergent in that Cinotto links certain of the harms alleged to the
acquisition of Countrywide Financial Corp. whereas the Boston cases focus on
mismanagement of foreclosures. However, all three complaints, at their core, make
strikingly similar allegations regarding the faulty servicing of certain residential
mortgages handled by the Bank. All three complaints allege, inter alia, the Bank’s
directors and officers failed to allocate adequate resources to ensure the proper
handling of residential mortgages, failed to properly maintain records and
documentation of residential mortgages, “robo-signed” affidavits in an effort to conceal
their poor document management practices, disregarded review and control risks,
failed to remediate once problems surfaced and either made or allowed inaccurate
and/or misleading statements in public filings. As such all three suits are substantially
identical.

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In addition, twelve of the sixteen individual defendants in the Boston Actions are
also named in the Cinotto complaint creating a high percentage of overlap. Although
three of the defendants in the Boston Actions do reside in Massachusetts thirteen do
not and one defendant resides in New York– further, it is the Bank that has moved for
a change of venue to New York and presumably would not have done so if the venue
was inconvenient for the defendants. Further, neither Ms. Gastineau nor Mr. Cottrell,
the sole plaintiffs in the Boston Actions, reside in or near Massachusetts. They are,
respectively, residents of Arkansas and Texas.
Plaintiffs also resist transfer because of the alleged similarity between the
Boston Actions and In re Bank of America Home Affordable Modification Program
(HAMP) Contract Litigation, Civ. A. No. 10 MD 2193 (pending in the District of
Massachusetts). However, the multidistrict litigation case is a class action involving
contractual claims by homeowners under the Home Affordable Modification Program
(“HAMP”) against the Bank. The Boston Actions and Cinotto are shareholder derivative
suits involving the duties and obligations of the Bank’s directors and officers to the
corporation and shareholders. These actions share few if any similarities.
Lastly, plaintiffs have argued that the Bank has a strong presence in Boston, yet
Bank of America (one of the largest commercial and consumer banks in the United
States) undoubtably has a strong presence in nearly all 50 states and, in particular,
certainly has an equally strong presence in the Southern District of New York.
Therefore, this factor does not weigh in favor of defeating the transfer.
The Bank has sufficiently demonstrated that judicial economy and the interest of

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justice is best served by a transfer given the substantial overlap of the issues, parties
and relief requested. A transfer will avoid the possibility of divergent, perhaps
contradictory, results in these substantially similar cases and prevent duplication of
effort on the part of the witnesses and the parties. Because transfer of the Boston
Actions to the Southern District of New York is appropriate, the court defers to Judge
Pauley on the issues of consolidation and the appointment of co-lead counsel.
Bank of America Corporation’s motion to transfer venue is ALLOWED, and the
actions are hereby transferred to the United States District Court for the Southern
District of New York. Bank of America Corporation’s motion to stay proceedings is
DENIED AS MOOT. Plaintiffs’ motion to consolidate related actions and appoint colead counsel is DENIED WITHOUT PREJUDICE.

September 19, 2011
DATE

/s/Rya W. Zobel
RYA W. ZOBEL
UNITED STATES DISTRICT JUDGE

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