Mortgage Resolution Servicing, LLC et al v. JPMorgan Chase Bank, N.A. et al

Filing 75

MEMORANDUM AND ORDER denying 42 Motion to Change Venue: For the foregoing reasons, the defendants' motion to transfer (Docket No. 42) is denied. (Signed by Magistrate Judge James C. Francis on 10/28/2015) Copies Mailed By Chambers. (tn)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- - - - - - - - - - - - - - - - - -:
MORTGAGE RESOLUTION SERVICING, LLC,:
1ST FIDELITY LOAN SERVICING, LLC, :
and S&A CAPITAL PARTNERS, INC.,
:
:
:
Plaintiffs,
:
:
- against :
:
JPMORGAN CHASE BANK, N.A., CHASE
:
HOME FINANCE LLC, and JPMORGAN
:
CHASE & CO.,
:
:
Defendants.
:
- - - - - - - - - - - - - - - - - -:
JAMES C. FRANCIS IV
UNITED STATES MAGISTRATE JUDGE

15 Civ. 0293 (LTS) (JCF)
MEMORANDUM
AND ORDER

On separate occasions, the plaintiffs -- Mortgage Resolution
Servicing, LLC (“MRS”), 1st Fidelity Loan Servicing, LLC (“1st
Fidelity”), and S&A Capital Partners, Inc. (“S&A”) -- purchased
residential mortgage debt from the defendants.

The plaintiffs

bring this action alleging breach of contract claims and related
tort actions, as well as one civil RICO claim.

The defendants

JPMorgan Chase Bank, N.A. (“the Bank”), Chase Home Finance LLC
(“Chase Home Finance”),1 and JPMorgan Chase & Company (“JPMC”), now
move pursuant to 28 U.S.C. § 1404(a) to have this case transferred
to the United States District Court for the District of Columbia
(“the D.C. Court”).

For the reasons that follow, the motion is

denied.
Background
Each

of

the

plaintiffs

is

1

in

the

business

of

buying

In May 2011, Chase Home Finance merged into the Bank.
(Third Amended Complaint (“3d Am. Compl.”), ¶ 7).
1

residential mortgage loans that “are not performing according to
their original terms.” (3d Am. Compl., ¶ 11). Upon purchasing the
mortgages,

the

plaintiffs

with

the

borrowers with the goal of avoiding further payment defaults.

(3d

Am. Compl., ¶ 12).

negotiate

payment

terms

Between 2005 and 2010, S&A and 1st Fidelity

respectively acquired from Chase Home Finance approximately 650 and
350 mortgages.

(3d Am. Compl., ¶¶ 14-15).

Additionally, in

February 2009, after months of communications between the parties,
Chase

Home

Finance

sold

MRS

3,529

mortgage

loans

(with

an

outstanding balance of $156 million) for $200,000. (3d Am. Compl.,
¶¶ 19-39).

The Third Amended Complaint asserts nine causes of

action: (1) breach of contract on behalf of MRS; (2) breach of
contract on behalf of S&A; (3) breach of contract on behalf of 1st
Fidelity; (4) conversion on behalf of all plaintiffs; (5) tortious
interference with prospective economic advantage on behalf of all
plaintiffs; (6) fraud and fraudulent inducement on behalf of MRS;
(7) negligent misrepresentation on behalf of MRS; (8) slander of
title on behalf of all plaintiffs; and (9) a civil RICO claim on
behalf of all plaintiffs.

(3d Am. Compl., ¶¶ 148-220).

In one way

or another, the plaintiffs’ claims all stem from their purchase of
mortgage loans from the defendants.
The allegation that ties the plaintiffs’ breach of contract,
tort, and civil RICO causes of action2 together is that the
defendants,

after

selling

mortgage

loans

to

the

plaintiffs,

released liens securing those loans, purported to forgive debt on
2

Specifically, counts 1-5 and 8-9.
2

mortgages they sold, and accepted and retained payments on loans
they no longer owned.
194, 204).

(3d Am. Compl., ¶¶ 152, 157, 162, 168, 172,

Those claims pursued by MRS alone3 include allegations

that the defendants sold it loans that were defective and that the
defendants fraudulently and negligently misrepresented the nature
and quality of those loans.

(3d Am. Compl., ¶¶ 177-181, 186-191).

The plaintiffs originally filed suit in New York state court, but,
in January 2015, the defendants removed the case here.

(Notice of

Removal, ¶ 1).
Looming in the background of this case are two somewhat
related matters.

First, in March 2012, the United States and

forty-nine states filed suit in the D.C. Court against numerous
financial institutions (including the defendants) for “misconduct
related

to

their

origination

residential mortgages.”

and

servicing

of

single

family

(Complaint, United States v. Bank of

America Corp., No. 12-CV-361 (D.D.C. March 12, 2012), attached as
Exh. A to Declaration of Michael M. Maya dated May 22, 2015 (“Maya
Decl.”), ¶ 1).

On April 4, 2012, all parties agreed to settle the

matter; the Honorable Judge Rosemary M. Collyer, U.S.D.J., approved
the settlement in the form of separate consent judgments against
the various defendants.

See United States v. Bank of America, 922

F. Supp. 2d 1, 4 (D.D.C. 2013); (Chase Consent Judgment, Bank of
America Corp., No. 12-CV-361 (D.D.C. April 4, 2012) (“Consent
Judgment”), attached as Exh. B to Maya Decl.).

The consent

judgment entered against these defendants required, among other
3

Specifically, counts 6-7.
3

things, that they provide refinancing and other relief to consumers
who satisfied eligibility criteria.
Judge

Collyer

retained

jurisdiction

(Consent Judgment, ¶ 5).
to

enforce

the

judgment.

(Consent Judgment, ¶ 13).
More recently, in May 2013, Laurence Schneider brought a qui
tam action against the defendants in the U.S. District Court for
the District of South Carolina.

(Complaint, United States ex rel.

Schneider v. JPMorgan Chase Bank, No 3:13-CV-1223 (D.S.C. May 6,
2013) (“Schneider Compl.”), attached as Exh. D to Maya Decl.). Mr.
Schneider is the president of plaintiff S&A and of Real Estate and
Finance, Inc., which in turn is the managing member of plaintiffs
MRS and 1st Fidelity.

(3d Am. Compl., ¶¶ 2-4).

In essence, Mr.

Schneider’s qui tam complaint asserts that the defendants violated
the

terms

of

the

consent

judgment

by,

among

other

things,

improperly claiming credit for forgiving mortgage debt that they no
longer

owned.

(Schneider

Compl.,

¶¶

4-13).

Mr.

Schneider

subsequently moved to have that case transferred to the D.C. Court
and marked as related to the prior litigation, pursuant to Judge
Collyer’s retention of jurisdiction over the consent judgment.
(Memorandum in Support of Motion to Transfer Venue, United States
ex rel. Schneider, No. 3:13-CV-1223 (May 27, 2014),
Exh. H to Maya Decl., at 3).

attached as

That motion was granted.

(Order

Granting Motion to Transfer, United States ex rel. Schneider, No.
3:13-cv-1223 (June 19, 2014), attached as Exh. I to Maya Decl.).
In light of the “common questions of law and fact” raised in
this complaint and Mr. Schneider’s qui tam action, the defendants
4

now move to have the plaintiffs’ case transferred to the D.C. Court
“so that the two related cases can be coordinated before a single
court.”

(Defendants’ Memorandum of Law in Support of Their Motion

to Transfer Venue to United States District Court for the District
of Columbia (“Def. Memo.”) at 2). The plaintiffs oppose the motion
primarily on the grounds that a forum selection clause contained in
a purchase agreement between MRS and Chase Home Finance identifies
New York as the forum for resolving disputes arising under that
agreement.

(Plaintiffs’ Memorandum in Opposition to Defendants’

Motion to Transfer Venue (“Pl. Memo.”) at 1, 3-4).
Discussion
A.

Legal Standard

A district court may transfer an action “[f]or the convenience
of parties and witnesses, in the interest of justice,” to any
district “where [the action] might have been brought.”
§ 1404(a).

28 U.S.C.

Congress intended § 1404(a) “to prevent the waste ‘of

time, energy and money’ and ‘to protect litigants, witnesses and
the public against unnecessary inconvenience and expense.’”

Van

Dusen v. Barrack, 376 U.S. 612, 616 (1964) (quoting Continental
Grain Co. v. Barge FBL-585, 364 U.S. 19, 26-27 (1960)).

District

courts have broad discretion over whether to grant a transfer, In
re Cuyahoga Equipment Corp., 980 F.2d 110, 117 (2d Cir. 1992), and
generally engage in a two-part inquiry when deciding such motions,
Mattel, Inc. v. Robarb’s, Inc., 139 F. Supp. 2d 487, 490 (S.D.N.Y.
2001).
“The court must first determine whether the action sought to
5

be transferred is one that ‘might have been brought’ in the
transferee court.

Second, the court must determine whether,

considering the ‘convenience of parties and witnesses’ and the
‘interest of justice,’ a transfer is appropriate.”

Id. at 490

(quoting Wilshire Credit Corp. v. Barrett Capital Management Corp.,
976 F. Supp. 174, 180 (W.D.N.Y. 1997)).4

Under the second prong of

this analysis, courts typically consider a variety of privateinterest

and

public-interest

factors.

See

Atlantic

Marine

Construction Co. v. United States District Court for Western
District of Texas, __ U.S. __, __ & n.6, 134 S. Ct. 568, 581 & n.6
(2013)

(collecting

factors).5

Weighing

these

factors

is

an

equitable task for which “[t]here is no rigid formula” and where
“no single [factor] is determinative.”

Citigroup Inc. v. City

Holding Co., 97 F. Supp. 2d 549, 561 (S.D.N.Y. 2000).
There is, however, an important, recently-articulated caveat
to this discussion: “When the parties have agreed to a valid forum4

The plaintiffs do not dispute that this case might have been
brought in the D.C. Court, so I will forgo that analysis.
5

Courts in this Circuit generally consider the following
factors:
(1) the convenience of witnesses, (2) the location of
relevant documents and the relative ease of access to
sources of proof, (3) the convenience of the parties, (4)
the locus of the operative facts, (5) the availability of
process to compel attendance of unwilling witnesses; (6)
the relative means of the parties; (7) a forum’s
familiarity with the governing law; (8) the weight
accorded a plaintiff’s choice of forum; and (9) trial
efficiency and the interests of justice based on the
totality of the circumstances.
Reliance Insurance Co. v. Six Star, Inc., 155 F. Supp. 2d 49, 56-57
(S.D.N.Y. 2001).
6

selection clause, a district court should” honor that contractual
provision unless there are “extraordinary circumstances unrelated
to the convenience of the parties.”

Atlantic Marine, __ U.S. at

__, 134 S. Ct. at 581 (emphasis added).

Because enforcing forum

selection clauses “protects [the parties’] legitimate expectations
and furthers vital interests of the justice system,” such clauses
are to be “given controlling weight in all but the most exceptional
cases.”

Id. (emphasis added) (quoting Stewart Organization, Inc.

v. Ricoh Corp., 487 U.S. 22, 33 (1988) (Kennedy, J., concurring)).
Accordingly, consideration of the defendants’ present motion must
begin with an analysis of the significance of the forum selection
clause contained in the agreement between MSR and Chase Home
Finance.6
B.

The Forum Selection Clause

“When parties have contracted in advance to litigate disputes
in a particular forum, courts should not unnecessarily disrupt the
parties’ settled expectations. . . . In all but the most unusual
cases [] ‘the interest of justice’ is served by holding the parties
to their bargain.”
583.

Atlantic Marine, __ U.S. at __, 134 S. Ct. at

However, the defendants raise two issues that complicate the

application of Atlantic Marine to this case. First, the defendants
argue that the forum selection clause only governs MRS’ breach of
6

The agreement between MRS and Chase Home Finance provides
that “all disputes arising [there]under shall be submitted to . . .
the courts of competent jurisdiction, state and federal, in the
State of New York,” and that the agreement “shall be construed in
accordance with the laws of the State of New York.” (Mortgage Loan
Purchase Agreement (“MLPA”), attached as Exh. O to Maya Decl., §
15).
7

contract claim.

(Defendants’ Reply to Plaintiffs’ Opposition to

Defendants’ Motion to Transfer Venue to United States District
Court for the District of Columbia (“Def. Reply”) at 4).

Second,

S&A and 1st Fidelity are not parties to the agreement that contains
the forum selection clause, and there is no allegation that they
entered into other contracts with the defendants that include
similar clauses. (Def. Reply at 3). The defendants conclude that,
in light of these considerations, Atlantic Marine does not control
here.

(Def. Reply at 3).

Whatever the intuitive appeal of the

defendants’ argument, it lacks support in the caselaw.
As an initial matter, it is not entirely certain that the
forum selection clause governs only MRS’ breach of contract claim.
According

to

the

Second

Circuit,

“when

ascertaining

the

applicability of a contractual provision to particular claims,
[courts] examine the substance of those claims, shorn of their
labels.” Phillips v. Audio Active Ltd., 494 F.3d 378, 388 (2d Cir.
2007).

As such, the focus of a court’s inquiry should be on

“factual allegations rather than on the causes of action asserted.”
Id.

at

388-89.

Whether

a

forum

selection

clause

covers

a

particular claim “is a contractual question that requires [] courts
to interpret the clause,” New Moon Shipping Co. v. MAN B & W Diesel
AG, 121 F.3d 24, 33 (2d Cir. 1997), pursuant to the law indicated
in the agreement’s choice of law clause, Martinez v. Bloomberg LP,
883 F. Supp. 2d 511, 517 (S.D.N.Y. 2012).

Under New York law, the

forum selection clause in the MLPA likely covers more than MRS’
breach of contract action.

See Montoya v. Cousins Chanos Casino,
8

LLC, No. 651353/11, 2012 WL 118475, at *5 (N.Y. Sup. Ct. Jan. 12,
2012) (interpreting forum selection clause covering claims “arising
under” contract and observing that, “[b]ecause of the strong public
policy favoring enforcement of forum selection clauses, courts have
construed these clauses broadly to encompass tort claims brought in
relation to the contract and/or which arise out of the business
relationship”).
tortious

As a factual matter, MRS’ claims for conversion,

interference,

fraudulent

inducement,

negligent

misrepresentation and slander of title all arise from the business
relationship created by the MPLA (see, e.g., 3d Am. Compl., ¶¶ 165,
172, 177, 186, 196; see also

Defendants’ Memorandum of Law in

Support of Their Motion to Dismiss Plaintiffs’ Second Amended
Complaint at 1 (“Plaintiffs [] assert a laundry list of quasicontractual and tort claims . . . . These claims are wholly
duplicative of Plaintiffs’ breach of contract claims . . . .”)),
and could, therefore, come under the forum selection clause.7
As for S&A and 1st Fidelity’s claims, while the plaintiffs
cite authority suggesting that non-parties to a contract may

7

Even the plaintiffs’ civil RICO claim depends on the
existence of, and negotiations surrounding, the MLPA and the
resulting sale of mortgage loans to MRS (see 3d Am. Compl., ¶¶ 20405, 212, 215-16), and it would be no stretch to consider this a
dispute arising under the MLPA, see Crescent International, Inc. v.
Avatar Communities, Inc., 857 F.2d 943, 944 (3d Cir. 1988) (per
curiam) (finding civil RICO claim covered by forum selection clause
in real estate sale agreement that required “any litigation upon
[the agreement’s] terms” to be brought in Florida); accord Roby v.
Corporation of Lloyd’s, 996 F.2d 1353, 1359-61 (2d Cir. 1993)
(finding platinffs’ RICO claims covered by forum selection clause).
Accordingly, were it not for the presence of S&A and 1st Fidelity
in this litigation, the forum selection clause might govern the
entire case.
9

nonetheless enforce a forum selection clause against the contract’s
signatories,

(see

Plaintiffs’

Sur-Reply

in

Opposition

to

Defendants’ Motion to Transfer (“Pl. Reply”) at 2), those cases are
inapposite.

They involve situations where a non-party sought to

litigate claims related to the contract containing the relevant
clause. See Freeford Ltd. v. Pendleton, 53 A.D.3d 32, 857 N.Y.S.2d
62

(1st

Dept.

2008),

and

Smith/Enron

Cogeneration

Limited

Partnership, Inc. v. Smith Cogeneration International, Inc., 198
F.3d

88

(2d

Cir.

1999).

However,

I

cannot

agree

with

the

defendants’ contention that Atlantic Marine does not control here
simply because S&A and 1st Fidelity are not parties to the MLPA.
(See Def. Reply at 3).
For one, § 1404(a) only authorizes courts to transfer an
entire case, Wyndham Associates v. Bintliff, 398 F.2d 614, 618 (2d
Cir. 1968); see also

Ahmed v. T.J. Maxx Corp, 777 F. Supp. 2d 445,

450 (E.D.N.Y. 2011), so any assessment of the defendants’ motion
must necessarily account for the forum selection clause, as it is
relevant to the case as a whole.8

Moreover, any benefits gained by

transferring this case must be balanced against the strong policy
favoring the enforcement of forum selection clauses.

See Paduano

v. Express Scripts Inc., 55 F. Supp. 3d 400, 434-35 (E.D.N.Y. 2014)
(“[T]he efficiency and economy achieved by trying interrelated
claims in one forum should not trump the forum-selection clauses

8

A court may sever a case and then transfer the severed
matter, Wyndham Associates, 398 F.2d at 618, but the defendants
have not suggested that S&A and 1st Fidelity’s claims should be
severed.
10

agreed to by [the parties].”).9
Careful review of both the Supreme Court’s opinion in Atlantic
Marine and precedent from this Circuit post-dating that decision
convinces me that the MLPA’s forum selection clause controls here,
notwithstanding the presence of S&A and 1st Fidelity.

In Atlantic

Marine, the Supreme Court explained that a court’s assessment of a
motion to transfer under § 1404(a) when the parties are bound by a
forum selection clause changes in two ways that are relevant to the
present discussion.
581-82.

Atlantic Marine, __ U.S. at __, 134 S. Ct. at

First, the choice of forum made by a plaintiff defying a

forum selection clause is not entitled to the usual deference, as
that

party

already

exercised

its

negotiated the relevant clause.

“venue

Id.

privilege”

when

it

Second, a court should not

consider arguments about the parties’ private interests, as those
arguments are effectively waived when the parties agree in advance
to litigate in a particular forum.

Id. at 582.

Here, rather than defying the forum selection clause, MRS
filed suit pursuant to its terms.

As such, the plaintiffs’ choice

of forum must be afforded the normal, or perhaps even greater
weight.

Moreover, because the defendants here seek to avoid

enforcement of a valid forum selection clause, their arguments
about the inconveniences they will face cannot be considered. Even

9

And in any case, the private benefits of transfer are most
likely to flow primarily to the party seeking to avoid enforcement
of the forum selection clause, and the Supreme Court has stated
that courts should decline to consider that party’s interests. See
Atlantic Marine, __ U.S. at __, 134 S. Ct. at 582; Paduano, 55 F.
Supp. 3d at 435.
11

though the defendants did not agree in advance to litigate with S&A
and 1st Fidelity in New York, they have not shown that there is
something uniquely inconvenient about defending those claims here.
Instead, the defendants’ arguments about inconvenience focus on the
case as a whole.

(See Def. Memo. at 14-16).

The problem with that

position is that it fails to in any way account for the fact that,
at least as to those claims involving MRS, they conceded the
convenience of litigating in this forum when they entered into the
MLPA.
Although I am unaware of another case in this Circuit that
both presents an analagous issue and post-dates Atlantic Marine,
there are helpful guideposts. First, in Tulepan v. Roberts, No. 14
Civ. 8716, 2014 WL 6808313 (S.D.N.Y. Dec. 3, 2014), the defendants,
notwithstanding a forum selection clause that required the case to
be litigated in New York, sought to have the case transferred to
Florida where one of the plaintiffs had filed a related suit.
at *1.

Id.

The court denied the defendants’ request, concluding that

none of the public interest factors, including the existence of the
“factually

related”

suit

pending

in

another

district,

was

sufficient to avoid enforcement of the forum selection clause. Id.
at *2-3.

Second, in Allianz Global Corporate & Specialty v.

Chiswick Bridge, Nos. 13 Civ. 7559, 13 Civ. 7565, 2014 WL 6469027
(S.D.N.Y. Nov. 17, 2014), two defendants in a multi-defendant case
moved on the basis of forum non conveniens to dismiss the claims
against them, arguing that a valid forum selection clause required
litigation to be pursued in Tokyo.
12

Id. at 1.

Ignoring the

plaintiff’s

claims

that

requiring

it

to

litigate

“closely

intertwined” matters in two forums would be “unduly costly and
prejudicial,” the court enforced the forum selection clause and
remarked that this promoted the public interest.
Circumstances

that

other

courts

have

Id. at *3-4.

found

sufficiently

extraordinary to warrant defying a forum selection clause are
simply not present here.

See, e.g., Credit Suisse AG v. Appaloosa

Investment Ltd. Partnership, No. 15 Civ. 3474, 2015 WL 5257003, at
*11 (S.D.N.Y. Sept. 9, 2015) (transferring case despite forum
selection
pending

clause

where

bankruptcy

case

action

created

and

was

“palpable
in

conflict”

“direct

with

conflict

with

defendants’ status and rights under the Bankruptcy Code”).
In sum, this case does not present considerations that would
allow me to ignore the Supreme Court’s command that “a valid forumselection clause [should be] given controlling weight in all but
the most exceptional cases.”

Atlantic Marine, __ U.S. at __, 134

S. Ct. at 581 (alteration in original) (quoting Stewart, 487 U.S.
at 33).

That two (or even eight) of the nine causes of action

alleged are not covered by the clause is simply not relevant here.
Adopting the defendants’ position might allow strategic litigants
to avoid enforcement of forum selection clauses by joining to its
suit other parties not subject to the clause.
Royce

Corp.,

775

F.3d

671,

685

(5th

Cir.

See In re Rolls

2014)

(Jones,

J.,

concurring) (characterizing as “highly unlikely” that the Supreme
Court intended Atlantic Marine to control “only when one party sues
one other party” and noting that “any clever party to a lawsuit can
13

readily join another party . . . in an attempt to avoid the forum
selection

clause”).

Because

I

conclude

that

Atlantic

Marine controls the present motion, the only question that remains
is whether the public interest factors the defendants cite satisfy
their burden of showing that this is one of those “unusual cases”
in which enforcement of a forum selection clause may be avoided.
See Atlantic Marine, __ U.S. at __, 134 S. Ct. at 582-83.
C.

Public Interest Factors

“Public-interest

factors

may

include

‘the

administrative

difficulties flowing from court congestion, the local interest in
having localized controversies decided at home, [and] the interest
in having the trial of a diversity case in a forum that is at home
with the law.’”

Atlantic Marine, __ U.S. at __ n.6, 134 S. Ct. at

581 n.6 (alteration in original) (quoting Piper Aircraft Co. v.
Reyno, 454 U.S. 235, 241 n.6 (1981)).10 In addition, courts in this
Circuit often consider “trial efficiency and the interests of
justice”

in

the

context

of

their

public

interest

analyses.

Spiciarich v. Mexican Radio Corp., No. 14 Civ. 9009, 2015 WL
4191532, at *6, 10 (S.D.N.Y. July 10, 2015).
1.

Forum Familiarity with the Law

The defendants concede that New York common law applies to the
10

Neither party argues that “court congestion” is a concern
in this case, so I will not consider this factor. Furthermore,
only the plaintiffs have argued that there is a “local interest”
here, stating that New York, as the place where defendants’ are
headquartered and where the MLPA is deemed to have been made, has
an interest in resolving this dispute locally. (Pl. Memo. at 8).
While that argument is perhaps a stretch, the defendants have made
no contrary showing that the District of Columbia has an interest
in this case that would favor transfer.
14

plaintiffs’ claims.

(Def. Memo. at 17).

Nevertheless, they argue

that the more relevant consideration here is this Court’s lack of
familiarity with the consent judgment approved by Judge Collyer.
I do not question Judge Collyer’s “unparalleled expertise with
respect to the interpretation and application of those voluminous
and complex settlements”

(Def. Memo. at 17), and I do not doubt

that she is “best suited to interpret the terms of the Consent
Judgment . . . because [she] presided over the settlement,” United
States v. Bank of America, 922 F. Supp. 2d 1, 5 (D.D.C. 2013)
(Collyer, J.), aff’d sub nom. United States v. Bank of America
Corp., 753 F.3d 1335 (D.C. Cir. 2014).

However, the defendants

greatly exaggerates the extent to which that expertise should weigh
in favor of transferring this case.

For one, the consent judgment

only figures centrally in the plaintiffs’ civil RICO claim, i.e.,
in one of the plaintiffs’ nine causes of action. More importantly,
one court’s having to interpret the terms of a consent judgment
entered by a different court is not extraordinary.

Cf. id. at 6

(observing that construing a consent decree is simply a matter of
contract interpretation).

Indeed, the Honorable Jesse M. Furman,

a judge in this district, has assessed claims that implicate the
consent judgments, albeit with assistance from Judge Collyer.

See

United States v. Wells Fargo Bank, N.A., 972 F. Supp. 2d 593, 604
(S.D.N.Y.

2013)

(“[Judge

Collyer]

left

it

to

this

Court

to

interpret the Amended Complaint in this case and to decide whether
the Government’s claims here are barred by the consent judgment.”).
Because the majority of the plaintiffs’ claims are diversity
15

actions governed by New York common law, as far as the defendants’
position

is

concerned,

this

factor

is,

at

best,

neutral.

Accordingly, it does not favor transfer.
2.

Trial Efficiency and the Interests of Justice

The defendants argue at length that this case should be
transferred

to

the

D.C.

Court

so

as

to

avoid

“duplicative

litigation” and the attending strain on judicial resources.
Memo. at 10).11

(Def.

According to the defendants, the plaintiffs’ case

“overlaps substantially” with Mr. Schneider’s pending qui tam
action.

(Def. Reply at 8).

The plaintiffs meanwhile argue that

the “core” of Mr. Schneider’s suit “has nothing whatsoever” to do
with their claims here.

(Pl. Memo. at 4).

Fortunately, resolving

the present dispute does not require crediting either position
because even the defendants’ characterization of the overlap does
not establish that transfer is warranted.
The

defendants

have

not

cited

any

post-Atlantic

Marine

authority from this Circuit to support the proposition that the
mere pendency of a related matter in another court is sufficiently
unusual to avoid the enforcement of a valid forum selection clause.
The two cases from the District of New Jersey that the defendants
cite are unhelpful, as they involve factual circumstances not
present here.

See Howmedica Osteonics Corp. v. Sarkisian, Civ. A.

No. 14-3449, 2015 WL 1780941, at *3 (D.N.J. April 20, 2015)

11

Pursuant to the Supreme Court’s admonition in Atlantic
Marine, I need not consider the defendants’ arguments about the
burden they will face in litigating in two separate courts. See
Atlantic Marine, __U.S. at __, 134 S. Ct. at 582.
16

(finding that enforcing forum selection clauses would result in
“palpable . . . injustice” as it would require either severing case
that “must be tried as one case” or “disregard[ing] the law of
jurisdiction and venue”); Samuels v. Medytox Solutions, Inc., Civ.
A. No. 13-7212, 2014 WL 4441943, at *4 (D.N.J. Sept. 8, 2014) (case
involving

“conflicting

selection clauses”).

--

but

independently

valid

--

forum

The Fifth Circuit’s decision in In re Rolls

Royce Corp., 775 F.3d 671, is not only distinguishable, but also
lends as much support to the plaintiffs’ position as to the
defendants’.

There the court confronted a situation where, “to

transfer

claims

the

of

the

[defendant

covered

by

the

forum

selection clause], the [] court would first have to sever those
claims from the claims” against the defendants not covered by a
forum selection clause.

Id. at 679-80.

While the decision

includes some passages that question the applicability of Atlantic
Marine

in

multi-defendant

cases

where

one

defendant

demands

transfer pursuant to a forum selection clause, e.g. id. at 679,
ultimately the court enforced the forum selection clause, requiring
the litigation to proceed in separate fora.
Requiring

the

defendants

to

defend

Id. at 683.
this

case

and

Mr.

Schneider’s qui tam action in separate courts might not be the most
efficient outcome for the parties or the federal judiciary, but
that inefficiency does not make this a sufficiently extraordinary
case.

Although

the

defendants

hint

at

the

possibility

of

inconsistent judgments (Def. Memo. at 12), they have not argued
that they are entitled to a stay in this case while Mr. Schneider’s
17

action is pending.
to

proceed

unfairness.

There is no indication that allowing the cases

simultaneously

will

result

in

any

substantive

If the defendants believe that are being subjected to

unnecessarily duplicative discovery requests, they should make an
appropriate motion for relief.

The contract they signed requires

them to litigate this case in New York.
Conclusion
For the foregoing reasons, the defendants' motion to transfer
(Docket No. 42) is denied.
SO ORDERED.

ES C. FRANCIS IV
ITED STATES MAGISTRATE JUDGE
Dated:

New York, New York
October 28, 2015

Helen D. Chaitman, Esq.
Lance Gotthoffer, Esq.
Chaitman LLP
465 Park Ave.
New York, NY 10022
Robert D. Wick, Esq.
Michael M. Maya, Esq.
Covington & Burling, LLP
One City Center
850 10th St., NW
Washington, DC 20001
Michael c. Nicholson, Esq.
Covington & Burling LLP
620 Eighth Ave.
New York, NY 10018-1405

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