KBC Asset Management N.V. v. Mcnamara et al
ORDER DENYING TRANSFER re: pldg. (12 in DE/1:13-cv-01854, 13 in MDL No. 2520, 10 in OHS/1:13-cv-00833), ( 1 in MDL No. 2520) The motion to transfer, pursuant to 28 U.S.C. 1407, is DENIEDSigned by Judge John G. Heyburn II, Chairman, PANEL ON MULTIDISTRICT LITIGATION, on 4/1/2014. Associated Cases: MDL No. 2520, DE/1:13-cv-01854, OHS/1:13-cv-00833 (DP)
UNITED STATES JUDICIAL PANEL
IN RE: CHEMED CORPORATION SHAREHOLDER
KBC Asset Management N.V. v. Kevin J. McNamara, et al.,
D. Delaware C.A. No. 1:13-01854
Mildred A. North v. Kevin J. McNamara, et al.,
S.D. Ohio, C.A. No. 1:13-00833
MDL No. 2520
ORDER DENYING TRANSFER
Before the Panel:* Pursuant to 28 U.S.C. § 1407, plaintiff in a Southern District of Ohio
action (North) moves to centralize this litigation in the Southern District of Ohio. This litigation
currently consists of two actions pending in two districts. The actions are shareholder derivative
actions brought against current and former officers and directors of Chemed Corp., a health care and
plumbing services provider.1 Plaintiffs in both actions allege that Chemed’s subsidiary, Vitas
Healthcare Corp. (Vitas), systematically submitted improper and ineligible claims to Medicare and
Medicaid over the past decade.
Defendants2 oppose the motion. Plaintiff in the District of Delaware action opposes
centralization and, alternatively, suggests that the District of Delaware should be selected as the
On the basis of the papers filed and the hearing session held, we conclude that Section 1407
centralization is not appropriate at this time. The actions here unquestionably involve complex facts
surrounding plaintiffs’ shareholder derivative claims that relate to an estimated decade-long and
systematic improper billing of Medicaid and Medicare at Chemed’s Vitas hospice care provider
Judges Marjorie O. Rendell and Lewis A. Kaplan did not participate in the decision of this
According to plaintiffs, since 2004, Chemed’s primary subsidiaries were Roto-Rooter (a
plumbing repair and cleaning services company) and Vitas (the larger of the two, which operates forprofit hospice programs that include routine home care, general inpatient care, crisis care and respite
Chemed Corp., Joel F. Gemunder, Patrick B. Grace, Thomas C. Hutton, Walter L. Krebs,
Andrea R. Lindell, Kevin J. McNamara, Timothy O’Toole, Thomas P. Rice, Donald E. Saunders,
George J. Walsh, III, David Williams, Frank E. Wood, Patrick P. Grace, Ernest J. Mrozek, and
Arthur V. Tucker, Jr.
-2subsidiary. However, we note that the proponent of centralization faces a heavy burden to
demonstrate that centralization of these two action is appropriate. See In re Transocean Ltd. Sec.
Litig., 753 F. Supp. 2d 1373, 1374 (J.P.M.L. 2010) (denying centralization of two actions, noting
that “[a]s we have stated in the past, where only a minimal number of actions are involved, the
moving party generally bears a heavier burden of demonstrating the need for centralization.”).
Moving plaintiff has failed to do so in these circumstances.
Weighing heavily in our decision to deny centralization is the pendency of a Section 1404
motion in the Southern District of Ohio action that, if granted, would eliminate the litigation’s
multidistrict character. See In re Gerber Probiotic Prods. Mktg. & Sales Practices Litig., 899 F.
Supp. 2d 1378, 1379 (J.P.M.L. 2012) (“The Panel has often stated that centralization under Section
1407 ‘should be the last solution after considered review of all other options.’”) (quoting In re Best
Buy Co., Inc., California Song–Beverly Credit Card Act Litig., 804 F.Supp.2d 1376, 1378
(J.P.M.L.2011)).3 Given the small number of involved actions and the correspondingly limited
number of involved counsel and courts, we conclude that centralization would not necessarily serve
the convenience of the parties and witnesses or promote the just and efficient conduct of these two
actions at this time. Alternatives to formal centralization – such as voluntary cooperation among the
few involved counsel and two judges – appear to be workable, particularly at this early stage of
See also In re: Michaels Stores, Inc., Pin Pad Litig.,844 F. Supp. 2d 1368, 1398-69
(J.P.M.L. 2012) (denying centralization of seven actions in two districts, noting “transfer pursuant
to Section 1404 is available to minimize any possibility of duplicative discovery among these actions.
Indeed, one action included in the present Section 1407 motion has already been transferred to the
Northern District of Illinois from the District of New Jersey, pursuant to Section 1404. Though
defendant represents that the remaining District of New Jersey plaintiff will not consent to Section
1404 transfer, we find that a motion for transfer to the Northern District of Illinois pursuant to
Section 1404 is the better course of action in this situation.”).
See In re Royal American Indust., Inc., Sec. Litig., 407 F. Supp. at 244 (“[W]e believe that
consultation and coordination between the two concerned courts coupled with cooperation of the
parties will suffice. Under the guidance of these courts, we are confident that procedures will be
utilized to govern the conduct of each action in light of the pendency of the other which will minimize
efforts by the parties and the judiciary, prevent duplication of discovery and eliminate any possibility
of inconsistent pretrial rulings.”) (internal citations omitted).
-3IT IS THEREFORE ORDERED that the motion, pursuant to 28 U.S.C. § 1407, for
centralization of these two actions is denied.
PANEL ON MULTIDISTRICT LITIGATION
John G. Heyburn II
Charles R. Breyer
Ellen Segal Huvelle
Sarah S. Vance
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