First NBC Bank vs. Kmart Corporation et al

Filing 17

ORDER DENYING TRANSFER re: pldg. (11 in ILN/1:14-cv-10088, 11 in LAE/2:15-cv-00558, 25 in MDL No. 2625, 12 in PAW/2:15-cv-00241), ( 1< /a> in MDL No. 2625) The motion to transfer, pursuant to 28 U.S.C. 1407, is DENIEDSigned by Judge Sarah S. Vance, Chair, PANEL ON MULTIDISTRICT LITIGATION, on 6/8/2015. Associated Cases: MDL No. 2625, ILN/1:14-cv-10088, LAE/2:15-cv-00558, PAW/2:15-cv-00241 (TL)

UNITED STATES JUDICIAL PANEL
on
MULTIDISTRICT LITIGATION

IN RE: KMART CORPORATION CUSTOMER
DATA SECURITY BREACH LITIGATION

MDL No. 2625

ORDER DENYING TRANSFER

Before the Panel:* Plaintiff in an action pending in the Northern District of Illinois moves
under 28 U.S.C. § 1407 to centralize pretrial proceedings in this litigation in the Northern District
of Illinois. This litigation consists of three actions pending in the Northern District of Illinois, the
Eastern District of Louisiana, and the Western District of Pennsylvania, as listed on Schedule A.1
All responding parties support centralization in the Northern District of Illinois.2 Plaintiff in the
action pending in the Western District of Pennsylvania alternatively suggests that district as an
appropriate transferee district.
On the basis of the papers filed and the hearing session held, we conclude that centralization
will not serve the convenience of the parties and witnesses or further the just and efficient conduct
of this litigation. Although all responding parties support centralization, the Panel has an
institutional responsibility that goes beyond accommodating the particular wishes of the parties.
These actions share factual questions arising from an alleged criminal intrusion into the payment data
system at retail stores owned or operated by defendant Kmart Corporation (Kmart) that resulted in
the electronic theft of payment card information of customers who made purchases at Kmart stores
between September 1, 2014, and October 9, 2014. There are, however, only five actions (including
the two related actions) at issue, three of which are pending in the same district. Where only a
minimal number of actions are involved, the proponent of centralization bears a heavier burden to
demonstrate that centralization is appropriate. See In re Transocean Ltd. Sec. Litig. (No. II), 753 F.
Supp. 2d 1373, 1374 (J.P.M.L. 2010). Movant has not met that burden here.
We have held that “centralization under Section 1407 should be the last solution after
considered review of all other options.” In re Best Buy Co., Inc., Cal. Song-Beverly Credit Card Act

*

Certain Panel members who could be members of the putative classes in this litigation have
renounced their participation in these classes and have participated in this decision.
1

The Panel has been notified of two related actions pending in the Northern District of

Illinois.
2

Plaintiff in the action pending in the Eastern District of Louisiana did not respond to the
motion, but filed a waiver of oral argument in which it indicated support for centralization in the
Northern District of Illinois.

-2Litig., 804 F. Supp. 2d 1376, 1378 (J.P.M.L. 2011). These options include transfer pursuant to 28
U.S.C. § 1404, as well as voluntary cooperation and coordination among the parties and the involved
courts to avoid duplicative discovery or inconsistent pretrial rulings. In the circumstances presented
here, both of these alternatives seem preferable to centralization. Though no Section 1404 motion
to transfer venue has been filed in any of these actions, plaintiffs in both actions pending outside the
Northern District of Illinois have indicated that they agree that this litigation should proceed in that
district. Accordingly, the parties ought to be able to agree to voluntarily transfer those two actions
to Northern District of Illinois pursuant to Section 1404. See In re Gerber Probiotic Prods. Mktg.
& Sales Practices Litig., 899 F. Supp. 2d 1378, 1380 (J.P.M.L. 2012) (discussing the advantages of
Section 1404 transfer over centralization). If the parties are unable to do so, voluntary cooperation
and coordination among the small number of parties and involved courts appears eminently feasible.
We encourage the parties to employ various alternatives to transfer which may minimize the
potential for duplicative discovery and inconsistent pretrial rulings in this litigation. See, e.g., In re
Eli Lilly & Co. (Cephalexin Monohydrate) Patent Litig., 446 F. Supp. 242, 244 (J.P.M.L. 1978); see
also Manual for Complex Litigation, Fourth, § 20.14 (2004).
IT IS THEREFORE ORDERED that the motion for centralization of these actions is denied.

PANEL ON MULTIDISTRICT LITIGATION

__________________________________________
Sarah S. Vance
Chair
Marjorie O. Rendell
Lewis A. Kaplan
R. David Proctor

Charles R. Breyer
Ellen Segal Huvelle
Catherine D. Perry

IN RE: KMART CORPORATION CUSTOMER
DATA SECURITY BREACH LITIGATION

MDL No. 2625

SCHEDULE A

Northern District of Illinois
FIRST NBC BANK v. KMART CORPORATION, ET AL., C.A. No. 1:14-10088
Eastern District of Louisiana
GULF COAST BANK & TRUST COMPANY v. KMART CORPORATION, ET AL.,
C.A. No. 2:15-00558
Western District of Pennsylvania
FIRST CHOICE FEDERAL CREDIT UNION v. KMART CORPORATION, ET AL.,
C.A. No. 2:15-00241