Guevara v. Merrill et al

Filing 49

TRANSFER ORDER re: pldg. ( 3 in MDL No. 2566), ( 1 in MDL No. 2566) Transferring 2 action(s) to Judge Timothy S. Hillman in the D. Massachusetts.Signed by Judge John G. Heyburn II, Chair, PANEL ON MULTIDISTRICT LITIGATION, on 10/21/2014. Associated Cases: MDL No. 2566, FLS/1:14-cv-22405, GAN/2:14-cv-00134, MA/1:14-cv-12825, MA/4:14-ap-04044, MA/4:14-ap-04057, MA/4:14-cv-40138 (DP)

UNITED STATES JUDICIAL PANEL
on
MULTIDISTRICT LITIGATION

IN RE: TELEXFREE SECURITIES LITIGATION

MDL No. 2566

TRANSFER ORDER

Before the Panel:* Pursuant to 28 U.S.C. § 1407, plaintiffs in one District of Massachusetts
action move to centralize this litigation in that district. The litigation consists of six actions pending
in three districts, as listed on Schedule A.1 Since the filing of the motion, the Panel has been notified
of six related actions.2 Plaintiffs in all actions and all responding defendants3 support or do not
oppose centralization in the District of Massachusetts.
On the basis of the papers filed and the hearing session held, we find that the actions listed on
Schedule A involve common questions of fact, and that centralization in the District of Massachusetts
will serve the convenience of the parties and witnesses and promote the just and efficient conduct of
this litigation. These actions share factual questions relating to the allegation that the TelexFree
companies4 operated a Ponzi pyramid scheme involving the recruitment of investors in marketing
TelexFree’s telephone service plan and that defendants directly participated in or aided and abetted
the alleged scheme. Centralization will eliminate duplicative discovery; prevent inconsistent pretrial
rulings, especially with respect to class certification; and conserve the resources of the parties, their
counsel and the judiciary.
Weighing all factors, we are persuaded that the District of Massachusetts is the most
appropriate location for this litigation. The events giving rise to the alleged claims primarily occurred
in Massachusetts, which is the principal place of business of the TelexFree companies. The federal
and state enforcement actions against TelexFree and affiliated individuals are pending there. Thus,

*

Judge Ellen Segal Huvelle took no part in the decision of this matter.

1

The Ferguson action listed on Schedule A originally was pending in the Eastern District of
North Carolina, but recently was transferred to the District of Massachusetts.
2

These and any other related actions are potential tag-along actions. See Panel Rules 1.1(h), 7.1
and 7.2.
3

The responding defendants are Citizens Bank of Massachusetts; Citizens Financial Group, Inc.;
Fidelity Co-Operative Bank; Fidelity Bank; Middlesex Savings Bank; TD Bank, N.A.; Wells Fargo
& Company; Wells Fargo Bank, N.A.; Bank of America Corporation; Bank of America, N.A.;
Propay, Inc.; Propay.com; Waddell & Reed Financial, Inc.; Waddell & Reed, Inc.; Global Payroll
Gateway, Inc.; and Base Commerce, LLC.
4

The TelexFree companies are TelexFree, Inc.; TelexFree, LLC; and TelexFree Financial, Inc.

-2the primary witnesses and other evidence likely will be located in Massachusetts. Additionally,
transfer of actions to this district will facilitate coordination with the TelexFree bankruptcy cases,
which also are pending in this district. The Honorable Timothy S. Hillman, to whom we assign this
litigation, presides over the related criminal action and thus is familiar with the factual and legal issues
presented by these actions. We are confident he will steer this litigation on a prudent course.
IT IS THEREFORE ORDERED that pursuant to 28 U.S.C. § 1407, the actions listed on
Schedule A and pending outside the District of Massachusetts are transferred to the District of
Massachusetts and, with the consent of that court, assigned to the Honorable Timothy S. Hillman for
coordinated or consolidated pretrial proceedings.

PANEL ON MULTIDISTRICT LITIGATION

John G. Heyburn II
Chairman
Marjorie O. Rendell
Lewis A. Kaplan
R. David Proctor

Charles R. Breyer
Sarah S. Vance

IN RE: TELEXFREE SECURITIES LITIGATION

MDL No. 2566

SCHEDULE A

Southern District of Florida
GUEVARA v. MERRILL, ET AL., C.A. No. 1:14-22405
Northern District of Georgia
COOK v. TELEXELECTRIC, LLLP, ET AL., C.A. No. 2:14-00134
District of Massachusetts
GITHERE, ET AL. v. TELEXELECTRIC, LLLP, ET AL., C.A. No. 1:14-12825
MARTIN, ET AL. v. TELEXFREE, INC., ET AL., Bky. Adv. No. 4:14-04044
CELLUCCI, ET AL. v. TELEXFREE, INC., ET AL., Bky. Adv. No. 4:14-04057
FERGUSON, ET AL. v. TELEXELECTRIC, LLLP, ET AL., C.A. No. 4:14-40138