Moralez v. Kern Schools Federal Credit Union

Filing 25

ORDER DENYING TRANSFER re: pldg. (7 in CAE/1:15-cv-01444, 7 in CAE/2:15-cv-02215, 7 in DC/1:15-cv-02013, 7 in FLM/8:15-cv-02743, 7 in ILS/3:15-cv-01162, 7 in MD/1:15-cv-03594, 16 in MDL No . 2684, 7 in MIW/1:15-cv-01208, 7 in MOW/4:15-cv-00758, 7 in NV/3:15-cv-00483, 7 in NYE/2:15-cv-05922, 5 in WAW/3:15-cv-05693), ( 1 in MDL No. 2684) The motion to transfer, pursuant to 28 U .S.C. 1407, is DENIEDSigned by Judge Sarah S. Vance, Chair, PANEL ON MULTIDISTRICT LITIGATION, on 2/2/2016. Associated Cases: MDL No. 2684, CAE/1:15-cv-01444, CAE/2:15-cv-02215, DC/1:15-cv-02013, FLM/8:15-cv-02743, ILS/3:15-cv-01162, MD/1:15-cv-03594, MIW/1:15-cv-01208, MOW/4:15-cv-00758, NV/3:15-cv-00483, NYE/2:15-cv-05922, WAW/3:15-cv-05693 (TB)

UNITED STATES JUDICIAL PANEL
on
MULTIDISTRICT LITIGATION

IN RE: CREDIT UNION CHECKING ACCOUNT
OVERDRAFT LITIGATION

MDL No. 2684

ORDER DENYING TRANSFER

Before the Panel:* Plaintiff in an action (Towner) pending in the Southern District of Illinois
moves under 28 U.S.C. § 1407 to centralize this litigation in that district. The litigation consists of
eleven actions pending in ten districts, as listed on Schedule A.1 All plaintiffs, all of whom
(including the Towner plaintiff) are represented by the same two law firms, support centralization.
All defendants, which are various credit unions, oppose centralization.
On the basis of the papers filed and the hearing session held, we deny the Towner plaintiff’s
motion. These eleven actions share the allegation that defendants all operate unlawful overdraft
programs that use an account’s “available balance” rather than its actual balance in determining
whether a given transaction triggers the assessment of an overdraft fee against the account holder.2
And all plaintiffs contend that this practice is contrary to defendants’ member agreements and
marketing materials. But each action is brought against a different credit union on behalf of a
different class. There is no overlap among the plaintiffs, the defendants, or the putative classes.
Discovery in each action will be chiefly, and perhaps even entirely, unique to that action.3
Furthermore, the actions, which moving plaintiff describes as essentially breach of contract cases,
are brought under the laws of at least nine states. In sum, there appears to be little or no risk of
duplicative discovery or conflicting pretrial rulings on discovery disputes, class certification, or other
matters. To the extent, if any, that discovery in these actions may overlap, informal coordination
appears practicable, especially given that all plaintiffs are represented by the same two law firms,

*

Judge Charles R. Breyer took no part in the decision of this matter.

1

The Panel has been informed of four additional related federal actions.

2

As described by the Towner plaintiff, the available balance is the actual balance minus
anticipated future debits and credits (which may or may not occur).
3

The record is unclear whether any of these cases will require much discovery beyond the
production of each defendant’s member agreements and related materials, and perhaps the
depositions of a few of each defendant’s employees.

-2seven of the eleven defendants are represented by a single law firm, and the other four defendants
are coordinating their defense.4
Although the Towner plaintiff relies heavily on the Panel’s June 2009 order centralizing
MDL No. 2036, In re: Checking Account Overdraft Litigation,5 we are not convinced that decision
supports creating the MDL proposed here. The Section 1407 motion in MDL No. 2036 was largely
unopposed, and, in fact, was supported by the two principal defendant banks, which were sued in
four of the five constituent actions. A review of the briefs submitted in connection with that motion
indicates that no party raised serious concerns regarding the potential scope of the MDL or the
logistical and other difficulties that might arise if the litigation expanded, as it did, to include
numerous other unrelated financial institutions. And, although the MDL has proceeded successfully
under the able supervision of the Honorable James Lawrence King,6 we note that the Panel, after
consulting with Judge King, ceased transferring tag-alongs to it in September 2011. In doing so, the
Panel concluded that the continued inflow of new actions “threaten[ed] to significantly hinder the
resolution of the already-centralized actions.”7
Here, even if other grounds did not already strongly weigh against centralization, the
possibility that this litigation could expand substantially counsels caution. According to the Towner
plaintiff, there are approximately 6,000 credit unions across the country. Because it is unclear how
many of them utilize an overdraft program like those allegedly used by the eleven defendants named
in these actions, the possibility that the scope and complexity of this proposed MDL could expand
beyond the bounds of manageability also influences our decision against centralization.

4

See In re: TD Bank, N.A., Gift Card Fees Litig., 703 F. Supp. 2d 1380, 1381 (J.P.M.L.
2010) (denying centralization, where, inter alia, the putative classes did not overlap and plaintiffs
were represented by common counsel).
5

In re: Checking Account Overdraft Litig., 626 F. Supp. 2d 1333, 1335 (J.P.M.L. 2009).

6

Only a handful of actions remain pending in the centralized proceedings.

7

In re: Checking Account Overdraft Litig., 818 F. Supp. 2d 1373, 1374 (J.P.M.L. 2011).

-3IT IS THEREFORE ORDERED that the motion for centralization of these actions is denied.

PANEL ON MULTIDISTRICT LITIGATION

Sarah S. Vance
Chair
Marjorie O. Rendell
Ellen Segal Huvelle
Catherine D. Perry

Lewis A. Kaplan
R. David Proctor

IN RE: CREDIT UNION CHECKING ACCOUNT
OVERDRAFT LITIGATION

MDL No. 2684

SCHEDULE A

Eastern District of California
MORALEZ v. KERN SCHOOLS FEDERAL CREDIT UNION,
C.A. No. 1:15-01444
THOMAS-ORTEGA v. MERIWEST CREDIT UNION,
C.A. No. 2:15-02215
District of District of Columbia
CHAMBERS v. NASA FEDERAL CREDIT UNION,
C.A. No. 1:15-02013
Middle District of Florida
FRY v. MIDFLORIDA CREDIT UNION,
C.A. No. 8:15-02743
Southern District of Illinois
TOWNER v. 1ST MIDAMERICA CREDIT UNION, ET AL.,
C.A. No. 3:15-01162
District of Maryland
KETNER v. STATE EMPLOYEES CREDIT UNION OF MARYLAND, INC.,
C.A. No. 1:15-03594
Western District of Michigan
PINKSTON-POLING v. ADVIA CREDIT UNION,
C.A. No. 1:15-01208
Western District of Missouri
BOWENS v. MAZUMA FEDERAL CREDIT UNION, ET AL.,
C.A. No. 4:15-00758

- A2 MDL No. 2684 Schedule A (Continued)

District of Nevada
GUNTER v. UNITED FEDERAL CREDIT UNION, ET AL.,
C.A. No. 3:15-00483
Eastern District of New York
MCDERMOTT v. BETHPAGE FEDERAL CREDIT UNION, ET AL.,
C.A. No. 2:15-05922
Western District of Washington
WODJA v. WASHINGTON STATE EMPLOYEES CREDIT UNION, ET AL.,
C.A. No. 3:15-05693