UNITED STATES OF AMERICA et al v. Homeward Residential Inc et al
Filing
289
MEMORANDUM OPINION AND ORDER - DENYING 226 MOTION to Consolidate Cases 4:12-CV-461 and 4:12-CV-543 filed by Ocwen Financial Corporation, Homeward Residential Inc. Signed by Judge Amos L. Mazzant, III on 2/29/216. (baf, )
United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION
UNITED STATES OF AMERICA
Ex rel. Michael J. Fisher, Brian Bullock and
Michael Fisher, Individually and Brian
Bullock, Individually
v.
HOMEWARD RESIDENTIAL, INC., f/k/a
American Home Mortgage Servicing, Inc.,
ET. AL.
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CASE NO. 4:12-CV-461
Judge Mazzant
UNITED STATES OF AMERICA
Ex rel. Michael J. Fisher, Brian Bullock and
Michael Fisher, Individually and Brian
Bullock, Individually
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v.
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OCWEN LOAN SERVICING, LLC., ET. AL. §
CASE NO. 4:12-CV-543
Judge Mazzant
MEMORANDUM OPINION AND ORDER
Pending before the Court is Defendants Ocwen Financial Corporation, Ocwen Loan
Servicing, LLC, and Homeward Residential, Inc.’s Motion to Consolidate for Trial (Dkt. #293
Ocwen; Dkt. #226 Homeward). After reviewing the relevant pleadings, the Court finds that the
motion should be denied.
BACKGROUND
Relator Michael J. Fisher (“Relator” or “Fisher”) filed United States of America v.
Homeward Residential, Inc., No. 4:12-cv-461 (E.D. Tex. 2012) (the “Homeward” action) under
seal on July 25, 2012 (Dkt. #1 Homeward). The United States declined to intervene, and on June
4, 2014, the Homeward complaint was unsealed and served (Dkt. #27 Homeward).
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Fisher filed United States of America v. Ocwen Loan Servicing, LLC, No. 4:12-cv-543
(E.D. Tex. 2012) (the “Ocwen” action) under seal on August 20, 2012 (Dkt. #1 Ocwen); and the
case was assigned to Judge Schell and Magistrate Judge Bush. The United States declined to
intervene, and on April 7, 2014, the Ocwen complaint was unsealed and served (Dkt. #19
Ocwen).
On January 9, 2015, Ocwen Loan Servicing, LLC (“OLS”) filed a Motion to Transfer
Action, in which it requested that that the case be transferred to this Court (Dkt. #81 Ocwen).
On March 9, 2015, Magistrate Judge Bush granted OLS’s motion to transfer, and the action was
transferred to this Court (Dkt. #101 Ocwen).
On March 3, 2015, Relators in the Homeward case sought leave to amend their
complaint, in which they sought to add Ocwen Financial Corporation (“OFC”) as a defendant
(Dkt. #100 Homeward). On April 17, 2015, Relators in the Ocwen case sought leave to amend
to amend their complaint, in which they sought to add OFC as a defendant (Dkt. #125 Ocwen).
The Court granted Ocwen’s motion on July 16, 2015 (Dkt. #212 Ocwen), and granted Homeward
Residential Inc.’s (“Homeward”) motion on July 17, 2015 (Dkt. #153 Homeward).
On December 23, 2015, Defendants filed their Motion to Consolidate for Trial (Dkt. #293
Ocwen; Dkt. #226 Homeward). On January 11, 2016, Relators filed their response (Dkt. #305
Ocwen; Dkt. #232 Homeward). On January 22, 2016, Defendants filed their reply (Dkt. #326
Ocwen; Dkt. #244 Homeward). On February 1, 2016, Relators filed their sur-reply (Dkt. #360
Ocwen; Dkt. #274 Homeward).
LEGAL STANDARD
Federal Rule of Civil Procedure 42 provides, in pertinent part:
(a) Consolidation. If actions before the court involve a common question of law
or fact, the court may:
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(1) join for hearing or trial any or all matters at issue in the actions;
(2) consolidate the actions; or
(3) issue any other orders to avoid unnecessary cost or delay.
FED. R. CIV. P. 42.
“A court has wide discretion in deciding whether two or more actions have common
questions of law and fact and whether consolidation would save time and money.” Gabriel v.
OneWest Bank FSB, Nos. H-11-3356, H-12-324, 2012 WL 1158732, at *1 (S.D. Tex. Apr. 5,
2012) (citing Mills v. Beech Aircraft Corp., 886 F.2d 758, 761-62 (5th Cir. 1989)); Xavier v.
Belfor USA Grp., Inc., Nos. 06-491, 06-7084, 2008 WL 4862543, at *2 (E.D. La. Feb. 20, 2008)
(quoting Alley v. Chrysler Credit Corp., 767 F.2d 138, 140 (5th Cir. 1985)). Therefore, “where
there are actions before the Court which do involve a common question of law or fact, the trial
court may, in its discretion, decide to consolidate the actions, but it is not mandated to do so.”
Xavier, 2008 WL 4862543, at *2. “While it is required that a common question of law or fact be
present as a prerequisite to consolidation, the mere presence of a common question does not
require consolidation.” Id. (citing Cont’l Bank & Tr. Co. v. Ols. E.D. Platzer, 304 F. Supp. 228,
229 (S.D. Tex. 1969)). Additionally, consolidation is not appropriate if judicial time and effort
would not be saved when balanced against “the inconvenience, delay and confusion that might
result[.]” Id. (citing Cont’l Bank & Tr. Co., 304 F. Supp. at 229-30).
Courts frequently consolidate cases that substantially overlap.
Gabriel, 2012 WL
1158732, at *1 (citing Gate Guard Serv., LP v. Solis, No. V-10-91, 2011 WL 2784447, at *14
(S.D. Tex. July 12, 2011)).
Factors for the court to consider in determining if consolidation is appropriate are
whether (1) the actions are pending before the same court; (2) there are common
parties; (3) there are common questions of law or fact; (4) there is risk of
prejudice or confusion if the cases are consolidated and if so, whether the risk is
outweighed by the risk of inconsistent adjudications of factual and legal issues;
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(5) consolidation will conserve judicial resources and reduce the time and cost of
handling the cases separately; and (6) the cases are at different stages.
Id. (citing In re Enron Corp. Sec., Derivative & ERISA Litig., Nos. H-01-3624, H-04-0088, H04-0087, H-03-5528, 2007 WL 446051, at *1 (S.D. Tex. Feb. 7, 2007)). Another factor courts
consider is “whether the cases are at the same stage of preparation for trial.” In re Enron Corp.
Sec., Derivative & ERISA Litig., 2007 WL 446051, at *1.
Consolidation does not merge suits into a single cause of action or change the rights of
the parties. In re Enron Corp. Sec., Derivative & ERISA Litig., 2007 WL 446051, at *1 (citing
Frazier v. Garrison I.S.D., 980 F.2d 1514, 1532 (5th Cir. 1983)) (“[A]ctions maintain their
separate identity even if consolidated.”); McKenzie v. United States, 678 F.2d 571, 574 (5th Cir.
1982) (“But consolidation does not cause one civil action to emerge from two; the actions do not
lose their separate identity; the parties to one action do not become parties to the other.”); Miller
v. United States Postal Serv., 729 F.2d 1033, 1036 (5th Cir. 1984) (“Consolidation does not so
completely merge the two cases as to deprive a party of any substantial rights that he may have
had if the actions had proceeded separately, for the two suits retain their separate identities and
each requires the entry of a separate judgment.”).
ANALYSIS
Defendants request that the Court consolidate the above-referenced actions for trial
purposes. Defendants assert that “a single trial would promote judicial efficiency, conserve
judicial and party resources, and pose no risk of prejudice to the parties given that the actions are
in procedurally identical stages.” (Dkt. #293 at pp. 7-8 Ocwen; Dkt. #226 at pp. 7-8
Homeward).1 Relators argue that “[t]hese cases are not appropriate for consolidation for trial
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Alternatively, Defendants request that the Court consolidate the cases for pretrial purposes, with the Homeward
case being tried first (Dkt. #293 at p. 8 Ocwen; Dkt. #226 at p. 8 Homeward). On September 8, 2015, the Court set
the Ocwen trial for Final Pretrial Conference on April 13, 2016, and Jury Selection on May 16, 2016 (Dkt. #246
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because the serious risk of jury confusion and prejudice to Relators far outweighs any minor
alleged gains in efficiency.” (Dkt. #305 at p. 3 Ocwen; Dkt. #232 at p. 3 Homeward).
The Court finds that consolidation could create a risk of significant jury confusion.
These cases are unusually complex cases. The government programs at issue are complex, and
Relators have asserted numerous, distinct, and complex allegations against Defendants.
Additionally, several witnesses have worked for both of Defendants’ companies during different
time periods. The Court finds that it would be nearly impossible for the jury to keep track of the
different violations, and which violation was committed by which company.
Defendants assert that consolidation is appropriate because OFC is a common defendant.
However, while OFC is a defendant in both of the Ocwen and Homeward cases, its roles and
reasons for liability are distinct, and the Court finds that consolidation would blur the legal
distinctions and could confuse the jury.
Therefore, the Court finds that consolidation is not appropriate, and Defendants’ motion
should be denied. The Ocwen case is set for Final Pretrial Conference on April 13, 2016, and
Jury Selection and Trial on May 16, 2016.
The Homeward case is set for Final Pretrial
Conference on June 2, 2016, and Jury Selection and Trial on June 28, 2016.
CONCLUSION
It is therefore ORDERED that Defendants Ocwen Financial Corporation, Ocwen Loan
Servicing, LLC, and Homeward Residential, Inc.’s Motion to Consolidate for Trial (Dkt. #293
Ocwen; Dkt. #226 Homeward) is hereby DENIED.
Ocwen), and set the Homeward case for Final Pretrial Conference on June 2, 2016, and Jury Selection on June 28,
2016 (Dkt. #184 Homeward). The Court does not see a reason to consolidate the cases for pretrial purposes, and
will not rearrange the cases’ trial schedules. Therefore, the cases will remain as previously scheduled on the Court’s
docket (Dkt. #246 Ocwen; Dkt. #184 Homeward).
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SIGNED this 29th day of February, 2016.
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AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE
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