United States of America, ex rel Michael J. Fisher v. JPMorgan Chase Bank, N.A.
MEMORANDUM OPINION AND ORDER re #41 MOTION For Transfer To U.S. District Court For The District Of Columbia Under 28 U.S.C. 1404(a) filed by JPMorgan Chase Bank NA. Defendant JPMorgan Chase Bank, N.A.s Motion to Transfer to U.S. District Court for the District of Columbia (Dkt. #41) is hereby DENIED. Signed by Judge Amos L. Mazzant, III on 3/27/17. (cm, )
United States District Court
EASTERN DISTRICT OF TEXAS
UNITED STATES OF AMERICA, ex rel.
MICHAEL J. FISHER, KEITH FRANKLIN,
CHESSA HARTFIELD, and REGINALD
JPMORGAN CHASE BANK NA
§ Civil Action No. 4:16-CV-00395-ALM
§ Judge Mazzant
MEMORANDUM OPINION AND ORDER
Pending before the Court is Defendant JPMorgan Chase Bank, N.A.’s Motion to Transfer
to U.S. District Court for the District of Columbia (Dkt. #41). The Court, having considered the
relevant pleadings and oral argument of the parties, finds the motion is denied.
In 2008, the United States faced a housing crisis caused, in part, by mortgage fraud and
predatory lending. The crisis caused home prices to plummet and foreclosures to skyrocket,
leaving homeowners with negative equity in their homes. Distressed homeowners were unable to
sell or refinance their homes to meet their mortgage obligations. In response to this crisis, the
government enacted the Emergency Economic Stabilization Act of 2008 (“EESA”). Fannie Mae
entered a Financial Agency Agreement for a Homeownership Preservation under the EESA
(“FAA”) with the U.S. Department of Treasury (“Treasury”), whereby the Treasury authorized
Fannie Mae to act as a financial agent of the United States for EESA programs.
The Home Affordable Modification Program (“HAMP”), administered by the Treasury
Department, was a voluntary program under EESA designed to prevent avoidable foreclosures by
providing homeowners with affordable mortgage loan modifications and other alternatives to
eligible buyers. HAMP’s primary goal was to relieve the burden on homeowners by lowering their
mortgage payments to 31% or less of their gross monthly income. Investors would receive
payments and a guarantee that no modification would result in a mortgage worth less than the net
present value of the property. In return, mortgage servicers, in addition to their annual servicing
fees, received HAMP incentive payments to complete the modifications. Each successful
modification entitled the servicer from $1,200–2,000 depending on how long the mortgage was
delinquent. From the program’s start in 2009 through the second quarter of 2016, HAMP generated
more than 1.6 million permanent modifications.
In 2009, JPMorgan Chase Bank, N.A. (“Chase”), one of the country’s largest mortgage
servicers by volume, enrolled in HAMP.
On July 31, 2009, Chase expressly certified its
compliance with HAMP guidelines and applicable federal laws in signing the initial Servicer
Participation Agreement (“SPA”). The SPA names Chase as the servicer and “Fannie Mae, solely
as Financial Agent of the United States” as the administrator. The SPA also names Freddie Mac
as a compliance agent. The SPA states that “[a]ny and all disputes between the parties . . . shall be
resolved solely and exclusively in the United States Federal courts located within the District of
Columbia. The parties signed a Financial Instrument on the same day, which details the
representations, warranties, and covenants that Chase is obligated to make in connection with its
participation in HAMP. The Financial Instrument was fully incorporated into the SPA. On March
24, 2010, Chase signed an Amended SPA. Chase also signed annual certifications, a prerequisite
to receiving HAMP payments.
Chase expressly certified in the SPAs and annual certifications that (1) it was in compliance
with the terms and guidelines of HAMP; (2) it was in compliance with all applicable laws and
requirements; (3) it created and maintained an effective HAMP program and committed the
resources needed to employ enough trained, experienced personnel with the tools and technology
necessary to provide quality service to homeowners; and (4) it had adequately documented and
monitored its compliance and immediately reported to the Government any credible evidence of
material violations of these certifications.
The Fifth Amended Complaint alleges Chase systematically violated HAMP guidelines
and knowingly presented false or fraudulent claims in excess of $430 million. On September 27,
2013, relator Michael J. Fisher sued in the Southern District of New York on behalf of the United
States (Dkt. #17). On November 3, 2015, Keith Franklin, Regginald McPhaul, and Chezza
Hartfield joined Michael J. Fisher as relators (“Relators”) in the third amended complaint (Dkt.
#34). On May 26, 2016, Relators filed a motion to transfer venue to this Court. On June 2, 2016,
the Southern District of New York transferred the case to this Court. On August 17, 2016, Chase
filed this Motion to Transfer to U.S. District Court for the District of Columbia Under 28 U.S.C.
1404(a) (Dkt. #41). On September 19, 2016, Relators filed a response (Dkt. #52). On September
29, 2016, Chase filed a reply (Dkt. #55). On October 11, 2016, Relators filed a sur-reply (Dkt.
#58). On October 25, 2016, the United States of America filed a statement of interest regarding
the motion to transfer (Dkt. #63). On November 3, 2016, the Court issued an order granting an
unopposed motion to defer ruling and allow for supplemental briefing (Dkt. #66). On January 6,
2017, Chase filed its supplemental brief (Dkt. #70). On January 17, 2017, Relators filed a response
to the supplemental brief (Dkt. #72). On March 13, 2017, the Court held oral argument on the
motion to transfer.
II. LEGAL STANDARD
Defendant moves to transfer venue pursuant to 28 U.S.C. § 1404(a), which permits a
district court to transfer any civil case “[f]or the convenience of parties and witnesses, in the
interest of justice . . . to any other district or division where it might have been brought.” 28 U.S.C.
§ 1404(a). “Section 1404(a) is intended to place discretion in the district court to adjudicate
motions for transfer according to an ‘individualized, case-by-case consideration of convenience
and fairness.’” Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quoting Van Dusen v.
Barrack, 376 U.S. 612, 622 (1964)). The purpose of 28 U.S.C. § 1404(a) “is to prevent the waste
‘of time, energy and money’ and ‘to protect the litigants, witnesses and the public against
unnecessary inconvenience and expense…’” Van Dusen v. Barrack, 376 U.S. 612, 616 (1964).
The U.S. Supreme Court has held that “when the parties have agreed to a valid forumselection clause, a district court should ordinarily transfer the case to the forum specified in that
clause.” Atl. Marine Constr. Co. v. U.S. Dist. Ct. for W. Dist. of Tex., 134 S. Ct. 568, 581 (2013)
(emphasis added). The U.S. Supreme Court made clear that its “analysis pre suppose[d] a
contractually valid forum-selection clause.” Id. at 581 n.5. The inquiry into a clause’s validity
and scope thus precedes the question of transfer pursuant that clause. See, e.g., Indus. Print Techs.
LLC v. Canon U.S.A., Inc., No. 2:14-CV-00019, 2014 WL 7240050, at *1–2 (E.D. Tex. Dec. 19,
2014) (“[T]he Atlantic Marine analysis . . . presupposes a valid contract and a dispute that
unquestionably falls within the scope of that contract.”); In re Union Elec. Co., 787 F.3d 903, 907
(8th Cir. 2015) (citing with approval a lower court’s preliminary determination of a forum selection
clause’s validity); Ashmore v. Allied Energy, Inc., No. 8:14-CV-00227-JMC, 2015 WL 128596, at
*3 (D.S.C. Jan. 9, 2015) (noting that a “[c]ourt must first determine whether the forum-selection
clause is valid under federal law” (internal quotations omitted)); Rogovsky Enter., Inc. v.
Masterbrand Cabinets, Inc., 88 F. Supp. 3d 1034, 1042 (D. Minn. 2015) (treating a relevant forumselection clause’s validity as a threshold question on a motion to transfer). Where a court finds
that the forum selection clause is not valid or that the dispute does not fall within the scope of the
contract, the typical section 1404 venue transfer analysis comes into play. See Indus. Print
Technologies, 2015 WL 128596, at *1.
The threshold inquiry when determining transfer eligibility under section 1404(a) is
“whether the judicial district to which transfer is sought would have been a district in which the
claim could have been filed,” or whether all parties have consented to a particular jurisdiction. In
re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004) (“Volkswagen I”). Once that threshold
inquiry is met, the Fifth Circuit has held that “[t]he determination of ‘convenience’ turns on a
number of public and private interest factors, none of which can be said to be of dispositive
weight.” Action Indus., Inc. v. U.S. Fid. & Guar. Co., 358 F.3d 337, 340 (5th Cir. 2004). The
private interest factors include (1) the relative ease of access to sources of proof; (2) the availability
of compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing
witnesses; (4) all other practical problems that make trial of a case easy, expeditious and
inexpensive. In re Volkswagen of America, Inc., 545 F.3d 304, 315 (5th Cir. 2008) (en banc)
(“Volkswagen II”). The public interest factors include (1) the administrative difficulties flowing
from court congestion; (2) the local interest in having localized interests decided at home; (3) the
familiarity of the forum with the law that will govern the case; and (4) the avoidance of
unnecessary problems of conflict of laws or in the application of foreign law. Id. These factors
are not exhaustive or exclusive, and no single factor is dispositive. Id.
The party seeking transfer of venue must show good cause for the transfer. Volkswagen II,
545 F.3d at 315. The moving party must show that the transferee venue is “clearly more
convenient” than the transferor venue. Volkswagen II, 545 F.3d at 315. The plaintiff’s choice of
venue is not a factor in this analysis, but rather contributes to the defendant’s burden to show good
cause for the transfer. Volkswagen II, 545 F.3d at 313 & 314 n.10 (“[W]hile a plaintiff has the
privilege of filing his claims in any judicial division appropriate under the general venue statute,
§ 1404(a) tempers the effects of the exercise of this privilege.”). However, “when the transferee
venue is not clearly more convenient than the venue chosen by the plaintiff, the plaintiff’s choice
should be respected.” Id. at 315.
Chase asserts that the SPA forum-selection clause binds Relators and covers False Claims
Act (“FCA”) lawsuits. Chase further asserts that both the SPA’s forum-selection clause and the
1404(a) factors require transfer to the U.S. District Court for the District of Columbia. Relators
assert that the SPA’s forum-selection clause does not apply to these parties or claims; rather, the
clause only applies to contract disputes that arise under Chase and non-party Fannie Mae’s
agreement. Relators and the United States argue the FCA’s broad venue provision controls.
A. Parties to the Forum-Selection Clause
The SPA contains a forum-selection clause, which reads,
The Agreement shall be governed by and construed under Federal law and not the
law of any state or locality, without reference to or application of the conflicts of
law principles. Any and all disputes between the parties that cannot be settled by
mutual agreement shall be resolved solely and exclusively in the United States
Federal courts located within the District of Columbia. Both parties consent to the
jurisdiction and venue of such courts and irrevocably waive any objections thereto.
(Dkt. #52, Exhibit B, ¶ 11(A)). Chase argues that this is a valid forum-selection clause and it binds
all parties to this litigation to resolve “[a]ny and all disputes” in the District of Columbia. Chase
contends the forum-selection clause binds the United States because Fannie Mae acted as a
“financial agent of the United States” when it entered the agreement (Dkt. #52, Exhibit B). Because
Relators filed suit on behalf of the United States, they “stand in the shoes of the government,
which is the real party in interest.” U.S. ex rel. Kreindler & Kreindler v. United Techs. Corp., 985
F.2d 1148, 1154 (2d Cir. 1993).
Relators argue that “between the parties” only includes parties to the SPA—namely Chase
and Fannie Mae. Relators argue the United States is not a “party” under the SPA forum-selection
clause, as further evidenced by the clause’s use of “[b]oth parties” rather than more inclusive
terminology. Relators contend the only parties to the SPA are Chase and Fannie Mae, and it “goes
without saying that a contract cannot bind a nonparty.” EEOC v. Waffle House, Inc., 534 U.S. 279,
Relators cite a portion of the FAA which states, “[t]he Treasury shall not be deemed a party
to any arrangement or agreement the Financial Agent may enter into with another entity to perform
any services under this FAA,” to claim Fannie Mae cannot make the Government a party to the
SPA. (Dkt. #52, Exhibit D at 1–2). However, Relators take this portion of the FAA out of context.
The portion of the FAA cited appears in “Section 14. Use of contractors,” where the Government
makes clear that Fannie Mae cannot bind the Government to any subcontractor agreements Fannie
Mae enters. This portion of the FAA is not so broad as to prohibit Fannie Mae—acting as financial
agent to the United States—from utilizing its express authority to bind the United States to
programs under EESA, the parent program of HAMP. Relators also rely on Frank v. Bear Stearns
& Co. to assert that “contracts with Fannie Mae and Freddie Mac are not ‘government contracts’
because the United States is not a party to those contracts . . . .” 128 F.3d 919, 923–24 (5th Cir.
1997). However, in Frank, the United States did not direct Fannie Mae or Freddie Mac to enter
into purchase and sale agreements with the defendants. Id. Further, there was no express agency
agreement in Frank, whereas here the FAA permits Fannie Mae to act as the United States’
financial agent in EESA programs.
Chase claims the SPA forum-selection clause binds the United States by virtue of its
agency relationship with Fannie Mae. Fannie Mae, acting as financial agent of the United States,
had authority to bind the Government. See Overseas Carriers, Inc. v. Team Ocean Servs.- Dallas,
Inc., 2013 WL 76300, at *12 (S.D. Tex. Jan. 4, 2013) (quoting Restatement (Third) of Agency §
6.01) (“When an agent acting with actual or apparent authority makes a contract on behalf of a
disclosed principal . . . the principal and the third party are parties to the contract.”). The Fifth
Circuit has held that principals are bound by forum-selection clauses in contracts signed by their
agents. See Sealed Appellant 1 v. Sealed Appellee 1, 625 F. App’x 628, 632 (5th Cir. 2015)
(principal bound by forum-selection clause in contract signed by agent); see also Bridas S.A.P.I.C.
v. Gov’t of Turkm., 345 F.3d 347, 356 (5th Cir. 2003) (recognizing agency as a basis for binding
principal nonsignatories to an arbitration agreement); Haynsworth v. The Corp., 121 F.3d 956, 963
(5th Cir. 1997) (noting that arbitration agreements and forum selection clauses are
indistinguishable for enforceability purposes). The Court agrees with Chase to the extent that
Fannie Mae had the authority to negotiate a forum-selection clause for disputes arising under the
SPA. The Treasury expressly authorized Fannie Mae to enter into the SPA as the United States’
agent. See FAA (Dkt. #52, Exhibit D at 1–2) (authorizing Fannie Mae to “[d]evelop standard
agreements . . . to initiate servicer participation in the program” and “secure agreement with
servicers for program participation”). The Government “cannot avoid [its contractual obligations]
merely by invoking a statutory civil claim.” U.S. v. Bankers Ins. Co., 245 F.3d 315 (4th Cir. 2001).
The FAA gave Fannie Mae actual authority to bind the United States to resolve disputes arising
under the SPA in a particular venue.
B. The Forum-Selection Clause’s Applicability to FCA Claims
The Court finds a proper principal-agent relationship between Fannie Mae and the United
States, whereas Fannie Mae acts as the United States’ financial agent. The FAA gave Fannie Mae
express authority to enroll Chase in HAMP and bind the parties to resolving SPA disputes in the
District of Columbia. The Court must now determine whether the forum-selection clause in the
SPA applies to FCA claims brought by the Department of Justice.
The Court finds that the SPA’s forum-selection clause does not control FCA litigation.
Suits to enforce the FCA may only be brought either by the Attorney General, 31 U.S.C. § 3730(a),
or by a private person known as a “relator,” who files suit “for the person and for the United States
Government” in the name of the United States, 31 U.S.C. § 3730(b)(l). The authority to bring an
FCA case rests with the Department of Justice alone; neither the Treasury nor Fannie Mae may
bring such a case. See United States ex rel. Haskins v. Omega Institute, Inc., 11 F. Supp. 2d 555,
561 (D.N.J. 1998) (“The exclusive authority to adjudicate FCA and fraud claims rests with the
Department of Justice and the Attorney General.”). If the United States intervenes in the case, the
Government assumes “the primary responsibility for prosecuting the action,” and the relator cannot
bind the Government. 31 U.S.C. § 3730(c)(l). The relator remains a party to the suit, but the
Government may settle the case over the relator’s objection, 31 U.S.C. § 3730(c)(2)(B), or may
seek to limit the relator’s participation in the litigation. 31 U.S.C. § 3730(c)(2)(C). Chase has not
provided, and the Court is unable to find, any authority suggesting the Court should allow Fannie
Mae—a private company with a narrowly tailored power to act on the Government’s behalf to
provide administrative, record-keeping, and payment functions for HAMP—to control where the
Department of Justice may pursue FCA claims.
Contract disputes under the SPA should be resolved in the District of Columbia. The FCA,
however, provides the Government with a remedy distinct from the underlying contract between
Chase and Fannie Mae. “The FCA is not a general ‘enforcement device’ for federal statutes,
regulations, and contracts.” United States ex rel. Steury v. Cardinal Health, Inc., 625 F.3d 262,
268 (5th Cir. 2010) (citations omitted). As the Fourth Circuit held in Wilson, “breach of contract
claims are not the same as fraudulent conduct claims, and the normal run of contractual disputes
are not cognizable under the False Claims Act.” United States ex rel. Wilson v. Kellogg Brown &
Root, 525 F.3d 370, 383 (4th Cir. 2008). Treating this FCA action as a “dispute” under the SPA
would plainly contravene the fundamental purpose of the FCA and the well-settled distinction
between breach of contract cases and FCA cases. See United States v. Kellogg Brown & Root, 800
F. Supp. 2d 143, 155 (D.C. Cir. 2011) (quoting United States ex rel. Owens v. First Kuwaiti Gen.
Trading & Constr. Co., 612 F.3d 724, 726–27 (4th Cir. 2010)) (“To blur the distinction between
fraud and breach of contract, then, is to contradict the purpose of the statute. ‘Allowing [the FCA]
to be used in run-of-the-mill contract disagreements . . . would burden, not help, the contracting
process, thereby driving up costs for the government and, by extension, the American public.’”).
The SPA does not cover FCA claims because a Department of Justice-initiated FCA fraud action
is not a “dispute” arising under the contractual agreement between Fannie Mae and Chase.
Deeming an FCA fraud claim a “dispute” under the SPA would improperly limit the
Department of Justice’s ability to exercise its prosecutorial discretion in choosing where to bring
FCA cases—a matter that the FCA statute expressly codifies. See 31 U.S.C. 31 USC § 3732(a).
The Department of Justice—not Fannie Mae or the Treasury—has the exclusive statutory authority
to bring an FCA claim. Chase has not provided, and the Court is unable to locate, any case in
which a court concluded that another federal agency—or private party—is authorized to control
where the Department of Justice must bring an FCA suit. This does not surprise the Court. The
policy considerations inherent in the structure of the FCA support that the SPA dispute resolution
procedures should not control an FCA claim. The SPA’s dispute resolution section is completely
at odds with the procedures of the FCA. The SPA requires the parties to “use all reasonable efforts
to promptly resolve the dispute by mutual agreement . . . the parties agree to take all reasonable
steps to resolve disputes internally before commencing legal proceedings.” (Dkt. #52, Exhibit B ¶
7). Conversely, the FCA requires relators to file a complaint under seal without notifying the
defendant so that the Government has an opportunity to investigate the allegations. 31 U.S.C. §
3730(b). Even if the SPA covered FCA claims, the Court would be hesitant to enforce the forumselection clause because it is incongruous with the statutory procedures for initiating an FCA
Chase argues that the forum-selection clause applies to FCA claims and should override
the broad statutory FCA venue provision. In support, Chase offers a case in which a court held a
relator to a forum-selection clause. See In re Bank of N.Y. Mellon Corp. False Claims Act Litig.,
851 F. Supp. 2d 1190 (N.D. Cal. 2012). But Mellon is not a federal FCA case; rather, it is concerned
with the California False Claims Act. Id. at 1193. Unlike the FCA, which provides only for suits
“in the name of the Government,” 31 U.S.C. § 3730(b)(1), California’s statute allows suits to be
brought on behalf of any of the state’s political subdivisions, obviating the policy and statutoryenforcement considerations explicated above. See Cal. Gov’t Code § 12652(c)(1). Chase relies on
another case in which a court held a government to a forum-selection clause in a fraud action. See
Collin Cty. v. Siemens Business Servs., Inc., 250 F. App’x 45, 49–50 (5th Cir. 2007). But Collin
County involved a county government bringing a common-law fraud claim relating to a contract
that it had executed itself. Id. These cases do not indicate that a contractual agreement should
override the Government’s broad sovereign authority to bring an FCA action “in any judicial
district” in which Chase transacts business. 31 U.S.C. § 3732(a).
Chase relies on several cases in the arbitration context to assert that the Court should
compel the Department of Justice to pursue its FCA claim in the District of Columbia. Importantly,
these cases are only minimally persuasive because federal law treats arbitration clauses differently
from forum-selection clauses. While the Court recognizes that arbitration clauses are “a specialized
kind of forum-selection clause,” there is no statutory presumption favoring a broad interpretation
of forum-selection clause coverage. Scherk v. Alberto-Culver Co.¸417 U.S. 506, 519 (1974).
Doubts as to whether a dispute falls within the scope of an arbitration are resolved in favor of
arbitration pursuant to the Federal Arbitration Act. See Moses H. Cone Mem’l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 24–25 (1983). Additionally, the cases on which Chase relies are
independently distinguishable. For example, in Bankers, FEMA—a government agency—drafted
and negotiated the arbitration clause under which it brought both fraud and breach of contract
claims. United States v. Bankers’ Ins. Co., 245 F.3d 315, 318 (4th Cir. 2012). Here, Fannie Mae—
a private company acting as the Government’s agent for a limited purpose—drafted the forumselection clause. Further, the non-binding arbitration in Bankers was subject to FEMA’s final
approval, which the court found would “not dilute in any way” the Attorney General’s
prosecutorial authority under the FCA. Id. at 324. Here, the SPA’s mandatory forum-selection
clause would constrain the Department of Justice’s prosecutorial authority. Chase also relies on
Atlantic Marine to argue that “a valid forum-selection clause [should be] given controlling weight
in all but the most exceptional cases.” Atlantic Marine Constr. Co. v. U.S. Dist. Court for the W.
Dist. of Tex., 134 S. Ct. 568, 581 (2013). But Atlantic Marine presumed an applicable valid forumselection clause, involved an agreement between private parties, did not address how courts are to
determine the scope of the clauses, and did involve sovereign authority. Id. Based on the foregoing,
the Court finds the SPA’s forum-selection clause inapplicable to FCA actions.
The Court finds a valid forum-selection clause exists between Fannie Mae and Chase, which
governs the resolution of disputes under the SPA. Fannie Mae had express authority pursuant to
the FAA to enroll Chase in HAMP and bind the Government to the agreement. However, the Court
finds that FCA claims are not subject to the SPA’s forum-selection clause. Because the dispute
does not fall within the scope of the contract, the typical section 1404 venue transfer analysis
comes into play. See Indus. Print Technologies, 2015 WL 128596, at *1. The threshold inquiry
when determining transfer eligibility under section 1404(a) is whether the judicial district to which
transfer is sought would have been a district in which the claim could have been filed. The Court
finds that Relators could have pursued their FCA claim in either the Eastern District of Texas or
the District of Columbia because the FCA’s broad venue provision deems proper “any judicial
district” in which Chase transacts business. 31 U.S.C. § 3732(a).
To transfer this FCA action, Chase must show good cause for the transfer and that the
transferee venue is “clearly more convenient” than the transferor venue. Volkswagen II, 545 F.3d
at 315. Convenience turns on a number of public and private interest factors, none of which can
be said to be of dispositive weight. Action Indus., Inc. 358 F.3d at 340. The private interest factors
include (1) the relative ease of access to sources of proof; (2) the availability of compulsory process
to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses; (4) all other
practical problems that make trial of a case easy, expeditious and inexpensive. Volkswagen II, 545
F.3d at 315.
The first private interest factor was not argued directly by Chase, but the Court finds the
factor weighs slightly against transfer because all four relators live and work in Texas and the
actions that gave rise to this FCA action occurred in Texas. Chase argues generally that all private
interest factors favor transfer because Chase is headquartered in New York, which is closer to the
District of Columbia. But Chase has not shown that the District of Columbia is “clearly more
convenient” than the Eastern District of Texas because many of the parties and witnesses live and
work in Texas. See Volkswagen II, 545 F.3d at 315. Further, the “location of documents is
relatively unimportant [in a venue transfer analysis] given the norm of electronic document
production.” Excellent Home Care Servs., LLC v. FGA, Inc., No. 13 CIV. 05390 ILG, 2014 WL
652357, at *3 (E.D.N.Y Feb. 19, 2014).
The second private interest factor, the availability of the compulsory process, is neutral. The
parties did not discuss this factor, but a court may compel a person to attend a trial or hearing
within the state in which the person resides, is employed, or regularly transacts business if the
person is a party or party's officer or is commanded to attend a trial and would not incur substantial
expense. Fed. R. Civ. P. 45(c)(1)(B) (emphasis added). A court also has nationwide subpoena
power to order third-party witnesses to attend deposition, so long as the deposition is to take place
within 100 miles of the witness's residence or regular place of business. Fed. R. Civ. P. 45(a)(2),
45(c)(1)(A). Because it appears that “all of the likely witnesses in this case are within the subpoena
power of either court,” this factor is neutral. See In re Radmax, Ltd., 720 F.3d 285, 288 (5th Cir.
The third private interest factor is neutral because each forum would inconvenience a number
of witnesses. The Eastern District of Texas would be more convenient for some witnesses because
the events leading to this action occurred in Texas, where a large number of witnesses live and
work. The District of Columbia would be more convenient for other witnesses because Chase is
headquartered in New York and some witnesses are employed on the east coast. While there is no
doubt that witnesses from New York would be inconvenienced by having to attend trial in
Sherman, the same could be said for witnesses in Texas having to attend trial in the District of
Columbia. When “inconvenience would exist in either potential venue, merely shifting
inconvenience from one party's witnesses to the other is insufficient to affect a transfer of venue
analysis.” Net Navigation Sys., LLC v. Extreme Networks, Inc., No. 4:14-CV-254, 2014 WL
5465449, at *4 (E.D. Tex. Oct. 27, 2014). Defendants bear the burden of demonstrating and
identifying unwilling third-party witnesses that would benefit from the transfer. Tex. Data Co.,
LLC v. Target Brands, Inc., 771 F. Supp. 2d 630, 644 n.14, n.15 (E.D. Tex. 2011). Because Chase
fails to carry this burden, the Court finds that this factor is neutral.
The Court finds the fourth private interest factor—while not argued by either party—weighs
slightly against transfer because of this Court’s familiarity with the parties and claims. See, e.g.,
United States v. Ocwen Loan Servicing, LLC, No. 4:12-CV-461, 2016 WL 2992229 (E.D. Tex.
May 24, 2016). In sum, the private interest factors weigh against transfer.
The public interest factors include (1) the administrative difficulties flowing from court
congestion; (2) the local interest in having localized interests decided at home; (3) the familiarity
of the forum with the law that will govern the case; and (4) the avoidance of unnecessary problems
of conflict of laws or in the application of foreign law. Id.
The parties did not address the first public interest factor. The most recent statistics
obtained by this Court for the 12–month period ending in December 31, 2016, indicate that the
median time from filing to trial in civil cases in the Eastern District of Texas was 19.4 months, as
compared to 44.3 months in the District of Columbia. See Federal Court Management Statistics,
December 2016, http://www.uscourts.gov/statistics-reports/federal-court-management-statisticsdecember-2016, accessed March 24, 2017. The median time from filing to disposition in the
Eastern District of Texas was 7.5 months and 7.8 months in the District of Columbia. This factor
weighs against transfer, as this case could be brought to trial more quickly in the Eastern District
of Texas, particularly given the Court’s familiarity with the claims at issue.
The second public interest factor was not argued, but weighs slightly against transfer. The
events that gave rise to this FCA action occurred in Texas and the Relators and many witnesses
reside here. Although the case affects the interests of citizens across the country, the citizens of
Texas have a greater interest in trying this case at home. Therefore, this factor weighs slightly
The third public interest factor weighs against transfer. Relators argue this Court’s depth
of case-specific familiarity weighs strongly against transfer. This Court presided over the Ocwen
and Homeward cases and is familiar with the claims and issues. See United States v. Ocwen Loan
Servicing, LLC, No. 4:12-CV-461, 2016 WL 2992229 (E.D. Tex. May 24, 2016); United States v.
Homeward Residential, Inc., No. 4:12-CV-461, 2016 WL 777000 (E.D. Tex. Feb. 29, 2016).
Chase contends, and the Court agrees, that the District of Columbia is familiar with FCA claims.
See, e.g., U.S. ex rel. Schneider v. J.P. Morgan Chase Bank, N.A., No. 1:14-cv-01047, 2016 WL
7408826 (D.D.C. Dec. 22, 2016). But this factor still weighs slightly against transfer because of
this Court’s case-specific familiarity.
The final public interest factor is neutral. This is an FCA action arising under federal law,
so there are no conflict of law issues. Chase contends that the public interest is served when one
court uniformly interprets the terms of a nationwide contract. But this is an FCA fraud action, not
a contract action. Having considered all the factors, the Court finds that, while venue is proper in
both the Eastern District of Texas and the District of Columbia, it would more convenient to try
the case in the Eastern District of Texas. Chase has failed to meet the significant burden to show
good cause for the transfer as required under Volkswagen II. 545 F.3d at 315 (holding that “when
the transferee venue is not clearly more convenient than the venue chosen by the plaintiff, the
plaintiff’s choice should be respected.”).
For the above stated reasons, the Court finds the SPA’s forum-selection clause does not
apply to FCA claims and Chase has not met its burden in showing good cause for transfer under
28 U.S.C. § 1404(a). It is therefore ORDERED that Defendant JPMorgan Chase Bank, N.A.’s
Motion to Transfer to U.S. District Court for the District of Columbia (Dkt. #41) is hereby
SIGNED this 27th day of March, 2017.
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?