Sehler et al v. Prospect Mortgage, LLC

Filing 29

MEMORANDUM OPINION re: 19 MOTION to Stay Pending Decision on Transfer by Prospect Mortgage, LLC. (See Memorandum Opinion For Details). Signed by District Judge James C. Cacheris on 9/16/13. (nhall)

IN THE UNITED STATES DISTRICT COURT FOR THE
EASTERN DISTRICT OF VIRGINIA
Alexandria Division

THOMAS SEHLER, et al.,
Plaintiff,
v.
PROSPECT MORTGAGE, LLC,

Defendant.

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1:13cv473(JCC/TRJ)

M E M O R A N D U M

O P I N I O N

This matter is before the Court on Defendant Prospect
Mortgage, LLC’s (“Defendant” or “Prospect Mortgage”) Motion to
Stay Pending Decision on Transfer (“Motion”).

[Dkt. 19.]

For the

following reasons the Court will deny Defendant’s Motion to Stay.
I.
A.

Background

Factual and Procedural Background

Prospect Mortgage is a California corporation that
offers mortgage products.

(Second Am. Compl. ¶ 9.)

On October

18, 2010, Elizabeth Sliger, Carol Dion and Scott Avila filed a
lawsuit in the United States District Court for the Eastern
District of California against Prospect Mortgage on behalf of
themselves, and all others similarly situated, seeking “to recover
overtime pay, minimum wages, and other relief.”

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(Second Am.

Compl. ¶ 10.) (See Sliger, v. Prospect Mortgage, LLC., Case No.
2:11cv465 (E.D. Cal.))(“Sliger”).

The court in Sliger granted in

part the plaintiffs’ motion for conditional certification of a
Fair Labor Standards Act, 29 U.S.C. § 201 et seq., (“FLSA”)
collective action.

(Second Am. Compl. ¶ 10.)

On January 23,

2013, by stipulation of the parties, the Sliger court decertified
the action.

(Second Am. Compl. ¶ 19.)

On April 18, 2013, Plaintiffs Thomas Sehler, Mohamed
Sadiqui, Lora Hartman, Monica Harmison, Allison Cougill, Alice
Dixon, Ronald Hantz and Annette Post (“Plaintiffs”) filed their
Complaint against Defendant Prospect Mortgage in this Court,
alleging violations of the FLSA.

[Dkt. 1.]

Plaintiffs filed their Amended Complaint.

On May 24, 2013,
[Dkt. 3.]

Defendant

filed its answer and affirmative defenses on August 5, 2013.
8.]

[Dkt

On August 19, 2013, Plaintiffs, with Defendant’s consent,

filed their Second Amended Complaint.

[Dkt. 19.]

In their Second Amended Complaint, Plaintiffs allege
that they were employed by Prospect Mortgage as loan officers.
(Second Am. Compl. ¶ 23.)

Plaintiffs aver that Defendant

wrongfully classified them as exempt employees under the FLSA.
(Second Am. Compl. ¶ 24.)

Plaintiffs were paid on a commission-

only basis; they therefore allege that Defendant wrongfully failed
to pay them (1) the minimum wage and (2) overtime compensation as

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required under the FLSA.

(Second Am. Compl. ¶¶ 34-47.)

On August 16, 2013, Defendant filed a motion with the
Judicial Panel on Multidistrict Litigation (“JPML”) requesting
that the 37 cases filed by former opt-in plaintiffs in the Sliger
action be “transferred to a single forum for coordinated or
consolidated pre-trial proceedings” pursuant to 28 U.S.C. § 1407.
(Miller Decl., ¶ 11; MDL No. 2486 [Dkt. 1-1].)

Defendant

requested that these 37 cases be transferred to the Northern
District of Illinois.
1].)

(Miller Decl., ¶ 11; MDL No. 2487 [Dkt 1-

Defendant expects the motion to be heard on the JPML’s

December 5, 2013 calendar and decided in early 2014.

(Miller

Decl., ¶ 11.)
On August 30, 2013, Defendant filed its Motion to Stay
Pending Decision on Transfer and accompanying memorandum in this
Court.

[Dkts. 19-20.]

Plaintiffs filed their opposition on

September 4, 2013.

[Dkt. 23.]

September 5, 2013.

Defendant filed its reply on

[Dkt. 26.]

Defendant’s Motion to Stay is before the Court.
II.

Standard of Review

“A pending transfer motion before the MDL panel does not
deprive the district court in which the action is then pending of
jurisdiction over pretrial matters.”

Litchfield Co. v. BP, Civil

Action No. 2:10cv1462, 2010 WL 2802498, at *1 (D.S.C. 2010);

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Judicial Panel on Multidistrict Litigation, Rule 2.1(d), 28 U.S.C.
foll. § 1407.

Nevertheless, it is well established that this

Court possesses the inherent power to stay proceedings and to
“‘promote economy of time and effort for itself, for counsel and
for litigants.’”

Robinson v. DePuy Orthopaedics, Inc., Civil

Action No. 3:12cv3, 2012 WL 831650, at * 2 (W.D. Va. 2012)
(quoting Landis v. N. Am. Co., 299 U.S. 248, 254 (1936)).
In considering a motion to stay, a district court must
“weigh competing interests and maintain an even balance.”
Yearwood v. Johnson & Johnson, Civil Action No. RDB-12-1374, 2012
WL 2520865, at *3 (D. Md. 2012).

Specifically, a district court

should consider three factors: “(1) the interests of judicial
economy; (2) hardship and equity to the moving party if the action
is not stayed; (3) potential prejudice to the non-moving party.”
Johnson v. DePuy Orthopaedics, Inc., Civil Action No. 3:12cv2274,
2012 WL 4538642, at *2 (D.S.C. 2012) (quoting Meyers v. Bayer AG,
143 F. Supp. 2d 1044, 1049 (E. D. Wis. 2001)).

Additionally,

“courts frequently grant stays in cases when an MDL decision is
pending.”

Brandt v. BP, Civil Action No. 2:10cv1460, 2010 WL

2802495, at *2 (D.S.C. 2010) (collecting cases).
III. Analysis
Defendant argues: (1) a temporary stay would create
minimal prejudice to Plaintiffs; (2) allowing the action to

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continue would create a hardship for Prospect Mortgage by exposing
it to unnecessary proceedings and the potential for inconsistent
rulings; (3) a temporary stay would promote judicial economy.
(Mem. at 4.)

Plaintiffs argue that they will be prejudiced by the

stay because discovery is scheduled to be completed by November
15, 2013 and the case ready for trial by November 21, 2013.
at 3.)

(Opp.

Plaintiffs further argue that Defendant will not be

prejudiced because it “forced the decertification of the Sliger
action” and should therefore be foreclosed from claiming hardship
in the individual actions filed by former Sliger opt-ins.
at 4-5.)

(Opp.

Moreover, Plaintiffs contend that the “MDL Panel will

likely deny the motion” to consolidate these cases for discovery.
(Opp. at 5.)
The Court finds that a stay pending resolution of
Defendant’s MDL motion is not warranted in this case.

The Court

will consider each of the three factors used to determine whether
to stay proceedings in turn.
A.

Judicial Economy

The Court acknowledges that staying the action pending
the MDL decision may serve the interests of judicial economy by
avoiding “the needless duplication of work and the possibility of
inconsistent rulings.”
(collecting cases).

Robinson, 2012 WL 831650, at *2

As Defendant notes, if the MDL Motion is

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granted, “any efforts on behalf of this Court concerning case
management will most likely have to be replicated by the judge
that is assigned to handle the consolidated litigation.”

Rivers

v. Walt Disney Co., 980 F. Supp. 1358 (C.D. Cal. 1997).
Nevertheless, the Court finds that judicial resources
would not be misused by allowing this case to proceed as currently
scheduled.

This Court has already ordered the parties to complete

discovery by Friday, November 15, 2013 and scheduled a final
pretrial conference for Thursday, November 21, 2013.

[Dkt. 10.]

This action could be resolved in this Court before the JPML rules
on the transfer motion.

Moreover, even were the JPML to grant

consolidation, it would only be for purposes of coordinating
discovery; the parties would still eventually be required to
litigate the merits of their claim in this Court.

Furthermore,

the Court notes that the JPML has stated that “the use of stay
orders by the district courts, particularly in the area of
discovery, is usually undesirable.”

In re Penn Central Securities

Litigation, 333 F. Supp. 382, 384 n.4 (J.P.M.L. 1971).
B.

Hardship to the moving party if the action is not
stayed

Defendant asserts that in the absence of a stay, it
would be harmed by duplicative proceedings. (Mem. at 6.)
Defendant asserts that it is “facing multiple similar actions
across the country” and has already taken part in over twenty Rule

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26(f) conferences and been served with “ten nearly identical sets
of discovery” in this matter.

(Mem. at 6.)

The Court recognizes that Defendant may be
inconvenienced by duplicative proceedings.

The Court finds,

however, that any prejudice to the Defendant caused by these
multiple actions stems largely from Defendant’s own stipulation to
the decertification of the Sliger matter.
¶ 19.)

(See Second Am. Compl.

Defendant had an opportunity to defend this suit as a

collective action; it agreed not to and now cannot claim prejudice
on these grounds.
C.

Potential prejudice to the non-moving party

By contrast, the Court finds that Plaintiffs face a
significant likelihood of prejudice by a stay in this matter.
This case is scheduled for a final pre-trial conference in this
Court on November 21, 2013.

[Dkt. 10.]

Again, the case could be

fully litigated in this Court before the JPML issues a decision on
transfer.
While many “[d]istrict courts have granted motions to
stay after finding that the plaintiff would not be prejudiced by a
slight delay,” the delay here be longer than that found
appropriate by these courts.

Brandt, 2010 WL 2802495, at *2

(noting that in that case “a delay of a few months, while longer
than some of the cases cited by the parties, is, nonetheless,

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slight when compared to the hardship to the defendants and the
interest of judicial economy.”); see also Louisiana Stadium and
Exposition Dist. v. Financial Guar. Ins. Co., Civil Action Nos.
09-235, 09-2738, 2009 WL 926982, at *1 (E.D. La. 2009)
(defendants’ responsive pleadings due before MDL panel eighteen
days after court issued stay); Kennedy v. Novartis Pharm., Corp.,
Civil Action No. 02-2331, 2002 WL 31051601, at *1 (E.D. La. 2002)
(finding minimal prejudice where the stay would create a “three to
four week delay”).
months.

The delay anticipated here is four to six

(Mem. at 5.)

This is a significant period of delay,

particularly given that the consolidated proceedings would only
manage discovery and other pretrial proceedings.

(Mem. at 7.)

Eventually, Plaintiffs will be required to litigate the merits of
their claims in this Court.
Furthermore, in many of the cases cited by Defendant the
action had already been conditionally transferred to the MDL.

See

Robinson, 2012 WL 831650, at *1 n. 1 (noting that a conditional
transfer order had already been entered); Yearwood, 2012 WL
2520865, at *3 (“As this case has been Conditionally Transferred
to MDL 2244, a decision will be made regarding transfer shortly”).
Here, by contrast, there has been no conditional transfer of the
case.

Indeed, the JPML has not heard Defendant’s argument

regarding transfer nor consolidated any of the cases in this

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matter.

This is in contrast to many instances where district

courts have granted stays pending transfer to MDLs already
created.

See Moore v. Wyeth-Ayerst Laboratories, 236 F. Supp. 2d

509, 510 (D. Md. 2002) (“This action, therefore, appears to be
within the scope of MDL 1203 in the Eastern District of
Pennsylvania.”); Johnson, 2012 WL 4538642, at *1 (“These suits
have been consolidated in multidistrict litigation (“MDL”) No.
2179 . . .”).

Therefore, the Court finds that a stay pending

transfer to MDL is not warranted in this case.
IV.

Conclusion

For the foregoing reasons, the Court will deny
Defendant’s Motion to Stay.
An appropriate Order will issue.

September 16, 2013
Alexandria, Virginia

/s/
James C. Cacheris
UNITED STATES DISTRICT COURT JUDGE

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