Decambaliza, Colleen v. QBE Holdings, Inc. et al
Filing
59
Order denying transfer to the MDL. Signed by John G. Heyburn II, Chairman of the Panel on Multidistrict Litigation. (rep)
Case MDL No. 2467 Document 54 Filed 08/07/13 Page 1 of 4
UNITED STATES JUDICIAL PANEL
on
MULTIDISTRICT LITIGATION
IN RE: BANK OF AMERICA, N.A.,
MORTGAGE CORPORATION FORCE-PLACED
HAZARD INSURANCE LITIGATION
MDL No. 2467
ORDER DENYING TRANSFER
Before the Panel: Pursuant to 28 U.S.C. § 1407, plaintiffs in one action (Gustafson) move
to centralize this litigation in the Central District of California, and request separation and remand of
claims concerning two unrelated insurance products in one action.1 This litigation currently consists
of five actions pending in four districts as listed on Schedule A.2 The actions involve allegedly
abusive practices in the unilateral “forced” placement of hazard insurance by Bank of America3 and
two affiliated insurers – QBE and Balboa4 – on borrowers with mortgages serviced by Bank of
America. Defendants support centralization, as do the plaintiffs in the Middle District of Florida
action and a second Central District of California action. Plaintiffs in the Southern District of Florida
action oppose centralization.
Less than a year ago, the Panel denied a motion to centralize force-placed insurance litigation
against eight major mortgage lenders – including Bank of America – on an industry-wide basis. See
In re: Mortgage Lender Force-Placed Ins. Litig., 895 F. Supp. 2d 1352, 1353-54 (J.P.M.L. 2012).
At that time, the Panel also determined that centralization on a lender-specific basis was not
warranted. See id. at 1353 & n.2.
1
This motion was heard with three related motions at the same hearing session. The related
motions concern centralization of force-placed hazard insurance litigation against three other banks
and the insurance companies they utilize to place such insurance. See MDL No. 2464, In re: HSBC
Mortg. Corp. Force-Placed Hazard Ins. Litig.; MDL No. 2465, In re: JPMorgan Chase Bank, N.A.,
Mortg. Corp. Force-Placed Hazard Ins. Litig.; MDL No. 2466, In re: Wells Fargo Bank, N.A.,
Mortg. Corp. Force-Placed Hazard Ins. Litig.
2
The Panel has been notified of three related actions.
3
“Bank of America” refers to Bank of America Corporation; Bank of America, N.A.; BAC
Home Loan Servicing, LP; and Banc of America Insurance Services, Inc.
4
“QBE” refers to QBE FIRST Insurance Agency Inc., QBE Financial Institution Risk
Services, Inc., QBE Holdings, Inc., and QBE Insurance Corporation. “Balboa” refers to Balboa
Insurance Company, Meritplan Insurance Company, and Newport Management Corporation.
Case MDL No. 2467 Document 54 Filed 08/07/13 Page 2 of 4
-2Movants contend that centralization of the five actions listed on Schedule A is now
appropriate because common factual and legal issues are raised by plaintiffs’ claims that Bank of
America and QBE/Balboa improperly place one type of insurance – hazard insurance – at excessive
premiums and fees, and engage in other abuses in violation of numerous laws. Movants also argue
that (1) unlike the motion the Panel denied last year, the current motion focuses on a single lender
– Bank of America – and a single category of insurance; and (2) centralization is necessary to address
the difficulties in coordinating the litigation with the competing group of plaintiffs’ counsel.
In response, plaintiffs in the Southern District of Florida action maintain that circumstances have not
significantly changed to warrant reconsideration of last year’s denial of centralization on a lenderspecific basis.
On the basis of the papers filed and the hearing session held, we will deny the motion.
Although the actions concern alleged abuses by Bank of America and QBE/Balboa with respect to
their force-placed hazard insurance practices, the Panel is not persuaded that Section 1407
centralization is necessary for the convenience of the parties and witnesses or for the just and efficient
conduct of this litigation. The Panel previously denied centralization on a lender-specific basis,
finding, inter alia, that individualized discovery and legal issues were likely to be numerous and
substantial in light of the variation in the mortgage contracts on key issues.5 That earlier denial does
not preclude the Panel from reaching a different result here, but the Panel grants reconsideration “only
rarely … where a significant change in circumstances has occurred.” See In re Plavix Mktg., Sales
Practices & Prods. Liability Litig. (No. II), — F. Supp. 2d —, 2013 WL 565971, at *1 (J.P.M.L.
Feb. 12, 2013).
Having reviewed the updated record, we do not find any new circumstances that warrant
reconsideration. Movants have not discussed the variation in mortgage contracts on the key issues
earlier identified by the Panel, and thus individualized discovery and legal issues seem likely to remain
substantial. Furthermore, as the opposing plaintiffs note, there are presently fewer actions than there
were last year, indicating that the need for centralization is now less.6
Additionally, movants’ proposal to separate and remand the flood and wind insurance claims
in the Southern District of Florida Hall action is unworkable. Section 1407(a) authorizes the Panel
to “separate any claim, cross-claim, counter-claim, or third-party claim” from the remainder of the
transferred action and to remand such claims to the transferor district. It does “not authorize the
Panel to transfer one issue raised by a claim . . . while remanding another issue raised by the same
claim.” In re Air Crash Disaster at Duarte, Cal. on June 6, 1971, 346 F. Supp. 529, 530 (J.P.M.L.
5
6
See In re: Mortgage Lender Force-Placed Ins. Litig., 895 F. Supp. 2d at 1353 & n.2.
The opposing plaintiffs note that last year’s motion encompassed 17 actions against Bank
of America.
Case MDL No. 2467 Document 54 Filed 08/07/13 Page 3 of 4
-31972).7 Movants’ proposal for separation and remand calls for carving out the subset of hazard
insurance issues from each of the individual claims pled in the Hall complaint and thus is not feasible.8
Lastly, the number of involved actions and districts is limited, and the record indicates that,
notwithstanding past difficulties among competing plaintiffs’ counsel in coordinating similar litigation,
informal coordination is practicable. Bank of America and QBE/Balboa each have common counsel
in the pending actions. Plaintiffs in two actions already are cooperating with movants, and opposing
plaintiffs’ counsel in the Southern District of Florida action represented at oral argument that they,
too, will cooperate with movants’ counsel in the coordination of the litigation. Given that express
representation, the limited number of involved actions, and the overlap among counsel, we believe
that informal coordination is feasible and preferred. See In re: Boehringer Ingelheim Pharm., Inc.,
Fair Labor Standards Act (FLSA) Litig., 763 F. Supp.2d 1377, 1378 (J.P.M.L. 2011).
IT IS THEREFORE ORDERED that the motion pursuant to 28 U.S.C. § 1407, for
centralization of these actions is denied.
PANEL ON MULTIDISTRICT LITIGATION
John G. Heyburn II
Chairman
Kathryn H. Vratil
Marjorie O. Rendell
Lewis A. Kaplan
Paul J. Barbadoro
Charles R. Breyer
Sarah S. Vance
7
See also In re Resource Exploration, Inc., Sec. Litig., 483 F. Supp. 817, 822 (J.P.M.L.
1980) (“[T]he Panel is not empowered to carve out issues for separate treatment under Section
1407.”).
8
For example, the Hall breach of contract claim covers all forms of insurance, not just hazard
insurance. Similarly, the Hall plaintiffs bring two RICO conspiracy claims against defendants and
carving up those claims in the manner described by movants seems untenable.
Case MDL No. 2467 Document 54 Filed 08/07/13 Page 4 of 4
IN RE: BANK OF AMERICA, N.A.,
MORTGAGE CORPORATION FORCE-PLACED
HAZARD INSURANCE LITIGATION
MDL No. 2467
SCHEDULE A
Central District of California
Christopher Gustafson, et al. v. BAC Home Loan Services, LP, et al., C.A. No. 8:11-00915
Robin Vitek v. Bank of America, N.A., et al., C.A. No. 8:13-00816
Middle District of Florida
Pamela Karp v. Bank of America Corporation, C.A. No. 8:12-01700
Southern District of Florida
Cheryl Hall, et al. v. Bank of America, N.A., et al., C.A. No. 1:12-22700
Western District of Wisconsin
Colleen Decambaliza v. QBE Holdings, Inc., et al., C.A. No. 3:13-00286
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