ditch v. feinberg, et al. - motion to vacate jpml conditional transfer order

BEFORE THE JUDICIAL PANEL ON

MULTIDISTRICT LITIGATION

MDL No. 2179 IN RE: Oil Spill by the Oil Rig

"Deepwater Horizon" in the

Gulf of Mexico, on April 20, 2010

This Filing Relates To The Following Case Only:

Ditch v. Feinberg et al., FLM/2:13-cv-00531

PLAINTIFF'S MEMORANDUM OF LAW IN SUPPORT OF

PLAINTIFF'S MOTION TO VACATE

CONDITIONAL TRANSFER ORDER (CTO-88)

Brian J. Donovan

Florida Bar No. 143900

The Donovan Law Group, PLLC

3102 Seaway Court, Suite 304

Tampa, FL 33629

Tel: (352)328-7469

[email protected]

COUNSEL FOR PLAINTIFF

Andrew J. Ditch

Dated: August 7, 2013

Case MDL No. 2179 Document 1549-1 Filed 08/07/13 of 20

Pursuant to Rule 7.1(f) of the Rules of Procedure for the Judicial Panel on Multidistrict

Litigation (“JPML”), Andrew J. Ditch (“Plaintiff”) files this Memorandum of Law in Support of

his Motion to Vacate Conditional Transfer Order (CTO-88), as follows.

I.

PRELIMINARY STATEMENT

Plaintiff filed this action against Kenneth R. Feinberg, Feinberg Rozen, LLP, D.B.A.

Gulf Coast Claims Facility, and William G. Green, Jr. ("Defendants") in Florida state court

asserting claims arising exclusively under Florida state law in order to obtain recovery for the

damages he incurred. The federal courts do not have removal jurisdiction over this case under

either 28 U.S.C. §§ 1331 (federal question) or 1332 (diversity). The Circuit Court of the

Twentieth Judicial Circuit in and for Lee County, Florida is the only court with jurisdiction to

adjudicate Plaintiff's claims.

Nevertheless, Defendants seek to continue to delay Plaintiff's pursuit of his claims by

having this action transferred into the multidistrict litigation ("MDL 2179"). In order to further

their delaying strategy, Defendants improperly removed Plaintiff's action to federal district

court despite having no basis for doing so. Because Defendants' removal was improper, Plaintiff

has requested the United States District Court for the Middle District of Florida ("Middle District

of Florida Court") to remand this action. The most efficient course of action now, both for the

parties and for the courts, is to permit the Middle District of Florida Court to determine the

threshold jurisdictional issue: whether removal was proper. A transfer at this stage would not

promote the “just and efficient” conduct of this action and would prejudice Plaintiff by causing

further needless delay and unnecessary expense.

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Plaintiff respectfully requests that the Panel vacate its conditional transfer of this matter

to the Eastern District of Louisiana in order for the Middle District of Florida Court to address

the pending motion to remand. Doing so will foster the just, speedy, and inexpensive

determination of this action. See Fed. R. Civ. P. 1.

II.

PROCEDURAL HISTORY

On June 12, 2013, Plaintiff, a victim of Defendants' "Expedited EAP Denial" strategy

which resulted in the financial ruin of Plaintiff, filed this action against Defendants in the

Circuit Court of the Twentieth Judicial Circuit in and for Lee County, Florida asserting claims

for gross negligence, negligence, negligence per se, fraud, fraudulent inducement, promissory

estoppel, and unjust enrichment under Florida state law.

On July 16, 2013 Defendants, independent contractors with 13 offices located in the

State of Florida, intentionally did not serve Plaintiff a copy of the Notice of Removal and

improperly removed this action on the erroneous grounds that the Middle District of Florida

Court has federal question jurisdiction under 28 U.S.C. § 1331 and diversity jurisdiction under

28 U.S.C. § 1332.

On July 18, 2013, Defendants filed a Notice of Tag-Along Case with the MDL Panel.

On July19, 2013, Defendants filed a motion to stay proceedings pending a transfer

decision by the JPML.

On July 23, 2013, Plaintiff filed his motion to remand, a copy of which is attached

hereto as Exhibit A.

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On July 23, 2013, Plaintiff also filed his response in opposition to Defendants’ motion to

stay, a copy of which is attached hereto as Exhibit B.

On July 24, 2013, the Panel issued its Conditional Transfer Order (CTO-88). Plaintiff

timely filed his Notice of Opposition on July 24, 2013.

III.

SUMMARY OF ARGUMENT

As demonstrated below, the JPML should grant Plaintiff's motion to vacate for at least

two reasons. First, the claims in Plaintiff's Complaint do not share any factual issues with the

claims in actions which were previously and appropriately transferred to MDL 2179.

Accordingly, a transfer of this case to the Eastern District of Louisiana for inclusion in MDL

2179 will not serve the convenience of the parties and witnesses and promote the just and

efficient conduct of this litigation. Second, vacatur is warranted because this first-of-its-kind type

of case does not pose any danger of inconsistent rulings or duplicative proceedings.

Furthermore, Plaintiff respectfully points out that the JPML should neither continue to

promote nor facilitate the gamesmanship of the legal system by defendants, e.g., the baseless

removal from state to federal court for the sole purpose of subsequently being able to

immediately file a Notice of Tag-Along Case with the JPML. The JPML’s sanctioning of this

type of procedural gamesmanship, although politically expedient and judicially efficient, is

unjust and makes a mockery of the U.S. judicial system.

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IV.

THE STANDARD TO BE APPLIED

A conditional transfer order is an administrative act of the Panel Clerk “which can

and will be vacated upon the showing of good cause by any party.” In re: Grain Shipment

Litig., 319 F. Supp. 533, 534 (J.P.M.L. 1970) (citing In re: IBM Antitrust Litig., 316 F. Supp.

976 (J.P.M.L. 1970)). Good cause exists where consolidation fails to promote the “just and

efficient” conduct of the action. See 28 U.S.C. § 1407(a); see also H.R. Rep. No. 1130, 90th

Cong. 2nd Session, 1968 USCCAN 1898, 1900 (explaining that “pretrial consolidation must

promote the just and efficient conduct of such actions and be for the convenience of the parties

and witnesses”). Congress intended for consolidation to be ordered “only where significant

economy and efficiency in judicial administration may be obtained.” See H.R. Rep. No. 1130,

1968 U.S.C.C.A.N. at 1900 (emphasis added).

V.

ARGUMENT AND AUTHORITIES

A. This Action Does Not Involve Common Questions of Fact with Actions Previously and

Appropriately Transferred to MDL 2179.

Plaintiff’s action is closely related to two other cases, Pinellas Marine Salvage, Inc., et

al. v. Kenneth R. Feinberg, et al. (FLM/8:11-cv-00582) and Selmer M. Salvesen v. Kenneth R.

Feinberg, et al., (FLM/2:11-cv-00375), which were inappropriately consolidated with MDL

2179. In each case, the complaint alleges, in part, that Defendants misled Plaintiffs by employing

a “Delay, Deny, Defend” strategy against them. This strategy, commonly used by unscrupulous

insurance companies, is as follows: “Delay payment, starve claimant, and then offer the

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economically and emotionally-stressed claimant a miniscule percent of all damages to which the

claimant is entitled. If the financially ruined claimant rejects the settlement offer, he or she may

sue.” In sum, Plaintiffs allege that BP is responsible for the oil spill incident; Feinberg, et al.

(independent contractors), via employment of their "Delay, Deny, Defend" strategy, are

responsible for not compensating and thereby financially ruining Plaintiff.

This Panel has previously made clear that, where related claims are being litigated in the

centralized proceedings in MDL 2179, a case is appropriate for transfer even if it raises different

factual issues from the personal injury and economic loss actions in MDL 2179. (4/18/11

Transfer Order, MDL 2179, Doc. No. 555 (transferring contract actions related to Vessels of

Opportunity program to MDL 2179 where “related claims already [were] being litigated in the

centralized proceedings”).

Plaintiff respectfully points out that the Pinellas and Salvesen cases are not “being

litigated” in MDL 2179. These two cases are inappropriately and indefinitely stayed (in essence,

“warehoused”) in MDL 2179. The Ditch case should not be transferred to join them.

B. Transfer Will Not Serve the Convenience of the Parties and Witnesses and Promote the

“Just and Efficient” Conduct of This Litigation.

Transfer will not serve the convenience of Plaintiff Ditch who is located in the Twentieth

Judicial Circuit Court of Florida. Transfer will not serve the convenience of the witnesses who

are located in the Twentieth Judicial Circuit Court of Florida. Transfer will not serve the

convenience of Defendant Green, who is a resident of Clearwater, Florida, and GCCF which had

13 offices located in the State of Florida at all times material hereto.

The result of a transfer would be that Plaintiff’s claims would spend many months or

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years winding through an overcrowded federal court that lacked jurisdiction from the outset. Not

only would Plaintiff be required to re-submit his Motion to Remand to the Transferee Court, but,

pursuant to MDL No. 2179 Pre-Trial Order No. 15, dated November 5, 2010, "all pending and

future motions, including Motions to Remand, are continued without date unless a motion is

specifically excepted from the continuance by the Court. The Court will then organize and

prioritize the continued motions and in due course, set the motions for hearing."

A transfer of this action would greatly prejudice Plaintiff by depriving him of the earliest

and most efficient resolution of the right to pursue his claims in Florida state court (if his

pending Motion to Remand is granted) or in the United States District Court for the Middle

District of Florida Court (if his pending Motion to Remand is denied).

Plaintiff continues to suffer damages from three separate sources: (a) once from the oil

spill, the environmental and economic damages of which have devastated his way of life;

(b) again by being left in financial ruin as a direct result of Defendants' tortious acts; and (c) a

third time for daring to demand justice, which will consume his time, energy and hopes for years

to come if he is held hostage by protracted litigation.

Defendants cannot cite to a single allegation in Plaintiff's Complaint supporting their

position that this case should be transferred to MDL 2179.

"Common questions of fact" do not exist between the instant case and cases previously

and appropriately transferred to MDL 2179. This case does not arise out of the same explosion,

fire, and oil spill; and does not allege similar factual injuries and damages arising from the oil

spill as Defendants erroneously and disingenuously allege. This case arises out of Defendants'

“Expedited EAP Denial” strategy. This strategy is as follows: “Fail to verify, investigate, and

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appraise the amount of loss claimed by the claimant in the EAP claim and deny the EAP claim

without ever requesting supporting documentation from the claimant.” Furthermore, Plaintiff's

allegations that Defendants violate OPA are evidence of Defendants' violation of their duty of

due care, but create neither a removable federal question nor a "common question of fact" with

cases previously and appropriately transferred to MDL 2179. Reason for the Panel to grant

Plaintiff’s Motion to Vacate Conditional Transfer Order (CTO-88) applies with particular force

here, where Defendants' "Expedited EAP Denial" administration of the compensation fund is

directly challenged.

In its Transfer Order, the Panel also states, "Centralization may also facilitate closer

coordination with Kenneth Feinberg’s administration of the BP compensation fund." This

raises the question whether the MDL 2179 Court can simultaneously "facilitate closer

coordination with" and adjudicate Plaintiff’s lawsuit against Feinberg, et al. especially when

Defendants insist that "OPA imposes no duty on responsible parties other than to establish and

advertise a process for receiving claims, not that they actually settle claims."

In this action, the factual issues are that Defendants, in part by making numerous false

statements of material fact to Plaintiff (See Complaint, ¶¶ 132, 137, 143), breached their legal

duty to Plaintiff, failed to exercise reasonable care, and acted with reckless, willful, and wanton

disregard for the business and livelihood of Plaintiff in their negligent operation of Defendant

GCCF's claim intake, claim review, claim evaluation and claim settlement and payment services.

Defendants knew or should have known that their conduct, commonly referred to as an

“Expedited EAP Denial” strategy, would foreseeably result in the financial ruin of Plaintiff and

cause irreversible damage to the economic interests of Plaintiff. See Motion to Remand, p. 2.

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As a direct and proximate result of Defendants' conduct, Plaintiff has suffered legal

injury and damages, in an amount to be proven at trial, including, but not limited to, loss of

profit, loss of business reputation, loss of livelihood, loss of income, and other economic loss.

Accordingly, Plaintiff filed this action against Defendants in Florida state court asserting claims

arising exclusively under Florida state law in order to obtain recovery for the damages he

incurred.

Judicial economy is undoubtedly well-served by MDL consolidation when scores of

similar cases are pending in the courts. Nevertheless, the excessive delay and “marginalization of

juror fact finding” (i.e., dearth of jury trials) sometimes associated with traditional MDL practice

are developments that cannot be defended. Delaventura v. Columbia Acorn Trust, 417 F. Supp.

2d at 153 (D. Mass. 2006). By forcing Plaintiff in the instant case to await resolution of

irrelevant discovery and factual disputes relating to completely different parties, theories of

recovery and remedies, consolidation with MDL 2179 unreasonably delays Plaintiff's pursuit

of his claims.

In sum, transfer of Ditch to MDL 2179 would not serve the convenience of the parties

and witnesses or promote the just and efficient conduct of the litigation. Ditch is highly

idiosyncratic in nature. Here, Defendants’ “Expedited EAP Denial” strategy and associated

tortious acts, not acts by BP, resulted in the financial ruin of Plaintiff. Accordingly, pretrial

motion practice and discovery, if any, will be largely case-specific. To the extent that any such

discovery will overlap with that taking place in the MDL, various alternatives to Section 1407

transfer are available to minimize duplication. See In re Eli 1 Lilly & Co. (Cephalexin

Monohydrate) Patent Litig., 446 F. Supp. 242, 244 (J.P.M.L. 1978) (noting that parties could

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cross-notice depositions, stipulate that discovery relevant to more than one action be usable in all

those actions, seek orders from the involved courts directing coordination of pretrial efforts, or

seek a stay).

1. The Opinion of the Honorable Carlton W. Reeves

Plaintiff respectfully points out that the recent opinion of the Honorable Carlton W.

Reeves, United States District Court for the Southern District of Mississippi, is instructive in the

instant matter. See State of Mississippi v. Gulf Coast Claims Facility, et al., Case No. 3:11-cv-

00509-CWR-LRA (S.D. Miss. 2011). A copy of Judge Reeves’s opinion is attached hereto

as Exhibit C.

In his Order of Remand, Judge Reeves points out, “GCCF’s argument that Hood has

unwittingly stated a claim under OCSLA is not compelling. According to OCSLA, federal courts

enjoy subject-matter jurisdiction “of cases and controversies arising out of, or in connection with

(A) any operation conducted on the outer Continental Shelf which involves exploration,

development, or production of the minerals, of the subsoil and seabed of the outer Continental

Shelf . . . .” The Fifth Circuit has written that it “appl[ies] a broad ‘but-for’ test to determine

whether a cause of action arises under OCSLA.” And in GCCF’s view, because it would not

exist but for the Deepwater Horizon’s explosion, this case (and, presumably, any other case to

which it could ever be a party) necessarily implicates OCSLA.

GCCF is correct that the Fifth Circuit views “[t]he jurisdictional grant[ ] contained in

43 U.S.C. § 1349(b)(1) [a]s very broad.” “But to view OCSLA’s scope so far-reaching as does

GCCF would render GCCF’s every potentially actionable decision a federal case, be it related

to the claims process at hand or a GCCF employee’s car wreck en route to the office.”

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Neither OCSLA’s plain language nor the Fifth Circuit’s decisions interpreting it contain

any indication that matters so far removed as these - occurring not on the outer Continental Shelf

but doing business in Dublin, Ohio, and aimed not at the “exploration, development, or product

of . . . minerals” but rather at “developing and publishing standards for recoverable claims”

related to the Deepwater Horizon spill - fall within the purview of Section 1349(b)(1), which

addresses “any operation conducted on the outer Continental Shelf . . . .” Plainly, although

GCCF’s activities amount [to] an operation, that operation is not conducted “on the outer

Continental Shelf.” Therefore, OCSLA does not apply and is not a proper basis for federal

jurisdiction.”

C. Vacatur Is Warranted Because This First-of-Its Kind Type of Case Does Not Pose Any

Danger of Inconsistent Rulings or Duplicative Proceedings.

Plaintiff’s Motion to Vacate Conditional Transfer Order (CTO-88) should be granted

because the most just and efficient course is to allow the Middle District of Florida Court to

decide Plaintiff's pending Motion to Remand. The Panel frequently abstains from ordering

transfers when important motions await decision by the originating court. See, e.g., In re L.E.

Lay & Co. Antitrust Litig., 391 F. Supp. 1054, 1056 (J.P.M.L. 1975) (finding that “on principles

of comity, we are reluctant to transfer any action that has an important motion under submission

by the court”); In re Prof’l Hockey Antitrust Litig., 352 F. Supp. 1405, 1407 (J.P.M.L. 1973)

(declining, without prejudice to reconsideration by the panel, to transfer action where motion for

preliminary injunction was sub judice because the Panel has “consistently adhered to well-

founded principles of comity in deciding motions for transfer under Section 1407”); In re

Resource Exploration, Inc., Securities Litig., 483 F. Supp. 817, 822 (J.P.M.L. 1980) (declining to

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transfer an action “on principles of comity” due to the pendency of a motion for summary

judgment that had been submitted to the transferor judge).

In particular, the Panel has stayed prior transfer decisions pending a decision by the

originating court on significant matters such as motions to remand, motions to stay, and motions

to dismiss. See In re Air Crash Disaster at J.F.K. Int’l Airport, MDL-227 (J.P.M.L. filed July 20,

1977) (unpublished order deferring Panel decision on question of transfer of tag-along action

until decision by transferor court on sub judice motion to remand that action to state court), cited

by Stanley A. Weigel, The Judicial Panel on Multidistrict Litigation, Transferor Courts and

Transferee Courts, 78 F.R.D. 575, 577, n. 15 (1978); see also, In re Prof’l Hockey Antitrust

Litig., 352 F. Supp. at 1406 (transfer order stayed pending decision of transferor court on motion

to dismiss); In re Kaehni Patent, 311 F. Supp. 1342, 1344 (J.P.M.L 1970) (transfer order stayed

pending decision of court on motion to dismiss); In re Deering Milliken Patent, 328 F. Supp.

504, 505-06 (J.P.M.L. 1970) (transfer under §1407 denied to allow decision by transferor judges

on motions for transfer that might render question of transfer under §1407 moot if decided

favorably).

Here, a transfer of this action would not promote “significant economy and efficiency in

judicial administration,” H.R. Rep. No. 1130, 1968 U.S.C.C.A.N. at 1900 (emphasis added) but

would delay the resolution of the motion to remand. A transfer at this juncture would result in

additional, unnecessary expense and delay because Judge Barbier, presiding over the pretrial

consolidation in the Eastern District of Louisiana, has ordered that motions to remand must be

resubmitted upon transfer into his court. See Pretrial Order #5, U.S. Dist. Ct., E.D. La., 2:10-

md-02179-CJB-SS, filed Aug. 16, 2010 (D.I. #17). In addition, Judge Barbier has issued a

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pretrial order indefinitely continuing all motions to remand, including future motions. See

Pretrial Order #15, U.S. Dist. Ct., E.D. La., 2:10-md-02179-CJB-SS, filed Nov. 5, 2010 (D.I.

#676). Plaintiff has already suffered delay in pursuing his claims against Defendants because of

the inappropriate removal and would be further prejudiced if transferred. Accordingly, the Panel

should vacate Conditional Transfer Order (CTO-88) with respect to this action in order to

promote the just, speedy, and inexpensive determination of this action.

Plaintiff's motion to vacate is distinguishable from, and more meritorious than, certain

inapposite motions filed by other plaintiffs in MDL 2179 that the Panel recently considered and

rejected. Compare Motions to Vacate filed in M.P. Cheng, LLC, v. BP Co. N. Am., Inc., S.D.

Tex. C.A. 4:10-4717 (D.I. 269); Kritzer v. Transocean, Ltd., S.D. Tex. C.A. 4:10-1854 (D.I.

273); and Pappas Restaurant, Inc. v. Transocean, Ltd., S.D. Tex. C.A. 3:10-303 (D.I. 275).

Whereas in those cases the transferor court had already stayed litigation See M.P. Cheng, LLC, v.

BP Co. N. Am., Inc., S.D. Tex. C.A. 4:10-4717 (D.I. 269) (denying motion to vacate where

plaintiff’s motion to remand had been filed after the court stayed proceedings pending transfer

decision); Kritzer v. Transocean, Ltd., S.D. Tex. C.A. 4:10-1854 (D.I. 273) (same) or even ruled

on plaintiff’s remand motion, See Pappas Restaurant, Inc. v. Transocean, Ltd., S.D. Tex. C.A.

3:10-303 (D.I. 275) (denying motion to vacate where transferor court had already denied

plaintiff’s motion for remand and stayed further litigation pending transfer decision). Here,

Plaintiff's Motion to Remand has not been denied by the Middle District of Florida Court.

Furthermore, there is no danger that the Middle District of Florida Court’s decision

regarding remand in this action would differ in any way from a decision made by the Transferee

Court. The law underlying Plaintiff's Motion to Remand is well-settled and consists of a

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straightforward question of law: whether federal courts have removal jurisdiction over this case

under either 28 U.S.C. §§ 1331 (federal question) or 1332 (diversity). They do not. Although

some remand motions have been filed in the Eastern District of Louisiana, each of those motions

presented issues distinctly different from those in Plaintiff's Motion to Remand. Finally,

because the jurisdictional determination is the principal issue pending before the Middle District

of Florida Court, there is no risk that duplicative proceedings will result from a vacatur of

Conditional Transfer Order (CTO-88) with respect to this action.

The most efficient and economical course of action, both for the parties and the courts, is

to vacate the conditional transfer order and permit the Middle District of Florida to decide the

motion to remand.

D. The JPML Should Neither Continue to Promote Nor Facilitate the Gamesmanship of

the Legal System by Defendants.

Theoretically, the JPML does not have power over state courts. In reality, multinational

corporations with deep pockets and politically well-connected MDL Defendants are easily able

to circumvent this “slight inconvenience” through procedural gamesmanship.

1. Defendants Removed this Case for an Improper Purpose.

It is a misuse of the MDL Panel procedures to file a baseless Notice of Removal and then

immediately seek to exploit the MDL Panel procedures to transfer a case to a foreign jurisdiction

for no identifiable purpose other than to indefinitely delay the litigation. Yet this is precisely

what Defendants have done here. As noted supra, Defendants removed this action on the

erroneous grounds that this Court has federal question jurisdiction under 28 U.S.C. § 1331 and

diversity jurisdiction under 28 U.S.C. § 1332. See Plaintiff’s Motion to Remand.

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As noted supra, Defendants removed this action, and immediately filed a "tag-along"

notice with the MDL Panel solely for the purpose of delay in the hope that the MDL Panel would

transfer this action to MDL 2179 before any court has the opportunity to either rule on the

jurisdiction of this action or reach the merits of Plaintiff's claims in this action. Plaintiff

respectfully refers the Panel to the “Chronology of Events” (Exhibit B, pp. 3, 4).

"If in fact the removal of this action was done for the purpose of delay, the Court strongly

disapproves of such gamesmanship of the legal system and waste of judicial resources. Rule 11

states, '[b]y presenting to the court a pleading, written motion, or other paper . . . an attorney or

unrepresented party certifies that to the best of the person’s knowledge, information, and belief,

formed after an inquiry reasonable under the circumstances: (1) it is not being presented for any

improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of

litigation.' Fed. R. Civ. P. 11(b). Counsel should be mindful of this and cautious in pursuing

such tactics in the future." Dale Sundby, et al., v. The Bank of New York Mellon, et al., Case No.

11CV627 DMS (RBB), U.S. District Court for the Southern District of California (May 3, 2011).

This Panel, as the Court held in Sundby, should strongly disapprove of Defendants'

gamesmanship of the legal system and waste of judicial resources in the instant case.

2. District Courts Have the Time, But May Not Have the Desire, to Rule Upon a

Motion to Remand.

As this Panel has repeatedly reaffirmed, “[b]etween the date a remand motion is filed and

the date the Panel finalizes transfer of the action to the MDL, a court wishing to rule upon that

motion (or any other motion) generally has adequate time in which to do so.” (Transfer Order, In

re Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, MDL

No. 2179 (J.P.M.L. filed February 7, 2011 (Doc. No. 494).

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Unfortunately as a result of the need to efficiently manage the overwhelming number of

cases in federal courts, and in deference to the JPML and the MDL transferee judge, many

district court judges have chosen to allow removed cases to simply be transferred to an MDL

before ruling upon a motion to remand. An example is the Salvesen case which was transferred

to MDL 2179 before the district court determined jurisdiction. Plaintiff respectfully points out

to this Panel that it would turn justice on its head to permit the Ditch case to suffer the same

unjust fate as the Salvesen case.

3. The Inappropriate Transfer of a Case to MDL 2179 Should Not Result in the

Automatic Transfer of Subsequent Actions with Common Issues of Fact.

One issue currently before this Panel is whether Plaintiff’s action involves “one or more

common questions of fact” with other cases consolidated with MDL 2179 and thus is appropriate

for transfer and coordination with those proceedings. Plaintiff respectfully points out to the Panel

that the more important question is whether the consolidation promotes the just and [not merely]

efficient conduct of such actions and is for the convenience of the parties and witnesses.

The Ditch case is not appropriate for transfer and coordination with other cases

consolidated with MDL 2179 for at least the following four reasons:

(a) All pending and future motions are continued without date in MDL 2179.

Pursuant to the MDL 2179 Court's Pretrial Order No. 15 (Rec. Doc. 676), “Pending

further orders of this Court, all pending and future motions, including Motions to Remand, are

continued without date unless a motion is specifically excepted from the continuance by the

Court.” Furthermore, pursuant to the MDL 2179 Court's Pretrial Order No. 25 (Rec. Doc. 983),

“All individual petitions or complaints that fall within Pleading Bundles B1, B3, D1, or D2,

whether pre-existing or filed hereafter, are stayed until further order of the Court.”

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As noted supra, once the Pinellas and Salvesen cases were transferred to the MDL 2179

Court, the cases were automatically stayed. Each case will languish indefinitely in MDL 2179.

(b) The MDL 2179 Court has declined to permit discovery on Feinberg or the

GCCF.

On August 29, 2011, Plaintiff’s Counsel emailed a letter to James Parkerson Roy,

Plaintiffs’ Liaison Counsel in MDL 2179, wherein he informed Mr. Roy that the Pinellas case

had been transferred to MDL 2179. The letter, in pertinent part, stated “I would like to

commence discovery as soon as possible. Since this action does not involve common questions

of fact with actions previously transferred to MDL No. 2179, please advise as to how we may

most expeditiously initiate and coordinate discovery ..... I look forward to working with you on

this case.” On September 5, 2011, Plaintiff’s Counsel received an email from Stephen J. Herman,

Plaintiffs’ Liaison Counsel in MDL 2179, wherein Mr. Herman stated, “please be advised that

the Court has, thus far, declined to permit formal discovery on Feinberg or the GCCF.”

In regard to MDL 2179, the MDL Panel states, “Centralization may also facilitate closer

coordination with Kenneth Feinberg’s administration of the BP compensation fund.” However,

formal discovery on Feinberg and the GCCF, and the associated pressure of a trial, are required

in order exert pressure on the parties to negotiate a settlement which reflects the true value of the

claims and not one which focuses on minimizing the liability of the defendants. Certainly, as has

occurred in MDL 2179, without formal discovery on Feinberg and the GCCF certain claims by

private individuals and businesses, including Plaintiff Ditch, for economic loss resulting from the

operation of the GCCF may not be properly resolved.

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(c) Kenneth R. Feinberg, Feinberg Rozen, LLP, D.B.A. Gulf Coast Claims Facility,

and William G. Green, Jr. are not named Defendants in any master complaint

or class action complaint in MDL 2179.

(d) The Transferee Court concedes that Feinberg, Feinberg Rozen, D.B.A. GCCF,

and Green are not Defendants in MDL 2179.

Under the Economic and Property Damages Settlement Agreement, “all Economic Class

Members who do not timely and properly Opt Out shall be permanently and forever barred from

commencing, instituting, maintaining or prosecuting any action based on any Released Claim

against any Released Parties in any court of law or equity, arbitration tribunal or administrative

or other forum.” Under this Agreement, “Other Released Parties” means “Released Parties” other

than BP. The list of Other Released Parties is over four pages in length. See Exhibit D. Kenneth

R. Feinberg, Feinberg Rozen, LLP, Gulf Coast Claims Facility (“GCCF”), and William G.

Green, Jr. are not on this list because the MDL 2179 Court never contemplated that these

Defendants would be included in MDL 2179.

E. The MDL 2179 Court Has Overreached Its Authority.

The instant action should not be transferred to MDL 2179 because that Honorable Court

has overreached its authority. See In Re: Oil Spill By The Oil Rig “Deepwater Horizon” In The

Gulf Of Mexico On April 20, 2010, Case No. 2:10-md-02179-CJB-SS, Doc. 6186-1 (E.D. La.).

1. The Lexecon Rule

The Supreme Court has held that a district court conducting pretrial proceedings pursuant

to 28 U.S.C. §1407(a) has no authority to invoke 28 U.S.C. §1404(a) to assign a transferred case

to itself for trial. Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998).

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Justice Souter, in delivering the opinion of the Court in Lexecon, explained “28 U. S. C.

§1407(a) authorizes the Judicial Panel on Multidistrict Litigation to transfer civil actions with

common issues of fact ‘to any district for coordinated or consolidated pretrial proceedings,’ but

imposes a duty on the Panel to remand any such action to the original district ‘at or before the

conclusion of such pretrial proceedings.’ ‘Each action so transferred shall be remanded by the

Panel at or before the conclusion of such pretrial proceedings to the district from which it was

transferred unless it shall have been previously terminated.’ 28 U.S.C. §1407(a). The issue here

is whether a district court conducting such ‘pretrial proceedings’ may invoke 28 U.S.C.

§1404(a) to assign a transferred case to itself for trial. We hold it has no such authority.”

Justice Souter pointed out that “the Panel’s instruction comes in terms of the mandatory

‘shall,’ which normally creates an obligation impervious to judicial discretion. Anderson v.

Yungkau, 329 U. S. 482, 485 (1947). In the absence of any indication that there might be

circumstances in which a transferred case would be neither ‘terminated’ nor subject to the

remand obligation, then, the statutory instruction stands flatly at odds with reading the phrase

‘coordinated or consolidated pretrial proceedings’ so broadly as to reach its literal limits,

allowing a transferee court’s self-assignment to trump the provision imposing the Panel’s remand

duty. If we do our job of reading the statute whole, we have to give effect to this plain command,

see Estate of Cowart v. Nicklos Drilling Co., 505 U. S. 469, 476 (1992), even if doing that will

reverse the longstanding practice under the statute and the rule, see Metropolitan Stevedore Co.

v. Rambo (1995) (“Age is no antidote to clear inconsistency with a statute.” (quoting Brown v.

Gardner, 513 U. S 115, 122 (1994))).”

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While the need to promote efficiency in litigation is real, Plaintiff respectfully points out

to this Panel that “age is no antidote” to the inappropriate transfer of cases to MDL 2179.

VI.

REQUEST FOR RELIEF

For the foregoing reasons, Plaintiff respectfully requests that the Panel grant his Motion

and enter an order (1) vacating the conditional transfer order (CTO-88) with respect to this cause

of action, and (2) granting Plaintiff such additional relief to which he may be entitled and

which the Panel deems just and proper.

DATED: August 7, 2013 Respectfully submitted,

/s/ Brian J. Donovan____________

Brian J. Donovan

Florida Bar No. 143900

3102 Seaway Court, Suite 304

Tampa, FL 33629

Tel: (352)328-7469

[email protected]

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ditch v. feinberg, et al. - motion to vacate jpml conditional transfer order

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