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Class Action Defense Cases—In re Northstar Education Finance: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiffs’ Motion To Centralize Class Action Litigation In District Of Minnesota

Judicial Panel Grants Plaintiffs’ Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Supported by Other Class Action Plaintiffs and by Common Defendant, and Transfers Class Actions to District of Minnesota

Three class actions – one each in California, Michigan and Minnesota – were filed against Northstar Education Finance alleging that “Northstar’s suspension of its bonus program, in which Northstar offered a credit to borrowers who were no more than 59 days late in making loan repayments, was a breach of contract.” In re Northstar Education Finance, Inc., Contract Litig., ___ F.Supp.2d ___ (Jud.Pan.Mult.Lit. December 3, 2008) [Slip Opn., at 1]. Plaintiffs in the Minnesota and Michigan class actions filed a motion with the Judicial Panel for Multidistrict Litigation (MDL) requesting centralization of the class actions pursuant to 28 U.S.C. § 1407; the Minnesota plaintiffs asked for centralization of the class actions in the District of Minnesota, and the Michigan plaintiffs asked for centralization of the class actions in the Eastern District of Michigan or, alternatively, in the District of Minnesota. Id. Defense attorneys and plaintiffs in the California class action supported the motion for centralization in the District of Minnesota. Id. The Judicial Panel granted the motion to centralize the class action lawsuits finding that “all actions are brought on behalf of overlapping putative nationwide classes of borrowers” and that “[c]entralization under Section 1407 will eliminate duplicative discovery; prevent inconsistent pretrial rulings, especially with respect to class certification; and conserve the resources of the parties, their counsel and the judiciary.” Id. The Judicial Panel also agreed that the District of Minnesota was the appropriate transferee court because Northstar is headquartered there and because all parties support transfer there. Id. Accordingly, the Panel ordered the class actions centralized in the District of Minnesota. Id., at 1-2.

Download PDF file of In re Northstar Education Finance, Inc., Contract Litigation Transfer Order