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Class Action Defense Cases—In re Countrywide Financial: Judicial Panel On Multidistrict Litigation (MDL) Grants Plaintiffs’ Motion To Centralize Class Action Litigation But Transfers Class Actions To Western District of Kentucky

Judicial Panel Grants Plaintiffs’ Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407, Over Objection of Responding Class Action Defendants, but Rejects All Recommended Transferee Courts and Transfers Class Actions to Western District of Kentucky

Three class actions – one each in California, Illinois and Massachusetts – were filed against various defendants, including Countrywide Financial Corp., Countrywide Home Loans and Countrywide Bank, FSB (collectively “Countrywide”); the class action complaints, each purportedly seeking to represent a nationwide class, alleged that Countrywide “engaged in discriminatory residential lending practices, including the imposition of discretionary fees/charges, which increased the cost of financing and resulted in higher loans for minority borrowers than similarly situated non-minority borrowers.” In re Countrywide Financial Corp. Mortgage Lending Practices Litig., ___ F.Supp.2d ___ (Jud.Pan.Mult.Lit. August 7, 2008) [Slip Opn., at 1]. Plaintiffs in the Massachusetts class action filed a motion with the Judicial Panel for Multidistrict Litigation (MDL) requesting centralization of the class actions pursuant to 28 U.S.C. § 1407 in the District of Massachusetts; plaintiffs in the other class actions supported the motion, but each argued for transfer of the class actions to the districts in which their own class action was pending. Id. Defense attorneys for Countrywide opposed pretrial coordination of the class actions, but alternatively argued for centralization in California. Id. The Judicial Panel granted the motion to centralize the class action lawsuits, noting that the class action complaints involve “common questions of fact” and concluding that centralization “will eliminate duplicative discovery; avoid inconsistent pretrial rulings, especially on the issue of class certification; and conserve the resources of the parties, their counsel and the judiciary.” However, the Panel decided to transfer the class actions to the Western District of Kentucky. Id., at 1-2.

NOTE: This opinion highlights the risk parties run in requesting pretrial coordination from the MDL Judicial Panel; the Panel has the discretion to select any district it chooses, including a district that has not been recommended by any of the parties to the litigation.

Download PDF file of In re Countrywide Financial Corporation