Judicial Panel Grants Defense Request for Pretrial Coordination of Class Action Lawsuits Pursuant to 28 U.S.C. § 1407 and Agrees to Transfers Class Actions to District of South Carolina
Two class actions – one in California and one in South Carolina – were filed against various defendants, including LandAmerica and SunTrust Banks, “on behalf of individuals and entities that sought to enter into a Section 1031 tax-deferred exchange and entrusted money to facilitate the exchange with the qualified intermediary LandAmerica 1031 Exchange Services, Inc.” but who “lost their investment due to alleged misconduct by various defendants, including SunTrust, where most such funds were deposited.” In re Landamerica 1031 Exchange Serv., Inc., Internal Revenue Service § 1031 Tax Deferred Exch. Litig., ___ F.Supp.2d ___ (Jud.Pan.Mult.Lit. June 12, 2009) [Slip Opn., at 1]. Plaintiffs in the South Carolina 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 that district or in the District of Nevada; plaintiffs in the California class action supported the motion, but while they did not oppose pretrial coordination in Nevada, they requested centralization either in South Carolina or California. Id. SunTrust also did not oppose centralization, but requested transfer to Georgia or Virginia, and three individual defendants supported transfer to Virginia. Id. The Judicial Panel granted the motion to centralize the class action lawsuits and agreed that the District of South Carolina was the appropriate transferee court because it was “nearer to SunTrust’s headquarters in Atlanta, Georgia, where relevant documents and witnesses are likely to be found.” Id., at 1-2. Accordingly, it ordered the class actions to be centralized in the District of South Carolina, id., at 2.