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Maverick Fund, L.D.C. v. Lender Processing Services, Inc.

United States District Court, Second Circuit

December 9, 2013

MAVERICK FUND, L.D.C., MAVERICK FUND USA, LTD., MAVERICK FUND II, LTD., MAVERICK NEUTRAL FUND, LTD., MAVERICK NEUTRAL LEVERED FUND, LTD., MAVERICK LONG FUND, LTD., and MAVERICK LONG ENHANCED FUND, LTD., Plaintiffs,
v.
LENDER PROCESSING SERVICES, INC., DOCX, LLC, JEFFREY S. CARBIENDER, FRANCIS K. CHAN, and LORRAINE BROWN, Defendants.

Matthew P. Silben and David A. Thorpe, Dietrich Siben Thorpe, Beverly, CA, for the Plaintiffs.

Lyle Roberts, Cooley LLP, Washington, DC, for the Defendants.

OPINION AND ORDER

DENISE COTE, District Judge.

Defendants in this securities fraud action have moved pursuant to 28 U.S.C. § 1404(a) to transfer this opt-out action to the Middle District of Florida, where the related securities class action is pending. For the following reasons, the motion is granted.

BACKGROUND

In 2010, a class action was filed in the Middle District of Florida and assigned to the Honorable Timothy J. Corrigan. City of St. Clair Shores Gen. Employees Ret. Sys. V. Lender Processing Servs., Inc., et al., No. 10 Civ. 1073 (M.D. Fla.). The defendants are Lender Processing Services, Inc. ("LPS") and two individuals named in this action: Jeffrey Carbiener and Francis Chan. LPS provides mortgage-processing and default-management technology. One of its subsidiaries, DocX, LLC ("DocX"), engaged in improper mortgage document execution practices. The class action complaint alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Judge Corrigan dismissed the complaint for failing adequately to plead scienter in 2012, but granted leave to replead. Eventually a third amended complaint was filed in October 2012. While a motion to dismiss was pending, the parties negotiated a settlement. The court gave preliminary approval to the settlement on July 8, 2013.

On August 1, 2013, seven Maverick entities ("Maverick") opted out of the class action settlement. They had purchased nearly 4 million LPS shares. Because Maverick held a significant number of shares, the parties renegotiated their settlement agreement. The amendment provides up to $900, 000 to pay attorneys' fees or litigation expenses incurred in connection with the opt-out litigation. The court gave preliminary approval to the amended settlement on October 30. The fairness hearing is scheduled for February 2013.

On August 6, Maverick filed this action in this district. It names DocX and Lorraine Brown as defendants in addition to LPS and individual defendants Carbiener and Chan. It asserts the same violations of the Securities Exchange Act, as well as violations of the laws of Georgia, Florida, and New York. At an initial conference on October 18, the parties discussed with the Court the defendants' intent to file this motion for a transfer. The motion was fully submitted on November 22.

DISCUSSION

Section 1404 provides: "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). As the Supreme Court recently explained, "[i]n the typical case not involving a forum-selection clause, a district court considering a § 1404(a) motion (or a forum non conveniens motion) must evaluate both the convenience of the parties and various publicinterest considerations." Atlantic Marine Const. Co., Inc. v. U.S. Dist. Court for Western Dist. of Texas , 2013 WL 6231157, at *11 (U.S. Dec. 3, 2013).

Factors relating to the parties' private interests include relative ease of access to sources of proof; availability of compulsory process for attendance of unwilling, and the cost of obtaining attendance of willing, witnesses; possibility of view of premises, if view would be appropriate to the action; and all other practical problems that make trial of a case easy, expeditious and inexpensive. Public-interest factors may include the administrative difficulties flowing from court congestion; the local interest in having localized controversies decided at home; [and] the interest in having the trial of a diversity case in a forum that is at home with the law. The Court must also give some weight to the plaintiffs' choice of forum.

Id. at *11 n.6 (citation omitted).

A. Deference to Plaintiff's Forum Choice

As noted by the Court of Appeals in connection with the related doctrine of forum non conveniens doctrine, "the degree of deference given to a plaintiff's forum choice varies with the circumstances." Iragorri v. United Technologies Corp. , 274 F.3d 65, 71 (2d Cir. 2001) (en banc). Iragorri instructed that district courts should locate the degree of deference to be afforded a plaintiff's forum choice "on a sliding scale' depending on the degree of convenience reflected by the choice in a given case." Norex Petroleum Limited v. Access Industries, Inc. , 416 F.3d 146, 154 ...


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