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In re Ameriquest Mortgage Co. Mortgage Lending Practices Litigation

Judicial Panel on Multidistrict Litigation · Civil Procedure

Civil ProcedureMultidistrict LitigationTransfer under 28 U.S.C. § 1407MDLJPML28 U.S.C. § 1407centralizationcommon questions of fact

Facts

The litigation consisted of five actions pending in different federal districts involving allegedly predatory lending practices by Ameriquest Mortgage Co. or related entities in residential mortgage transactions. Plaintiffs alleged, among other things, that Ameriquest failed to disclose material terms and used bait-and-switch tactics. The actions sought relief under different legal theories and proposed varying putative classes. Additional related actions were pending in other districts as potential tag-along actions.

Issue

Whether these five actions should be centralized under 28 U.S.C. § 1407 for coordinated or consolidated pretrial proceedings despite differing legal theories and putative classes, and if so, which district should serve as the transferee forum.

Rule

Centralization under 28 U.S.C. § 1407 is appropriate when actions involve common questions of fact and transfer will serve the convenience of parties and witnesses and promote the just and efficient conduct of the litigation. Transfer under Section 1407 does not require complete identity, or even a majority, of common factual issues, and the transferee court may use pretrial management techniques to handle both common and individual issues efficiently.

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Five federal actions are pending in Seattle, Atlanta, Boston, Dallas, and Newark against Redwood Home Finance and its affiliate. Each alleges that the lender used the same scripted sales pitch and closing process to hide key loan costs, but the complaints invoke different state consumer statutes and common-law fraud theories.

Should the Panel most likely centralize the actions under 28 U.S.C. § 1407?

Explanation. Centralization is appropriate when the actions involve common questions of fact and transfer will serve convenience and the just and efficient conduct of the litigation. The majority opinion rejected the argument that differing legal theories defeat transfer. Section 1407 does not require complete identity of issues. (Derived from In re Ameriquest Mortgage Co. Mortgage Lending Practices Litigation (n.d.).)