COLLEEN KOLLAR-KOTELLY, UNITED STATES DISTRICT JUDGE.
Presently before the Court is Plaintiffs' [15] Motion to Transfer Case to the United States District Court for the Northern District of Texas. In response, Defendants filed a [29] Cross-Motion to Dismiss for Lack of Jurisdiction. Upon consideration of the pleadings,
This case arises from the Ponzi scheme of Allen Stanford, who controlled Stanford International Bank ("SIB") which sold billions of dollars in fraudulent certificates of deposit to more than 50,000 people over a period of more than two decades. Pl.s' Mot. ¶ 2. Plaintiff Ralph S. Janvey was appointed by the United States District Court for the Northern District of Texas, Dallas Division, to serve as the Receiver for the Stanford Receivership Estate. Compl. ¶ 2. In his capacity as Court-Appointed Receiver, Janvey filed suit on behalf of the Stanford Receivership Estate and the Official Stanford Investors Committee (collectively, "Plaintiffs") against Proskauer Rose, LLP, Chadbourne & Parke, LLP, and Thomas V. Sjoblom (collectively, "Defendants") on January 27, 2012, asserting negligence, aiding and abetting in breaches of fiduciary duties, and aiding and abetting in a fraudulent scheme, among other claims, by assisting SIB in evading regulatory oversight and obstructing the government investigation. Id. at ¶¶ 209-221; Pl.s' Mot., ¶ 3. Although Plaintiffs filed sixty-one lawsuits on behalf of the Stanford Receivership Estate in the United States District Court for the Northern District of Texas, Plaintiffs filed the present cause of action in this Court. See Def.s' Opp'n. at 1-2; Rouhandeh Decl., ECF No. [31-1].
On February 16, 2012, Defendants filed a Notice of Potential Tag-Along Action with the United States Panel on Multidistrict Litigation, seeking transfer of this case to the United States District Court for the Northern District of Texas. See Remand Order (Dec. 23, 2013), ECF No. [14]. Subsequently, on March 2, 2012, this case was transferred to the United States District Court for the Northern District of Texas by the Panel on Multidistrict Litigation pursuant to 28 U.S.C. § 1407, which provides that civil actions that involve one or more common questions of fact and are pending in different districts may be transferred to any district for coordinated or consolidated pretrial proceedings. The Clerk of the Panel entered a conditional order transferring the case to the Northern
On October 24, 2012, Defendants filed Motions to Dismiss for Lack of Jurisdiction in the Northern District of Texas. See N.D. Tex. (Dallas), ECF Nos. [49], [50], [53]. Defendants argued that the Northern District of Texas did not have subject matter jurisdiction because the parties were not diverse due to the "statelessness" of Defendants Proskauer Rose and Chadbourne & Parke. Def.s' Mot. to Dismiss, N.D. Tex. (Dallas), ECF No. [49], at 13-23. Additionally, Defendants contended that, because Plaintiffs originally chose to file in the District of Columbia, they could not assert jurisdiction in the Northern District of Texas pursuant to 28 U.S.C. § 754 and must instead establish an independent ground for federal subject matter jurisdiction, which they failed to do. Id. at 23-26. On December 12, 2012, Plaintiffs moved for a recommendation of remand of the case to the District of Columbia, arguing that the District of Columbia court could cure any jurisdictional defects by ordering a 28 U.S.C. § 1631 transfer in the "interest of justice" to a court with jurisdiction. See Pl.s' Mot. for Recommendation of Remand, N.D. Tex. (Dallas), ECF No. [55]. On August 21, 2013, the United States District Court of the Northern District of Texas issued an order denying Defendants' motions to dismiss and recommending that the United States Judicial Panel on Multidistrict Litigation remand the case back to the United States District Court for the District of Columbia to determine Plaintiff's § 1631 transfer request. See Order (Aug. 21, 2013), N.D. Tex. (Dallas), ECF No. [71]. On December 23, 2013, a Remand Order was issued by the Judicial Panel on Multidistrict Litigation directing remand of the case from the U.S. District Court for the Northern District of Texas to the U.S. District Court for the District of Columbia. See Remand Order (Dec. 23, 2013), ECF No. [14]. The Panel gave weight to the Northern District of Texas' determination that remand was necessary to provide Plaintiffs "the opportunity to present to the District of Columbia court evidence and argument that a transfer to this Court [the Northern District of Texas] would be in the interest of justice." Id. at 3.
On February 5, 2014, Plaintiffs filed in this Court a Motion to Transfer Case to the United States District Court for the Northern District of Texas pursuant to 28 U.S.C. § 1631. On February 20, 2014, Defendants filed a Cross-Motion to Dismiss for Lack of Jurisdiction and a Memorandum in Opposition to Plaintiffs' Motion to Transfer and in Support of Defendants' Cross-Motion to Dismiss. Plaintiffs concede that this court does not have jurisdiction over this action, but argue that this case should be transferred to the Northern District of Texas pursuant to § 1631 because Plaintiffs reasonably believed that diversity jurisdiction existed at the time of filing in this court and if transfer to a court of proper jurisdiction is denied, "there is a risk that the Receiver's negligence claims may be barred." Pl.'s Mot. ¶ 14. Defendants contend that this action should be dismissed because Plaintiffs filed this action in this court in bad faith and thus it is not in the interest of justice to transfer the action. On March 27, 2014, Plaintiffs filed a Motion for Leave to Late-File Reply. See ECF No. [33]. The Court granted Plaintiffs' Motion on June 30, 2014, and Plaintiffs' Reply was subsequently docketed. Accordingly, this motion is now ripe for review.
Pursuant to 28 U.S.C. § 1631, courts have authority to transfer a civil action filed in the wrong jurisdiction, "if it
The first requirement of a § 1631 transfer—that the district court in which the action was originally filed lack jurisdiction—has clearly been met in this case, and both parties agree that this Court lacks jurisdiction. See Pl.s' Mot. Mem. ¶ 3 ("The parties agree that the District of Columbia district court did not and does not have diversity jurisdiction to hear this case."); Def.s' Opp'n. at 8 ("[T]here is no dispute that this Court lacks federal subject-matter jurisdiction over this case."). In their Complaint, Plaintiffs originally alleged that this Court had jurisdiction over this action under 28 U.S.C. § 1332(a)(1) because "Plaintiffs and Defendants are citizens of different states." Compl. ¶ 7. However, both parties now concede that this Court lacks subject-matter jurisdiction over this case because some of the defendants are in fact "stateless" for the purposes of diversity jurisdiction. See Pl.s' Mot. Mem. ¶ 3 ("[T]he District of Columbia district court did not and does not have diversity jurisdiction. . . Plaintiffs did not know the facts about the law firms `stateless partners' at the time."); Def.s' Opp'n. at 7 ("[E]ach defendant law firm has at least one partner who is a `stateless' person, precluding diversity jurisdiction."). Specifically, two of the defendants are law firms with partners who are American citizens domiciled abroad. See Def. Chadbourne & Parke, LLP's Mot. to Dismiss, N.D. Tex. (Dallas), Mecz Decl. and Greenwald Decl., ECF No. [49-1]; Def. Proskauer Rose LLP's Mot. to Dismiss, N.D. Tex. (Dallas), Spitzer Decl., ECF No. [51].
The next requirement for a § 1631 transfer is that the transfer be made to a court "in which the action could have been brought at the time it was filed or noticed." Fasolyak, WL 2007 2071644, at *11. Both parties appear to agree that the Northern District of Texas has jurisdiction over these proceedings pursuant to 28 U.S.C. § 754. See Def.s' Opp'n. at 1-2 ("Unlike the Northern District of Texas, which Plaintiffs concede has `jurisdiction over the Stanford receiver proceedings'..."); Pl.s' Mot. Mem. ¶ 3. Pursuant to § 754, the Northern District of Texas, as the court that appointed Plaintiff as Receiver, has jurisdiction over any claim brought by the Receiver in his execution of Receivership duties. See Def. Chadbourne & Parke's Mot. to Dismiss, N.D. Tex. (Dallas), at 18 ("[The Northern District of Texas] has previously acknowledged that `a receiver has standing to bring ancillary recovery actions in the appointing court...'") (citing Janvey v. Alquire, 846 F.Supp.2d 662, 668-69 (N.D.Tex.2011)).
However, the question remains as to whether this action could have been brought in the Northern District of Texas at the time it was filed—as required by the statute. In their Opposition, Defendants raise the specter that had Plaintiff filed the present action in the Northern District of Texas at the time Plaintiff filed the action in this court, the action would have been barred by the Texas statute of limitations. See Def.s' Opp'n at 2. Plaintiffs effectively ignore this issue in their briefing, focusing instead on whether the Texas statute of limitations would bar this action if it were filed in the Northern District of Texas District Court today. But whether an action would have been barred by a statute of limitations in the transferee court if that action had originally been filed in that court is an essential part of the analysis of the third requirement of a § 1631 transfer. See Hyun Min Park v. Heston, 245 F.3d 665, 667 (8th Cir.2001) (holding that untimely appeal could not be transferred under § 1631 because transfer "can remedy the mistake of filing in the wrong court, but not the mistake of filing in an untimely manner"); Briseno v. United States, No. 08-74, 2009 WL 899697, at *2 (Fed.Cl. Mar. 31, 2009) (transferring case pursuant to § 1631 because plaintiffs had cited "to a statute of limitations which, in their opinion, would likely bar a new case filed after the dismissal of plaintiffs' suit in this court, but which would not bar plaintiffs' claims as of the date of their original filing in this court."). Neither party sufficiently briefs
This Court must finally consider whether transferring this case to the Northern District of Texas is in the interest of justice. The legislative history of § 1631 indicates that "Congress contemplated that the provision would aid litigants who were confused about the proper forum for review." Am. Beef Packers, Inc. v. I.C.C., 711 F.2d 388, 390 (D.C.Cir.1983) (per curiam) (citing S.Rep. No. 275, 97th Cong., 2d Sess. 11 (1981), reprinted in 1982 U.S.C.C.A.N. 11, 21). In determining whether a transfer is in the interest of justice, the equities of dismissing a claim when it could be transferred should be carefully weighed. Liriano v. United States, 95 F.3d 119, 122 (2d Cir.1996) (citing Franchi v. Manbeck, 947 F.2d 631, 634 (2d Cir. 1991)). Courts have found that transfer is "in the interest of justice" when, for example, the original action was misfiled by a pro se plaintiff or by a plaintiff who, in good faith, misinterpreted a complex or novel jurisdictional provision. See, e.g., Prof'l Managers' Ass'n v. U.S., 761 F.2d 740, 745 fn. 5 (D.D.C.1985) (holding that transfer was in the interest of justice "because of the complexity of the federal court system and special jurisdictional provisions"); Besser v. Sec. of HHS, No. 86-1477, 1987 WL 155962, at *1 (D.C.Cir.1987) (holding transfer was in the interest of justice because a pro se litigant was confused as to where to file his action). Courts have also looked to whether it would be time consuming and costly to require a plaintiff to refile his or her action in the proper court or whether dismissal would work a significant hardship on plaintiff who would likely now be time barred from bringing his or her action in the proper court. See Prof'l Managers' Ass'n, 761 F.2d. at 745 fn. 5; Maxwell, 2011 WL 1897175, at *2 (holding transfer was in the interest of justice because it would be too costly and time-consuming to make prisoner refile his habeas petition); Bailey v. Fulwood, 780 F.Supp.2d 20, 27 (D.D.C. 2011) (same).
Weighing these factors, the Court cannot find that transfer is in the interest of justice in the present case. First, Plaintiffs are not pro se litigants who were simply confused as to the proper forum in which to file their action. Rather, Plaintiffs are represented by two law firms, Strasburger & Price, LLP and Neligan Foley, LLP. Cf. Esposito v. C.I.R., 208 F.Supp.2d 44, 46 (D.D.C.2002) ("Confusion about the proper forum is certainly understandable when the litigants are pro se...."); Besser, 1987 WL 155962, at *1 (holding that "because this pro se litigant was confused as to where to file his action, we decline to dismiss the petition. Instead, we transfer this action ...."). Nor have Plaintiffs alleged that there were complex or novel jurisdictional provisions
Furthermore, the fact that Plaintiffs previously filed sixty-one related lawsuits and, "in an abundance of caution," one virtually identical suit in the Northern District of Texas, but only one suit in the District of the District of Columbia, suggests that Plaintiffs may have been aware that the District of Columbia was an improper forum. Pl.s' Mot. Mem. ¶ 4 fn. 1 ("... in an abundance of caution, Plaintiffs filed a second suit in the Northern District of Texas ... which is ... stayed pending the outcome of the D.C. suit."). The timing of this suit also suggests that Plaintiffs were attempting to circumvent concerns regarding the constraints of the statute of limitations in Texas. While the limitations period for negligence claims is two-years in Texas, it is three-years in the District of Columbia. Kansa Reinsurance Co. v. Cong. Mortg. Corp. of Tex., 20 F.3d 1362, 1369 (5th Cir.1994) (citing TEX. CIV. PRAC. & REM. CODE ANN. § 16.003); Johnson v. Long Beach Mortg. Loan Trust 2001-4, 451 F.Supp.2d 16, 47 (D.D.C.2006) (citing D.C. Code § 12-301). Defendants argue that "by filing in a different district with a longer limitations period, plaintiffs hoped to overcome their delay in filing this action and preserve their [allegedly] stale claims." Def.s' Opp'n at 11. Plaintiff does not respond to any of these arguments by Defendants. Such forum-shopping plaintiffs are not the type of confused litigants Congress contemplated in providing for transfer pursuant to § 1631.
Finally, transfer is not in the interest of justice in so far as it would avoid the
For the foregoing reasons, the Court finds that transfer of this case to the Northern District of Texas is not appropriate pursuant to 28 U.S.C. § 1631 because it is not in the interest of justice. Accordingly, Plaintiffs' [15] Motion to Transfer is DENIED and Defendants' [29] Cross-Motion to Dismiss is GRANTED.