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April 15, 2004.

THOMAS BRADFORD and GRACE BRADFORD, on behalf of themselves and all other similarly situated individuals, Plaintiffs,

The opinion of the court was delivered by: JAMES ZAGEL, District Judge


Factual Background

This case first arrived on my docket in February of 1994 after being transferred from the U.S, District Court for the Western District of New York for consolidation with other similar cases. It is one of the few cases of its type that remains. Al the time the original Complaint was filed, Independence One Mortgage Corporation (IOMC) serviced approximately 155,000 mortgages on properties located in all 50 states and the District of Columbia, In 1994, IOMC sold its assets to Norwest, including the servicing rights to approximately 120,000 loans. The records associated with IOMC's loans were also transferred to Norwest. Since that time, IOMC has not been in the business of servicing mortgage loans.

  In September of 1996, the Plaintiffs moved for certification of a nationwide class. An agreed upon order was entered by this Court on September 18, 1997 certifying Five subclasses all of which included only those mortgages being serviced by IOMC as of September 30, 1994. The date was important because it limited the class to loans which were "open," i.e. being serviced at the time IOMC transferred its loans to Norwest. The order did not address the status of those potential class members with "closed" loans, loans that were paid off before September 30, 1994, other than to say that Plaintiffs' pending motion for class certification was withdrawn, In March of 2000, Plaintiffs moved for certification of the remainder of the class.

  During supplemental briefing on the issue, the Seventh Circuit handed down its decision in In re Bridgestone/Firestone, Inc, Tires Prods, Liab. Litig., 288 F.3d 1012 (7th Cir. 2002), In re Bridgestone/Firestone made certification of a nationwide class inappropriate where the litigants' cases were governed by differing state laws, Thereafter, on October 7, 2003, l denied class certification for both the "open" and "closed" loans and invited Plaintiffs to file for certification of narrower classes. Ten days later, Plaintiffs brought a renewed motion lo certify a statewide class in New York.


  Plaintiffs have subsequently brought two motions seeking to amend their original Complaint to add the following class representatives from various states: Josephine H. Merlo for Illinois, Armando and Rosa Medina for Florida, Andrea Bianchi for New Jersey, and Wanda G. Freeman for South Carolina, *fn1 Federal Rule of Civil Procedure 15(a) provides that where a responsive pleading has already been served, a party may amend its pleading "only by leave of the court" and that "leave shall be freely given when justice so requires." Fed.R.Civ.P. 15(a). However, "leave to amend need not be given if there is an apparent reason not to do so, such as `undue delay, bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility." Chavez v. III. State Police, 251 F.3d 612, 632 (7th Cir. 2001), quoting Payne v. Churchich, 161 F.3d 1030, 1036 (7th Cir. 1998).

  Additionally, the burden rests upon the plaintiff to show a valid reason for delay in seeking leave to amend. Ameritech v. Computer, 188 F.R.D. 280, 286 (N.D. Ill. 1999) citing Saders v. Venture Stares, 56 F.3d 771, 775 (7th Cir. 1995). A denial of the motion is warranted when a party fails to "provide an explanation as to why the amendment did not take place sooner" and its delay is burdensome to the opposing party. Hindo v. University of Health Sciences, 65 F.3d 608, 615 (7th Cir. 1995).

  IOMC objects to the amendment on grounds that (1) it would be fufile, (2) it would unduly prejudice IOMC, (3) it would unduly delay these proceedings, and (4) the Plaintiffs have not presented any justification for their delay in seeking to amend.

  1. Futility

  IOMC argues that the amendment would be fufile because the statute of limitations has expired as to some, if not all, of the newly named plaintiffs, Ms. Merlo and possibly some of the other newly named plaintiffs had loans that were "closed" before 1994 and were not part of the original class certified by this court on September 18, 1997. IOMC claims that the September 18th order, which called for the withdrawal of Plaintiffs' motion for certification of a broader class, started the clock for statute of limitations purposes, making the newly named plaintiffs' claims untimely.

  As a rule, putative class members' individual claims are tolled at all times during the pendency of a class action up to and until class certification is actually denied, American Pipe & Constr. Co. v. Utah. 414 U.S, 538 (1974); See Also Crown, Cork & Seal Co. v. Parker, 462 U.S, 345 (1983). Tolling is appropriate and necessary because "[w]e want the class members to rely on the filing of the class action rather than to clutter the courts with a multitude of separate suits" filed merely to prevent the statute of limitation from running. Elmore v. Henderson, 227 F.3d 1009, 1012 (7th Cir. 2000).

  IOMC argues that Plaintiffs' withdrawal should be treated as a denial, I disagree and find the two are fundamentally different. Tolling is done to prevent potential class members from filing independently until the class's scope is defined. Unlike a denial, a withdrawal does not permanently define or limit class membership. It leaves open the potential for subsequent requests for certification of a broader class, such as the one filed by Plaintiffs in March, 2000. Thus, a withdrawal is insufficient to start the time running. Since time was tolled until the motion for class certification was denied on October 7, 2003, the claims of potential class members with "closed" loans fall well within the statutory period and are not time barred.

  IOMC also argues that amending the complaint to include newly named plaintiffs who will ultimately represent state classes is wasteful because such statewide classes are barred by the Seventh Circuit's Decision in In re Bridgestone/Firestone, In that decision, the Court reversed the district court's certification of a nationwide class because the differences in state tort law destroyed predominance of common issues of law within the class. The Court went on to address the possibility of statewide classes stating that "[l]est we soon see a Rule 23(f) petition to review the certification of 50 state classes, we add that this litigation is not manageable as a class action even on a statewide basis." In re Bridgeston/Firestone, 288 F.3d at 1018, IOMC argues, on the basis of this statement, that In re Bridgestone/Firestone barred statewide class actions in cases where the law differs between states and that this bar prevents me iron) certifying state classes in this case. However, IOMC's reading of In re Bridgestone/Firestone is divorced of its proper context. The Seventh Circuit's prohibition against statewide classes was based primarily on the factual differences that existed between individual class members, which could not be resolved by segregation into ...

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