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Diaz v. Ameriquest Mortgage Co.

United States District Court, Seventh Circuit

January 2, 2014

JESUS DIAZ, JR. and KAREN DIAZ, Plaintiffs,


MARVIN E. ASPEN, District Judge.

Plaintiffs Jesus and Karen Diaz ("the Diazes") have filed two motions. In the first motion, the Diazes ask that we request the Judicial Panel on Multidistrict Litigation to remand their case to the United States Bankruptcy Court for the District of Massachusetts, Eastern Division ("Bankruptcy Court"). In the second motion, they ask leave to file a first amended complaint. For the reasons discussed below, we deny both motions.


On April 23, 2007, the Diazes filed an adversary proceeding against Ameriquest Mortgage Company ("Ameriquest") and Deutsche Bank National Trust Company, as Trustee, in the Bankruptcy Court. (Opp'n to Sugg. Rem. at 2.) The Diazes alleged that Ameriquest violated the Truth in Lending Act, 15 U.S.C. § 1601 et. seq. ("TILA"), by failing to provide copies of the notice of right to cancel the transaction. (Sugg. Rem. ¶ 9.) Because they did not receive the copies, the Diazes alleged that they were entitled to rescind the transaction.[1] ( Id. )

On January 30, 2009, the Judicial Panel on Multi-District Litigation ("Panel") issued a conditional transfer order ("CTO") to this court pursuant to 28 U.S.C. § 1407. (Sugg. Rem. ¶ 5.) The Panel determined that the Diazes' TILA claims would benefit from consolidating pretrial proceedings and discovery with other claims against Ameriquest alleging TILA violations. (Opp'n to Sugg. Rem. ¶¶ 5-6.) On May 15, 2013, the Diazes filed a motion to ask that we suggest to the Panel that the case be remanded to the Bankruptcy Court. (Sugg. Rem. ¶ 1.) Finally, on August 2, 2013, the Diazes filed a motion for leave to file its first amended complaint, pursuant to Federal Rule of Civil Procedure 15(a), to clarify that their claim was brought under the Massachusetts Consumer Credit Cost Disclosure Act, Mass. Gen. Laws. Ann. ch. 140D, § 10(a) (West) ("MCCCDA") rather than under TILA. (Mot. Am. at 1.) We address each of these claims separately.


A. Suggestion of Remand to Massachusetts Bankruptcy Court

We first evaluate the motion requesting the Panel to remand the case to the Bankruptcy Court.

The Panel retains the power to remand any case to the transferor court. In re Bridgestone/Firestone, Inc., ATX, ATX II, and Wilderness Tires Prods. Liab. Litig., 128 F.Supp.2d 1196, 1197 (S.D. Ind. 2001). The transferee court may recommend remand before pre-trial proceedings have concluded. J.P.L.M. R. P. 10.1(b). The judge may file a suggestion of remand, indicating "that he perceives his role under Section 1407 to have ended." In re Holiday Magic Sec. and Antitrust Litig., 433 F.Supp. 1125, 1126 (J.P.M.L. 1977) (citing In re Air Crash Disaster Near Dayton, Ohio, 386 F.Supp. 908, 909 (J.P.M.L. 1975)). This decision "generally turns on the question of whether the case will benefit from further coordinated proceedings as part of the MDL." In re Bridgestone/Firestone, Inc., 128 F.Supp.2d at 1197; see also In re Aqua Dots Prods Liab. Litig., No. 08 C 2364, 2011 WL 3325783, at *1 (N.D. Ill. Aug. 2, 2011). Remand is not appropriate if continued consolidation would "eliminate duplicative discovery, prevent inconsistent pretrial rulings, and conserve the resources of the parties, their counsel, and the judiciary." In re Heritage Bonds Litig., 217 F.Supp.2d 1369, 1370 (J.P.M.L. 2002); In re Ameriquest Mortgage Co. Mortgage Lending Practices Litig., MDL No. 1715, 2010 WL 1418399, at *1 (N.D. Ill. Apr. 6, 2010).

The Panel will generally remand a case before pretrial proceedings are completed "only upon a showing of good cause." In re CBS Color Tube Patent Litig., 342 F.Supp. 1403, 1405 (J.P.M.L. 1972). The Diazes contend that discovery in this matter is sufficiently complete for the parties to move forward with a pre-trial conference in the Bankruptcy Court. (Sugg. Rem. ¶ 9.) Additionally, they allege that "there are no allegations of misrepresentation, fraud, or other misconduct" and that "there does not appear to be any benefit from continuing to litigate" in the Northern District of Illinois. ( Id. )

Ameriquest asserts that "discovery remains ongoing." (Opp'n to Sugg. Rem. at 3.) While Ameriquest's discovery has been halted due to scheduling conflicts, they anticipate that once they take the Diazes' depositions, they will require written discovery and other depositions. (Opp'n to Mot. Am. at 3 nn.2, 5.) Even though the Diazes believe their discovery to be complete, "[d]efendants, too, deserve the benefits of coordinated and consolidated pre-trial discovery." In re Aqua Dots Prods Liab. Litig., 2011 WL 3325783, at *2. Ameriquest alleges that coordinated discovery is incomplete and that it intends to file motions for coordinated summary judgment. (Opp'n to Sugg. Rem. at 6-7.) Remand, therefore, "would be nothing more than an abandonment of the Panel's judgment to include the [...] cases in this MDL." In re Bridgestone/Firestone, Inc., 128 F.Supp.2d at 1197. MDL proceedings are maintained in order to encourage "just and efficient conduct." 28 U.S.C. § 1407(a). We find that the MDL still serves this purpose and that remand would be inappropriate at this time. We accept Ameriquest's contentions that coordinated discovery remains outstanding and that it would be left to defend two related claims with similar discovery in different forums if we suggested remand. (Opp'n to Mot. Am. at 3.) For these reasons, we deny the motion for suggestion of remand.

B. Leave to File Amended Complaint

Next, the Diazes move to file a first amended complaint and "clarify[] that [their] claim for rescission is being asserted under the [MCCCDA]." (Mot. Am. at 1.)

As a preliminary matter, Ameriquest contends that Rule 15(a) of Civil Procedure does not apply to this motion because "plaintiffs are seeking dismissal of the only cause of action in their complaint with the replacement of a new cause of action." (Opp'n to Mot. Am. at 3.) ...

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