284 F. Supp. 3d 335
E.D.N.Y2018Background
- Plaintiff Marie Travis (New York resident) filed a putative class action in E.D.N.Y. against Navient Corp. and Navient Solutions, alleging Navient steered federal student-loan borrowers into forbearance rather than income-driven repayment (IDR) to maximize profits.
- Proposed intervenors (Demyanenko-Todd, Force, Miller) are plaintiffs in a separate, earlier-filed putative class action in the Middle District of Pennsylvania asserting similar steering allegations and different contract theories; they moved to intervene in Travis and to dismiss/stay/transfer under the first-to-file rule.
- The Demyanenko-Todd action alleges breach of the loan (master promissory) agreement; Travis alleges breach of the servicing agreement; the putative classes differ and Travis would not be a member of the Demyanenko-Todd putative class.
- There is also an earlier CFPB enforcement action and a Pennsylvania Attorney General action against Navient raising related servicing-practice claims; none of the federal cases has a certified class at the time of this decision.
- Proposed intervenors sought intervention as of right (Fed. R. Civ. P. 24(a)) or permissive intervention (24(b)) principally to press dismissal/stay/transfer under the first-to-file rule or transfer under 28 U.S.C. § 1404(a).
- The court denied the motion in full, holding proposed intervenors lacked a legally protectable interest for mandatory intervention, permissive intervention would prejudice the parties and delay the case, the first-filed rule did not apply, and transfer under § 1404(a) was unwarranted.
Issues
| Issue | Plaintiff's Argument | Defendant / Proposed Intervenors' Argument | Held |
|---|---|---|---|
| Whether proposed intervenors may intervene as of right under Rule 24(a) | Travis will adequately represent intervenors; intervenors lack a direct, legally protectable interest because no class has been certified and Travis asserts different contract theory | Intervenors claim a protectable interest in the litigation's outcome and in preventing inconsistent rulings and reverse-auction settlements | Denied — intervenors failed to show a direct, substantial, legally protectable interest or inadequate representation |
| Whether permissive intervention under Rule 24(b) should be allowed | Opposes intervention as unnecessary and prejudicial; party interests are adequately represented and coordination can address efficiencies | Seeks permissive intervention to move to dismiss/stay/transfer under first-to-file rule | Denied — court exercises discretion against intervention because it would delay/prejudice and intervenors seek intervention solely to press first-to-file relief |
| Whether the first-to-file rule requires dismissal/stay/transfer in favor of the Pennsylvania action | Travis argues first-to-file is inapplicable because the actions and classes are not sufficiently similar and Travis would not be included in the first-filed putative class | Intervenors argue Demyanenko-Todd is first-filed and substantially similar, so this action should yield | Denied — court finds actions not sufficiently similar (Travis and her claims would not be part of the first-filed action) and equities disfavour applying the rule |
| Whether transfer to Middle District of Pennsylvania under § 1404(a) is warranted | Travis and Navient oppose transfer; plaintiff chose forum and resides in E.D.N.Y.; uncertainty whether Pennsylvania court has jurisdiction over Travis's claims | Intervenors argue convenience and judicial economy favor transfer because related actions are pending in Pennsylvania and key witnesses/documents located there | Denied — plaintiff’s forum choice and convenience weigh against transfer; other transfer factors neutral or uncertain; transfer not in interests of justice at this time |
Key Cases Cited
- Restor-A-Dent Dental Labs., Inc. v. Certified Alloy Prods., Inc., 725 F.2d 871 (2d Cir. 1984) (elements for intervention as of right under Rule 24(a))
- Sec. Pac. Mortg. & Real Estate Servs., Inc. v. Republic of Philippines, 962 F.2d 204 (2d Cir. 1992) (failure to satisfy any Rule 24(a) factor is sufficient to deny intervention)
- Wash. Elec. Coop., Inc. v. Mass. Mun. Wholesale Elec. Co., 922 F.2d 92 (2d Cir. 1990) (interest for intervention must be direct, substantial, and legally protectable)
- First City Nat'l Bank & Tr. Co. v. Simmons, 878 F.2d 76 (2d Cir. 1989) (first-filed rule principles and priority of earlier-filed suit)
- Emp'rs Ins. of Wausau v. Fox Entm't Grp., Inc., 522 F.3d 271 (2d Cir. 2008) (first-filed rule promotes judicial administration but requires similar parties and claims)
- D.H. Blair & Co. v. Gottdiener, 462 F.3d 95 (2d Cir. 2006) (factors to evaluate convenience and transfer under 28 U.S.C. § 1404(a))