Western and Southern Life Insurance Company v. Countrywide Financial Corp.
2:11-cv-07166
C.D. Cal.Aug 30, 2011Background
- Western and Southern filed suit in April 2011 alleging Countrywide sold mortgage-backed securities with untrue statements and omissions in registration statements and prospectuses.
- Plaintiffs invoke the Securities Act of 1933, the Exchange Act of 1934, and Ohio common-law fraud claims, alleging systemic underwriting standards violations.
- Plaintiffs contend the securities were toxic due to defective loans, causing widespread defaults and devaluation of certificates (about 94% not investment grade).
- Defendants moved under 28 U.S.C. § 1404(a) to transfer venue from the Southern District of Ohio to the Central District of California because related actions are pending there.
- A hearing was held on August 9, 2011, and the court denied the transfer, keeping the case in Ohio.
- Court applied the Artisan/Nicol balancing test, giving primacy to the plaintiff's forum choice and considering convenience, location of evidence, and public-interest factors.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1404(a) transfer is warranted. | Plaintiffs argue Ohio has substantial connection and is not California-centric. | Defendants contend substantial overlap with California actions and witness/document convenience favor transfer. | Denied; factors did not strongly favor transfer. |
| Is the plaintiff's forum choice entitled to deference? | Plaintiffs' choice should be given substantial weight due to Ohio connections. | Defendants claim California has locus of operative facts. | Plaintiff's forum choice respected; not outweighed by transfer factors. |
| Do California actions create a weighty “related cases” factor? | Cases are related but not identical; underlying offerings differ. | Significant overlap in practices and witnesses justifies transfer to California. | Not controlling; not enough to override Ohio forum. |
| Are witnesses and documents more conveniently situated in California? | No adequate specificity about witnesses; electronic discovery mitigates concerns. | Many California witnesses and documents favor transfer. | Insufficient showing of specific, necessary testimony; no transfer. |
| Do public-interest factors weigh in favor of transfer? | Transfer would disrupt reliance on local interests and dispersed national scope. | California court congestion and efficiency arguments favor transfer. | No significant public-interest justification to transfer. |
Key Cases Cited
- Nicol v. Koscinski, 188 F.2d 537 (6th Cir. 1951) (plaintiff's forum choice weighs heavily in transfer analysis)
- Artisan Development v. Mountain States Development Corp., 402 F. Supp. 1312 (S.D. Ohio 1975) (balancing factors for § 1404(a) transfer)
- Lewis v. ACB Bus. Servs., 135 F.3d 389 (6th Cir. 1998) (strong deference to plaintiff's choice of forum)
- Hague v. Sandburg, 468 F. Supp. 2d 952 (S.D. Ohio 2006) (public-interest considerations in transfer analysis)
- Gulf Oil Corp. v. Gilbert, 330 U.S. 501 (1947) (general framework for transfer and forum convenience)
- Wayne County Employees Retirement System v. MGIC Investment Corp., 604 F. Supp. 2d 969 (E.D. Mich. 2009) (liberal forum choice in securities actions context)
- Reese v. CNH Am. LLC, 574 F.3d 315 (6th Cir. 2009) (forum choice and transfer considerations)