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RESPONSE IN SUPPORT -- (re: pldg. ( 1 in MDL No. 2950) ) Filed by Defendant Wells… — Agent Fee Litigation (Dkt. 174)
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Wells Fargo Bank N.A.'s Response to Alliant CPA Group LLC's Motion for Transfer of Actions, filed June 17, 2020 as Document 174 before the United States Judicial Panel on Multidistrict Litigation in In re: Paycheck Protection Program (PPP) Agent Fees Litigation, MDL No. 2950. Wells Fargo supports centralizing the agent-fee actions under 28 U.S.C. § 1407 in the Northern District of Georgia. The response argues that each case turns largely on whether agents who helped borrowers apply for PPP loans are entitled to fees from lenders, noting that Alliant's motion identified 12 cases and 19 additional potential tag-along actions have been noticed. It argues against defendant-specific proceedings and distinguishes the loan-processing claims in MDL No. 2954. The response runs 6 pages and is signed by Christopher M. Viapiano of Sullivan and Cromwell LLP.
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Case MDL No. 2950 Document 174 Filed 06/17/20 Page 1 of 6
BEFORE THE UNITED STATES JUDICIAL PANEL
ON MULTIDISTRICT LITIGATION
IN RE: PAYCHECK PROTECTION
PROGRAM (PPP) AGENT FEES MDL No. 2950
LITIGATION
WELLS FARGO BANK N.A.’S RESPONSE TO ALLIANT CPA GROUP LLC’S
MOTION FOR TRANSFER OF ACTIONS
Wells Fargo Bank N.A. (“Wells Fargo”)1 files this response to Alliant CPA Group
LLC’s (“Alliant”) Motion for Transfer of Actions to the Northern District of Georgia Pursuant to
28 U.S.C. § 1407 for a Coordinated and/or Consolidated Proceeding (ECF No. 1). Wells Fargo
agrees that a single, consolidated proceeding for the proposed actions would result in significant
efficiencies and preserve judicial resources and therefore supports the creation of the proposed
multidistrict litigation in the Northern District of Georgia.
The actions proposed for consolidation are uniquely positioned to benefit from
centralized proceedings. Each case—filed by putative “agents” claiming that they are entitled to
fees from lenders for assisting borrowers prepare and submit loan applications through the
Paycheck Protection Program (“PPP”)—turns in large part on a single issue: whether agents who
assist borrowers in applying for PPP loans are entitled to fees from lenders even if those lenders
have not otherwise agreed to pay them. Indeed, for many cases, plaintiffs, and defendants, that
may well be the only issue on which liability turns.
1
Specially appearing Defendant Wells Fargo & Co., which has been named as a defendant
in several of the actions at issue, is not a proper defendant to those actions. It is a financial holding
company under the Bank Holding Company Act of 1956, 12 U.S.C. § 1841 et seq., and has never
offered loans under the Paycheck Protection Program.
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Case MDL No. 2950 Document 174 Filed 06/17/20 Page 2 of 6
The efficiencies from consolidation are considerable. Alliant’s Motion identified
12 cases for consolidation, with 19 additional cases noticed as potential tag-along actions since
then. (See ECF Nos. 25, 88, 94, 98, 111, 134, 135, 143.) And putative agents are continuing to
file new cases, with multiple potential tag-along actions filed as recently as several days ago. See,
e.g., Ratliff CPA Firm, PC v. Intuit Inc., No. 20-cv-02241 (D.S.C. filed June 12, 2020); Ratliff
CPA Firm, PC v. Citizens Bank, No. 20-cv-02240 (D.S.C. filed June 12, 2020). Absent
centralization, dozens of courts across the country will be forced to decide an identical issue,
potentially subjecting defendants to various inconsistent rulings, and placing unnecessary burdens
on both the parties and the courts. By centralizing these cases for pre-trial proceedings and,
crucially, resolution of the central question underlying liability, many if not all of these cases could
be resolved entirely in one ruling. See In re Standard & Poor’s Rating Agency Litig., 949
F. Supp. 2d 1360, 1362 (J.P.M.L 2013) (explaining that numerous courts having to separately
decide the issue of whether federal-question jurisdiction existed over identical claims could lead
to “the very conflicting results and obligations and undue expenditure of judicial resources that
centralization would help to avoid”).
For this reason, these “agent fee” actions are different from the various PPP loan-
related actions filed against lenders that are wholly unsuitable for consolidation. For example,
several plaintiffs have brought claims against Wells Fargo and other lenders alleging generally
that the lenders prioritized certain applications over others or otherwise did not process
applications on a “first-come, first-served” basis, and some plaintiffs have separately sought
consolidation of those actions as well. See In re Wells Fargo Paycheck Protection Plan Litig.,
MDL No. 2954 (filed June 9, 2020). The various claims brought in those actions will depend
heavily on the individual circumstances of each plaintiff—including whether the plaintiff applied
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Case MDL No. 2950 Document 174 Filed 06/17/20 Page 3 of 6
for or received a loan from another lender, was harmed from any delay in receiving a loan, or relied
on any statements made by lenders in deciding to apply for a loan, among many other factual
circumstances. As to the cases brought by putative agents, on the other hand, there is a single,
potentially dispositive issue common to all claims and the benefits of consolidation are significant.
Wells Fargo recognizes that a common legal question alone generally is not
sufficient to justify consolidation under Section 1407(a). In re Medi-Cal Reimbursement Rate
Reduction Litig., 652 F. Supp. 2d 1378 (J.P.M.L. 2009) (“Merely to avoid two federal courts
having to decide the same issue is, by itself, usually not sufficient to justify Section 1407
centralization.” (emphasis added)). But the significant efficiencies that would result given the
unique circumstances presented by the dispositive common question at issue in these actions, as
well as the growing number of courts and parties involved, support consolidation under
Section 1407. More than 100 entities have been named as defendants so far, and at least 16 lenders
have already been named as defendants in multiple actions. Given the size of many of these
institutions and the scope of the PPP, it is likely that many lenders will be implicated in further
suits. Likewise, there is a distinct possibility that many of the plaintiffs will claim that they have
assisted with applications submitted to multiple lenders. The parties and the courts are thus faced
with a morass of overlapping actions that very well may continue to grow. Proactively centralizing
them now, for coordinated resolution of the same key issue on which each turns and, if necessary,
any additional questions of what plaintiffs must show to demonstrate their entitlement to fees, is
the cleanest and most efficient course.
To be sure, certain actions may present questions of ripeness and standing that raise
threshold issues concerning the courts’ jurisdiction, but such matters also can be addressed in a
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Case MDL No. 2950 Document 174 Filed 06/17/20 Page 4 of 6
centralized proceeding, if they are not resolved on their own in due course.2 Further, questions
regarding plaintiff-specific or lender-specific circumstances, including whether plaintiffs have
satisfied other possible prerequisites to receive agent fees, may be rendered moot by first deciding
whether plaintiffs actually have any legal entitlement to demand fees under the applicable statutes
and regulations in the first place or, alternatively, can be resolved through discovery. Indeed, it
appears that many of the complaints filed thus far present no such factual issues because plaintiffs
simply claim that they assisted a borrower, and the lenders have stated that they will not pay any
agent fees or will only pay a portion of them. See, e.g., Corrected First Amended Complaint ¶¶ 45-
53, Am. Video Duplicating, Inc., No. 20-cv-03815 (C.D. Cal. June 12, 2020); Amended Complaint
¶¶ 38-46, Fruci & Assocs., PS v. A10 Capital, LLC, No. 20-cv-00864 (W.D. Wash. June 9, 2020);
Complaint ¶¶ 53-61, Full Compliance, LLC v. Amerant Bank, N.A., No. 20-cv-22339 (S.D. Fla.
June 5, 2020); Complaint ¶¶ 38-44, ImpAcct LLC v. JPMorgan Chase & Co., No. 20-cv-01344
(D. Colo. May 12, 2020). Plaintiffs’ claims largely do not depend on such factual details, but
rather, are based on the simple (and incorrect) assertion that they are entitled to fees for their work
under the statute and regulation alone. See, e.g., Complaint ¶¶ 41, 51-52, Am. Video Duplicating,
Inc., No. 20-cv-03815 (C.D. Cal. June 12, 2020). By that theory, whether a plaintiff filled out a
particular form or had a separate agreement with a lender is a secondary issue.
2
Indeed, plaintiffs in several actions have already agreed to dismiss the financial holding
companies, which are not proper defendants to these actions, see supra n. 1, named in their original
complaints. See, e.g., Notice of Dismissal, Am. Video Duplicating, Inc. v. Citigroup Inc., No. 20-
cv-03815 (C.D. Cal. June 15, 2020); Notice of Dismissal, Brunner Accounting Grp. v. SVB Fin.
Grp., No. 20-cv-04235 (C.D. Cal. June 1, 2020); Notice of Dismissal, Am. Video Duplicating, Inc.
v. Royal Bank of Canada, No. 20-cv-04036 (C.D. Cal. June 1, 2020) (voluntarily dismissing
defendants Royal Bank of Canada, Small Business Loan Source, Inc., Celtic Investment, Inc., and
Celtic Bank Corporation).
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Case MDL No. 2950 Document 174 Filed 06/17/20 Page 5 of 6
The creation of defendant-specific multidistrict proceedings is not a reasonable
alternative, as it would lose the clear benefit of centralization—having a single court decide the
core issue of these claims—with little if any upside. It would also require further expenditure of
judicial resources by forcing the Panel to carve out claims in multi-defendant suits against specific
lenders and send them piecemeal across the country. To the extent that this Panel determines that
consolidation is warranted, it should consolidate all agent-fee actions. Any individual defendant
that believes it should be excluded can then use the mechanism provided by Section 1407(a) to
sever its claims from a particular action or move for remand under the Rules of Procedure of the
United States Judicial Panel on Multidistrict Litigation.
Finally, Wells Fargo agrees with Alliant that the Northern District of Georgia is an
appropriate forum for consolidation. The Northern District of Georgia, and in particular the main
federal courthouse located in Atlanta, offers a convenient and centralized locale for the many
parties involved. As Alliant notes, “the ease of access, economical travel options, Atlanta’s
banking and financial services industry and its geographically central location” make the Northern
District of Georgia a suitable transferee forum. (ECF No. 1-1 at 13.) Further, the district has
experience with multidistrict litigations, and it appears to have sufficient resources available to
effectively and expeditiously administer this proposed proceeding. (See id. at 16-17 (citing
caseload statistics for the Northern District of Georgia).)
Given the unique efficiencies that consolidation of these agent-fee actions presents,
Wells Fargo submits that the Panel should create the proposed multidistrict proceeding and
consolidate all agent-fee cases for pre-trial proceedings in the Northern District of Georgia.
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Case MDL No. 2950 Document 174 Filed 06/17/20 Page 6 of 6
Dated: June 17, 2020 /s/ Christopher M. Viapiano
Christopher M. Viapiano
SULLIVAN AND CROMWELL LLP
1700 New York Ave., N.W., Suite 700
Washington, DC 20006-5215
(202) 956-7500
viapianoc@sullcrom.com
Attorneys for Defendant Wells Fargo Bank, N.A.
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