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INTERESTED PARTY RESPONSE IN OPPOSITION -- (re: pldg. ( 1 in MDL No. 2950) ) Filed by… — Agent Fee Litigation (Dkt. 188)
Summary
The interested party response of Ocean Bank in opposition to Alliant CPA Group, LLC's motion for transfer of actions under 28 U.S.C. § 1407, filed June 17, 2020 as Document 188 before the United States Judicial Panel on Multidistrict Litigation in In re: Paycheck Protection Program (PPP) Agent Fees, MDL No. 2950. Ocean Bank, a defendant in Full Compliance, LLC, et al. v. Amerant Bank, N.A., et al., Case No. 1:20-cv-22339-JEM, joins the Regional and Small Bank Group's opposition (Doc. 166) and makes a special appearance. The response cites an SBA report of over 4.5 million PPP loans totaling over $511 billion and states that Ocean Bank funded about $187 million in PPP loans. It argues that centralization in the Northern District of Georgia would prejudice small community banks and that discovery would be defendant-specific. It asks the Panel to deny the Motion to Transfer (Doc. 1).
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Case MDL No. 2950 Document 188 Filed 06/17/20 Page 1 of 5
BEFORE THE UNITED STATES JUDICIAL PANEL
ON MULTIDISTRICT LITIGATION
In re: PAYCHECK PROTECTION MDL No. 2950
PROGRAM (“PPP”) AGENT FEES
Civil Action No. 1:20-cv-22339
INTERESTED PARTY RESPONSE OF OCEAN BANK IN OPPOSITION TO
MOVANT ALLIANT CPA GROUP, LLC’S MOTION FOR
TRANSFER OF ACTIONS PURSUANT TO 28 U.S.C. § 1407
Pursuant to Rule 6.2(e) of the Rules of Procedure for the United States Judicial Panel on
Multidistrict Litigation, Defendant Ocean Bank—one of twenty lenders sued in Full Compliance,
LLC, et al. v. Amerant Bank, N.A., et al., Case No. 1:20-cv-22339-JEM (S.D. Fla. June 5, 2020),
which was recently noticed as a potential tag-along action on June 10 by Defendant Celtic Bank
Corp. d/b/a/ Celtic Bank (Doc. 88)—joins the Regional and Small Bank Group’s Response in
Opposition to Movant Alliant CPA Group, LLC’s Motion for Transfer of Actions (Doc. 166), and
briefly emphasizes the prejudice that small, community financial institutions with limited
resources, such as Ocean Bank, will experience if an industry-wide MDL is created.1
According to the Small Business Administration’s most recent report dated June 6, 2020,
on the Paycheck Protection Program (PPP) (Exhibit A), over 4.5 million PPP loans totaling over
$511 billion have been made by 5,458 lenders to small businesses in each of the 50 states and
various U.S. territories, including American Samoa, Guam, the Northern Mariana Islands, Puerto
1
Ocean Bank has not been served in the Full Compliance action. Ocean Bank makes a special
appearance herein and expressly reserves, and does not waive or intend to waive, any of its rights
or defenses in the Full Compliance action, including, without limitation, the defenses of
insufficiency of service of process, lack of jurisdiction, or improper venue.
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Case MDL No. 2950 Document 188 Filed 06/17/20 Page 2 of 5
Rico, and the U.S. Virgin Islands.2 97.7% of the lenders that made PPP loans are small financial
institutions with under $10 billion in assets. 82.7% are small financial institutions with under $1
billion in assets. Most of these small lenders are community banks or credit unions that serve the
local communities in which they operate.
Articles recounting the overwhelming influence of community banks in lending PPP funds
to small businesses abound. See, e.g., Jessica Menton & Mark Fahey, Small Banks and Small
Businesses Turned Out To Be a Good Combination When It Came to PPP Loans, USA TODAY,
June 2, 2020, https://www.usatoday.com/story/money/usaandmain/2020/06/02/ppp-loans-
community-banks-more-helpful-small-businesses/5300871002/ (“Banks with less than $10 billion
in assets issued about 60% of loans in the first round of the PPP, according to the Small Business
Administration (SBA). Bigger banks have bounced back during the ongoing second round of the
program, but weeks after many customers already had secured loans through small banks.”);
Matthew C. Klein, Smaller Banks Doled Out Bulk of PPP Loans, Fed Data Shows, BARRON’S,
May 5, 2020, https://www.barrons.com/articles/smaller-banks-doled-out-bulk-of-ppp-loans-fed-
data-show-51588677303 (“Smaller lenders were responsible for almost all of the credit provided
to small businesses under the Paycheck Protection Program through April 22, a Barron’s analysis
shows, a finding that underscores the struggle the U.S. is facing to prop up the small business that
make up the backbone of the economy.”).
Ocean Bank is one such community bank, which was recently sued in the Southern District
of Florida by a two-member Florida accounting firm, purporting to represent a nationwide class of
2
Available at https://www.sba.gov/sites/default/files/2020-06/PPP_Report_Public_200606%20
FINAL_-508.pdf (last visited June 17, 2020).
2
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similarly situated plaintiffs, alleging state law claims, including declaratory relief, unjust
enrichment, and conversion, arising out of alleged non-payment of agent fees. See Full
Compliance, LLC v. Amerant Bank, N.A., Case No. 1:20-cv-22339-JEM (S.D. Fla. June 5, 2020).
Ocean Bank has not even been served yet, but already is facing the potential burden of being
dragged into the Northern District of Georgia to defend multidistrict litigation with dozens of other
lenders—many of which have far more resources and at least have a business presence in Georgia.
Ocean Bank would be severely prejudiced if it is swept up in the proposed multidistrict
litigation. It is a small community bank with under $5 billion in assets that serves the South Florida
area. Its twenty-three branches are all located in Miami-Dade County or Broward County. It has
been sued in only one action, currently pending in the Southern District of Florida, where all of
the relevant documents and witnesses are located. It funded only about $187 million in PPP loans.
And more than 90% of its loan exposure is in the South Florida area.
Nevertheless, if consolidation occurs, Ocean Bank will have to appear in the Northern
District of Georgia for pretrial proceedings involving cases in which it is not even a party, claims
under other state laws, and defendants with far greater resources that will dominate the
proceedings. Litigation costs and delays will increase substantially, especially because local
counsel must be retained pursuant to Northern District of Georgia Local Rule 83.1, many of the
issues considered during pretrial proceedings may not relate to Ocean Bank, and dozens of
defendants and plaintiffs will be permitted to provide input on discovery. In re Dietgoal
Innovations, LLC, 999 F. Supp. 2d 1380, 1381 (J.P.M.L. 2014) (denying centralization because of
the “heightened inconvenience that transfer may cause certain parties”).
3
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Any benefit derived from centralization will be minimal. The named defendants vary from
action to action. In re Cordarone (Amiodarone Hydrochloride) Mktg., Sales Practices & Prods.
Liab. Litig., 190 F. Supp. 3d 1346, 1347 (J.P.M.L. 2016) (“Given the different defendants sued in
these actions, centralization appears unlikely to serve the convenience of a substantial number of
parties and their witnesses.”). And most if not all of the discovery will be plaintiff- and defendant-
specific. In re Proton-Pump Inhibitor Prods. Liab. Litig., 273 F. Supp. 3d 1360, 1361 (J.P.M.L.
2017) (denying centralization because “the named defendants vary from action to action,” “the
various defendants are competitors,” and “a significant amount of the discovery in these actions
appears almost certain to be defendant-specific”).
The better path forward is to let each case proceed in the jurisdiction in which it was filed
or to consolidate only the claims against any nationwide bank who does not oppose centralization,
such as Wells Fargo, into separate MDLs. See In re Alien Children Educ. Litig., 482 F. Supp. 326,
329 (J.P.M.L. 1979) (separating equal protection claims against individual school districts and
remanding to the districts in which they were filed because each district had “different exclusionary
policies” and plaintiffs with “different characteristics”); see also In re Galveston, Tex. Oil Well
Platform Disaster, 322 F. Supp. 1405, 1407 (J.P.M.L. 1971) (inconvenience of transfer for
opponents of centralization outweighed the convenience for proponents of centralization).
For the foregoing reasons, and for the reasons in the Regional and Small Bank Group’s
Response in Opposition to Movant Alliant CPA Group, LLC’s Motion for Transfer of Actions
(Doc. 166), Ocean Bank respectfully requests that the Panel deny the Motion to Transfer (Doc. 1).
4
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Dated: June 17, 2020 Respectfully submitted,
WHITE & CASE LLP
Southeast Financial Center, Ste. 4900
200 South Biscayne Boulevard
Miami, Florida 33131-2352
Telephone: (305) 371-2700
Facsimile: (305) 358-5744
By: s/ Jaime A. Bianchi
Jaime A. Bianchi
Florida Bar No. 908533
jbianchi@whitecase.com
Counsel for Ocean Bank
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