Court filing

RESPONSE (JOINDER) -- (re: pldg. ( 158 in MDL No. 2950), ( 166 in MDL No. 2950), (… — Agent Fee Litigation (Dkt. 189)

Summary

A joinder filed June 17, 2020 by Academy Bank, N.A. before the United States Judicial Panel on Multidistrict Litigation in In re: Paycheck Protection Program (PPP) Agent Fee Litigation, MDL No. 2950, as Document 189. Academy joins the oppositions filed as Doc. 171, Doc. 166 and, in part, Doc. 158 to Alliant CPA Group LLC's motion to transfer the actions to the Northern District of Georgia under 28 U.S.C. § 1407. It argues that 66 of the 72 defendants are named in only one lawsuit, that common questions of fact are unlikely, and that jurisdictional issues such as its Rule 12(b)(1) motion should be resolved first. In the alternative, it asks that any transfer be limited to large banks or that separate actions be set for each lender, with venue in the Northern District of Georgia. The filing is signed by Stinson LLP and includes a proof of service.

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Case MDL No. 2950 Document 189 Filed 06/17/20 Page 1 of 5

BEFORE THE UNITED STATES
JUDICIAL PANEL ON MULTIDISTRICT LITIGATION

IN RE: Paycheck Protection Program ("PPP") )
Agent Fee Litigation ) MDL Docket No. 2950
__________________________________________)

ACADEMY BANK, N.A., JOINDER IN RESPONSES IN OPPOSITION
TO MOTION FOR TRANSFER OF ACTIONS PURSUANT TO 28 U.S.C. § 1407

Academy Bank, N.A. ("Academy") opposes the Motion for Transfer of Actions to the

Northern District of Georgia Pursuant to 28 U.S.C. § 1407 (the "Motion") filed by Alliant CPA

Group LLC. Doc. 1. Academy hereby joins in and incorporates by reference the joint responses

in opposition filed by Synovus Bank, et al., Doc. 171, and various Regional and Small Banks, Doc.

166, as well as that portion of the response filed by JP Morgan Chase Bank, N.A., Doc. 158, to the

extent it opposes transfer of the subject actions to multi-district litigation consolidation and/or

coordination. Because those filings properly provide the factual and legal grounds for denial of

the Motion, Academy refers to them for support of its opposition.

Opposition to Transfer

While 72 defendants are named in the subject actions, 66 of those defendants are involved

in only a single lawsuit. Therefore, there are very few defendants that are truly involved in multi-

district litigation. Doc. 166 at 1. In truth, the PPP litigation is simply not multi-district in nature.

Academy is one of the many comparatively small bank defendants, see Exhibit B, at 2, to Doc.

166, that is involved in a single action. See Exhibit A to Doc. 166; Doc. 171 at 13-14. Transfer of

Academy's action would only result in unnecessary expense and delay by participation in an

industry-wide case with large bank defendants truly involved in multi-district litigation. Doc. 171

at 16.

CORE/0502664.0103/159994413.1
Case MDL No. 2950 Document 189 Filed 06/17/20 Page 2 of 5

The "multi-district" litigation is actually a product of gaming by plaintiff counsel in these

cases by filing multiple cases against a few of the large banks despite making the same claims on

behalf of the same putative members. See Doc. 166 at 4; Doc. 171 at 3. Such manipulation should

not be rewarded by inflicting the cost of nationwide litigation against single-action smaller banks.

It cannot be known if there are common facts among the cases because the complaints

allege no specific facts concerning the interaction with lenders and disclosure (if any) of alleged

agency by the purported agent members, the existence (if any) of contracts for compensation, or

other compliance with SBA requirements of the subject PPP loans made under SBA delegation.

See Doc. 158 at 8-9; Doc. 166 at 4-5 & 7-10; Doc. 171 at 4-5 & 8-10. Instead, it is likely that

those facts are different among the various defendants. Doc. 171 at 2.

There will likely not be common legal issues because the actions primarily assert claims

styled as state law causes of action, which will vary from state to state depending the site of

origination of the loan (assuming the plaintiffs have standing to assert state law claims arising

under the law of states beyond those in which such plaintiffs' transactions occurred). Doc. 166 at

10-11; see also Doc. 171 at 10-13.

The complaints do not allege that the subject loans were made in the same transactions by

the lenders joined as defendants. Instead, the loans were made in separate transactions by the

defendants to borrowers who plaintiffs now claim to have acted as agents. Yet, the actions join

these lenders engaged in separate transactions in violation of Rule 20, Fed. R. Civ. P., resulting in

a misjoinder under Rule 21, Fed. R. Civ. P., that is then used as a bootstrap to justify inclusion of

the single-action smaller banks in a vast multi-district case with their misjoined large bank co-

defendants. The misjoinder is further relied upon by the plaintiffs to improperly aggregate the

claims against the small banks with the large bank exposure to create the $5 million amount in

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Case MDL No. 2950 Document 189 Filed 06/17/20 Page 3 of 5

controversy otherwise absent in a properly-filed single action against the smaller bank. See 28

U.S.C. § 1332(d). This is no basis on which to found a proper multi-district case.

Like other smaller banks, Academy has filed a motion pursuant to Rule 12(b)(1), Fed. R.

Civ. P., for this lack of subject matter jurisdiction. Panda Accounting LLC v. Academy Bank, N.A.,

No. 20-cv-00985, Doc. 17. Such threshold matters should be resolved before transfer for multi-

district consolidation is ripe for consideration. See Doc. 166 at 6-7; Doc. 171 at 14-15.

For the foregoing reasons, Academy submits that the Motion has failed to meet its burden

to establish that common questions of fact exist among the actions, the transfer would be more

convenient for the parties and witnesses, and the transfer would promote the just and efficient

conduct of the actions. See 28 U.S.C. § 1407(a); Doc. 166 at 11-19. The Motion for multi-district

consolidation or coordination and transfer should be denied.

Separate Actions for Lenders

In the alternative, should the Panel nevertheless grant transfer, it should be limited to claims

against the large banks that are truly subject to multi-district actions. See Doc. 158 at 10; Doc. 171

at 17. If the Court should conclude, however, that claims against Academy should be transferred,

then Academy requests that separate multi-state actions be established for each lender defendant.

If this structure is not employed, the single-action small bank defendants will be subjected to the

inevitable enormous cost and delay attendant to the large bank litigation which is more arguably

multi-district in nature. See Doc. 158 at 10-12. Under those circumstances, claims against

Academy should be separated from those against larger banks, MidFirst Bank and JP Morgan

Chase Bank, N.A., that were misjoined as co-defendants with Academy. 28 U.S.C. § 1407(a).

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Case MDL No. 2950 Document 189 Filed 06/17/20 Page 4 of 5

Selection of Venue

In such event, Academy further requests that the Motion's request be granted for selection

of the Northern District of Georgia for venue of any transferred action. See Doc. 158 at 12-16;

Doc. 166 at 19-20; Doc. 171 at 17-18.

CONCLUSION

The individual actions in the various districts should proceed in the venues in which they

filed. They are not truly multi-district in nature, but only made to appear so by manipulation of

the dockets by plaintiffs' counsel. The Motion fails to establish any of the requirements for transfer

and should be denied.

WHEREFORE, Academy Bank, N.A., requests that the Panel deny all relief sought by the

Motion.

June 17, 2020. Respectfully submitted,

STINSON LLP

/s/ Mark S. Carder
Mark S. Carder
George F. Verschelden
1201 Walnut, Ste. 2900
Kansas City, MO 64106
Phone: (816) 842-8600
Fax: (816) 691-3495
mark.carder@stinson.com
george.verschelden@stinson.com

Attorneys for Academy Bank, N.A.

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Case MDL No. 2950 Document 189 Filed 06/17/20 Page 5 of 5

PROOF OF SERVICE

I hereby certify pursuant to J.P.M.L. 4.1(a) that on June 17, 2020, I filed the foregoing

document with this Panel's CM/ECF system, which served counsel of record for each of the parties

to this putative MDL electronically.