Transfer Order (Thompson v. Robinhood Financial LLC) — In re January 2021 Short Squeeze Trading Litigation (Dkt. 375, S.D. Fla.)

Summary

A Transfer Order of the United States Judicial Panel on Multidistrict Litigation in In re: January 2021 Short Squeeze Trading Litigation, MDL No. 2989, filed August 10, 2021 as Document 305 (3 pages) and entered that day as Document 375 in Case 1:21-md-02989-CMA. The Central District of California Thompson plaintiff moved under Panel Rule 7.1 to vacate the conditional transfer of Thompson v. Robinhood Financial LLC, C.A. No. 2:21-02230, arguing that federal subject matter jurisdiction is lacking and that a pending remand motion should be decided first; Robinhood Financial LLC opposed the motion. The Panel states that it is not persuaded, finds common questions of fact with the actions transferred to MDL No. 2989, and orders the action transferred under 28 U.S.C. § 1407 to the Southern District of Florida and assigned to the Honorable Cecilia M. Altonaga.

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Case 1:21-md-02989-CMA Document 375 Entered on FLSD Docket 08/10/2021 Page 1 of 3
             Case MDL No. 2989 Document 305 Filed 08/10/21 Page 1 of 3




                                UNITED STATES JUDICIAL PANEL
                                             on
                                 MULTIDISTRICT LITIGATION


   IN RE: JANUARY 2021 SHORT SQUEEZE
   TRADING LITIGATION                                                                    MDL No. 2989


                                          TRANSFER ORDER


           Before the Panel: Plaintiff in the Central District of California Thompson action moves
   under Panel Rule 7.1 to vacate our order that conditionally transferred Thompson to the Southern
   District of Florida for inclusion in MDL No. 2989. Defendant Robinhood Financial LLC opposes
   the motion.

           In support of his motion to vacate, plaintiff argues that federal subject matter jurisdiction
   over Thompson is lacking, and that his pending motion for remand to state court should be decided
   before transfer. We are not persuaded by these arguments. The Panel has held that such
   jurisdictional objections generally do not present an impediment to transfer. 1 See, e.g., In re
   Prudential Ins. Co. of Am. Sales Practices Litig., 170 F. Supp. 2d 1346, 1347–48 (J.P.M.L. 2001)
   (“[R]emand motions can be presented to and decided by the transferee judge.”). 2

           Therefore, after considering the parties’ arguments, we find that the action listed on
   Schedule A involves common questions of fact with the actions transferred to MDL No. 2989, and
   that transfer under 28 U.S.C. § 1407 will serve the convenience of the parties and witnesses and
   promote the just and efficient conduct of the litigation. In our order centralizing this litigation, we
   held that the Southern District of Florida was an appropriate Section 1407 forum for actions


   1
     The Sixth Circuit decision in BancOhio Corp. v. Fox, 516 F.2d 29 (6th Cir. 1975), which plaintiff
   cites in support of his motion, is not to the contrary. The Sixth Circuit has declined to read
   BancOhio as preventing Section 1407 transfer when a jurisdictional objection is pending. See In
   re McConnell, No. 11-4265, slip op. at 2 (6th Cir. Apr. 26, 2012) (denying mandamus petition
   objecting to Panel transfer while a jurisdictional motion was pending; “The writ in BancOhio was
   addressed to the transferor judge, not the MDL Panel. . . , and was issued after the transferor judge
   had ruled on the merits of the petitioners’ motion to dismiss for lack of jurisdiction. The court was
   not asked, and did not consider, whether the MDL Panel is authorized to transfer a case before the
   transferor court has ruled on a pending jurisdictional issue.”) (emphasis in original).
   2
     Panel Rule 2.1(d) expressly provides that the pendency of a conditional transfer order does not
   limit the pretrial jurisdiction of the court in which the subject action is pending. Between the date
   a remand motion is filed and the date that transfer of the action to the MDL is finalized, a court
   generally has adequate time to rule on a remand motion if it chooses to do so.
Case 1:21-md-02989-CMA Document 375 Entered on FLSD Docket 08/10/2021 Page 2 of 3
            Case MDL No. 2989 Document 305 Filed 08/10/21 Page 2 of 3




                                                  -2-

   sharing factual questions arising from trading restrictions imposed by Robinhood and other brokers
   in late January 2021 in response to a dramatic rise in trading and share prices for a group of “meme
   stocks.” 3 See In re January 2021 Short Squeeze Trading Litig., MDL No. 2989, __ F. Supp. 3d
   __, 2021 WL 1258399 (J.P.M.L. Apr. 1, 2021). Like many of the cases already in the MDL,
   plaintiff in Thompson alleges that Robinhood imposed restrictions on his ability to purchase shares
   of AMC and asserts various state common law and consumer protection law claims. Additionally,
   the question of federal jurisdiction in Thompson is intertwined with a common factual and legal
   question raised in the MDL—whether the Securities Litigation Uniform Standards Act preempts
   plaintiffs’ state law claims. Transfer will yield significant efficiencies.

          IT IS THEREFORE ORDERED that the action listed on Schedule A is transferred to the
   Southern District of Florida and, with the consent of that court, assigned to the Honorable Cecilia
   M. Altonaga for coordinated or consolidated pretrial proceedings.

                                             PANEL ON MULTIDISTRICT LITIGATION




                                                              Karen K. Caldwell
                                                                  Chair

                                         Catherine D. Perry                 Nathaniel M. Gorton
                                         Matthew F. Kennelly                David C. Norton
                                         Roger T. Benitez                   Dale A. Kimball




   3
     These meme stocks allegedly include: GameStop Corp. (GME); AMC Entertainment Holdings
   Inc. (AMC); American Airlines Group Inc. (AAL); Bed Bath & Beyond Inc. (BBBY); BlackBerry
   Ltd. (BB); Express, Inc. (EXPR); Koss Corporation (KOSS); Naked Brand Group Ltd. (NAKD);
   Nokia Corp. (NOK); Sundial Growers Inc. (SNDL); Tootsie Roll Industries, Inc. (TR); and
   Trivago N.V. (TRVG).
Case 1:21-md-02989-CMA Document 375 Entered on FLSD Docket 08/10/2021 Page 3 of 3
             Case MDL No. 2989 Document 305 Filed 08/10/21 Page 3 of 3


   IN RE: JANUARY 2021 SHORT SQUEEZE
   TRADING LITIGATION                                               MDL No. 2989


                                      SCHEDULE A


                    Central District of California

         THOMPSON v. ROBINHOOD FINANCIAL LLC, C.A. No. 2:21-02230


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