MDL Panel Denies Centralization in In re Diversified Lending Group, Inc., Securities Litigation

by charlesjung

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The U.S. Judicial Panel on Multidistrict Litigation denied centralization in In re Diversified Lending Group, Inc., Securities Litigation, — F.Supp.2d —-, 2010 WL 3270231 (U.S. Jud. Pan. Mult. Lit. Aug. 17, 2010).  Common defendant Jackson National Life Insurance Company moved for coordinated or consolidated pretrial proceedings of litigation in the Central District of California.  This litigation consists of five actions pending in three districts: three actions in the Central District of California and one action each in the Middle District of Florida and the Western District of Michigan.

The Panel concluded that common questions of fact predominated “as all actions arise out of an alleged fraud perpetrated by Diversified Lending Group.” Id. *1.  But only one of the actions contained a demand for class certification and it is already pending in the Central District of California. “Consequently, the Panel sees virtually no possibility for inconsistent pretrial class certification rulings.” Id.

“[S]everal parties have stated their willingness to cooperate and informally coordinate discovery among the actions. Given that three of five actions are already pending in the same district and Jackson National is the only defendant common to all actions, such voluntary cooperation may be the best way to minimize the potential for duplicative discovery and/or inconsistent pretrial rulings. See, e.g., In re Eli Lilly and Company (Cephalexin Monohydrate) Patent Litigation, 446 F. Supp.  242, 244 (J.P.M.L. 1978); see also Manual for Complex Litigation, Fourth, § 20.14 (2004).  Given the limited number of cases and their concentration in the Central District of California, coordination of the litigation among various judges should not be difficult. On balance, the Panel’s judgment is that Section 1407 centralization is not necessary for the convenient and efficient conduct of this litigation.


The Panel thus denied the motion for centralization.