United States District Court, E.D. Texas, Sherman Division
UNITED STATES OF AMERICA, ex rel. MICHAEL J. FISHER, KEITH FRANKLIN, CHESSA HARTFIELD, and REGINALD MCPHAUL
JPMORGAN CHASE BANK N.A.
MEMORANDUM OPINION AND ORDER
L. MAZZANT, UNITED STATES DISTRICT JUDGE
before the Court is Defendant JPMorgan Chase Bank, N.A.'s
Motion to Transfer to U.S. District Court for the District of
Columbia (Dkt. #41). The Court, having considered the
relevant pleadings and oral argument of the parties, finds
the motion is denied.
2008, the United States faced a housing crisis caused, in
part, by mortgage fraud and predatory lending. The crisis
caused home prices to plummet and foreclosures to skyrocket,
leaving homeowners with negative equity in their homes.
Distressed homeowners were unable to sell or refinance their
homes to meet their mortgage obligations. In response to this
crisis, the government enacted the Emergency Economic
Stabilization Act of 2008 (“EESA”). Fannie Mae
entered a Financial Agency Agreement for a Homeownership
Preservation under the EESA (“FAA”) with the U.S.
Department of Treasury (“Treasury”), whereby the
Treasury authorized Fannie Mae to act as a financial agent of
the United States for EESA programs.
Home Affordable Modification Program (“HAMP”),
administered by the Treasury Department, was a voluntary
program under EESA designed to prevent avoidable foreclosures
by providing homeowners with affordable mortgage loan
modifications and other alternatives to eligible buyers.
HAMP's primary goal was to relieve the burden on
homeowners by lowering their mortgage payments to 31% or less
of their gross monthly income. Investors would receive
payments and a guarantee that no modification would result in
a mortgage worth less than the net present value of the
property. In return, mortgage servicers, in addition to their
annual servicing fees, received HAMP incentive payments to
complete the modifications. Each successful modification
entitled the servicer from $1, 200-2, 000 depending on how
long the mortgage was delinquent. From the program's
start in 2009 through the second quarter of 2016, HAMP
generated more than 1.6 million permanent modifications.
2009, JPMorgan Chase Bank, N.A. (“Chase”), one of
the country's largest mortgage servicers by volume,
enrolled in HAMP. On July 31, 2009, Chase expressly certified
its compliance with HAMP guidelines and applicable federal
laws in signing the initial Servicer Participation Agreement
(“SPA”). The SPA names Chase as the servicer and
“Fannie Mae, solely as Financial Agent of the United
States” as the administrator. The SPA also names
Freddie Mac as a compliance agent. The SPA states that
“[a]ny and all disputes between the parties . . . shall
be resolved solely and exclusively in the United States
Federal courts located within the District of Columbia. The
parties signed a Financial Instrument on the same day, which
details the representations, warranties, and covenants that
Chase is obligated to make in connection with its
participation in HAMP. The Financial Instrument was fully
incorporated into the SPA. On March 24, 2010, Chase signed an
Amended SPA. Chase also signed annual certifications, a
prerequisite to receiving HAMP payments.
expressly certified in the SPAs and annual certifications
that (1) it was in compliance with the terms and guidelines
of HAMP; (2) it was in compliance with all applicable laws
and requirements; (3) it created and maintained an effective
HAMP program and committed the resources needed to employ
enough trained, experienced personnel with the tools and
technology necessary to provide quality service to
homeowners; and (4) it had adequately documented and
monitored its compliance and immediately reported to the
Government any credible evidence of material violations of
Fifth Amended Complaint alleges Chase systematically violated
HAMP guidelines and knowingly presented false or fraudulent
claims in excess of $430 million. On September 27, 2013,
relator Michael J. Fisher sued in the Southern District of
New York on behalf of the United States (Dkt. #17). On
November 3, 2015, Keith Franklin, Regginald McPhaul, and
Chezza Hartfield joined Michael J. Fisher as relators
(“Relators”) in the third amended complaint (Dkt.
#34). On May 26, 2016, Relators filed a motion to transfer
venue to this Court. On June 2, 2016, the Southern District
of New York transferred the case to this Court. On August 17,
2016, Chase filed this Motion to Transfer to U.S. District
Court for the District of Columbia Under 28 U.S.C. 1404(a)
(Dkt. #41). On September 19, 2016, Relators filed a response
(Dkt. #52). On September 29, 2016, Chase filed a reply (Dkt.
#55). On October 11, 2016, Relators filed a sur-reply (Dkt.
#58). On October 25, 2016, the United States of America filed
a statement of interest regarding the motion to transfer
(Dkt. #63). On November 3, 2016, the Court issued an order
granting an unopposed motion to defer ruling and allow for
supplemental briefing (Dkt. #66). On January 6, 2017, Chase
filed its supplemental brief (Dkt. #70). On January 17, 2017,
Relators filed a response to the supplemental brief (Dkt.
#72). On March 13, 2017, the Court held oral argument on the
motion to transfer.
moves to transfer venue pursuant to 28 U.S.C. § 1404(a),
which permits a district court to transfer any civil case
“[f]or the convenience of parties and witnesses, in the
interest of justice . . . to any other district or division
where it might have been brought.” 28 U.S.C. §
1404(a). “Section 1404(a) is intended to place
discretion in the district court to adjudicate motions for
transfer according to an ‘individualized, case-by-case
consideration of convenience and fairness.'”
Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29
(1988) (quoting Van Dusen v. Barrack, 376 U.S. 612,
622 (1964)). The purpose of 28 U.S.C. § 1404(a)
“is to prevent the waste ‘of time, energy and
money' and ‘to protect the litigants, witnesses and
the public against unnecessary inconvenience and
expense…'” Van Dusen v. Barrack,
376 U.S. 612, 616 (1964).
U.S. Supreme Court has held that “when the parties have
agreed to a valid forum-selection clause, a district
court should ordinarily transfer the case to the forum
specified in that clause.” Atl. Marine Constr. Co.
v. U.S. Dist. Ct. for W. Dist. of Tex., 134 S.Ct. 568,
581 (2013) (emphasis added). The U.S. Supreme Court made
clear that its “analysis pre suppose[d] a contractually
valid forum-selection clause.” Id. at 581 n.5.
The inquiry into a clause's validity and scope thus
precedes the question of transfer pursuant that clause.
See, e.g., Indus. Print Techs. LLC v. Canon
U.S.A., Inc., No. 2:14-CV-00019, 2014 WL 7240050, at
*1-2 (E.D. Tex. Dec. 19, 2014) (“[T]he Atlantic
Marine analysis . . . presupposes a valid contract and a
dispute that unquestionably falls within the scope of that
contract.”); In re Union Elec. Co., 787 F.3d
903, 907 (8th Cir. 2015) (citing with approval a lower
court's preliminary determination of a forum selection
clause's validity); Ashmore v. Allied Energy,
Inc., No. 8:14-CV-00227-JMC, 2015 WL 128596, at *3
(D.S.C. Jan. 9, 2015) (noting that a “[c]ourt must
first determine whether the forum-selection clause is valid
under federal law” (internal quotations omitted));
Rogovsky Enter., Inc. v. Masterbrand Cabinets, Inc.,
88 F.Supp.3d 1034, 1042 (D. Minn. 2015) (treating a relevant
forum-selection clause's validity as a threshold question
on a motion to transfer). Where a court finds that the forum
selection clause is not valid or that the dispute does not
fall within the scope of the contract, the typical section
1404 venue transfer analysis comes into play. See Indus.
Print Technologies, 2015 WL 128596, at *1.
threshold inquiry when determining transfer eligibility under
section 1404(a) is “whether the judicial district to
which transfer is sought would have been a district in which
the claim could have been filed, ” or whether all
parties have consented to a particular jurisdiction. In
re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004)
(“Volkswagen I”). Once that threshold inquiry is
met, the Fifth Circuit has held that “[t]he
determination of ‘convenience' turns on a number of
public and private interest factors, none of which can be
said to be of dispositive weight.” Action Indus.,
Inc. v. U.S. Fid. & Guar. Co., 358 F.3d 337, 340
(5th Cir. 2004). The private interest factors include (1) the
relative ease of access to sources of proof; (2) the
availability of compulsory process to secure the attendance
of witnesses; (3) the cost of attendance for willing
witnesses; (4) all other practical problems that make trial
of a case easy, expeditious and inexpensive. In re
Volkswagen of America, Inc., 545 F.3d 304, 315 (5th Cir.
2008) (en banc) (“Volkswagen II”). The public
interest factors include (1) the administrative difficulties
flowing from court congestion; (2) the local interest in
having localized interests decided at home; (3) the
familiarity of the forum with the law that will govern the
case; and (4) the avoidance of unnecessary problems of
conflict of laws or in the application of foreign law.
Id. These factors are not exhaustive or exclusive,
and no single factor is dispositive. Id.
party seeking transfer of venue must show good cause for the
transfer. Volkswagen II, 545 F.3d at 315. The moving
party must show that the transferee venue is “clearly
more convenient” than the transferor venue.
Volkswagen II, 545 F.3d at 315. The plaintiff's
choice of venue is not a factor in this analysis, but rather
contributes to the defendant's burden to show good cause
for the transfer. Volkswagen II, 545 F.3d at 313
& 314 n.10 (“[W]hile a plaintiff has the privilege
of filing his claims in any judicial division appropriate
under the general venue statute, § 1404(a) tempers the
effects of the exercise of this privilege.”). However,
“when the transferee venue is not clearly more
convenient than the venue chosen by the plaintiff, the
plaintiff's choice should be respected.”
Id. at 315.