Hengle et al v. Curry et al, No. 3:2018cv00100 - Document 114 (E.D. Va. 2018)
Court Description: MEMORANDUM OPINION. Signed by District Judge Robert E. Payne on 06/15/2018. (smej, )
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Hengle et al v. Curry et al Doc. 114 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF VIRGINIA Richmond Division GEORGE HENGLE and LULA WILLIAMS, on behalf of themselves and all individuals similarly situated, Plaintiffs, V. Civil Action No. 3:18-cv-100 MARK CURRY, et al., Defendants. MEMORANDUM OPINION This TO THE matter NEWPORT INC. AND is before NEWS the DIVISION Court BY AWL, RED STONE, INC. (ECF No. on the INC., MOTION TO AMERICAN TRANSFER WEB LOAN, 3) and NATIONWIDE AWL CLASS PLAINTIFFS' MOTION FOR LIMITED INTERVENTION (ECF No. 77) to join the motion to transfer. (collectively, ''AWL") and AWL, Inc., Red Stone, American Inc. Web ("Red Loan, Inc. Stone"; with AWL, collectively, "the AWL Defendants")^ move to transfer this action to the Newport News Division, where an action brought by the putative intervenor plaintiffs—Royce Solomon, et al. v. ^ American Web Loan appears to be a name under which AWL, Inc. sometimes does business. Therefore, even if those companies are different, see Compl. (ECF No. 1) SIH 13-14, they can be referred to as a single entity for purposes of this memorandum. Similarly, although AWL and Red Stone must be distinguished for the factual background here, they can be treated as a single unit when considering the motion to transfer. Dockets.Justia.com American Web Loan^ Inc., et al.. No. 4:17-cv-145 {'"Solomon")—is currently pending. For the reasons set forth below, both motions will be granted. BACKGROUND A. Factual Background As alleged in the Complaint, Mark Curry ("Curry") was the "architect of [a] rent-a-tribe lending scheme" involving the Otoe-Missouria Tribe ("the Tribe") and an entity for which Curry was the chief Compl. i 12. executive At some officer, point after the 2009, MacFarlane Curry Group. created the MacFarlane Group and associated with the Tribe in order to form AWL. Although the Tribe characterized AWL as an independent tribal lending entity, the Tribe allegedly had no control over AWL's income or expenses, and simply allowed Curry and the MacFarlane Group to use the entities as a front to offer illegal high-interest loans, in return for which the Tribe received a 1% flat fee of AWL's revenue. The money loaned was transferred from a bank account controlled by the MacFarlane Group, which tribal officials could not access. Then, after the loan agreements were executed, the MacFarlane Group accepted consumer payments directly, and the only funds that AWL or the Tribe ever received or handled 40-41. The was the Tribe specified was revenue similarly percentage. Id. H 31-37, uninvolved in AWL's day-to-day operations, which were mostly conducted by MacFarlane Group employees located outside the Tribe's reservation. Id. iSI 38-39. After AWL began operating, federal regulators began ""cracking down" on lending entities connected with other tribes, and the New York Department of Financial Services issued a cease-and-desist letter regarding the Tribe's lending activities in New York. Curry subsequently sold the MacFarlane Group to Red Stone, a tribal entity, to insulate himself from any potential liability. Nonetheless, the Complaint alleges. Red Stone still operates in the same way as the MacFarlane Group—that is, with no role for the Tribe, and with substantial involvement by comes Medley Capital subsidiary. Medley Curry. Id. 1ISI 42-57. The funding for Corporation {""Medley Opportunity Fund AWL's allegedly created scheme Capital") II, Medley LP and (""Medley Fund to from its Fund"). allow Medley investors to Capital purchase interests in AWL's loans. Medley Capital then solicited third- party investments, and invested its own funds, in Medley Fund, which in turn provided the MacFarlane Group with the substantial capital underlying AWL's loans. Medley Fund Virginia as continues to fund AWL today. I^ If 59-67. Curry would intentionally offer loans and chose collect payments, a place where AWL notwithstanding his knowledge that the loans would be illegal under Virginia's usury laws. The MacFarlane Group, through AWL, then began marketing, initiating, and collecting loans in Virginia. Consumers were required to electronically sign a form loan agreement created by Curry and the MacFarlane contract, the loans C'APR") that was Group. Under the terms of were subject to an annual percentage much higher than 12%. However, neither that rate the Tribe nor any of the defendants had a consumer finance license permitting them to charge interest at such a high rate, and they never attempted to obtain such a license. Id. 11 68-71, 74. George with Hengle Hengle, Richmond ('"Hengle") collectively, Division—both and Lula Williams ('"Williams"; "Plaintiffs")—residents obtained loans from AWL. of the Hengle's loan was subject to an APR of 737.97%, and Williams' loan was subject to an APR of 593.12%. Because of those interest rates, Hengle and Williams paid $4,397.20 and $2,718.87, respectively, to AWL. Id. 11 72-73, 76-77. B. Procedural Background On February 13, 2018, Plaintiffs brought suit against Curry, the AWL Defendants, Medley Fund, and Medley Capital. See Compl. (ECF No. 1). They asserted six class claims: (1) COUNT ONE, Violations of the Racketeer Influenced and Corrupt Organizations 18 U.S.C. § 1962(a), Capital; against Act Medley ("RICO"), Fund and Medley (2) COUNT TWO, Violations of RICO, 18 U.S.C. § 1962(b), against all defendants; (3) COUNT THREE, Violations of RICO, 18 U.S.C. § 1962(c), against Curry and the AWL Defendants; (4) COUNT FOUR, Violations of RICO, 18 U.S.C. § 1962(d), against all defendants; (5) COUNT FIVE, Violations of Virginia Usury Laws, against all defendants; and (6) COUNT SIX, Unjust Enrichment, against all defendants. Id. SISI 84-153. Complaint, In the Civil Cover Plaintiffs indicated Sheet attached that this case was to the related to another action pending before this Court, Lula Williams, et al. V. Big Picture Loans, LLC, et al.. No. 3:17-cv-461 (''Williams''). ECF No. 1-4 at 1. The AWL Defendants moved to transfer this action to the Newport News Division on February 21, 2018. ECF No. 3. Shortly thereafter, the Court requested statements from Plaintiffs and the AWL Defendants about why this case is related to Williams and Solomon, had given their related to its respectively. ECF Nos. positions, the Williams, but did relation to Solomon. See 10, 11. After the parties Court found that the case not express any conclusion ECF No. 75 at 2. The was about next day, Royce Solomon, Jodi Belled, Michael Littlejohn, and Giulianna Lomaglio (collectively, "the Solomon Plaintiffs") moved to intervene in support of the AWL Defendants' motion to transfer. ECF No. 77. The Court then granted jurisdictional discovery because dismiss the Complaint on some grounds Plaintiffs' defendants that request had implicated the for moved to Court's subject matter jurisdiction. ECF No. 76. Nonetheless, given the AWL Defendants' and Curry's jurisdictional discovery, ECF subsequent Nos. 96, 98, motions it is to unclear stay how much progress has been made in that regard. Finally, Plaintiffs recently class moved counsel, to have which the their AWL attorneys Defendants appointed have as interim responded to but not formally opposed. ECF Nos. 99, 102. C. Factual and Procedural Background in Solomon The Solomon Plaintiffs filed suit against AWL, Curry, the MacFarlane Group, Medley Fund, Medley Capital, and eight other entities^ in the Newport News Division on December 15, 2017. See ECF No. 1 (Docket No. 4:17-cv-145). They filed an amended complaint against AWL, Curry, the MacFarlane Group, Medley Fund, Medley Capital and eight other entities and individuals^ on March ^ Those other entities are SOL Partners ("SOL"); Oakmont Funding, Inc.; Dinero Investments, Inc.; Chieftain Funding, Inc.; Dant Holdings, Inc.; DHI Computing Service, Inc. ("GOLDPoint"); Smith Haynes & Watson, LLC; and Middlemarch Partners ("Middlemarch"). ^ Those other entities and individuals are SOL; Medley LLC; Medley Management, Inc.; Medley Group, LLC (with Medley Capital and Medley Fund, collectively, "the Medley Defendants"); Brook 6 9, 2018. See Solomon Am. Compl. (ECF No. 41, Docket No. 4:17-cv145). That litigation is predicated on the same facts as this action. Specifically, the Solomon Plaintiffs allege that: (1) Curry worked with the Tribe to create AWL as a front to offer illegal almost high-interest entirely including the loans; controlled MacFarlane (2) by AWL's lending entities Group, and the process was managed by Curry, Tribe had little involvement in AWL's operations; (3) the Tribe received only 1% of the substantial revenues from AWL's lending scheme; (4) the Tribe's acquisition of the MacFarlane Group through Red Stone was a sham, as Curry continues to be heavily involved in AWL's lending operation; and (5) Medley Fund is primarily responsible for financing AWL's lending. See id. SISI 81-126. AWL's lending process is also described in the same general terms as in this case, although substance Solomon AWL's of the loan Amended Complaint agreements in focuses much more on the detail, including their truth-in-lending disclosures and choice of law and arbitration provisions. See id. ff 127-37, 185-97. Although the Solomon not defendants services in Capital and Taube; Seth Middlemarch. Amended in Complaint this names eight those defendants case, defendants that either support of AWL's lending operation or Medley Fund raise lending Taube (collectively, ^^the capital are provide help Medley for AWL. See Taubes"); GOLDPoint; and id. SISI 21-23, defendants 26, is 28-37. more In other reflective of words, the their greater inclusion detail in as the Solomon Amended Complaint than of any difference between the key parties in Solomon and this case. The only significant factual contrast between the Solomon Amended Complaint and the Complaint here is the composition of the proposed obtained those classes. loans from loans. Newport AWL Solomon News Like and also Division, Plaintiffs, well in excess Virginia law. Id. SISI 10, payments resides and 726.13%, made the in the 145. in maximum Belleci, Plaintiffs connection Virginia, the interest of Solomon albeit rate on 12% APR with the loan his in was permitted however, is a by Nebraska resident, and her interest rate of 595.06% exceeded the maximum 16% APR that Nebraska permits. Id. SISI 11, 154-58. Littlejohn is a South Carolina resident 597.35%, above the Finally, Lomaglio interest rate Id. 5ISI 13, their 182-84. class instead claims of the was a California higher As on limited a than number an result, behalf the of Virginia and type of resident, California's a interest rate, and her maximum 481.60% 10% APR. Solomon Plaintiffs allege putative nationwide class, classes here. Compare id. 5 198 with Compl. The charged relevant maximum of 12%. Id. SISI 12, 166-68. is was who claimed by Plaintiffs 85-86. claims in Solomon are different. The Solomon Plaintiffs assert nine class claims: also (1) COUNT ONE, against Violations American of Web RICO, Loan, 18 U.S.C. § 1962(c), Curry, the MacFarlane Group, SOL, the Medley Defendants, and the Taubes; (2) COUNT TWO, against Violations American Group, SOL, of Web the RICO, Loan, Medley 18 U.S.C. § 1962(d), Curry, the Defendants, MacFarlane the Taubes, GOLDPoint, and Middlemarch; (3) COUNT THREE, Transfer Curry, Act the Violations (^"EFTA"), of the against MacFarlane Electronic American Group, SOL, Funds Web the Loan, Medley Defendants, the Taubes, and GOLDPoint; (4) COUNT FOUR, (''TILA"), Violations of the Truth 15 U.S.C. § 1638(a)(3), in Failure Lending to Act Disclose Finance Charge, against AWL, Inc.; (5) COUNT FIVE, Violations 15 U.S.C. § 1638(a)(4), Failure to of Disclose TILA, Finance Charge Expressed as an Annual Percentage Rate, against AWL, Inc.; (6) COUNT SIX, Violations of TILA, 15 U.S.C. § 1638(a)(5), Failure to Disclose the Total of Payments, against AWL, Inc.; (7) COUNT SEVEN, 15 U.S.C. § 1638(a)(6), Violations Failure to of Disclose TILA, Number, Amount, and Due Dates or Period Payment Scheduled to Repay the Total of Payments, against AWL, Inc.; (8) COUNT EIGHT, Violations 15 U.S.C. § 1638(a)(1), Failure of to TILA, Disclose the Identity of the Creditor, against AWL, Inc.; (9) COUNT NINE, Unjust Enrichment, against all defendants. Id. SISI 209-76. After the filing of the Solomon Amended Complaint on March 9, responsive motions were filed on April 8 and 9, and the Solomon Plaintiffs' responses are not due until June 8. ECF No. 92 (Docket been No. conducted 4:17-cv-145). or, No apparently, jurisdictional even requested. discovery However, has like Plaintiffs in this case, the Solomon Plaintiffs recently moved for the appointment of their attorneys as interim class counsel. ECF No. 100 (Docket No. 4:17-cv-145). DISCUSSION I. Solomon Plaintiffs' Motion to Intervene As noted, the Solomon Plaintiffs have moved to intervene for the limited purpose of joining the AWL Defendants' motion to transfer this action to the Newport News Division. Although Plaintiffs consent to the Solomon Plaintiffs' intervention. Pis. Intervention Resp. (ECF No. 91) at 1-2, the Court will briefly address the merits of the Solomon Plaintiffs' motion here. 10 The Solomon Plaintiffs seek to intervene under Fed. R. Civ. P. 24(a)(2). Under that provision, a court must permit intervention by any party that ""claims an interest relating to the property or transaction that is the subject of the action, and is so practical protect situated matter its that impair interest, disposing or impede unless of the the action [party]'s existing may as ability parties a to adequately represent that interest.'' Alternatively, the Solomon Plaintiffs move to intervene under Rule 24(b), pursuant to which a court may permit intervention by anyone who ""has a claim or defense that shares fact." with Fed. R. discretion [under the main Civ. action P. a common 24(b)(1)(B). question ""In of law exercising Rule 24(b)], the court must consider or its whether the intervention will unduly delay or prejudice the adjudication of the original parties' rights." Id. 24(b)(3). The threshold issue for any intervention motion is whether that motion is timely. See id. 24(a), 24(b)(1). To determine whether a motion to intervene is timely, the Court must ""assess three factors: progressed; first, second, the how far prejudice the any underlying resulting suit delay has might cause the other parties; and third, why the movant was tardy in filing its motion." Alt v. U.S. EPA, 758 F.Sd 588, 591 (4th Cir. 2014). ""[T]he most important factor . . . is the prejudice caused to the other parties by the delay." Hill Phoenix, Inc. v. 11 Systematic Refrigeration, Inc., 117 F. Supp. 2d 508, 514 (E.D. Va. 2000). ''The determination of timeliness is committed to the [Court's] sound discretion," which is "wide" in this context. Alt, 758 F.3d at 591 (internal quotations omitted). If a motion to intervene is timely, the Court's "decision whether to grant permissive intervention is a matter 'within [its] sound discretion.'" In re Rivada Networks, 230 F. Supp. 3d 467, 472 (E.D. Va. 2017) (quoting Smith v. Pennington, 352 F.3d 884, 892 (4th Cir. 2003)). "' [L]iberal intervention is desirable to dispose apparently and of as much of the persons process.'" due concerned Liberty Liquidators, Inc., 314 as controversy is as many compatible with efficiency Fire Mut. F.R.D. involving Co. v. 180, Ins. 183 (E.D. Va. Lumber 2016) (alteration in original) (quoting Feller v. Brock, 802 F.2d 722, 729 (4th Cir. 1986)). The Solomon Plaintiffs do not explain how they satisfy the elements for mandatory intervention under Rule 24(a)(2). Much of their briefing discusses why this action is not related to Williams, an issue that the Court has already decided. Even if the Court can vaguely discern why the Solomon Plaintiffs have an interest in this action that might be decisions, Curry's given alleged the Solomon rent-a-tribe affected Plaintiffs' scheme, it is by the Court's involvement unclear why with Hengle and Williams do not adequately represent that interest. Because 12 the Solomon Plaintiffs have failed to answer that question, they will not be permitted to intervene under Rule 24(a). However, their request for permissive intervention stands on firmer ground. The similarities between this case and Solomon make it clear that the Solomon Plaintiffs have claims that share common legal and factual questions with Plaintiffs' claims. Fed. R. Civ. P. 24(b)(1)(B). Plaintiffs suggest that the motion to intervene is not timely because of the gap between the filing of the motion to explanation intervene transfer (or is lack only and the thereof) one factor motion for in to the the intervene. delay in timeliness But the moving analysis. to See Alt, 758 F.3d at 591; cf. Steves & Sons, Inc. v. JELD-WEN, Inc., 323 F.R.D. 553, 558 (E.D. Va. 2018) (''MM]ere passage of time is but one factor to be circumstances. '" (quoting 386 (4th pleading Cir. 1982))). stage, and by considered Hill v. This of all the W. Elec. Co., 672 F.2d 381, action consenting in has to light not advanced intervention. past the Plaintiffs concede that they are not prejudiced in any way by intervention, especially in light of its limited purpose. For those same reasons, intervention would not unduly delay this litigation. It is admittedly unclear why the Solomon Plaintiffs must intervene instead of participating as amici curiae, see Lee v. Va. Bd. of Elections, No. 3:15CV357-HEH, 2015 WL 5178993, at *5 (E.D. Va. Sept. 4, 2015), but the former will allow them to comment on the 13 need for transfer slightly more effectively than the latter. Moreover, as noted, the Fourth Circuit generally takes a liberal approach towards permissive intervention. See Feller, 802 F.2d at 729. The Solomon Plaintiffs have met the test for permissive intervention. Their motion is granted, and they are allowed to intervene for the sole purpose of joining in the AWL Defendants' motion to transfer. Accordingly, both the AWL Defendants' and the Solomon Plaintiffs' briefs may be considered in connection with the transfer motion. II. AWL Defendants' Motion to Transfer The AWL Defendants 28 U.S.C. § 1404(a). convenience of That parties seek statute and a transfer dictates witnesses, in under that, ''[f]or the interest the of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented."^ Courts must answer two questions to resolve motions under this provision: ""(1) whether the claims might have been brought in the transferee forum, and (2) whether the interest of justice and convenience of the parties and witnesses justify Although the AWL Defendants' motion concerns the more unique intra-district transfer, the plain language of Section 1404(a) indicates that the principles concerning transfers between districts apply equally to transfers between divisions. 14 transfer to that forum." Koh v. Microtek Int^l^ Inc., 250 F. Supp. 2d 627, 630 (E.D. Va. 2003); see also Glob. Touch Sols., LLC V. Toshiba Corp., 109 F. Supp. 3d 882, 889 (E.D. Va. 2015). To satisfy the first facet of the test, ^'a movant must establish that both venue and jurisdiction with respect to each defendant is proper in the transferee district." Koh, 250 F. Supp. 2d at 630. The second facet directs the court to assess several factors, including: (1) ease of access to sources of proof; (2) the convenience of the parties and witnesses; (3) the cost of obtaining the attendance of witnesses; (4) the availability of compulsory process; (5) the interest in having local controversies decided at home; (6) in diversity cases, the court's familiarity with the applicable law; and (7) the interest of justice. Byerson v. Equifax Info. Servs., LLC, 467 F. Supp. 2d factors may 627, be consider . . . are 631 (E.D. Va. weighed, 2006). Mtjhe plaintiff's "^^While each principal choice of of those factors forum, to witness convenience, access to sources of proof, party convenience, and the interest of justice.'" Id. at 632 (quoting Samsung Elecs. Co., Ltd. V. Rambus, Inc., 386 F. Supp. 2d 708, 715 (E.D. Va. 2005)). No single factor is dispositive in the transfer analysis, which is highly fact-dependent. Samsung Elecs., 386 F. Supp. 2d at 716. As a result, courts have significant discretion to decide transfer motions "according 15 to an ^individualized, case-by-case consideration of convenience and fairness.'" Id. at 715 (quoting Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988)). However, the movant '^bears the burden of proving that the circumstances of the case are strongly in favor of transfer." Global Touch Sols., 109 F. Supp. 3d at 890 (emphasis in original) (internal quotations omitted). Thus, ''transfer is not appropriate where it will only serve to shift the balance of inconvenience from one party to the other." Id. (internal quotations omitted). A. Propriety of Newport News Division as Transferee Forum The Section 1404(a) factors are only relevant if the AWL Defendants can show that all defendants in this action could be properly sued in the Newport News Division for their underlying conduct here. See Koh, 250 F. Supp. 2d at 630 ("[A] movant must establish that both venue and jurisdiction with respect to each defendant is added)); Practice & in the Charles 15 proper A. Wright Procedure § 3845 transferee (4th & district." Arthur ed. R. updated (emphasis Miller, Apr. Federal 2018) ("In suits against multiple defendants, transfer is proper only to a district in which all of them are subject to personal jurisdiction and in which venue is proper for an action against all of them."). 16 1. Venue The federal venue statute allows civil actions to be brought in: (1) a district in which any defendant resides, if all defendants are residents of the state in which the district is located; (2) a district in which a ''substantial part of the events . . . giving rise district any in which to the claim defendant is occurred"; subject to or the (3) a court's personal jurisdiction, if no district satisfies the first two options. 28 U.S.C. § 1391(b). The same rules apply for determining the appropriate division within the Eastern District of Virginia. E.D. Va. Civ. L.R. 3(C). Although the RICO statute also authorizes venue in certain U.S.C. § 1965(a); ESAB Grp., Inc. districts, see 18 v. Centricut, Inc., 126 F.3d 617, 626 (4th Cir. 1997), that provision does not help the AWL Defendants here because it points to the districts where suit may be brought, and not to divisions within a district. Thus, Section 1965(a) would only show that the Eastern District of Virginia is a proper venue, not that either the Newport News or Richmond Divisions are proper. Moreover, Local Rule 3(C) specifically refers to Section 1391 alone, so there is no basis for relying on Section 1965 to determine the divisions in which venue may lie. The 1391 AWL makes Defendants venue in do the not specify Newport 17 News which part Division of Section proper for Plaintiffs' claims. Because multiple defendants do not reside in Virginia, let alone the Newport News Division, see Compl. SISI 12, 16-17, Section 1391(b)(1) cannot apply here. Consequently, the only plausible basis for venue is Section 1391(b)(2) (or (3), if no division is proper under subsection (2)). This action does not involve particular property, so the relevant question is whether ^^a substantial part of the events . . . giving rise to the claim Defendants occurred" need not in the establish Newport that News the Division. division ""has The the AWL most substantial contacts to the dispute. Rather, it is sufficient that a substantial part of the events occurred in that venue, even if a greater part of the events occurred elsewhere." Power Paragon, Inc. v. Precision Tech. USA, Inc., 605 F. Supp. 2d 722, 726 (E.D. Va. 2008) (internal citation omitted). Accordingly, the Court must ""review the entire sequence of events underlying [each] claim" and determine if part of that sequence occurred in the Newport News Division. Mitrano v. Hawes, 377 F.3d 402, 405 (4th Cir. 2004) (internal quotations omitted); see also Power Paragon, 605 F. Supp. 2d at 726. Although the AWL Defendants' discussion of venue is limited, even a cursory review of the Complaint reveals that a substantial portion of the events underlying Plaintiffs' claims occurred in the various subparts Newport of News Section Division. 1962 18 RICO claims involve slightly under the different elements, but enterprise the common through a denominator pattern of is the existence racketeering of an activity or collection of unlawful debt. See 18 U.S.C. § 1962(a)-(d); Field V. GMAC LLC, 660 F, Supp. 2d 679, 686 (E.D. Va. 2008). The collection of interest at an APR greater than 12% is also the focus of laws, Compl. fSI 141-43, claims Plaintiffs' is claim essentially for so violations the locus identical for usury the of of Virginia's RICO and usury of the venue purposes analysis. In addition, to prove unjust enrichment under Virginia law, a plaintiff must show, inter alia, benefit on the defendant. See Schmidt v. that he Household conferred a Fin. Corp., II, 276 Va. 108, 116 (2008). In this case, the collection of the unlawful debt and the conferral of the benefit arise from the same act: a class member's payment of principal or interest on an allegedly usurious AWL loan. That act necessarily occurred wherever the class member was located when the payment was made. In addition, the payment of funds was made possible by the consumers' execution of loan agreements with AWL, an act that- given AWL's electronic loan process—also occurred where the class member was located. The putative class definition includes only those consumers who resided in Virginia when they executed their loan Compl. Complaint agreements 85, 99, 111, illustrates, with or 125, 135, this made to AWL. See 145. As the Solomon Amended class 19 payments definition would include Solomon, who resides in the Newport News Division, and there are doubtless numerous other consumers in that division who fall within Plaintiffs' putative class. Therefore, the AWL Defendants have demonstrated that a substantial part of the events giving rise to Plaintiffs' claims occurred in the Newport News Division, such that venue there would be proper. 2. Personal Jurisdiction Whether the AWL Defendants have shown that every defendant here could be subject to personal jurisdiction in the Newport News Division question. based The on AWL Plaintiffs' Defendants' claims is a more discussion of difficult personal jurisdiction is not just limited, as was the case with venue; it is nonexistent. See AWL Reply (ECF No. 15) at 3-4. Given that failure to address the matter at all, unless it is obvious from the Complaint or otherwise undisputed that all defendants would be subject to personal jurisdiction in the Newport News Division, the AWL Defendants have not met their burden to show that transfer is permissible under Section 1404(a). Rule 4(k) jurisdiction allows over district defendants in courts two to exercise circumstances personal that are pertinent here: (1) where a state court in the state where the district court is located could exercise personal jurisdiction over the defendant. Fed. R. Civ. P. 4{k)(1)(A); and (2) where authorized by a federal statute, id. 4(k)(1)(C). Both approaches 20 supply a possible basis for a court in the Newport News Division to exercise personal jurisdiction over the defendants here, but the results of each analysis differ. a. Virginia's Long-Arm Statute Under Rule 4(k)(l){A), "[a] federal district court may only exercise personal jurisdiction over a foreign [defendant] if such jurisdiction is authorized by the long-arm statute of the state in which it sits and application of the long-arm statute is consistent with the due process clause of the Fourteenth Amendment." Consulting Eng'rs. Corp. v. Geometric Ltd., 561 F.3d 273, 277 {4th Cir. 2009). Virginia's long-arm statute is coextensive with the limits of the Due Process Clause, so "'the statutory and constitutional inquiries merge into the question of whether the . . . defendants had sufficient minimum contacts with Virginia to satisfy due process." D'Addario v. Geller, 264 F. Supp. 2d 367, 378 (E.D. Va. 2003). That long-arm statute allows courts to exercise personal jurisdiction over a person, who acts directly or by an agent, as to a cause of action arising from the person's: 1. Transacting any business in this Commonwealth; 2. Contracting to supply services things in this Commonwealth; or 3. Causing or tortious injury by an act omission in this Commonwealth; [or] 21 4. Causing tortious injury in this Commonwealth by an act or omission outside this Commonwealth if he regularly does or solicits business, or engages in any other persistent course of conduct, or derives substantial revenue from goods used or consumed or services rendered, in this Commonwealth; Va. Code § 8.01-328.1(A). alongside the core due Those provisions process requirement must that be a read defendant ""have certain minimum contacts with [the forum state] such that the maintenance of fair of the play Washington, and 326 suit does substantial U.S. 310, not offend justice." 316 (1945) traditional notions Int^l Shoe (internal Co. v. quotations omitted). Accordingly, when a defendant's contacts with the forum state are continuous and systematic, irrespective of whether the transaction in question had sufficient contacts with the state, a court may exercise general personal jurisdiction over the defendant. In the absence of continuous and systematic contacts, a court may still exercise specific personal jurisdiction when the contacts create relate a to the substantial cause of connection action with and the forum state. Diamond Healthcare Partners, 229 F.3d of Ohio, 448, Inc. 450 v. (4th Humility Cir. of 2000) Mary Health (emphasis in original) (internal citation omitted). The absence of any evidence from the AWL Defendants about their or the other defendants' conduct in Virginia makes it hard 22 to conduct a proper constitutional inquiry. It seems clear from the allegations in the Complaint—and the AWL Defendants appear to concede—that AWL, by operating its website, intentionally offered the purportedly usurious loans to consumers in Virginia, and then collected payments from those same consumers. Nonetheless, the frequency of those interactions is unknown, and there is no indication that AWL conducted further business in Virginia. Thus, it cannot be said that AWL's contacts with the Commonwealth were "''so continuous and systematic as to render [it] essentially at home'" here. Daimler AG v. Bauman, 571 U.S. 117, 139 Dunlop Tires (2011)). court (2014) Operations, The in (alteration AWL the 8.A. Defendants Newport in News v. original) (quoting Brown, therefore Division 564 have would U.S. not have Goodyear 915, shown 919 that had a general personal jurisdiction over AWL. However, AWL could have been subject to specific personal jurisdiction within the limits of the Due Process Clause. AWL effectively reached into Virginia by soliciting consumers' loan applications, requiring individuals to complete applications and loan agreements on AWL's website, providing the consumers with loans, actions and collecting implicate loan several payments provisions electronically. of Virginia's Those long-arm statute: transacting business in the Commonwealth, contracting to supply things (loans) in the 23 Commonwealth, and causing tortious injury through an act in the Commonwealth (collecting loan payments through the website). Va. Code § 8.01-328.1(A)(1)(3). Moreover, the claims asserted against AWL all arise from that conduct, since those claims involve the issuance of or collection on usurious loans offered by AWL in Virginia. This close connection demonstrates anticipated being with its that AWL should have ^'reasonably haled into court" in Virginia in connection actions, World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 297 (1980); see also Diamond Healthcare, 229 F.3d at 450, and that subjecting AWL to jurisdiction in the Commonwealth is reasonable in light of the factors outlined Volkswagen, see 444 Newport News in World-Wide U.S. at 292. Consequently, a court in the Division could have exercised specific personal jurisdiction over AWL without offending due process. However, the Court lacks enough information to assess general or specific jurisdiction as to the remaining defendantsRed Stone, defendants jurisdiction Curry, are in Medley almost Capital, certainly Virginia: Curry and not appears Medley subject to be Fund. to Those general domiciled in Puerto Rico, see Compl. f 12; see also Daimler, 571 U.S. at 137; Red Stone appears to be incorporated and to have its principal place of business elsewhere, and likely is not "essentially at home" here, see Compl. SI 15; see also Daimler, 571 U.S. at 137, 139; and Medley Capital and Medley Fund are in the same position 24 as Red Stone, see Compl. SISI 16-17. As for specific jurisdiction, although the Complaint references those defendants' activities, it is unclear whether they ^purposefully established minimum contacts in [Virginia],'" such that they should have anticipated being brought to court here in connection with AWL's lending operation. ePlus Tech., Inc. v. Aboud, 313 F.3d 166, 176 (4th Cir. 2002) 462, (quoting 475 determine contacts Burger King (1985)). Thus, with certainty with any Virginia, analysis a guessing game. on Corp. this the v. Rudzewicz, record, nature essentially of making the 471 Court those the U.S. cannot defendants' due process For that reason, the AWL Defendants have failed to show that the non-AWL defendants could be subject to personal jurisdiction in the Newport News Division pursuant to Rule 4 (k)(1)(A). b. RICO Statute The jurisdictional analysis under Rule 4(k)(l)(C) is more straightforward. The RICO statute indicates that ''[a]11 other process in any action . . . under this chapter may be served on any person in any judicial district in which such person resides, is found, has an agent, or transacts his affairs." 18 U.S.C. § 1965(d). The Fourth Circuit 25 has held that this provision authorizes nationwide service of a summons.^ See ESAB Grp., 126 F.3d at 626. As a result, personal jurisdiction over a defendant with respect to RICO claims may be exercised anywhere in the served not United under violate States, Section the as long 1965(d) Fifth as and Amendment. the defendant exercising See Trs. was properly jurisdiction of the does Plumbers & Pipefitters Nat. Pension Fund v. Plumbing Servs., Inc., 791 F.3d 436, 443 (4th Cir. 2015) (''Plumbers & Pipefitters'^); ESAB Grp., 126 F.3d at 627-28. For the Fifth Amendment to be implicated, a court's exercise of personal jurisdiction would have to "'result in such extreme inconvenience or unfairness as would outweigh the congressionally articulated policy evidenced by a nationwide service of process provision.'" Plumbers & Pipefitters, 791 F.3d ^ This conclusion puts the Fourth Circuit in the clear minority. There is no dispute that RICO permits nationwide service of process, but most courts have held that Section 1965(b)—which authorizes nationwide service of a summons only if "it is shown that the ends of justice require that other parties residing in any other district be brought before the court"—grants such authority. See Sadighi v. Daqhighfekr, 36 F. Supp. 2d 267, 272 (D.S.C. 1999); U.S. Dep't of Justice, Civil RICO: A Manual for Federal Attorneys 93-94 (2007), available ^ https://www.justice.gov/sites/default/files/usam/legacy/2014/10/ 17/civrico.pdf. The Fourth Circuit's reading effectively "eradicate[s] the 'ends of justice' inquiry by using [S]ection 1964(d) to acquire personal jurisdiction." D'Addario, 264 F. Supp. 2d at 386 n.22. Medley Capital and Medley Fund clearly disagree with ESAB Group, given their motions to dismiss for lack of personal jurisdiction in this case, ECF No. 54, and in Solomon, ECF No. 64 (Docket No. 4:17-cv-145). Nonetheless, ESAB Group has not been overruled, and the Court will not depart from its rationale here. 26 at 444 (quoting Denny^s, Inc. v. Cake, 364 F.3d 521, 524 n. 2 (4th Cir. 2004)). resident, rise to it a is "[W]hen ^highly level of a defendant is a United States unusual . . . that inconvenience constitutional concern.'" Id. will (second alteration in original) (quoting ESAB Grp., 126 F.3d at 627). All defendants here operate in the United States, so they could presumably be served with process in a judicial district where they reside, Furthermore, suffer the there extreme Newport business in are is found, no Division. connection transact evidence inconvenience News or or that any unfairness Defendants their defendant from have affairs.® litigating conducted with the underlying like Oklahoma, Delaware, and New York. Even if there some inconvenience in instead of one of having to defend the those states, ''it is not would dispute in their states would action in so in be Virginia extreme as to defeat the exercise of personal jurisdiction pursuant to valid service transfer of process, although decision." ESAB Complaint's allegations it Grp., may 126 show certainly F.3d that at the factor into a 627. Finally, the RICO claims are ® Defendants were served with process in this case through the Virginia Secretary of State as their statutory agent. ECF No. 13; see also Va. Code § 8.01-329(A). But the provision allowing such service refers back to Virginia's long-arm statute, and whether all defendants could be subject to personal jurisdiction under that law is unclear. However, nothing in the record shows an impediment to appropriate RICO service on defendants. 27 "'colorable"—that is, they are ""arguable and nonfrivolous, whether or not [they] would succeed on the merits.'" D'Addario, 264 F. Supp. 2d at 388 (quoting Davis v. Featherstone, 97 F.3d 734, 737-38 (4th Cir. 1996)). Consequently, a court in the Newport News Division could exercise personal jurisdiction over the the Fifth Amendment. The doctrine of pendent personal jurisdiction would also defendants permit as to that closely-related the RICO court usury to and claims consistent exercise unjust with jurisdiction enrichment claims. over the See ESAB Grp., 126 F.3d at 628. For these reasons, venue would be proper in the Newport News Division, and personal jurisdiction could be exercised over all defendants by a court there. Accordingly, all of Plaintiffs' claims could have been brought in that division. B. Section 1404(a) Factors Because the AWL Defendants have satisfied the first part of Section 1404(a), the Court must decide whether the convenience of the parties and witnesses and the interest of justice support a transfer. As noted, courts "consider four factor when deciding whether to transfer venue: (1) the weight accorded to plaintiff's choice of venue; (2) witness convenience and access; (3) convenience of the parties; and (4) the justice." Plumbers & Pipefitters, 791 F.3d at 444. 28 interest of 1. Plaintiffs' Choice of Forum [A] plaintiff s choice of venue is entitled to substantial weight in (internal determining quotations whether transfer omitted). That is choice appropriate." is afforded Id. less weight in the transfer analysis if the chosen venue is not the plaintiff's home forum, or if ''the nucleus of operative facts" is not in that forum. Samsung Elecs., 386 F. Supp. 2d at 716. Even in that case, however, the plaintiff's choice is still relevant "so long as there is a connection between the forum and the plaintiff's claim that reasonably and logically supports the plaintiff's decision to bring the case in the chosen forum." Id. Plaintiffs 11, so this reside in action is the in Richmond their home Division, forum. Compl. Because 10- the acts allegedly constituting the RICO enterprise and the collection of unlawful debt may have occurred in a number of places, an obvious nucleus of operative facts does not present itself here. To the Western extent that District there of is Oklahoma, one, it where is the most AWL likely in Defendants the have their operations and where the Tribe is located. Nonetheless, as discussed at some length, AWL has clearly engaged in conduct in Virginia—including obtained and paid in by the Richmond Plaintiffs Division, reflect. as the Accordingly, loans this factor still weighs in Plaintiffs' favor even if the bulk of the underlying events happened elsewhere. 29 The AWL Defendants also contend that Plaintiffs' choice of forum should be given less weight because this case is a class action. The Court has recognized that ''courts often give less weight to because the that plaintiff's type of choice case of forum has "numerous in class possible actions" plaintiffs, each possibly able to make a showing that a particular forum is best suited for the adjudication of the class' claim." Byerson, 467 F. factor Supp. 2d at still weighed 633 (internal against quotations transfer in omitted). Byerson, This though, because the Eastern District of Virginia was "home both to the [pjlaintiffs and to key non-party witnesses." Id. Here, the Solomon Plaintiffs' filing of a very similar case in a different division in Virginia illustrates the precise concern expressed in Byerson. Unlike in Byerson, although the Richmond Division is Plaintiffs' home forum, the parties have not identified any non- party witnesses here, so the cost of discovery in the Newport News Division will not be appreciably more expensive than the cost here.^ As a result this factor still weighs against transfer, but slightly less so than in Byerson. ^ Plaintiffs argue that the cost of discovery is "not close," Pis. 0pp. (EOF No. 12) at 11, apparently focusing on the cost of the consolidated litigation that might result if this action is transferred. But that argument improperly assumes that Judge Jackson—who is presiding over Solomon—will consolidate the two cases. The better comparison is between the cost of discovery here and in the Newport News Division if this case proceeds 30 2. Witness Convenience and Access to Evidence Witness convenience is "of considerable importance" in deciding a motion to transfer. Samsung Elecs., 386 F. Supp. 2d at 718. This factor looks to which forum better enables witnesses to testify in person, as "live testimony is preferred to other means of presenting evidence." Id. In this analysis, the convenience of non-party witnesses takes priority over that of party Id. convenience relative witnesses. of Of course, different courts fora cannot without judge the evidence, so "Mtjhe party asserting witness inconvenience has the burden to proffer, by affidavit or otherwise, sufficient details respecting the witnesses and their potential testimony to enable the court to assess the materiality of evidence and the degree of inconvenience.'" Id. (quoting Koh, 250 F. Supp. 2d at 636). The AWL Defendants have not identified any witnesses that would be inconvenienced if this action proceeded in the Richmond Division instead explained why of the transfer Newport would News Division, otherwise improve nor have the they parties' access to evidence. In fact, they effectively concede that this factor does not support transfer, noting that "[n]either independently. Moreover, even accepting Plaintiffs' premise, they ignore the substantial benefits of having witnesses common to this case and Solomon testify in one proceeding instead of in parallel actions in different courthouses. See Byerson, 467 F. Supp. 2d at 634-35. 31 Division witnesses either sense presents that any would particular be location." AWL in light of required Reply the at advantage to 5. relatively travel This for AWL long or distances acknowledgement short the distance to makes between the Richmond and Newport News Divisions. That proximity, however, also undermines Plaintiffs' contentions regarding the greater convenience of litigating this action in the Richmond Division. Contrary to what Plaintiffs seem to believe, the key witnesses in this case are not Virginia consumers; they are the individuals who participated in or contributed to defendants' alleged RICO enterprise, none of whom appear to reside in Virginia. Assuming those witnesses are travelling from other states to Virginia, having them drive to the Newport News Division instead of the Richmond Division is not inconvenient. Likewise, the discovery that might be sought from Virginia state agencies in Richmond may be important, but it is hard to see how seeking that discovery from Newport News instead of Richmond makes the Richmond Division ''plainly a much more convenient factor is venue." mostly Pis. neutral in 0pp. the at 11. transfer Consequently, analysis, this although possibly weighing slightly against transfer. 3. Party Convenience As the above discussion shows, transferring the case to the Newport News Division will not measurably affect the parties' 32 convenience. From the limited record available, the only reasonable conclusions at this point are that: (1) Plaintiffs, who are Richmond Division residents, will be inconvenienced slightly by having to travel to the Newport News Division; and (2) all defendants will benefit from a transfer will be able to defend this action and Solomon because (in they which they are effectively all named as defendants)® in one division instead of two. However, the AWL that transfer Defendants cannot prevail by showing will simply ''shift the balance of inconvenience from one party to the other." Glob. Touch Sols., 109 F. Supp. 3d at 890 (internal quotations omitted). Therefore, this factor weighs against transfer, even if minimally so. 4. Interest of Justice This factor requires consideration of "public interest factors aimed at systemic integrity and fairness." Most prominent among the elements of systemic integrity are judicial economy and the avoidance of inconsistent judgments. Fairness is assessed by considering docket congestion, interest in having local controversies decided at home, knowledge of applicable law, unfairness in burdening forum citizens with jury duty, and interest in avoiding unnecessary conflicts of law. ® Red Stone is not a defendant in Solomon. However, the Solomon Amended Complaint names the MacFarlane Group as a defendant, and that entity was subsumed by Red Stone after merging with it, so Red Stone is functionally a defendant in that case. 33 Byerson, 467 (quoting F. Supp. 2d Samsung Elecs., at 635 (internal citations omitted) 386 Systemic F. Supp. 2d at 721). integrity ''must also . . . take account of a party's attempt to game the federal courts through forum manipulation." Samsung Elecs., 386 F. Supp. 2d at 721. In some cases, "'the interest of justice may be decisive in ruling on a transfer motion even though the convenience of the parties and witnesses point in a different direction.'" Id. at 716 (quoting Wright & Miller, supra, § 3854); see also In re Vistaprint Ltd., 628 F.3d 1342, 1347 (Fed. court's Cir. 2010) discretion to ("[I]t is conclude entirely that in within a given the district case the § 1404(a) factors of public interest or judicial economy can be of paramount consideration, . . . even if the convenience factors call for a different result." (internal citation and quotations omitted)). The parties do not discuss factors like docket congestion, interest in having local disputes decided at home, knowledge of applicable law, burdens of jury duty, or possible conflicts of law. Because the Newport News Division and the Richmond Division are in the same district, those facts are not implicated in any real way here. Instead, the AWL Defendants base their argument on the need for judicial economy and avoidance of inconsistent judgments given the litigation of a very similar proceeding, Solomon, in the Newport News Division. That case is relevant to 34 two issues that fall under the interest of justice heading: the existence of a related action in a different district, and the first-to-file rule. See Wenzel v. Knight, No. 3:14CV432, 2015 WL 222179, at *5 (E.D. Va. Jan. 14, 2015); Byerson, 467 F. Supp. 2d at 635; Samsung Elecs., 386 F. Supp. 2d at 721-24. Even though ''the policies served by transfer are similar in both instances," those topics may be analyzed separately. Byerson, 467 F. Supp. 2d at 635. Thus, the Court will do so here, a. Related Action Section 1404(a) is generally intended to avoid a "multiplicity of litigation resulting from a single transaction or event." Wright & Miller, supra, § 3854; see also Cont^l Grain Co. V. The FBL-585, 364 U.S. 19, 26 (1960) ("To permit a situation in which two cases involving precisely the same issues are simultaneously pending in different District Courts leads to the wastefulness of time, energy and money that § 1404(a) was designed to prevent."). simultaneously inconsistent manages both on Allowing separate outcomes" that cases. Samsung tracks does not Elecs., related cases creates exist 386 a when F. to proceed "prospect the Supp. same 2d at of court 721. Thus, "[t]ransfer and consolidation will serve the interest of judicial economy in most cases where the related actions raise similar or identical issues of fact and law." Id. As a result, "'[t]he interest of justice weighs heavily in favor of transfer 35 when related actions are pending in the transferee forum.'" Wenzel, 2015 WL 222179, at *3 (quoting U.S. Ship Mqmt., Inc. v. Maersk Line, Ltd., 357 F. Supp. 2d 924, 937 (E.D. Va. 2005)). The AWL Defendants argue that the pendency of Solomon in the Newport News Division is enough to counteract Plaintiffs' choice of forum and the convenience factors, all of which weigh against transfer similarities to between some degree. the They underlying point to facts, the broad claims, and defendants in both cases, asserting that one court should deal with the overlapping issues to avoid the confusion result from that the extent to inconsistent differences which rulings. between transfer this Plaintiffs, case and that could however, Solomon would serve the interest contend limit the of justice. They also argue that the AWL Defendants' invocation of judicial economy is questionable because it merely conceals their desire to further transfer the litigation to the Western District of Oklahoma—a type of forum shopping that is inconsistent with the goals of Section 1404(a). The obvious similarities between this case and Solomon weigh in favor of transfer. As described above, both cases arise from the exact same factual background: Curry's engineering a rent-a-tribe scheme, associating with the Tribe to form AWL as a front for the MacFarlane Group's lending operation, relying on Medley Capital and Medley Fund to fund the loans, and selling 36 the MacFarlane Group to Red Stone once the threat of regulation or prosecution became more apparent. The claims are also largely the same, as both complaints allege RICO violations and some state law claims. In addition, given the common facts, many of the same legal issues will need to be resolved in both cases, including whether the AWL sovereign immunity and Defendants are protected whether the arbitration by tribal provisions in AWL's loan agreements are enforceable against the plaintiffs. And, of course, ^^it is essential to avoid any risk of inconsistent rulings on class action issues, such as composition of classes and sub-classes." Byerson, 467 F. Supp. 2d at 636. Consequently, "wholly apart from the first-to-file rule," it is best for one court to "assess the factors that point to factual and legal overlap and sort out the class action issues that will arise" in this case and in Solomon. Id. The does not action. either with existence of some outweigh As the noted, the functionally the differences clear additional identical MacFarlane benefits to Group—or between of defendant closely two cases transferring defendants a the in in linked Solomon this to this are case—as multiple defendants in this case—as with SOL, the Medley Defendants, the Taubes, GOLDPoint, and Middlemarch. Similarly, although the Solomon Plaintiffs assert EFTA and TILA claims that Plaintiffs here do not, the central claims 37 of both cases are the RICO claims based similarities on are collection more of unlawful significant debt. Thus, than . . . the "the differences" because the cases "involv[e] the same provision of federal law and the same basic conduct by," for the most part, the same defendants. Id. Finally, it is insignificant that the proposed class definition consumers Virginia in whereas Solomon the consumers.^ class concerns a definition Because the nationwide here Solomon class of limited is class to definition includes Virginia consumers—indeed, one is a named plaintiff—any decision affecting that class will necessarily affect the putative class in this case. In light of this overlap, "a single district court hearing each of the related actions will be able to ensure that all consumers adversely affected by the practices ^ Plaintiffs argue that the Court should not consider the proposed class definitions because the absence of certification makes that comparison premature. That is particularly important here. Plaintiffs say, because the Solomon class is overly broad and unlikely to be certified in its current form given the variations in states' usury laws. Yet that potential result is immaterial here; although at least one court has considered the likelihood of certification when deciding whether to stay a case based on the first-to-file rule, see Lac Anh Le v. Pricewaterhousecoopers LLP, No. C-07-5476 MMC, 2008 WL 618938, at *1 (N.D. Cal. Mar. 4, 2008), transferring a case because of a related action does not require the same commonality of parties that a stay on first-to-file grounds does, compare id. with Byerson, 467 F. Supp. 2d at 635-36. Moreover, this Court and others have treated proposed class definitions as a relevant factor in the transfer analysis, and the Fourth Circuit has not required a different approach. See Byerson, 467 F. Supp. 2d at 636; see also Wenzel, 2015 WL 222179, at *4. Consequently, the Court need not postpone its ruling on the transfer motion. 38 complained of will be protected, and that none of their claims will fall through the cracks that may exist between the classes that ultimately are certified." Id. Therefore, the pendency of Solomon and the need for judicial economy point strongly in favor of transfer to the Newport News Division. Plaintiffs' forum shopping argument does not dictate otherwise. As an initial matter. Plaintiffs' premise is flawed because the AWL Defendants' plan can barely be construed as forum shopping. Plaintiffs suggest that the AWL Defendants would have simply moved to transfer the case directly to the Western District of Oklahoma if they had no ulterior motives. But that assertion ignores the possibility that Judge Jackson and this Court, looking at similar motions to transfer by the AWL Defendants, might have reached opposite conclusions, forcing the parties to litigate similar actions in different states—a situation that is likely worse for the AWL Defendants than the current one. The AWL Defendants unsurprisingly chose to avoid that risk by seeking transfer to the Newport News Division first so that one court could unclear intended how resolve transfer "to to enhance the the the issue. Newport factual News Furthermore, it is Division circumstances" could supporting be a transfer to Oklahoma. Pis. 0pp. at 16. Nothing about the facts of Solomon or this case would be affected by transfer to the Newport News Division, and consolidation there would seemingly 39 weigh against transfer to Oklahoma because it would show that some plaintiffs besides Solomon chose to sue in Virginia. In any event, frustrate the the AWL Defendants' approach purpose of the transfer statute. In does not support of that argument. Plaintiffs cite In re Craqar Industries, 706 F.2d 503 (5th Cir. 1983), which stated that, if a motion to transfer is granted, ^^the transferee-district should accept the ruling on the transfer as the law of the case and should not re-transfer except under the most impelling and unusual circumstances or if the transfer order is manifestly erroneous." Id. at 505 (internal quotations omitted). But the court was referring to the practice districts, here. of id., Moreover, ^^tossing which cases Plaintiffs because venue back do may not be and forth" contend proper in between will more happen than one district under Section 1404(a), Mitrano, 377 F.3d at 405, it is reasonable for a transferee court to send a transferred case to a third district that might be more convenient than either of the first two districts. The AWL Defendants' strategy is thus consistent, not at odds, with the purpose of Section 1404(a). As a result, the existence of Solomon still weighs heavily in favor of transfer notwithstanding the AWL Defendants' motivations, b. First-to-File Rule Under filed in the first-to-file different [f]ederal rule, '^when courts 40 upon multiple the suits same are factual issues, the first or prior action is permitted to proceed to the exclusion of another subsequently followed.'" Wenzel, 2015 WL 222179, at *5 {alteration in original) (quoting Allied-General Nuclear Servs. v. Commonwealth Edison Co., 675 F.2d 610, 611 n. 1 (4th Cir. 1982)); see also Learning Network, Inc. v. Discovery Commc'ns, Inc., 11 F. App'x 297, 300-01 (4th Cir. 2001). Similar to the general approach rule with respect to related actions, the helps avoid duplicative litigation and conserve judicial resources, so "the actions being assessed need not be identical if there is substantial overlap with respect to the issues and parties." Byerson, 467 F. Supp. 2d at 635-36. "The rule is not rigid, however, and courts have recognized an exception the balance of convenience favors the second ^when action.'" Wenzel, 2015 WL 222179, at *5 (quoting Learning Network, 11 F. App'x at 302); see also ("[E]xceptions to Samsung the Elecs., rule are 386 F. Supp. 2d at common ^when justice 724 or expediency requires.'" (quoting Genentech, Inc. v. Eli Lilly & Co., 998 F.2d 931, 937 (Fed. Cir. 1993))). Exceptions may also arise in the case of bad faith, anticipatory suits, or forum shopping. Samsung Elecs., 386 F. Supp. 2d at 724. The AWL Defendants claim that the first-to-file rule further supports a transfer because the complaint in Solomon was 41 filed two Solomon months^® Plaintiffs before make Plaintiffs the same initiated argument, this case. that asserting The the close relationship between this case and Solomon make the more tenuous connection between this case and Williams less important in the first-to-file framework. Plaintiffs, however, view the presence of Williams in this Court as essentially dispositive of the first-to-file question. They also contend that, even if the rule applies, the balance of convenience exception militates against transfer because this case has progressed farther than Solomon. The close relationship between this case and Solomon weighs in favor of transfer. Plaintiffs cannot seriously dispute the similarity between this case and Solomon. Instead, they respond to the AWL Defendants and the Solomon Plaintiffs by pointing to Williams—which the true was standard filed to in which June 2017, Solomon well should before be Solomon—as compared. This argument relies on Wenzel, which involved a motion to transfer Where, as here, an amended complaint relates back to the original complaint, see Fed. R. Civ. P. 15(c)(1), the filing date of the original complaint is the applicable date for firstto-file purposes, see Wenzel, 2015 WL 222179, at *5 n.9. Plaintiffs also assert that Darlene Gibbs, et al. v. Plain Green, LLC, et al.. No. 3:17-cv-495 (''Gibbs'") bears on the first-to-file analysis. However, Gibbs is pending before Judge Lauck, not this Court. Given that the Court will not decide any of the issues in that case, it would not be any more efficient for this case to remain here in light of Gibbs. 42 an action that had facts similar to two other cases: Moses, which was pending in another district, and DCG & T, which was pending before the court considering the motion to transfer. Wenzel, 2015 WL 222179, at *5. The court noted that DCG & T had been filed before Moses, but concluded that the first-to-file analysis applied to the latter instead of the former because Moses "raises substantially the same legal claims against the same group of defendants and . . . was filed first." Id. It also noted that, although "[t]here are some efficiency gains to be had by keeping DCG & T and [Wenzel] in the same court, . . . the first-to-file rule does not dictate that DCG & T takes priority over Moses." Id. Nonetheless, recognizing the "strong relationship" between the claims in DCG & T and the claims in Wenzel, the court concluded that "the overlap between the parties and factual issues plays into the efficient resolution of both cases," and used that factor, among others, to deny Plaintiffs' core transfer. Id. at *6. Some argument because elements is that Williams of Wenzel the was are instructive. first-to-file filed before rule Solomon. cannot But, apply even here if this case is related to Williams, it is far more closely related to Solomon. The Williams—may plaintiffs have in asserted Wi11iams—who similar RICO, include usury, Hengle and and unjust enrichment claims to those in this case, but Williams involves a 43 different different tribe, ''architect" that case. case and different As a of result, Williams are tribal the the lending businesses, rent-a-tribe facts and completely scheme the different. at and issue a in defendants in this This disparity is thus greater than in Wenzel, where the action to be transferred had the same defendants and some of the same facts as DCG & T. See 2015 WL 222179, at *5. The connection between this case and Solomon, however, is substantial. Consequently, even if might be somewhat efficient to keep this case and Williams in the same court, Williams should not take priority over Solomon in the first-to-file analysis simply because it was filed first. See id. Key factual distinctions, however, limit the applicability of the rest pendency of of DCG Wenzel & T here. The before the court only relied court to deny the on motion the to transfer because there was a "strong relationship" between both cases and a clear "overlap between the parties and factual issues." Id. at *6. Here, on the other hand, the relationship between this case and Williams is relatively weak, and the parties and factual issues barely overlap. As a result, keeping those cases before this Court does not serve the goals of judicial efficiency because a decision based on the unique facts of one case is unlikely to have much effect in the other case. 44 Accordingly, the Court does not give the pendency of Williams much weight when considering the first-to-file rule. The relative lack of progress in Solomon is a more notable factor. When assessing the balance of convenience in the context of the first-to-file rule, ''^courts have declined to defer to the first-filed action when little if anything has been done to advance that action to trial.'" Id. (quoting Affinity Memory & Micro, Inc. v. K & Q Enters., Inc., 20 F. Supp. 2d 948, 954 (E.D. Va. 1998)). Based on a review of the Solomon docket alone. Plaintiffs appear to be right that the case has not proceeded very far. Although the complaint was filed on December 15, 2017, the Solomon Plaintiffs and the AWL Defendants jointly moved on February 23, 2018 to allow the filing of an amended complaint and an extended briefing schedule for responsive motions. EOF Nos. 35, 37 (Docket No. 4:17-cv-145). After the Solomon Amended Complaint was timely filed on March 9, defendants filed various motions in response on April 8 and 9. However, the Solomon Plaintiffs' responses to those motions are not due until June 8. See ECF No. 92 (Docket No. 4:17-cv-145). In contrast, most responsive motions to the Complaint in this case were ripe as of May 25, and jurisdictional arguments the Court discovery raised in the has ordered regarding AWL the the Defendants' parties to sovereign and conduct immunity Curry's unripe motions to dismiss. See ECF No. 76. The ""^time and energy spent 45 by this Court in advancing this case" to trial at a faster pace than the prevents court the in Solomon first-to-file may rule influence from whether favoring convenience transfer here. Wenzel, 2015 WL 222179, at *6. Nonetheless, two factors suggest that the progress of this case compared to Solomon should not affect the transfer analysis much, if at all. First, the expected ripe date of the responsive motions in Solomon is not meaningfully later than the equivalent motions here, defendants the case in and that forward. can be case In Defendants' and more than addition, imminent jurisdictional AWL attributed discovery Curry's to the the court's although to number failure Plaintiffs deadlines motions sizable in stay this to of move tout the case, the jurisdictional discovery indicate that the actual progress of such discovery might be limited. Second, example, support progress where of cannot plaintiffs their claims be have before measured acquired filing in more suit, a vacuum. For information the lack in of subsequent discovery does not necessarily mean that the case has not made progress; it may simply reflect that those plaintiffs need less discovery to reach the same level of progress as other plaintiffs who acquired little to no relevant evidence before initiating litigation. The latter seems to be true here. The Solomon Plaintiffs note that they filed 46 their complaint only after an eleven-month investigation consisting of interviews and communications with third parties and victims to uncover the facts of Curry's alleged rent-a-tribe scheme. As a result, the complaint contained thorough allegations about every part of the operation, which the Solomon Amended Complaint has only enhanced. In comparison, the facts alleged in the Complaint here are relatively sparse and seem to be supported by public filings and news articles, not independent research. Indeed, the Complaint bears a close resemblance to complaints in other renta-tribe cases in the Richmond Division, like Williams and Gibbs. Nothing prohibits Plaintiffs or their counsel from using a form complaint, discovery part by but their they the have claims of purportedly Complaint's progress achieved simplicity. ring was Given hollow when necessitated these the in mitigating factors, the Court concludes that the statuses of this case and Solomon do not meaningfully affect the first-to-file analysis. Even if they do, the effect is minor, and is far outweighed in the interest of justice framework by the relatedness of Solomon, which provides an independent basis for transfer to the Newport News Division. See Byerson, 467 F. Supp. 2d at 636. The interest of justice, therefore, still weighs substantially in favor of transfer. Considering all the Section 1404(a) factors, although Plaintiffs' choice of forum and the convenience of the witnesses 47 and parties weigh against transfer or are neutral, the interest of justice clearly tilts the balance towards transfer. Accordingly, the Court will grant the AWL Defendants' motion to transfer. CONCLUSION For the foregoing reasons, the MOTION TO TRANSFER TO THE NEWPORT NEWS DIVISION BY AWL, INC., AMERICAN WEB LOAN, INC. AND RED STONE, INC. (ECF No. 3) and NATIONWIDE AWL CLASS PLAINTIFFS' MOTION FOR LIMITED INTERVENTION (EOF No. 77) will be granted. It is so ORDERED. /s/ Robert E. Payne Senior United States District Judge Richmond, Virginia Date: June /T. 2018 48
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