KBC Asset Management. N.V. v. McNamara

ORDER DENYING TRANSFER

Before the Panel:* Pursuant to 28 U.S.C. § 1407, plaintiff in a Southern District of Ohio action (North) moves to centralize this litigation in the Southern District of Ohio. This litigation currently consists of two actions pending in two districts. The actions are shareholder derivative actions brought against current and former officers and directors of Chemed Corp., a health care and plumbing services provider.1 Plaintiffs in both actions allege that Chemed’s subsidiary, Vitas Healthcare Corp. (Vitas), systematically submitted improper and ineligible claims to Medicare and Medicaid over the past decade.

Defendants2 oppose the motion. Plaintiff in the District of Delaware action opposes centralization and, alternatively, suggests that the District of Delaware should be selected as the transferee district.

On the basis of the papers filed and the hearing session held, we conclude that Section 1407 centralization is not appropriate at this time. The actions here unquestionably involve complex facts surrounding plaintiffs’ shareholder derivative claims that relate to an estimated decade-long and systematic improper billing of Medicaid and Medicare at Chemed’s Vitas hospice care provider subsidiary. However, we note that the proponent of centraliza*1336tion faces a heavy burden to demonstrate that centralization of these two action is appropriate. See In re Transocean Ltd. Sec. Litig., 753 F.Supp.2d 1373, 1374 (J.P.M.L. 2010) (denying centralization of two actions, noting that “[a]s we have stated in the past, where only a minimal number of actions are involved, the moving party generally bears a heavier burden of demonstrating the need for centralization.”). Moving plaintiff has failed to do so in these circumstances.

Weighing heavily in our decision to deny centralization is the pendency of a Section 1404 motion in the Southern District of Ohio action that, if granted, would eliminate the litigation’s multidistrict character. See In re Gerber Probiotic Prods. Mktg. & Sales Practices Litig., 899 F.Supp.2d 1378, 1379 (J.P.M.L. 2012) (“The Panel has often stated that centralization under Section 1407 ‘should be the last solution after considered review of all other options.’ ”) (quoting In re Best Buy Co., Inc., California Song-Beverly Credit Card Act Litig., 804 F.Supp.2d 1376, 1378 (J.P.M.L. 2011)).3 Given the small number of involved actions and the correspondingly limited number of involved counsel and courts, we conclude that centralization would not necessarily serve the convenience of the parties and witnesses or promote the just and efficient conduct of these two actions at this time. Alternatives to formal centralization — such as voluntary cooperation among the few involved counsel and two judges — appear to be workable, particularly at this early stage of litigation.4

IT IS THEREFORE ORDERED that the motion, pursuant to 28 U.S.C. § 1407, for centralization of these two actions is denied.