JPMORGAN CHASE PAYCHECK PROTECTION PROGRAM MDL

UNITED STATES JUDICIAL PANEL

MULTIDISTRICT LITIGATION

IN RE: JPMORGAN CHASE PAYCHECK PROTECTION PROGRAM MDL No. 2944

LITIGATION

ORDER DENYING TRANSFER

Before the Panel:

The actions before the Panel involve allegations that JPMorgan Chase

Bank, N.A., and JPMorgan Chase & Co. (together, “Chase”) failed to properly process applications

for loans under the Paycheck Protection Program (“PPP”), a federal loan program established under

the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to help small businesses

suffering economic damage from COVID-19 related shutdowns.

Plaintiff in one action (Hyde-

Edwards Salon & Spa) filed a motion under 28 U.S.C. § 1407 to centralize nine actions in the

Southern District of California. Separately, plaintiffs in two other actions (Cyber Defense Group

and Kull) filed a motion for centralization of the same nine actions, as well as a tenth one, in the

Central District of California. Plaintiffs in Cyber Defense Group and Kull recently dismissed their

actions, and presumably are no longer pursuing their motion. However, whether to centralize this

litigation remains a live issue among the parties to seven remaining actions,

which are listed on

Schedule A. Additionally, the Panel has been notified of four related actions.

Responding plaintiffs in two actions on the motion (Legendary Transport and Sha-Poppin

Gourmet Popcorn) and one related action (KPA Promotions) support centralization. They

variously propose the Central District of California, Southern District of California, and Northern

District of Illinois as the transferee district. Plaintiff in one action (Outlet Tile) opposes

centralization.

Defendant Chase opposes centralization and, alternatively, proposes the District of Colorado

or Northern District of Texas as the transferee district. Defendant Phunware, Inc., which is sued in

one action (Sha-Poppin Gourmet Popcorn), opposes centralization and, alternatively, seeks

separation and remand of the claims against Phunware and other loan recipient defendants to its

Judge David C. Norton took no part in the decision of this matter.

This docket was heard at the July 30, 2020 hearing session with two other dockets

involving the alleged mishandling of PPP loan applications. See MDL No. 2952, In re: Bank of

America Paycheck Protection Program Litigation; MDL No. 2954, In re: Wells Fargo Paycheck

Protection Program Litigation.

One other action involving an unrelated agent fees class complaint (American Video)

previously was removed from the motions for centralization at the request of movants and

defendants. See Minute Order, ECF No. 84 (J.P.M.L. June 8, 2020).

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originating court, the Northern District of Illinois. Defendants RCHS Operations, Inc., and RCSH

Operations, LLC (together, “RCSH”) assert that RCSH should not be part of the Sha-Poppin action

regardless of where it proceeds, but concurs in Phunware’s request for separation and remand;

alternatively, RCSH suggests centralization in the Northern District of Illinois.

On the basis of the papers filed and the hearing session held,

we will deny plaintiff’s motion.

Although these actions share factual questions arising out of allegations that Chase failed to

implement and follow federal regulations requiring that PPP loan applications be processed on a

“first-come, first-served” basis, we conclude that centralization will not serve the convenience of

the parties and witnesses or further the just and efficient conduct of the litigation. On the present

record, it appears that individualized factual issues concerning the circumstances of each loan

application will significantly diminish the potential efficiencies from centralization.

Additionally,

the number of involved actions is limited and appears unlikely to grow. In fact, two actions have

been voluntarily dismissed since the filing of the first motion for centralization, and in a third action

(Outlet Tile), the underlying docket indicates that settlement discussions are underway.

There are

only four potential tag-along actions.

In the present circumstances, voluntary coordination among the parties and the involved

judges is preferable to centralization. We encourage the parties to employ various alternatives to

transfer which may minimize the potential for duplicative discovery and inconsistent pretrial rulings.

Such coordination appears practicable in this litigation, considering the limited number of actions

and districts. Additionally, common defendant Chase is represented by the same counsel in all

actions, and represents in the Panel briefing it will support informal coordination of any overlapping

discovery and other pretrial activities.

IT IS THEREFORE ORDERED that the motion for centralization of the actions listed on

Schedule A is denied.

In light of the concerns about the spread of COVID-19 virus (coronavirus), the Panel

heard oral argument by videoconference at its hearing session of July 30, 2020. See Suppl. Notice

of Hearing Session, MDL No. 2944 (J.P.M.L. July 14, 2020), ECF No. 99.

Plaintiffs allege different obstacles to submitting their applications, and the record

indicates that some applications were granted, some were denied, and some were incomplete or

never submitted. These differences will result in substantial case-specific factual issues, motions,

and discovery. See In re Mortgage Lender Force-Placed Ins. Litig., 895 F. Supp. 2d 1352, 1353

(J.P.M.L. 2012) (denying centralization where “individualized discovery and legal issues are likely

to be numerous and substantial”).

At oral argument, counsel for Chase represented that dismissal of an unnamed action

was forthcoming soon.

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PANEL ON MULTIDISTRICT LITIGATION

Karen K. Caldwell

Chair

Ellen Segal Huvelle R. David Proctor

Catherine D. Perry Nathaniel M. Gorton

Matthew F. Kennelly

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IN RE: JPMORGAN CHASE PAYCHECK PROTECTION PROGRAM MDL No. 2944

LITIGATION

SCHEDULE A

Central District of California

OUTLET TILE CENTER v. JPMORGAN CHASE AND CO., ET AL., C.A. No. 2:20-03603

LEGENDARY TRANSPORT, LLC v. JPMORGAN CHASE & CO., ET AL.,

C.A. No. 2:20-03636

Southern District of California

HYDE-EDWARDS SALON & SPA v. JPMORGAN CHASE & CO., ET AL.,

C.A. No. 3:20-00762

District of Colorado

LADAGA VENTURES LLC v. JPMORGAN CHASE BANK, N.A., C.A. No. 1:20-01204

Northern District of Illinois

SHA-POPPIN GOURMET POPCORN LLC v. JPMORGAN CHASE BANK, N.A, ET AL.,

C.A. No. 1:20-02523

SHINY STRANDS, INC. v. JPMORGAN CHASE & CO., C.A. No. 1:20-02547

Northern District of Texas

STARWALK OF DALLAS, LLC, ET AL. v. JPMORGAN CHASE & CO.,

C.A. No. 3:20-01005

Case MDL No. 2944 Document 105 Filed 08/05/20 Page 4 of 4