Law360 (June 1, 2020, 9:45 PM EDT) -- JPMorgan Chase Bank NA has urged a federal judicial panel not to create multidistrict litigation for an array of lawsuits it's facing over its participation in a federal coronavirus relief loan program for small businesses, arguing that the cases are "a jigsaw puzzle of unmatched pieces."
In a brief filed Friday with the U.S. Judicial Panel on Multidistrict Litigation, Chase said that requests to combine potentially a dozen proposed class actions around its lending under the Paycheck Protection Program should be rejected because the cases are too varied to be merged effectively.
"The identified actions are a jigsaw puzzle of unmatched pieces, jumbling together dissimilar plaintiffs, defendants, theories, and claims into an unworkable muddle that lacks predominant common questions of fact and unifying legal theories," the bank wrote in its brief. "Consolidating these cases would produce few efficiencies far outweighed by the resulting delays and new burdens."
Chase was pushing back on a pair of MDL bids filed early last month by small business plaintiffs that have accused the bank of misconduct related to the PPP, a $660 billion coronavirus relief initiative that enlists banks to offer forgivable loans for small businesses to use on payroll and other overhead costs while much of the U.S. economy is shutdown during the COVID-19 crisis.
The plaintiffs, which consist of a San Diego, California, salon and a Los Angeles cybersecurity business, are behind two proposed class actions that allege Chase unfairly and improperly prioritized PPP loan applications from larger borrowers, and they have asked that their cases be consolidated and centralized in California along with several other PPP suits against the bank from around the country.
According to them, these cases collectively revolve around similar factual and legal issues concerning Chase's processing of PPP loan applications, will implicate similar data and other evidence about the bank's policies and procedures, and are still at such an early stage of proceedings that the greatest efficiencies can be gained by transferring and consolidating now.
But Chase argued Friday that these other suits actually involve a "hodgepodge" of different grievances, including alleged application difficulties, improper applicant requirements and loan backdating. They also target differing sets of defendants, are brought by differently situated plaintiffs and assert claims that implicate a range of federal and state statutes and common law, according to the bank.
"Movants thus propose to merge mismatched facts, theories, claims and parties into a single proceeding where individual issues will inescapably predominate over any common issues," the bank told the panel. "Chase proposes a simpler solution: the cases should stay put."
The bank said that some plaintiffs in the cases could have their claims mooted as new loans continue getting approved through the program, while anticipated motion practice in the various cases may further narrow the scope of pending litigation. At that point, "informal coordination and alternative procedures" can be used to achieve efficiencies that consolidating the cases now would not, the bank added.
"Consolidation is neither necessary nor appropriate, and the panel should deny the motions," Chase said.
Chase was among several parties that submitted briefs on Friday weighing in on the MDL bids, which were filed by the Hyde-Edwards Salon & Spa and Cyber Defense Group LLC.
While the movants have asked that any MDL be centralized in California's Central or Southern districts, a gourmet popcorn seller whose PPP suit against Chase was singled out for potential consolidation voiced its support Friday for merging the cases but argued that its home in the Northern District of Illinois would be a better host venue.
The bank, for its part, has said that Colorado or the Northern District of Texas would be preferable if the panel opts for consolidation.
A representative for Chase and counsel for the Hyde-Edwards and Cyber Defense plaintiffs did not immediately return requests for comment on Monday.
The Hyde-Edwards Salon & Spa is represented by Rebecca A. Peterson and Robert K. Shelquist of Lockridge Grindal Nauen PLLP, Benjamin Galdston of Berger Montague, Gregory F. Coleman and Alex R. Straus of Greg Coleman Law PC, and Daniel K. Bryson, Scott C. Harris and Patrick M. Wallace of Whitfield Bryson LLP.
The Cyber Defense Group is represented by Dylan Ruga, Ji-In Houck and David M. Angeloff of Stalwart Law Group.
Chase is represented by Gregory E. Ostfeld of Greenberg Traurig LLP.
The case is In Re JPMorgan Chase Paycheck Protection Program Litigation, MDL number 2944, before the U.S. Judicial Panel on Multidistrict Litigation.
--Editing by Michael Watanabe.
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