UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

--------------------------------- X
MORTGAGE RESOLUTION SERVICING,
LLC, 1ST FIDELITY LOAN SERVICING,
LLC, and S & A CAPITAL PARTNERS, No. 15-CV-00293 (LTS)(JCF)
INC.,
Plaintiffs,

- v. - UNDER SEAL

JPMORGAN CHASE BANK, N.A., CHASE

HOME FINANCE, LLC, and JPMORGAN
CHASE&CO.,

Defendants.
--------------------------------- X

DEFENDANTS' MEMORANDUM OF LAW

IN SUPPORT OF THEIR MOTION TO TRANSFER VENUE
TO UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

Robert D. Wick
Michael M. Maya
COVINGTON & BURLING LLP
One CityCenter, 850 Tenth Street, NW
Washington, DC 20001-4956
(202) 662-6000
rwick@cov .com
mmaya@cov .com

Michael C. Nicholson
COVINGTON & BURLING LLP
The New York Times Building
620 Eighth A venue
New York, New York 10018-1405
(212) 841-1000
mcnicholson@cov .com

Attorneys for Defendants

 TABLE OF CONTENTS

PRELIMINARY STATEMENT .................................................................................................... !

BACKGROUND ............................................................................................................................ 2

A. Regulatory Framework ........................................................................................... 2

1. The National Mortgage Settlement.. ........................................................... 3

2. The Home Affordable Modification Program ............................................ 3

B. Schneider's Two Related Actions ........................................................................... 4

1. Overlapping Factual Allegations ................................................................ 4

2. Overlapping Legal Allegations ................................................................... 6

C. Procedural History .................................................................................................. 8

1. The Schneider FCA Action ......................................................................... 8

2. The Schneider Private Action ..................................................................... 8

LEGAL STANDARD ..................................................................................................................... 9

ARGUMENT ................................................................................................................................ 10

I. THIS ACTION SHOULD BE TRANSFERRED TO THE DISTRICT OF

COLUMBIA FOR COORDINATION WITH THE RELATED FCA ACTION ............ 10

II. THE REMAINING TRANSFER FACTORS SUPPORT TRANSFER OF THIS

ACTION TO THE DISTRICT OF COLUMBIA. ............................................................ 14

A. The Convenience of the Parties and Witnesses Favor Transfer. .......................... 14

B. The Locus of Operative Facts Is in the District of Columbia ............................... 16

C. The Location of Relevant Documents, the Availability of Compulsory

Process, and the Forum's Familiarity with Governing Law Support
Transfer or Are Neutral. ........................................................................................ 16

D. Plaintiffs' Choice of Forum Is Entitled to Little Weight. ..................................... 17

CONCLUSION ............................................................................................................................. 19
 TABLE OF AUTHORITIES

Page(s)

Cases

Aguiar v. Natbony,
No. 10 Civ. 6531 (PGG), 2011 WL 1873590 (S.D.N.Y. May 16, 2011) ................................ 17

APA Excelsior III L.P. v. Premiere Techs., Inc.,

49 F. Supp. 2d 664 (S.D.N.Y. 1999) ................................................................................ passim

Berg v. First Am. Bankshares, Inc.,

576 F. Supp. 1239 (S.D.N.Y. 1983) ......................................................................................... 11

CYI, Inc. v. Ja-Ru, Inc.,

913 F. Supp. 2d 16 (S.D.N.Y. 2012) ........................................................................................ 15

Dahl v. HEM Plzarm. Corp.,

867 F. Supp. 194 (S.D.N.Y. 1994) .............................................................................. 10, 13, 17

ITT World Commc 'ns, Inc. v. F. C. C.,

621 F.2d 1201 (2d Cir. 1980) ................................................................................................... 12

Keitt v. New York City,

882 F. Supp. 2d 412 (S.D.N.Y. 2011) ...................................................................................... 18

McCain v. Racing,
No. 07 Civ. 5729 (JSR), 2007 WL 2435170 (S.D.N.Y. Aug. 27, 2007) ................................. 18

Nieves v. Am. Airlines,

700 F. Supp. 769 (S.D.N.Y. 1988) .................................................................................... 10, 14

Rindfleisch v. Gentiva Health Sys., Inc.,

752 F. Supp. 2d 246 (S.D.N.Y. 2010) ...................................................................................... 17

River Road Int '!, L.P. v. Josephthal Lyon & Ross, Inc.,
871 F. Supp. 210 (S.D.N.Y. 1995) .......................................................................................... 12

Robertson v. Cartinhour,
No.lO Civ. 844 (LTS) (HBP), 2011 WL5175597 (S.D.N.Y. Oct. 28, 2011) ................ passim

Savin v. CSX Corp.,

657 F. Supp. 1210 (S.D.N.Y. 1987) ................................................................................. passim

United States v. Bank ofAm.,

303 F.R.D. 114 (D.D.C. 2014) ................................................................................................. 13

ii
United States v. Bank ofAm.,
922 F. Supp. 2d 1 (D.D.C. 2013) ............................................................................................. 13

United States v. Bank ofAm.,

No. 12-361 (RMC), 2015 WL 424240 (D.D.C. Feb. 2, 2015) ................................................ 13

United States v. Carey,

152 F. Supp. 2d 415 (S.D.N.Y. 2001) ................................................................................ 13, 16

United States ex rel. Mergent Servs. v. Flaherty,

540 F.3d 89 (2d Cir. 2008) ....................................................................................................... 12

Williams v. City of New York,

No. 03 Civ. 5342(RWS), 2006 WL 399456 (S.D.N.Y. Feb. 21, 2006) ....................... 10, 12, 14

Statutes

28 U .S.C. § 1391 .............................................................................................................................. 9

28 u.s.c. § 1404 .......................................................................................................................... 1, 9

Other Authorities

Fed. R. Civ. P. 45 ........................................................................................................................... 17

Ill
 Defendants JPMorgan Chase Bank, N.A. and JPMorgan Chase & Co.

(collectively, "Chase") move pursuant to 28 U.S.C. § 1404(a) for an order transferring this case

to the United States District Court for the District of Columbia.

PRELIMINARY STATEMENT

This case is one of two related actions that debt collector Laurence Schneider is

pursuing against Chase. The first of the two actions is a False Claims Act action that Schneider

filed in May 2013 (the "Sclmeider FCA Action"). In that action, Schneider accuses Chase of

defrauding the federal government in connection with the National Mortgage Settlement

("NMS") and the Home Affordable Modification Program ("HAMP"). Although Schneider

originally filed the Schneider FCA Action in the District of South Carolina, at his request the

case was later transferred to the District of Columbia and assigned to Judge Rosemary M.

Collyer, the judge who presided over the National Mortgage Settlement.

This action, in turn, is a private action (the "Schneider Private Action") filed in

December 2014 on behalf of three corporate entities owned and operated by Schneider (the

"Schneider Entities"). The Schneider Entities are in the business of purchasing distressed

mortgage debt and attempting to collect the debt from homeowners. According to the operative

Second Amended Complaint ("SAC") in the Schneider Private Action, the Schneider Entities

were injured by the same fraudulent course of conduct that allegedly injured the federal

government. Specifically, the SAC accuses Chase of"dumping" defective mortgage loans on

the Sclmeider Entities as part of a "pattern of racketeering" designed to evade the requirements

of the NMS and HAMP.

Although the Schneider Private Action and the Schneider FCA Action differ in

certain respects, they plainly present a large degree of factual and legal overlap. For example,
the complaints in both actions rely heavily on allegations that Chase maintained a secret "second

set of books" that it allegedly used to conceal its violations of federal mortgage law. Similarly,

both actions accuse Chase of using this second set of books to carry out a fraudulent scheme

intended to cheat the federal government of millions of dollars under the NMS and HAMP. In

addition, both actions allege that in the course of carrying out the supposed scheme, Chase

purported to forgive certain mortgage loans that it had previously sold to the Schneider Entities,

and then wrongfully claimed credit under the NMS for forgiving those loans.

In light of these common questions of law and fact, this action should be

transferred to the District of Columbia so that the two related cases can be coordinated before a

single court. Transfer to the District of Columbia will protect both the parties and the federal

judiciary from the burdens of duplicative litigation and the risks of inconsistent legal rulings. It

will also facilitate the assignment of both actions to Judge Collyer, the leading expert in the

federal judiciary on the complex NMS consent judgments at issue in these cases. Moreover,

transfer to the District of Columbia will impose no inconvenience on Schneider, since he himself

moved to transfer the Schneider FCA Action to that District for the avowed purpose of

permitting its assignment to Judge Collyer.

For these reasons, as more fully set forth below, Chase's motion to transfer should

be granted.

BACKGROUND

A. Regulatory Framework

Both the Schneider Private Action and the Schneider FCA Action draw heavily on

the mortgage loan servicing framework established by the NMS and HAMP.

2
 1. The National Mortgage Settlement

The NMS arose out of a complaint filed in March 2012 by the United States and

forty-nine states against the largest financial institutions in the country, including Chase. See

Maya Decl. Ex. A (NMS Compl.). The plaintiffs alleged that the defendants had violated

various state and federal laws as a result of "the issuance of improper mortgages, premature and

unauthorized foreclosures, violation of service members' and other homeowners' rights and

protections, the use of false and deceptive affidavits and other documents, and the waste and

abuse of taxpayer funds." /d. ~ 2.

Less than a month after the complaint was filed, the parties reached a settlement,

which Judge Collyer approved in the form of a separate consent judgment for each defendant.

See Maya Decl. Ex. B (Consent Judgment for Chase). Each consent judgment provided that the

defendant would comply with a detailed set of mortgage servicing standards and would grant a

fixed amount of "consumer relief' by forgiving or modifying the terms of consumer mortgage

loans. See id. ~~ 2-5. The terms of the consent judgments were so voluminous and complex that

the parties agreed to the appointment of an independent monitor and several accounting firms to

verify that the settlements were properly implemented. See id. ~ 7.

Judge Collyer retained jurisdiction to enforce each NMS settlement, id. ~ 13, and

the parties agreed that the settlements would be enforceable solely in the United State District

Court for the District of Columbia, id. at Ex. E, § J(2).

2. The Home Affordable Modification Program

In 2009, the Treasury Department launched the Making Home Affordable

Program ("MHA"), which was "part of the Government's broader strategy to help owners avoid

foreclosure, stabilize the housing market, and improve the nation's economy." Maya Decl. Ex.

C (SAC)~ 134. Under this program, the federal government provides incentive payments to

3
participating mortgage servicers that agree to modify the terms of qualified mortgage loans. See

SAC~ 135; Maya Decl. Ex. E (Schneider FCA Action First Am. Compl. ("FCA Compl."))

~~ 113-14.

The "cornerstone" ofMHA is HAMP, SAC~ 135, which provides for

modifications of first-lien mortgage loans for residential properties. To participate in HAMP, a

mortgage servicer must enter into a Servicer Participation Agreement ("SPA") with the Treasury

Department and must abide by certain servicing standards issued by Treasury. See SAC~ 135;

FCA Compl. ~~ 119-20. Fannie Mae and Freddie Mac serve as Treasury's administrative and

compliance agents for purposes of the MHA programs, including HAMP. See FCA Compl.

~~ 117, 133.

B. Schneider's Two Related Actions

As described below, both the Schneider Private Action and the Schneider FCA

Action revolve around a common core of factual and legal allegations regarding a "second set of

books" that Chase allegedly used to maintain its non-performing mortgage loans.

1. Overlapping Factual Allegations

At the heart of both the Schneider Private Action and the Schneider FCA Action

are a common set of allegations that Chase created a "hidden" set of books-known as

"Recovery One" or "RCVl "-that it supposedly used to circumvent its obligations under the

NMS and HAMP. See, e.g., SAC~~ 2-4,51-54, 114-18; FCA Compl. ~~ 16-20, 163-78. Chase

allegedly moved all non-performing mortgage loans that it had written off for accounting

purposes to Recovery One in order to conceal those loans from federal regulators. See, e.g.,

SAC~ 4 (Recovery One "was created to conceal [] federally related mortgages from []

regulators"); id. ~ 51 (Recovery One "is utilized to conceal the existence of non-performing and

charged off mortgage loans from the various government regulators"); FCA Compl. 11 16

4
(Recovery One was not disclosed to government regulators and "is still only known to those

select few that are directory involved with it within Chase"); id. ~~ 174-75 (Chase "fail[ ed] to

disclose the existence of the RCVl population" and omitted Recovery One loans from

compliance reports to the NMS Monitor and Freddie Mac).

The complaints in both actions rely heavily on allegations that Chase failed to

service the loans housed on Recovery One in compliance with the standards imposed by the

NMS and HAMP. For example, the Schneider Private Action alleges that Recovery One is

plagued by corrupt data and "is not a platform which can perform the normal, customary and

required servicing functions for federally related mortgages." SAC~ 53. As a result, "the loans

[allegedly] failed to meet the requirements established for them to qualify for incentive payments

through the MHA and HAMP programs," id. ~ 136, and Chase allegedly violated the servicing

and consumer relief requirements imposed by the NMS, see id. ~~ 138, 141, 146, 149.

Similarly, the Schneider FCA Action alleges that "(t]he accuracy and integrity of

the information pertaining to the borrowers' accounts whose loans are in the RCV1 population

was and is fatally and irreparably flawed." FCA Compl. ~ 16; see also id. ~ 163 (RCV1 is "a

collection of various federally regulated mortgage loans whose documentation has been

corrupted, ignored or allowed to fall into disarray"); id. ~ 176, 178 (RCVl data was "irreparably

corrupted" and lacked "accuracy and integrity"). Consequently, "the loans in RCV1 were not

serviced according to the requirements of Federal law, the [NMS], the MHA programs or any of

the other consent orders or settlements reached by Chase with any government agency prior to

the [NMS]." !d.~ 16; see also id. ~ 164 (for loans in RCVl, "compliance with any regulatory

body is impossible"); id. ~ 175 (RCV1 "made it impossible for Chase to be in compliance with

... HAMP or the Servicing Standards of the [NMS]").

5
 Both complaints go on to allege that Chase's dealings with the Schneider Entities

exemplify the violations of law that allegedly arose from its use of Recovery One. According to

the complaints, Chase sent several waves of debt forgiveness letters in 2012 and 2013 in an

effort to satisfy its consumer relief obligations under the NMS. SAC~~ 89-91; FCA Compl.

~~ 12, 199-201, 233, 235. As a result of data corruption and recordkeeping errors on Recovery

One, however, Chase allegedly sent these letters to numerous borrowers whose loans had been

sold to the Schneider Entities. SAC~~ 92, 94; FCA Compl. ~~ 11, 203, 224, 226, 244-45, 251-

52, 265. Both complaints allege that Chase nevertheless claimed credit under the NMS for

forgiving loans it did not own. See SAC~~ 173, 177; FCA Compl. ~~ 13, 17, 19, 194, 206.

Similarly, both complaints allege that Chase's erroneous debt forgiveness letters violated federal

law and were typical of the NMS and HAMP violations that supposedly occurred as a result of

the problems with Recovery One. SAC~~ 112-18; FAC Compl. ~~ 17, 19, 191-210, 221-57.

2. Overlapping Legal Allegations

Based on this common core of factual allegations, the Schneider Private Action

and the Schneider FCA Action assert overlapping legal theories related to Chase's alleged

violations of the NMS, HAMP, and federal mortgage law.

In the Schneider Private Action, the operative complaint relies heavily on alleged

violations of the NMS and HAMP as a basis of the Schneider Entities' RICO and tort claims.

For example, the Schneider Entities describe the alleged violations of the NMS and HAMP as

both the pattern of racketeering underlying their RICO claims and as the motive and intent that

supports their intentional tort claims. See SAC~~ 4-5 (RCVl was created "to conceal these

federally related mortgages from [ ] regulators" and was "part of a larger scheme and conspiracy

by Defendants ... to evade their legal obligations and liabilities under federal law as parties to

multiple consent orders, settlements and agreements entered into with various branches of

6
federal and state governments"); id. ~~ 112-18 (conduct directed at Schneider Entities was "part

of a larger scheme and conspiracy" designed to "evade liability for [ ] legal violations"); id.

~~ 132-49 (Chase had "motive" to "dump" loans on plaintiffs to obtain HAMP incentive

payments and to "conceal" NMS violations); id. ~ 248 (alleged predicate acts "are part of a larger

effort by Defendants to relieve themselves of their legal obligations and liabilities and to conceal

their improper receipt of credit under, inter alia, applicable law and the Lender Settlements").

The Private Action thus repeatedly accuses Chase of scheming and conspiring to evade and

violate the NMS and HAMP. See id. ~~ 4, 112, 118, 139, 149, 248; see also Maya Decl. Ex. M

(Preliminary Pre-Trial Statement) at 2-3, 8 (asserting that requisite "pattern of racketeering"

consists of a "scheme" to circumvent NMS and federal law and that "Plaintiffs' allegations that

Chase has engaged in systemic efforts to avoid its obligations under [the NMS] are relevant to

demonstrate motive, intent, and a pattern of wrongful conduct by Chase").

The same alleged violations of the NMS and HAMP lie at the heart of the FCA

Action. See FCA Compl. ~~ 21-39 (alleging damages to government supposedly resulting from

violations of NMS and HAMP); id. ~~ 163-287 (repeatedly alleging that Chase violated NMS

and HAMP under heading asserting that "Chase falsely claimed compliance with servicing

standards and consumer relief requirements of the [NMS] Consent Judgment and the servicing

requirements of HAMP"). Whether Chase in fact violated the NMS and HAMP is thus a central

question in both the FCA Action and the Private Action. It is also a highly complex question

involving the voluminous requirements of the NMS and RAMP- requirements as to which

Judge Collyer and the D.C. federal courts are the leading experts in the federal judiciary.

7
 C. Procedural History

1. The Schneider FCA Action

Schneider filed his FCA Action on May 6, 2013 in the United States District

Court for the District of South Carolina. See Maya Decl. Ex. D (Schneider FCA Action Compl.).

Mter the Department of Justice declined to exercise its statutory right to intervene and prosecute

the case itself, the action was unsealed and Chase was served with process. See Maya Decl. Ex.

F (Summons Return). Schneider then moved to transfer the action to the United States District

Court for the District of Columbia, arguing that the case should be transferred because "the

parties to the Consent Judgment ... must seek to enforce the Consent Judgment before Judge

Collyer." Maya Decl. Ex. H (Mem. in Supp. of Mot. to Transfer) at 3.

On June 19,2014, Schneider's motion to transfer was granted and the case was

transferred to the District of Columbia and assigned to Judge Collyer. See Maya Decl. Ex. I

(Order filed June 19, 2014); Maya Decl. Ex. J (Notice of Designation of Related Civil Cases).

On November 17, 2014, Schneider filed an amended complaint under seal. See Maya Decl. Ex.

K (docket sheet from Schneider FCA Action). The amended complaint accuses Chase of

violating the FCA and several state-law analogs to the FCA by (1) falsely representing that it

complied with the consumer relief requirements of the NMS, (2) falsely representing that it

complied with the servicing standards imposed by the NMS, and (3) falsely certifying its

compliance with the requirements of HAMP. FCA Com pl.~~ 296-410.

2. The Schneider Private Action

The Schneider Entities filed the original complaint in the Private Action in state

court on December 24, 2014 and amended their complaint two days later. See Maya Decl. Ex. L

(Notice of Removal)~~ 1-2. Mter Chase removed the action to this Court on January 15, 2015,

the Schneider Entities filed the operative SAC on March 31, 2015. See Maya Decl. Ex. K(docket

8
sheet from Schneider Private Action). The SAC asserts fourteen separate causes of action

including breach of contract, fraud, tortious interference with contract, defamation, and civil

RICO violations. SAC~~ 150-261.

LEGAL STANDARD

An action may be transferred "[f]or the convenience of the parties and witnesses,

in the interest of justice," to any district "where it might have been brought." 28 U.S.C.

§ 1404(a). When considering a motion to transfer, the court "conducts a two-pronged analysis:

whether the action could have been brought in the transferee district and, if yes, whether transfer

would be an appropriate exercise of the Court's discretion." Robertson v. Cartinlwur, No. 10

Civ. 844 (LTS) (HBP), 2011 WL 5175597, at *3 (S.D.N.Y. Oct. 28, 2011) (Swain, J.).

The first prong of the two-part test is satisfied if the transferee court would have

personal jurisdiction over the defendants and if venue would lie in that court. !d. Those

requirements plainly are satisfied here: as Schneider acknowledged in moving to transfer his

FCA Action to the District of Columbia, Chase is subject to personal jurisdiction in that forum,

and venue is proper in that forum because Chase resides there for purposes of the federal venue

statutes. See Maya Decl. Ex. H (Mem. in Supp. of Mot. to Transfer) at 4 (arguing that venue for

Schneider FCA Action is proper in D.C.); 28 U.S.C. § 1391(b)(1) (civil action "may be brought

in a judicial district in which any defendant resides"); 28 U .S.C. § 1391(c)(2) (for venue

purposes, corporate defendant is resident of"any judicial district in which such defendant is

subject to the court's personal jurisdiction with respect to the civil action in question").

This motion therefore turns on the second prong of the two-part test: whether

transfer would be an appropriate exercise of the Court's discretion. Robertson, 2011 WL

5175597, at *3. Courts considering that question look to a number of factors, including:

9
 (1) the convenience of witnesses; (2) the convenience of the
parties; (3) the location of relevant documents and the relative ease
of access to sources of proof; (4) the locus of operative facts; (5)
the availability of process to compel the attendance of unwilling
witnesses; (6) the relative means of the parties; (7) the forum's
familiarity with the governing law; (8) the weight accorded the
plaintiff's choice of forum; and (9) trial efficiency and the interests
of justice, based on the totality of the circumstances.

/d. at *4. Among these factors, the "interests of justice" is particularly important. Under this

factor, the existence of a related action "weighs heavily toward transfer," APA Excelsior III L.P.

v. Premiere Techs., Inc., 49 F. Supp. 2d 664, 668 (S.D.N.Y. 1999), and is such a "strong factor"

that it "may be determinative," Williams v. City of New York, No. 03 Civ. 5342(RWS), 2006 WL

399456, at *3 (S.D.N.Y. Feb. 21, 2006).

ARGUMENT

I. THIS ACTION SHOULD BE TRANSFERRED TO THE DISTRICT OF

COLUMBIA FOR COORDINATION WITH THE RELATED FCA ACTION.

This case should be transferred to the District of Columbia both to avoid

duplicative litigation of common questions of law and fact and to take advantage of Judge

Collyer's unique expertise in interpreting and applying the NMS.

As courts in this District have often observed, "[t]here is a strong policy favoring

the litigation of related claims in the same tribunal in order that pretrial discovery can be

conducted more efficiently, duplicitous litigation can be avoided, [] and inconsistent results can

be avoided." APA Excelsior, 49 F. Supp. 2d at 668 (quoting Savin v. CSX Corp., 657 F. Supp.

1210, 1214 (S.D.N.Y. 1987)). As a result, the existence of a related action "weighs heavily

toward transfer," id., and "cases have frequently been transferred to a forum in which other

actions were pending from the same transactions." Dahl v. HEM Pharm. Corp., 867 F. Supp.

194, 196 (S.D.N.Y. 1994). Transfer is especially appropriate where the related actions involve

"the same facts, transactions, or occurrences," Nieves v. Am. Airlines, 700 F. Supp. 769, 773

10
(S.D.N.Y. 1988), or "hinge upon the same factual nuclei," Berg v. First Am. Bankslzares, Inc.,

576 F. Supp. 1239, 1243 (S.D.N.Y. 1983).

This case provides a textbook example of the type of action that should be

transferred pursuant to these principles. As discussed above, both the Schneider Private Action

and the Schneider FCA Action rely on a common set of factual allegations regarding, among

other things:

• Chase's alleged use of its Recovery One system to conceal charged offloans from
federal regulators, SAC~~ 4, 51; FCA Compl. ~~ 16, 174-75,

• Chase' s alleged use of Recovery One to evade its obligations under the NMS and
HAMP, SAC~~ 2-4,51-54, 113-18; FCA Compl. ~~ 16-20, 163-78,

• Chase's alleged misconduct in forgiving loans owned by the Schneider Entities and
then claiming credit under the NMS for forgiving loans it did not own. SAC ~~ 89-
105, 173, 177; FCA Compl. ~~ 11-13, 17-19, 199-206, 223-35, 244-52; and

• The data corruption and recordkeeping errors that allegedly infect Recovery One.
SAC ~~ 53, 101-02, 116, 136, 146; FCA Compl. ~~ 16, 163-64, 176, 178.

Litigating these common factual questions in two different courts and on two

different discovery schedules would impose substantial burdens on both Chase and the federal

judiciary. Indeed, the Schneider Entities anticipate such wide-ranging discovery into these

common questions that they asked this Court to suspend the usual limit of ten depositions per

side. Maya Decl. Ex. M (Preliminary Pre-Trial Statement) at 23. Chase should not be required

to present numerous witnesses for duplicative depositions on the very same factual questions;

nor should this Court be forced to waste time and effort on questions of fact and discovery issues

that Schneider has already placed before another federal court. Under settled law, transfer

should be granted to avoid this needless waste of judicial and party resources. See APA

Excelsior, 49 F. Supp. 2d at 670 (where "both actions hinge on the same core of operative facts,"

transfer will "serve the interests of judicial economy and fairness by avoiding duplicative

11
litigation and the possibility of inconsistent rulings"); Williams, 2006 WL 399456, at *3

(pendency of related action favored transfer because, inter alia, "discovery requests ... will

likely overlap"); River Road Int '1, L.P. v. Josephthal Lyon & Ross, Inc., 871 F. Supp. 210, 214

(S.D.N.Y. 1995) (transfer appropriate in related actions to facilitate coordinated discovery and to

avoid duplicative discovery disputes). 1

Transfer to the District of Columbia also is supported by the common legal

questions that arise in both actions. For example, both the Schneider Private Action and the

Schneider FCA Action call for a determination of whether Chase violated the requirements of the

NMS or HAMP. Supra at 6-7. Transfer should be granted to avoid the prospect that two

different federal judges will reach inconsistent conclusions on these common questions of law.

See, e.g., ITT World Commc 'ns, Inc. v. F. C. C., 621 F.2d 1201, 1208 (2d Cir. 1980) ("[T]here is a

policy of unifying related proceedings in a single court, and obtaining consistent results."); APA

Excelsior, 49 F. Supp. 2d at 670 ("[T]ransfer will serve the interests of judicial economy and

fairness by avoiding duplicative litigation and the possibility of inconsistent rulings."); River

Road Int '1, L.P., 871 F. Supp. at 214 ("The presence of related litigation in the transferee forum

weighs heavily in favor of transfer, since litigation of related claims in the same tribunal ...

avoids duplicative litigation and inconsistent results." (internal quotation and citation omitted)).

Judge Collyer's unmatched expertise in interpreting and applying the NMS

settlements provides yet another reason for transfer. Each of those settlements vests the District

1
At the status conference conducted on April 24, 2015, the Court suggested that the inefficiency
that would result from overlapping discovery in the two actions potentially could be reduced
through coordination between this Court and the District of Columbia court, without the transfer
of this action to D.C. In this case, however, coordination across two separate courts would be
unworkable because the Government- the real party in interest in the Schneider FCA Action,
see United States ex ref. Mergent Servs. v. Flaherty, 540 F.3d 89, 93 (2d Cir. 2008)-is not a
party to this action and therefore would not be subject to this Court's discovery orders.

12
of Columbia federal courts with exclusive jurisdiction over disputes arising thereunder. See

Maya Decl. Ex. B (Consent Judgment) at Ex. E, § 1(2). Based in part on these provisions, Judge

Collyer has presided over numerous cases involving the NMS settlements. See, e.g., United

States v. Bank ofAm., No. 12-361 (RMC), 2015 WL 424240 (D.D.C. Feb. 2, 2015); United

States v. Bank ofAm., 303 F.R.D. 114 (D.D.C. 2014); United States v. Bank ofAm., 922 F. Supp.

2d 1 (D.D.C. 2013). Moreover, Judge Collyer is now presiding over the Schneider FCA action

at the express request and suggestion of Mr. Schneider. See Maya Decl. Ex. H (Mem. in Supp.

of Mot. to Transfer) at 3. Judge Collyer's accumulated expertise in interpreting the NMS

settlements is an additional reason why transfer to the District of Columbia would serve the

interests of justice. See, e.g., Robertson, 2011 WL 5175597, at *4 (because of experience with

related litigation, transferee court was "uniquely familiar with the facts and legal theories"

asserted by parties); Dahl, 867 F. Supp. at 197 (transfer appropriate because, inter alia,

transferee court was "intimately familiar" with case and its "factual complexities"); Savin, 657 F.

Supp. at 1214 (transferee court's familiarity with factual background due to involvement in

related litigation would "prove of substantial assistance to both parties."); see also United States

v. Carey, 152 F. Supp. 2d 415, 421-22 (S.D.N.Y. 2001) (where action "originates with [a]

Consent Decree ... provid[ing] [a] [j]udge ... with extensive supervisory powers," although

some relevant conduct "may have occurred elsewhere, the heart of the events at issue lies with

the Consent Decree").

For all these reasons, the interests of justice favor transfer of this action to the

District of Columbia so that it may be coordinated with the FCA Action pending before Judge

Collyer. See, e.g., Robertson, 2011 WL 5175597, at *4-*5 (transferring action to forum where

13
related action was pending); Williams, 2006 WL 399456, at *3 (same); APA Excelsior, 49 F.

Supp. 2d at 673 (same); Nieves, 700 F. Supp. at 774 (same); Savin, 657 F. Supp. at 1215 (same).

II. THE REMAINING TRANSFER FACTORS SUPPORT TRANSFER OF THIS

ACTION TO THE DISTRICT OF COLUMBIA.

Chase respectfully submits that the pendency of a previously-filed, related action

in the District of Columbia should be "determinative" of this motion. Williams, 2006 WL

399456, at *3. To the extent, however, that the Court considers the remaining factors that courts

sometimes consider in ruling on motions to transfer, those factors likewise support a transfer to

the District of Columbia.

A. The Convenience of the Parties and Witnesses Favor Transfer.

The convenience of the parties and non-party witnesses are among the factors that

courts typically consider in evaluating motions to transfer. See Robertson, 2011 WL 5175597, at

*4. Both these factors support a transfer to the District of Columbia.

With respect to the convenience of the parties, Schneider essentially conceded

that the District of Columbia would be a convenient forum for this litigation when he moved to

transfer the Schneider FCA Action from the District of South Carolina to the District of

Columbia. See Maya Decl. Ex. H (Mem. in Supp. of Mot. to Transfer). Indeed, Schneider's

motion papers expressly argued that the District of Columbia would be a convenient forum for

all parties, including himself. !d. at 5.

Having represented that the District of Columbia is a convenient forum for his

FCA Action, Schneider cannot now argue that it is an inconvenient forum for his related Private

Action. Moreover, if Schneider were permitted to litigate his Private Action in a different forum

than his FCA Action, Chase and its witnesses would be put to the undue burden and expense of

litigating overlapping cases in two different courts and on two different schedules. Indeed, even

14
the witnesses affiliated with the Schneider Entities would be subjected to far less burden and

inconvenience if they were deposed only once under a coordinated discovery schedule applicable

to both actions as opposed to being subjected to duplicative depositions in two actions.

Moreover, because of the substantial overlap in the factual basis of the Schneider

Private Action and the Schneider FCA Action, it is likely that many witnesses would be required

to testify at trial in both cases. To the extent that these witnesses reside outside of either New

York or the District of Columbia, it would be far more convenient for them to travel only once to

the District of Columbia than to be required to travel separately to the District of Columbia and

to New York. This is especially true for the non-party witnesses, whose convenience is of

paramount concern. See CYI, Inc. v. Ja-Ru, Inc., 913 F. Supp. 2d 16, 22 (S.D.N.Y. 2012).

Schneider asserted in his motion to transfer the Schneider FCA Action from South

Carolina to the District of Columbia that the non-party witnesses could include Joseph A. Smith,

the NMS Monitor. See Maya Decl. Ex. H (Mem. in Supp. of Mot. to Transfer) at 5. Other non-

party witnesses potentially could include representatives of Fannie Mae and Freddie Mac who

administer the HAMP program for the Treasury Department. None of these witnesses are

located in New York, and Fannie Mae and Freddie Mac are located in and around the District of

Columbia. See Maya Decl. Ex. K (docket sheet from Schneider FCA Action showing Monitor's

location in Raleigh, North Carolina); Fannie Mae, Our Locations, http://www.fanniemae.com/

portal/about-us/careers/locations.html (last visited May 20, 2015); Freddie Mac, Corporate

Office Locations, http://www .freddiemac.com/corporate/about/where_to _reach_us/ (last visited

May 20, 2015).

The convenience of the party witnesses also supports transfer. Like the non-party

witnesses, it would be more convenient for the party witnesses who reside outside of New York

15
or the District of Columbia to make one trip to testify at trial instead of two separate trips to New

York and D.C. For Schneider himself and employees of the Schneider Entities, it would be no

less convenient to travel from Florida to the District of Columbia than to travel from Florida to

New York. Similarly, with respect to Chase's employee witnesses, who are located in, among

other places, Arizona, see Boyle Decl. 11113-5, there would be no meaningful difference between

litigation in New York and litigation in the District of Columbia.

B. The Locus of Operative Facts Is in the District of Columbia.

The locus of operative facts in this action also favors transfer to the District of

Columbia. See Robertson, 2011 WL 5175597, at *4. As discussed above, this action revolves in

part around allegations that Chase violated (1) the NMS Consent Judgment, which was entered

by Judge Collyer in the District of Columbia, and (2) the requirements of the federal HAMP

program, which is administered and enforced by Fannie Mae and Freddie Mac in the

Washington, DC area. See FCA Compl. 1111117, 134-35. Moreover, none of the key conduct or

events took place in New York. See Boyle Decl.11113-6 (Chase witnesses located in Arizona and

Texas). Under these circumstances, the locus of operative fact supports transfer to the District of

Columbia. See Carey, 152 F. Supp. 2d at 421-22 (where action "originates with [a] Consent

Decree ... provid[ing] [a] [j]udge ... with extensive supervisory powers," although some

relevant conduct "may have occurred elsewhere, the heart of the events at issue lies with the

Consent Decree").

C. The Location of Relevant Documents, the Availability of Compulsory

Process, and the Forum's Familiarity with Governing Law Support Transfer
or Are Neutral.

Three additional factors-the location of relevant documents, the availability of

compulsory process, and the forum's familiarity with governing law, see Robertson, 2011 WL

5175597, at *4-either favor transfer or are neutral.

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 With respect to the location of documents, this factor carries little or no weight

because the documents in this case will be exchanged electronically. See, e.g., Rindfleisch v.

Gentiva Health Sys., Inc., 752 F. Supp. 2d 246, 258 (S.D.N.Y. 2010) (location of documents not

"particularly significant given the technological age in which we live, where there is widespread

use of ... electronic document production").

With respect to the forum's familiarity with governing law, the decisive

consideration is that Judge Collyer-the judge who presided over entry of the NMS

settlements-possesses unparalleled expertise with respect to the interpretation and application

of those voluminous and complex settlements. See Robertson, 2011 WL 5175597, at *4; Dahl,

867 F. Supp. at 197; Savin, 657 F. Supp. at 1214. Furthermore, the fact that New York common

law applies to one or more of plaintiffs' claims "is to be accorded little weight on a motion to

transfer venue ... because federal courts are deemed capable of applying the substantive law of

other states." Aguiar v. Natbony, No. 10 Civ. 6531 (PGG), 2011 WL 1873590, at *10 (S.D.N.Y.

May 16, 2011) (internal quotation and citation omitted).

With respect to the availability of compulsory process, Chase is unaware of any

non-party witness who would be available for trial in New York but not in the District of

Columbia. The Fannie Mae and Freddie Mac employees involved in administering the HAMP

program, by contrast, will be within the subpoena range of the court only if the action is

transferred to the District of Columbia. See Fed. R. Civ. P. 45(c)(1) (subpoena may command

person to testify only within 100 miles or, under certain circumstances, within state).

D. Plaintiffs' Choice of Forum Is Entitled to Little Weight.

Although a plaintiffs choice of forum is sometimes given weight in evaluating a

motion to transfer, that factor deserves no weight where, as here, the plaintiff does not reside in

17
the chosen forum and has elected to litigate related claims in the transferee forum. See SAC

~~ 7-9 (Schneider Entities all reside in Florida); FAC Compl. ~ 42 (Schneider resides in Florida);

Keitt v. New York City, 882 F. Supp. 2d 412, 459 (S.D.N.Y. 2011) ("A plaintiffs choice of

forum is accorded less deference ... where plaintiff does not reside in the chosen forum and the

operative facts did not occur there."); McCain v. Racing, No. 07 Civ. 5729 (JSR), 2007 WL

2435170, at *3 (S.D.N.Y. Aug. 27, 2007) ("plaintiffs choice offorum is entitled to less

deference" where plaintiff does not reside in forum and has chosen to litigate related claims in

transferee forum).

It makes no difference that the Schneider Entities allege that Chase breached a

contract containing a New York forum selection clause. See Maya Decl. Ex. 0 (Mortgage Loan

Purchase Agreement ("MLPA")) § 15. The law is clear that a forum selection clause does not

defeat a district court's "discretion to transfer the action in the interest of justice." APA

Excelsior, 49 F. Supp. 2d at 671-73. Indeed, the court inAPA Excelsior transferred an action

despite a forum selection clause that expressly provided that the parties to the clause would "not

attempt to deny or defeat ... personal jurisdiction or venue [in New York] by motion or other

request for leave." /d. It follows a fortiori that the clause at issue here- which contains no

similar waiver of the right to move for a transfer of venue-will not defeat a transfer motion

bolstered by the federal judiciary's strong interest in avoiding piecemeal litigation of related

disputes. See id.; see also Savin, 657 F. Supp. at 1214-15 (transferring action notwithstanding

forum selection clause in favor of New York; finding that even though New York would be "a

slightly more convenient forum than Pittsburgh," any inconvenience resulting from transfer was

outweighed by advantages of litigating related cases in single forum).

18
 CONCLUSION

For the foregoing reasons, this case should be transferred to the United States

District Court for the District of Columbia.

Dated: May 22, 2015 Respectfully submitted,

COVINGTON & BURLING LLP

By: --'-~
~~ J 0"""'" --',~
Robert D. Wick
W~~
--=-=--------
Michael M. Maya
One CityCenter, 850 Tenth Street, NW
Washington, DC 20001-4956
Telephone: (202) 662-6000
Facsimile: (202) 662-6291
rwick@cov .com
mmaya@cov .com

Michael C. Nicholson
COVINGTON & BURLING LLP
The New York Times Building
620 Eighth Avenue
New York, New York 10018-1405
(212) 841-1000
mcnicholson@cov .com

Attorneys for Defendants

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