Appellate Case: 14-3151 Document: 01019285138 Date Filed...

No.In The United States Court of Appeals

for the

Tenth Circuit ________________________________________

IN RE RBS SECURITIES INC., RBS ACCEPTANCE INC., AND

FINANCIAL ASSET SECURITIES CORP. Defendants-Petitioners

__________________________________________

PETITION FOR WRIT OF MANDAMUS RELATING TO ORDERS OF THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF KANSAS NO. 11 CIV. 2340

PETITION FOR WRIT OF MANDAMUS

ORAL ARGUMENT REQUESTED

R. Alexander Pilmer David I. Horowitz Tammy A. Tsoumas Derek M. Milosavljevic Gavin C.P. Campbell KIRKLAND & ELLIS LLP 333 South Hope Street Los Angeles, California 90071 Tel: (213) 680-8400 Fax: (213) 680-8500 Counsel for Defendants-Petitioners RBS Securities Inc., RBS Acceptance Inc., and Financial Asset Securities Corp.

Appellate Case: 14-3151 Document: 01019285138 Date Filed: 07/24/2014 Page: 1

RULE 26.1 CORPORATE DISCLOSURE STATEMENT

RBS Securities Inc. is a wholly-owned subsidiary of RBS Holdings USA

Inc., and an indirect wholly-owned subsidiary of the Royal Bank of Scotland

Group plc, a public company whose stock is traded on the London Stock

Exchange. No other publicly-held entities own more than 10 percent of the stock

of RBS Securities Inc.

RBS Acceptance Inc. is a wholly-owned subsidiary of RBS Holdings USA

Inc., and an indirect wholly-owned subsidiary of the Royal Bank of Scotland

Group plc, a public company whose stock is traded on the London Stock


of RBS Acceptance Inc.

Financial Asset Securities Corp. is a wholly-owned subsidiary of RBS

Holdings USA Inc., and an indirect wholly-owned subsidiary of the Royal Bank of

Scotland Group plc, a public company whose stock is traded on the London Stock


of Financial Asset Securities Corp.


i

TABLE OF CONTENTS Page

I. INTRODUCTION ......................................................................................... 1

II. STATEMENT OF ISSUES PRESENTED .................................................. 2

III. STATEMENT OF RELIEF REQUESTED ................................................ 2

IV. STATEMENT OF NECESSARY FACTS .................................................. 3

V. ARGUMENT ................................................................................................ 10

A. The District Court’s Order Disregards the Congressionally-Established Structure of the Federal District Courts and Represents an Abdication of the Court’s Obligation to Decide the Disputes in the Case Before It. ...................................................... 12

1. No Statutory Authority Permits The District Court to Designate Judge Cote for Service in This Case. ....................... 12

2. The District Court Cannot Abstain from Deciding Disputes In This Case and Cede Its Authority to a Court Outside This Circuit. ................................................................. 19

3. The District Court’s Order Does Not Comply With the Procedure for Assigning District Judges Under the Central District’s Local Rules. .................................................. 22

B. Interference With This Court’s Appellate Jurisdiction and Prejudice From Unauthorized Rulings Are Not Correctable On Appeal.................................................................................................. 23

C. The District Court’s Order Raises Novel and Important Questions Regarding District Courts’ Authority to Transfer Cases Outside of the Congressionally-Mandated System of Transfer and Judicial Designation. ...................................................... 27

D. Because The Challenged Order Is a Discovery Order, RBS Lacks an Adequate Alternative to Mandamus Relief. ........................ 28

VI. CONCLUSION ............................................................................................ 29


ii

TABLE OF AUTHORITIES Page No(s).

Cases

Armster v. U.S. Dist. Court, 806 F.2d 1347 (9th Cir. 1986) .............................................................................. 11

Borja v. U.S. Dist. Court, 919 F.2d 100 (9th Cir. 1990) ................................................................................ 25

Cessna Aircraft Co. v. Brown, 348 F.2d 689 (10th Cir. 1965) ....................................................................... 17, 28

Cheney v. U.S. Dist. Court, 542 U.S. 367 (2004) .............................................................................................. 11

CitiFinancial Corp. v. Harrison, 453 F.3d 245 (5th Cir. 2006) ................................................................................ 20

Clyma v. Sunoco, 594 F.3d 777 (10th Cir. 2010) ................................................................. 12, 21, 27

Dhalluin v. McKibben, 682 F. Supp. 1096 (D. Nev. 1988) ........................................................................ 20

FTC v. MacArthur, 532 F.2d 1135 (7th Cir. 1976) .............................................................................. 18

Hollingsworth v. Perry, 558 U.S. 183 (2010) ....................................................................................... 22, 23

Holmes v. Grubman, 315 F. Supp. 2d 1376 (M.D. Ga. 2004) ................................................................ 15

Hustler Magazine, Inc. v. U.S. Dist. Court, 790 F.2d 69 (10th Cir. 1986) ................................................................................ 21

In re Cement Antitrust Litig. (MDL No. 296), 688 F.2d 1297 (9th Cir. 1982) .............................................................................. 24

In re Cooper Tire & Rubber Co., 568 F.3d 1180 (10th Cir. 2009) ............................................................... 11, 12, 19


iii

In re Corrugated Container Antitrust Litig., 662 F.2d 875 (D.C. Cir. 1981) .............................................................................. 13

In re Fibreboard Corp., 893 F.2d 706 (5th Cir. 1990) ................................................................................ 29

In re Flight Transp. Corp. Sec. Litig., 764 F.2d 515 (8th Cir. 1985) ................................................................................ 17

In re Korean Air Lines Disaster of Sept. 1, 1983, 829 F.2d 1171 (D.C. Cir. 1987) ............................................................................ 20

In re McBryde, 117 F.3d 208 (5th Cir. 1997) ................................................................................ 23

In re Motor Fuel Temperature Sales Practices Litig., 711 F.3d 1050 (9th Cir. 2013) ........................................................... 14, 23, 25, 26

In re Plumbing Fixture Cases, 298 F. Supp. 484 (J.P.M.L. 1968) .................................................................. 15, 17

In re Repetitive Stress Injury Litig., 11 F.3d 368 (2d Cir. 1993) ............................................................................ 18, 29

In re Sony BMG Music Enter., 564 F.3d 1 (1st Cir. 2009) ..................................................................................... 23

In re United States, 10 F.3d 931 (2d Cir. 1993) ................................................................................... 29

Kerr-McGee Corp. v. Ritter, 461 F.2d 1104 (10th Cir. 1972) ............................................................................ 23

La Buy v. Howes Leather Co., 352 U.S. 249 (1957) ....................................................................................... 11, 29

Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998) ................................................................................................ 16

Ligon v. City of N.Y., 736 F.3d 118 (2d Cir. 2013) ................................................................................. 23


iv

Mallard v. U.S. Dist. Court, 490 U.S. 296 (1989) .............................................................................................. 19

McDowell v. United States, 159 U.S. 596 (1895) .............................................................................................. 13

Nguyen v. United States, 539 U.S. 69 (2003) ......................................................................................... 14, 15

Perry v. Schwarzenegger, 591 F.3d 1147 (9th Cir. 2009) .............................................................................. 27

Roche v. Evaporated Milk Ass’n, 319 U.S. 21 (1943) ............................................................................. 10, 11, 19, 24

Schlagenhauf v. Holder, 379 U.S. 104 (1964) .............................................................................................. 11

SG Cowen Sec. Corp. v. U.S. Dist. Court, 189 F.3d 909 (9th Cir. 1999) ................................................................................ 27

Sprint Commc’ns, Inc. v. Jacobs, 571 U.S. __, 134 S. Ct. 584 (2013) ....................................................................... 19

Stein v. KPMG, LLP, 486 F.3d 761 (2d Cir. 2007) ................................................................................. 26

United States v. Coppa, 267 F.3d 132 (2d Cir. 2001) ................................................................................. 28

United States v. Microsoft Corp., 147 F.3d 935 (D.C. Cir. 1998) .............................................................................. 26

United States v. Roberts, 618 F.2d 530 (9th Cir. 1980) ................................................................................ 13

United States v. West, 672 F.2d 796 (10th Cir. 1982) .............................................................................. 26

Utah-Idaho Sugar Co. v. Ritter, 461 F.2d 1100 (10th Cir. 1972) ............................................................................ 23


v

Valenzuela-Gonzalez v. U.S. Dist. Court, 915 F.2d 1276 (9th Cir. 1990) .............................................................................. 28

Woods Constr. Co. v. Atlas Chem. Indus., Inc., 337 F.2d 888 (10th Cir. 1964) .............................................................................. 22

Statutes

28 U.S.C. § 292 ........................................................................................... 13, 14, 15

28 U.S.C. § 294 ........................................................................................................ 14

28 U.S.C. § 1294 ...................................................................................................... 24

28 U.S.C. § 1404 ......................................................................................... 13, 16, 17

28 U.S.C. § 1406 ............................................................................................... 13, 16

28 U.S.C. § 1407 .............................................................................................. passim

28 U.S.C. § 1651 ............................................................................................... 11, 28

Other Authorities

Wright & Miller, 15 Fed. Prac. & Proc. Juris. § 3846 (4th ed.) .............................. 16

Rules

D. Kan. L.R. 40.1 ..................................................................................................... 26

Fed. R. Civ. P. 77(b) ................................................................................................ 30


vi

STATEMENT OF RELATED CASES

RBS is concurrently filing mandamus petitions to the Courts of Appeals for

the Ninth and Second Circuits: In re RBS Securities Inc., et al. v. United States

Dist. Court, No. 14-___ (9th Cir.); In re RBS Securities Inc., et al., No. 14-___ (2d

Cir.). An appeal from a motion to dismiss ruling in the case below is pending

before this Court: Nomura Home Equity Loan, et al. v. NCUA Bd., Nos. 12-3295 &

12-3298 (10th Cir.). An appeal of another motion to dismiss ruling involving

plaintiff-respondent NCUA and issues related to those in the case below is also

before this Court: NCUA Bd. v. Barclays Capital Inc., et al., No. 13-3183 (10th

Cir.). NCUA is also involved in appeals regarding issues related to those in the

case below in the Ninth Circuit, one of which also involves RBS: NCUA Bd. v.

RBS Securities Inc., et al., Nos. 13-56620 & 13-56621 (9th Cir.); NCUA Bd. v.

Goldman, Sachs & Co., et al., Nos. 13-56851, 13-56852, 13-80165, 13-80230, 14-

55309 (9th Cir.).


vii

GLOSSARY

Add. Addendum to this petition FHFA Federal Housing Finance Agency NCUA National Credit Union Administration Board PA Petitioners’ Appendix in Support of Petition Protocol Master Discovery Protocol (entered in this case) RBS RBS Securities Inc., RBS Acceptance Inc., & Financial Asset Securities Corp. RMBS Residential mortgage-backed securities


1

I. INTRODUCTION

This is one of three actions brought by the National Credit Union

Administration Board (“NCUA”) against Petitioners RBS Securities Inc. and RBS

Acceptance Inc. (“RBS”)1 in three different districts in three different circuits.

After the Judicial Panel on Multidistrict Litigation denied a motion to consolidate

these actions, the District Court for the District of Kansas entered an order

purporting to enable a district judge from the Southern District of New York to

decide discovery disputes in this case under the guise of a “Coordination Judge,”

even though there is no authority for such a procedure.2 The extraordinary nature

of mandamus relief is appropriate to correct this error for numerous reasons.

First, the District Court’s order was clearly erroneous because: (i) there is no

statutory authority for out-of-circuit judges to issue rulings in this case; (ii) the

order represents an improper ceding of the District Court’s obligation to decide the

cases before it; and (iii) the order does not comply with the Local Rules for the

District of Kansas.

1 Petitioner Financial Asset Securities Corp. (also referred to in this petition as “RBS”) is only involved in this action. 2 The key “Coordination Judge” provision is Section 2 of the “Master Discovery Protocol” entered by the District Court. (Add. 4.) (All references to “Add.” are to the addendum to this petition.) As described below, this order was also entered in cases pending in the Central District of California and the Southern District of New York. (PA 632, 720.) (All references to “PA” are to RBS’s concurrently-filed Petitioners’ Appendix.) RBS is simultaneously seeking writs of mandamus in the Ninth and Second Circuits.


2

Second, the District Court’s order threatens the appellate jurisdiction of this

Court, and the harm from being subject to the decisions of a court with no

authority to issue them cannot be corrected on appeal.

Third, the District Court’s order presents novel questions about the ability of

judges to create new procedures for consolidating cases in different circuits when

the Judicial Panel on Multidistrict Litigation has rejected consolidation. Indeed,

neither NCUA nor the District Court has identified any precedent for the

“Coordination Judge” provisions of the Master Discovery Protocol.

For all these reasons, RBS requests that this Court issue a writ of mandamus

directing the District Court to strike the “Coordination Judge” provisions of the

Master Discovery Protocol and vacate the orders entered pursuant to those

provisions.

II. STATEMENT OF ISSUES PRESENTED

Whether a writ of mandamus is warranted to correct the District Court’s

clear error in entering an order that purports to allow an out-of circuit district court

to make or be involved in making decisions in this case.

III. STATEMENT OF RELIEF REQUESTED

RBS respectfully petitions this Court for a writ of mandamus directing the

District Court to strike Section 2 of the Master Discovery Protocol and vacate all

discovery orders entered in this case pursuant to Section 2.


3

IV. STATEMENT OF NECESSARY FACTS

On March 20, 2009, NCUA placed U.S. Central FCU and WesCorp FCU,

the two largest corporate credit unions in the country, into conservatorship; in

September 2010, NCUA placed two other corporate credit unions, Southwest

Corporate FCU and Members United Corporate FCU, into conservatorship. (PA

68, 571–72, 672–73.)

On June 20, 2011, on behalf of U.S. Central, NCUA sued RBS in the

District of Kansas (U.S. Central was headquartered in Lenexa, Kansas), alleging

violations of Sections 11 and 12 of the Securities Act of 1933 and state Blue Sky

laws regarding the sale of approximately $1.7 billion of residential mortgage-

backed securities (“RMBS”). (See PA 57–94.) That case—now before this

Court—is pending before the Honorable John W. Lungstrum.3 Soon after, on July

18, 2011, NCUA sued RBS on behalf of WesCorp in the Central District of

California (WesCorp was headquartered in San Dimas, California) alleging the

same federal claims (and California Blue Sky claims) regarding approximately

$1.6 billion in RMBS purchases. (See PA 664–92.) That case is pending before

the Honorable George H. Wu.

3 The Honorable James P. O’Hara, Chief Magistrate Judge for the District of Kansas, is also actively involved in the case.


4

On September 2, 2011, after NCUA filed its Kansas and California cases

against RBS, the Federal Housing Finance Agency (“FHFA”)— a different federal

agency assigned as conservator for Fannie Mae and Freddie Mac —filed several

RMBS lawsuits in New York. Ultimately, the New York FHFA cases were

assigned to the Honorable Denise L. Cote, of the Southern District of New York.

RBS was named as a co-defendant in some of the New York FHFA cases, and

FHFA also sued RBS in the District of Connecticut. (See Complaint, FHFA v.

Royal Bank of Scotland Grp. PLC, No. 11-cv-01383 (D. Conn. Sept. 2, 2011), ECF

No. 1.)

After observing several plaintiff-favorable rulings by Judge Cote in the New

York FHFA cases, on September 23, 2013 (over two years after filing suit in

Kansas), NCUA sued RBS (located in Stamford, Connecticut) in the Southern

District of New York on behalf of Southwest (based in Plano, Texas) and Members

(based in Warrenville, Illinois). (See PA 563–84.) 4 NCUA’s New York case

against RBS involves roughly $300 million in RMBS purchases—less than ten

percent of the amount at issue in the cases pending in California and Kansas.

In New York, NCUA filed an “explanation of related case” claiming that its

suit against RBS was “related” to the New York FHFA cases, even though: (1)

4 On the same day NCUA sued RBS in New York, NCUA filed separate lawsuits (again on behalf of Southwest and Members) against Morgan Stanley, Goldman Sachs, Credit Suisse, UBS, and Wachovia.


5

FHFA’s main case against RBS was in Connecticut, not New York; (2) the cases

involved different governmental entities acting as conservators for different types

of entities (government-sponsored Fannie and Freddie versus privately-owned

credit unions); and (3) out of the dozens of offerings at issue in these “related

cases,” only four actually overlapped. (See PA 559–62.)5 Over RBS’ objection,

Judge Cote accepted the cases as related. (See PA 585–89.)

On October 11, 2013, RBS joined a request to the Judicial Panel on

Multidistrict Litigation (“JPML”) to transfer all of the New York NCUA lawsuits

to the District of Kansas pursuant to 28 U.S.C. § 1407,6 based on both the factual

overlap between the cases and on several factors specific to the District of Kansas,

including Judge Lungstrum’s familiarity with the issues in the cases, and the fact

that the Kansas actions were the first-filed actions (by two years).7 (PA 731–68.)

NCUA opposed the MDL petition, arguing that “discovery is not common

across these cases and must be undertaken separately for the distinct Credit 5 NCUA claimed that the FHFA cases “involve similar allegations” and that NCUA “is similarly a governmental entity” (PA 562), but the relevant Southern District rule states that “[c]ivil cases shall not be deemed related merely because they involve common legal issues or the same parties.” S.D.N.Y. Rule for the Division of Business Among District Judges, Rule 13(a)(2)(A). 6 RBS filed a notice with the JPML that the California NCUA case was a potential tag-along action. (PA 769–72.) 7 Before NCUA even submitted its response to the MDL petition, Judge Cote sua sponte stated that she would be fully capable of handling such an MDL in her court—stating that “[i]f the NCUA cases are litigated in this district before this Court they will be addressed promptly and efficiently.” (PA 595.)


6

Union(s) that purchased the distinct RMBS at issue in a specific case” and that

“NCUA will seek discovery specific to each RMBS offering.” (PA 785, 787.)8

NCUA also noted that “NCUA as liquidating agent represents different Credit

Unions, a key fact entirely ignored by Defendants. . . . Each of those Credit Unions

had different employees, documents, processes, relationship with the Defendants,

and transaction histories.” (PA 785.)9 Instead, NCUA urged that all the cases be

transferred to Judge Cote in the Southern District of New York. (PA 795–96.)10

On February 12, 2014, the JPML denied the request for a transfer, accepting

NCUA’s argument that the cases did not share sufficient common questions to

warrant consolidation under 28 U.S.C. § 1407, and noting that “different

representations made to different purchasers of RMBS will be at issue, involving

different discovery and motion practice.” (PA 834.) Upon receiving the order 8 Unless otherwise noted, all emphasis in the Petitioners’ Appendix is added by RBS. 9 The same critiques NCUA raised with respect to an MDL involving NCUA’s lawsuits would have applied a fortiori to its previous claim that cases a different plaintiff (FHFA) brought were somehow related to the NCUA cases. Comparing those cases, they also involved completely “different employees, documents, processes, relationship with the Defendants, and transaction histories.” Additionally, the types of entities involved (credit unions versus Fannie and Freddie) and the actual plaintiff (FHFA versus NCUA) were also completely different. 10 This position mirrors FHFA’s in the Connecticut case against RBS. There, the court noted that FHFA’s counsel “frequently conveys the impression that . . . they want the court to simply adopt, without critically evaluating, decisions made in the SDNY Actions.” (Order at 2, FHFA v. Royal Bank of Scotland Grp. PLC, No. 11-cv-01383 (D. Conn. Mar. 31, 2014), ECF No. 334.)


7

rejecting consolidation, Judge Cote “immediately . . . reached out to Judges

Lungstrum and Wu and introduced [her]self, and . . . began a conversation with

them about working to coordinate our litigation.” (PA 602.) Although the JPML

rejected the idea of an MDL in one district before one judge, Judge Cote stated

that: “It seems to me that we should certainly manage [this] litigation . . . as if all

the litigations were managed in one district before one judge.” (PA 603.)

Furthering her apparent goal of assuming the role of “Coordination Judge,”

Judge Cote required RBS and the other parties in the New York NCUA actions to

submit letters regarding whether they agreed that a “master discovery protocol”

should be entered across all three sets of actions. (PA 622.) But before the parties

filed their submissions, Judge Cote entered an order noting that “this Court

conferred” with Judges Lungstrum, Wu, and O’Hara, and purporting to limit

RBS’—and all other parties’—arguments regarding “any discovery dispute in the

New York, Kansas, or California actions” to a two-page submission to Judge Cote

and the other judges. (PA 625–26.) Later that day, the parties submitted a joint

letter, noting that they agreed, in the abstract, to “the entry of some form of . . . a

master discovery protocol,” but noting that the defendants “have issues, to varying

degrees, with the scope and content of the proposals made by plaintiff.” (PA 627.)

NCUA—in contrast to the positions it took before the JPML—argued that

“it would be most efficient to present pre-trial disputes to a single judge,” and


8

therefore “proposed that all three judges designate a coordination judge to decide

all pre-trial disputes in the first instance, with all judges taking appropriate steps to

ensure that any rulings are binding in all Courts.” (PA 416.) NCUA provided no

authority for a procedure whereby one judge would make rulings that other Article

III judges would effectively enter as clerks of the “Coordination Judge.”

Over RBS’ objection,11 on April 2, 2014, at a joint hearing across all three

cases, Judge Cote announced that the judges had tentatively agreed to a

“Coordination Judge,” and that she was “pleased to be serving in that role for you.”

(PA 430.) A formal Master Discovery Protocol (the “Protocol”) was entered in the

New York case on April 9, in this case on April 10, and in the California case on

June 12. (Add. 1–11; PA 629–39, 717–730.) Section 2 of the Protocol purports to

impose a “Procedure for Presenting Discovery Dispute[s]” whereby:

Judge Cote is designated as the “Coordination Judge” for all Actions. All discovery applications and disputes shall be brought to the Coordination Judge in the form of a two-page letter, with copies simultaneously provided to the other three Judges. Following consultation with Judges Lungstrum and/or O’Hara, and Judge Wu, the Coordination Judge will endeavor to respond promptly.

All applications and disputes regarding discovery in any Action will be filed in the lead case pending in the Southern District of New York . . . . If the application or dispute applies to fewer than all Actions, then the submission should be filed as well in the Action or Actions to which it applies. The discovery parameters and limitations set forth in the ruling by the Coordination Judge on the application or dispute

11 (PA 355–62; see also PA 373.)


9

will be given effect in all Actions, unless the ruling indicates otherwise.

(Add. 4.)12 Judge Cote confirmed that discovery disputes, even those arising solely

in the California or Kansas actions, would be submitted to her, and she would

make the ruling:

I plan to consult with my fellow judges before ruling on any matter of substance so that the parties can be assured that any ruling I make is supported by all of us . . . . Therefore, we would want all submissions, even though I am the coordination judge, to be served simultaneously on each of my colleagues . . . . I would be the coordination judge. I would give you the ruling, but it would be after I have consulted with my colleagues.

(PA 430, 432.)

12 This is not the first time RBS has faced attempts to substitute Judge Cote in the place of an assigned judge. In the FHFA cases, discovery was coordinated across the 17 New York cases and the single Connecticut case brought against RBS. (Joint Order, FHFA v. Royal Bank of Scotland Grp. PLC, No. 11-cv-01383 (D. Conn. Nov. 1, 2012), ECF No. 91.) The coordination order in that case did not allow Judge Cote to resolve discovery disputes in the Connecticut case, but in late January 2014, FHFA urged “further coordination” of the cases—namely, to have Judge Cote oversee the remaining discovery and trial in the Connecticut case. (See FHFA Mot. for Further Coordination, FHFA v. Royal Bank of Scotland Grp. PLC, No. 11-cv-01383 (D. Conn. Jan. 29, 2014), ECF Nos. 288 & 288-1.) RBS noted in opposition that there was no authority for such a transfer of substantive rulings to take place, and that FHFA was attempting to judge-shop to ensure that Judge Cote’s favorable rulings in the New York FHFA cases were imposed in the Connecticut case. (See RBS Opp’n to FHFA Mot. for Further Coordination at 10–13, FHFA v. Royal Bank of Scotland Grp. PLC, No. 11-cv-01383 (D. Conn. Feb. 7, 2014, ECF No. 293.) Judge Thompson denied FHFA’s request for further coordination based on “substantially the reasons set forth by the defendants in their opposition memoranda.” (Order at 2, FHFA v. Royal Bank of Scotland Grp. PLC, No. 11-cv-01383 (D. Conn. Mar. 31, 2014), ECF No. 334.)


10

Since April 9, 2014, Judge Cote has issued several orders as “Coordination

Judge” pertaining to RBS in this case, sometimes just one or two business days

after the parties in the actions submitted dozens of pages of briefing, without any

indication of how the judges consulted or their views on the dispute. (See PA 530–

49, 552–58.)13 Up until May 27, 2014 (after RBS brought this issue to the District

Court’s attention), none of these orders bore Judge Lungstrum’s signature. (Id.)

On April 23, 2014, RBS moved to have the Coordination Judge provisions

stricken; on May 27, 2014, Judge Lungstrum denied the motion. (Add. 12–17.)

Judge Lungstrum’s opinion provided no authority for the provisions, but he

nonetheless refused to strike the provisions of the Protocol requiring (1) disputes in

this case to be submitted to Judge Cote and (2) that rulings in this case are to be

made by Judge Cote. (Id.) Judge Wu also denied RBS’ similar motion in

California, despite agreeing “that there is no applicable, binding law that

specifically provides for” a “Coordination Judge.” (PA 716.)

V. ARGUMENT

This Court has jurisdiction over this petition pursuant to the All Writs Act,

which authorizes the Courts of Appeals to issue extraordinary writs “in aid of their

respective jurisdictions.” 28 U.S.C. § 1651(a); Roche v. Evaporated Milk Ass’n,

13 Judge Cote also issued a more substantive order to show cause regarding joinder of parties on June 2, which Judge O’Hara entered in this case without modification on June 6. (PA 550–51.)


11

319 U.S. 21, 25 (1943). The “traditional” use of the extraordinary writs is “to

confine an inferior court to a lawful exercise of its prescribed jurisdiction or to

compel it to exercise its authority when it is its duty to do so,” and “to remove

obstacles to appeal.” Roche, 319 U.S. at 26. The Supreme Court has endorsed the

broader exercise of mandamus powers—sometimes termed “supervisory” and

“advisory” powers—“to correct established practices of the district court” or “to

review important and novel questions.” Armster v. U.S. Dist. Court, 806 F.2d

1347, 1352 (9th Cir. 1986); see Schlagenhauf v. Holder, 379 U.S. 104 (1964); La

Buy v. Howes Leather Co., 352 U.S. 249 (1957).

For a writ to issue, (1) the petitioner must have no other adequate means to

attain the relief it desires; (2) the petitioner must demonstrate that the right to

issuance of the writ is clear and indisputable, and (3) the issuing court must be

satisfied that the writ is appropriate under the circumstances. In re Cooper Tire &

Rubber Co., 568 F.3d 1180, 1187 (10th Cir. 2009) (quoting Cheney v. U.S. Dist.

Court, 542 U.S. 367, 380–81 (2004)). In considering a petition for an

extraordinary writ, this Court considers whether (1) the petitioner has alternative

means to secure relief, (2) the petitioner will be damaged in a way not correctable

on appeal, (3) the district court’s order constitutes an abuse of discretion, (4) the

district court’s order represents an oft-repeated error and manifests a persistent

disregard of applicable law, and (5) the court’s order raises new and important


12

problems of law or issues of first impression. Id. at 1187; Clyma v. Sunoco, 594

F.3d 777, 782 (10th Cir. 2010). Here, each of these factors is present.

A. The District Court’s Order Disregards the Congressionally-Established Structure of the Federal District Courts and Represents an Abdication of the Court’s Obligation to Decide the Disputes in the Case Before It.

“When the district court errs in deciding a legal issue, it necessarily abuses

its discretion.” In re Cooper Tire, 568 F.3d at 1186 (citation and internal quotation

marks omitted). The District Court’s order was clearly erroneous (i) by

designating, without authority, an out-of-circuit judge to decide, or share in

deciding, issues in this case, (ii) by ceding some or all of its authority and

obligation to decide issues in this case, and (iii) by enabling violations of the

District Court’s local rules on judicial assignments.

1. No Statutory Authority Permits The District Court to Designate Judge Cote for Service in This Case.

The Protocol’s requirement that discovery disputes be submitted to Judge

Cote is clearly erroneous and without authority.14 Congress has established a

comprehensive system for transferring judges and cases between federal district

14 Judge Lungstrum cited no authority when he denied RBS’ motion to modify the Protocol. (Add. 12–17.) And NCUA has never cited any authority, other than the Manual for Complex Litigation (which is not authority) and the JPML’s Order denying the one-judge-in-one-district approach the Protocol requires. (PA 500–01.)


13

courts.15 “In our federal judicial system, judges of a particular district court may

exercise their authority only within that district except under specific limited

designations permitted by statute.” In re Corrugated Container Antitrust Litig.,

662 F.2d 875, 879 (D.C. Cir. 1981).16 28 U.S.C. § 292 governs the designation of

district judges for service in other courts, and 28 U.S.C. §§ 1404, 1406, and 1407

govern the transfer of cases. None of these statutes have been followed here;

instead, the Protocol is an unrecognizable variant of any Congressionally-

authorized means of “coordinating” cases.

a. The Protocol Does Not Comply With 28 U.S.C. § 292(d).

For an out-of-circuit district judge like Judge Cote to serve on a district court

within this Circuit, under § 292(d), she must be designated to do so by the Chief

Justice of the United States. Before such a designation is made, the Chief Judge of

this Circuit must present a “certificate of necessity” to the Chief Justice certifying

the need for an out-of-circuit judge to serve within this Circuit. 28 U.S.C. §

15 28 U.S.C §§ 291–297 (Chapter 13, “Assignment of Judges to Other Courts”); id. §§ 1390–1413 (Chapter 87, “District Courts; Venue”). 16 See also United States v. Roberts, 618 F.2d 530, 546 (9th Cir. 1980) (Wyatt, D.J., dissenting) (“That district courts may act only within their respective districts seems self-evident and has been assumed since the Judiciary Act of 1789. Congress, however, has not hesitated to make it emphatic. . . . The Supreme Court has said: ‘District Courts are solely the creation of statute, and the place in which a judge thereof may exercise jurisdiction is subject absolutely to the control of Congress’.” (quoting McDowell v. United States, 159 U.S. 596, 598–99 (1895))).


14

292(d).17 The Chief Justice’s authority to designate a judge for such service is

exclusive. See generally In re Motor Fuel Temperature Sales Practices Litig., 711

F.3d 1050, 1052–54 (9th Cir. 2013). Ninth Circuit Chief Judge Kozinski has

explained that a necessity will be certified only where there is “severe or

unexpected over-burdening, as happens when a judge dies or retires, when the

district is experiencing a judicial emergency or when all the judges are recused

because of a conflict,” and “even then,” the first option is to find a judge from

within the circuit. Id. at 1053. In fact, in In re Motor Fuel, Chief Judge Kozinski

refused to certify a necessity where an out-of-circuit judge “graciously”

volunteered to serve in a case—as Judge Cote has done here—but where there was

no need for such service. Id. at 1052–54.

At bottom, the District Court had no authority to sua sponte designate Judge

Cote for service, Chief Judge Briscoe never issued a certificate of necessity, and

Chief Justice Roberts never designated Judge Cote for service in this case. The

Protocol is therefore a clearly erroneous attempt to avoid the normal restrictions on

judicial designation.18

17 Because Judge Cote is a senior judge, she may be subject instead to § 294(d), which still requires that the Chief Judge of this Circuit present the same “certificate of necessity” to the Chief Justice of the United States. 28 U.S.C. § 294(d). 18 The Supreme Court has reversed designations not authorized by Title 28. In Nguyen v. United States, 539 U.S. 69 (2003), the Court held that an improper designation under § 292(a) required vacating the judgments of a panel of the Ninth


15

b. The Protocol Is Not Authorized By 28 U.S.C. § 1407.

Consolidation under § 1407 allows for the transfer of pretrial proceedings

from multiple districts to a single district if the JPML determines that the cases

share common questions of fact sufficient to warrant such consolidation. Multi-

district consolidation, however, never involves the contemporaneous exercise of

authority by multiple district courts—during pretrial proceedings in an MDL, “the

jurisdiction of the transferor court ceases.” In re Plumbing Fixture Cases, 298 F.

Supp. 484, 496 (J.P.M.L. 1968). In any event, the JPML, which has the exclusive

authority to order such consolidation, refused to do so.19

c. The Protocol Is Not Authorized By Any Other Transfer Mechanism.

For this case to have been transferred to Judge Cote outside of the multi-

district litigation process, a transfer could have been made under § 1404(a) if

Circuit, and noted that the statute “embodies weighty congressional policy concerning the proper organization of the federal courts.” Id. at 74–76, 79–80. While Nguyen involved an Article IV judge, the case was not based on “structural constitutional guarantees embodied in Article III.” Id. at 76 n.9. Instead, the Court found it “unnecessary to discuss the constitutional questions because the statutory violation is clear.” Id. The statutory violation is also clear here, and the fact that Judge Cote is an Article III judge is of no import. 19 District courts have no power to consolidate proceedings themselves. See 28 U.S.C. § 1407(a)–(c) (transfer for coordinated or consolidated proceedings “shall be made by the [JPML],” such proceedings “shall be conducted by a judge or judges to whom such actions are assigned by the [JPML],” and only a party or the JPML may initiate transfer); Holmes v. Grubman, 315 F. Supp. 2d 1376, 1380 (M.D. Ga. 2004) (“[T]he Court notes its inability and lack of authority to transfer this action to the Southern District of New York [pursuant to 28 U.S.C. § 1407].”).


16

deemed necessary “[f]or the convenience of the parties and witnesses, in the

interest of justice,” or under § 1406 if venue was improper. Along with MDL

consolidation under § 1407, these are the exclusive procedures for transferring

cases between different district courts; district courts may not create new

procedures for transferring or consolidating cases outside of those authorized by

Congress. See Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S.

26, 40–41 (1998) (district courts cannot self-assign MDL cases).

The hybrid proceedings created by the Protocol have no foundation in these

statutes. Nor do the proposed proceedings before a “Coordination Judge” resemble

what would have happened had a proper transfer occurred. If the case had been

transferred under either § 1404 or § 1406, it would have ended the jurisdiction of

the transferor court and Judge Lungstrum would no longer have the case on his

docket. See Wright & Miller, 15 Fed. Prac. & Proc. Juris. § 3846 (4th ed.) (“When

a motion for transfer . . . is granted . . . the transferor court and the appellate court

for the circuit in which that court sits lose jurisdiction over the case and may not

proceed further with regard to it.”). And if transfer had taken place pursuant to §

1407, then all pretrial proceedings would be consolidated in a single district court

with exclusive jurisdiction, not distributed across three districts in three circuits.


17

This Court has held that mandamus may be used to challenge improper

transfer orders,20 but the Protocol is not even a recognizable “transfer order”—it

creates a novel type of partial “transfer,” whereby RBS in this case must bring its

disputes to Judge Cote, who will issue rulings that Judge Lungstrum will then enter

in this case. Other ‘partial transfer’ orders have been the subject of successful

mandamus petitions in other Courts of Appeals. For example, in In re Flight

Transportation Corporation Securities Litigation, 764 F.2d 515 (8th Cir. 1985),

the district court had received numerous cases as part of MDL proceedings, but

required the parties to continue filing all documents before it, despite ordering the

trials transferred to another district (just as RBS must file all documents before

Judge Cote). Id. at 516. The Eighth Circuit granted a petition for mandamus,

holding that “[s]ince the District Court’s order attempts both to transfer the cases . .

. and to retain jurisdiction . . . it exceeds the transfer power conferred under §

1404(a)” and noted that “no case has ever interpreted [§ 1404(a)] to authorize the

sort of ‘transfer’ at issue here.” Id. at 516–17. The JPML has also stated “[t]wo

courts of exclusive different jurisdictions, or venues, cannot exercise control over

the same single claim for relief at the same time.” In re Plumbing Fixture Cases,

20 Cessna Aircraft Co. v. Brown, 348 F.2d 689, 691 (10th Cir. 1965) (“Mandamus is an appropriate remedy to test the validity of the transfer order.”).


18

298 F. Supp. at 495; see also FTC v. MacArthur, 532 F.2d 1135, 1143 (7th Cir.

1976) (“[A]n action should not be split between two districts.”).

Mandamus has also been used where judges have improperly consolidated

cases. In In re Repetitive Stress Injury Litigation, 11 F.3d 368 (2d Cir. 1993),

reh’g denied in part, 35 F.3d 637 (2d Cir. 1994), reh’g denied 35 F.3d 640 (2d

Cir.), a district court consolidated forty-four cases before it under Rule 42, despite

recognizing that “the factual or legal issues of the various cases were not

identical.” Id. at 371. The plaintiffs separately moved to consolidate all similar

proceedings nationwide under § 1407, but the request was denied because the

JPML did not find sufficient common questions of fact. Id. at 372. The Second

Circuit held that “substitut[ing] a discussion of so-called mass torts for precise

findings as to what are the ‘common question[s] of law or fact’ justifying

consolidation” was clearly erroneous and warranted the issuance of a writ. Id. at

373. The court noted that “[w]ith regard to issues of law, the plaintiffs come from

a variety of jurisdictions and rely for their claims on the law of different states. An

order that merges all discovery and court proceedings and requires the participation

of all counsel simply has no basis in Rule 42.” Id. Repetitive Stress involved

consolidation within one district—under an identifiable Federal Rule of Civil

Procedure—and never conceived of the kind of impromptu consolidation of power


19

in a “Coordination Judge” across multiple districts without statutory authority that

is at issue in this case. Mandamus is even more necessary here.

2. The District Court Cannot Abstain from Deciding Disputes In This Case and Cede Its Authority to a Court Outside This Circuit.

The Protocol also represents a clearly erroneous ceding of the District

Court’s obligation to decide the cases before it. And a writ of mandamus is the

appropriate vehicle to seek relief.

The traditional use of the writ in aid of appellate jurisdiction both at common law and in the federal courts has been to confine an inferior court to a lawful exercise of its prescribed jurisdiction or to compel it to exercise its authority when it is its duty to do so.

Mallard v. U.S. Dist. Court, 490 U.S. 296, 308 (1989) (quoting Roche, 319 U.S. at

26) (emphasis added); see In re Cooper Tire, 568 F.3d at 1186 (same). Likewise,

federal courts “have no more right to decline the exercise of jurisdiction which is

given, than to usurp that which is not given,” and “a federal court’s obligation to

hear and decide a case is virtually unflagging.” Sprint Commc’ns, Inc. v. Jacobs,

571 U.S. __, 134 S. Ct. 584, 590–91 (2013) (internal quotation marks and citations

omitted).

The District Court here has no ability to cede—in whole or in part—its

authority to decide discovery disputes in this case.21 This is merely the flipside of

21 None of the accepted methods for delegating pre-trial discovery disputes, such as designating a special master under Federal Rule of Civil Procedure 53 or


20

Judge Cote’s erroneous seizure of power in this case: Judge Cote has no authority

to be involved in rendering decisions in a case outside her district, and Judge

Lungstrum cannot allow Judge Cote to take any role in rendering such decisions.

Judge Lungstrum attempted to assuage RBS’s concerns in his May 27 ruling

by stating that “[t]he [Protocol] expressly requires Judge Cote to consult with a

judge from this district on any discovery dispute.” (PA 526.) But there is simply

no authority for Judge Cote to play any role—either with or without consulting

Judge Lungstrum—in this case. Judge Lungstrum must decide all the disputes in

this case independently. Cf. In re Korean Air Lines Disaster of Sept. 1, 1983, 829

F.2d 1171, 1176 (D.C. Cir. 1987) (R.B. Ginsburg, J.) (“The federal courts spread

across the country owe respect to each other’s efforts and should strive to avoid

conflicts, but each has an obligation to engage independently in reasoned

analysis.”). Signing an order drafted by another judge does not demonstrate that a

assigning a magistrate judge under 28 U.S.C. § 636, were followed here (nor do they contemplate using a district judge in a different circuit). With a special master or a magistrate judge, ultimate authority remains with a single Article III judge, see Fed. R. Civ. P. 53(f), 72, whereas the Protocol calls for some undefined “consultation” among Article III judges. This is contrary to the principle that “[t]he structure of the federal courts does not allow one judge of a district court to rule directly on the legality of another district judge's judicial acts or to deny another district judge his or her lawful jurisdiction.” Dhalluin v. McKibben, 682 F. Supp. 1096, 1097 (D. Nev. 1988); see also CitiFinancial Corp. v. Harrison, 453 F.3d 245, 251 (5th Cir. 2006) (“[A] district court judge, whether as a matter of respect and institutional orderliness, if not jurisdiction, should shy from involvement in a case proceeding before another Article III judge.”).


21

court has engaged in reasoned analysis, rather than rubber-stamping the order, and

mandamus may be used where courts effectively refuse to exercise their

discretion.22

Nor would it make sense for Judge Cote to be involved in rendering

decisions in this case, when there are significant differences between this case and

the ones over which Judge Cote presides. For example, in New York, NCUA has

no federal securities claims remaining, and Judge Cote has ruled that NCUA’s

remaining state law claims are not subject to a loss causation defense. (PA 646–

57.) But here, in contrast, NCUA has federal securities claims that are subject to a

loss causation defense. There is no reason why Judge Cote should participate in

deciding what discovery is needed to support loss causation defenses that only

apply in cases not pending before her. Nor should Judge Cote have any say in the

scope of discovery RBS may seek in this case against NCUA, on behalf of U.S.

Central, when the case pending before Judge Cote does not relate to U.S. Central.23

RBS cannot be forced to submit to the “Coordination Judge” a dispute that is not at

22 See, e.g., Clyma, 594 F.3d at 783 (granting mandamus where entry of “a minute order without any substantive explanation” made it impossible for court of appeals “to say the district court exercised any meaningful discretion”); Hustler Magazine, Inc. v. U.S. Dist. Court, 790 F.2d 69, 71 (10th Cir. 1986) (granting mandamus where district court refused to hear petitioners’ arguments for transfer). 23 As NCUA’s counsel put it to the JPML at oral argument, “[t]here is not a single claim in New York that pertains to securities purchased by [U.S. Central or WesCorp].” (PA 825.)


22

issue in the New York case. Any twisting of the principles of federal jurisdiction

to involve a different court in those decisions further crystallizes the impropriety of

the challenged provisions.

3. The District Court’s Order Does Not Comply With the Procedure for Assigning District Judges Under the Central District’s Local Rules.

The District Court’s coordination order will also result in violations of the

District Court’s local rules. “Rules of practice adopted by the United States

District Courts . . . have the force and effect of law, and are binding upon the

parties and court which promulgated them . . . .” Woods Constr. Co. v. Atlas

Chem. Indus., Inc., 337 F.2d 888, 890 (10th Cir. 1964) (reversing award of

attorney’s fees where appellee failed to submit bill of costs within time limit

prescribed by local rule); see also Hollingsworth v. Perry, 558 U.S. 183, 191

(2010) (“[Local] rules have the force of law.”) (internal quotation marks omitted).

The Supreme Court has recognized that mandamus may be used to prevent

violations of local rules by district judges.24 Here, the District Court’s order

eviscerates the local rules’ guarantee of an assignment to a district judge in the 24 Hollingsworth, 558 U.S. 183 (finding “fair prospect” that a majority of the Supreme Court would vote to grant mandamus or certiorari based on a violation of local rules and noting that “[i]f courts are to require that others follow regular procedures, courts must do so as well”); see also In re Sony BMG Music Enter., 564 F.3d 1, 9–10 (1st Cir. 2009) (granting mandamus to prevent violation of local rules and noting that “this is a society dedicated to the rule of law . . . we are bound to enforce that [local] rule. In the last analysis, this boils down to a case about the governance of the federal courts.”).


23

District of Kansas.25 If any transfer is to occur under the local rules, it is to occur

by returning the case to the clerk, or seeking approval of the Chief Judge.26

Mandamus has been used in situations involving the improper assignment of

cases,27 and the failure to follow the local rules here should also be corrected by

issuing a writ of mandamus.

B. Interference With This Court’s Appellate Jurisdiction and Prejudice From Unauthorized Rulings Are Not Correctable On Appeal.

To determine if a petitioner’s harm is correctable on appeal, courts analyze

“the effect of the challenged order on the operation of the courts”—and in cases

with a significant impact on the operation of the courts, “the degree of injury to

petitioners is a less critical factor.” In re Cement Antitrust Litig. (MDL No. 296),

688 F.2d 1297, 1303 (9th Cir. 1982) (analyzing Ninth Circuit factors similar to

25 Local Rule 40.1 provides that “the chief judge is responsible for . . . the assignment of cases to the judges.” D. Kan. L.R. 40.1. 26 D. Kan. L.R. 40.1. The detailed discovery dispute procedures set forth under District of Kansas Local Rules 7.1, 37.1 and 37.2 have also been abandoned under the Protocol and replaced with a 2-page letter to an out-of-district judge. 27 See, e.g., In re McBryde, 117 F.3d 208, 222–25, 229–31 (5th Cir. 1997); Utah-Idaho Sugar Co. v. Ritter, 461 F.2d 1100, 1102–04 (10th Cir. 1972) (granting mandamus petition ordering judge to transfer case); Kerr-McGee Corp. v. Ritter, 461 F.2d 1104, 1105 (10th Cir. 1972) (same); cf. Ligon v. City of N.Y., 736 F.3d 118, 125–26 & n.17, 130 (2d Cir. 2013) (noting concern with manipulation of related-case assignments); In re Motor Fuel, 711 F.3d at 1052–54 (expressing concern with “interfer[ing] with the random assignment of cases,” or “removing the judges to whom the cases were originally assigned and transferring them to an out-of-circuit judge”).


24

Tenth Circuit factors). Here, the Protocol significantly impacts the operation of the

courts—and prejudices RBS—because it: (i) interferes with this Court’s ability to

hear appeals from a District Court within this Circuit; (ii) interferes with the

Court’s authority to manage the judges serving within the Circuit; and (iii)

deprives them of the right to have their cases heard exclusively by a judge with the

authority to rule on them—a harm that is not correctable on appeal.

First, the District Court’s order muddies the water of any appeal in this case

and thereby threatens this Court’s appellate jurisdiction. This Court’s mandamus

power “extends to those cases which are within its appellate jurisdiction although

no appeal has been perfected,” and “a function of mandamus . . . is to remove

obstacles to appeal.” Roche, 319 U.S. at 25–26. Appeals are to be heard “[f]rom a

district court of the United States to the court of appeals for the circuit embracing

the district.” 28 U.S.C. § 1294. But if rulings in this case are made by Judge Cote,

are appeals from those orders to be heard before this Court or the Second Circuit?

May the same order be appealable in all three involved Courts of Appeals, thus

exposing every discovery order to appeal in the Second, Ninth, and Tenth Circuits,

and creating the possibility of a circuit split on the same discovery ruling? If the

Courts of Appeals involved were to split on the validity of a discovery ruling, yet

that ruling purports to apply across all cases, how would the parties comply?

These questions are avoided if this Court strikes the improper provisions of the


25

Protocol, but even if not, mandamus relief would remain appropriate to clarify the

avenues of appeal from orders made pursuant to the challenged provisions of the

Protocol—mandamus is “especially appropriate” where it “will quickly settle a

jurisdictional dispute between two courts.” Borja v. U.S. Dist. Court, 919 F.2d

100, 101 (9th Cir. 1990).

Second, the District Court’s order interferes with the Congressionally-

established system for having the Courts of Appeals manage which judges serve

within the circuit, and having the Chief Justice of the United States control the

transfer of judges between circuits. See supra at 13–14. As Ninth Circuit Chief

Judge Kozinski noted in In re Motor Fuel, even where an out-of-circuit judge

“graciously” volunteers for service in this Circuit, that judge may only serve “with

the approval of the Chief Justice of the United States,” 711 F.3d at 1052, whose

own “Guidelines for the Intercircuit Assignment of Article III Judges” stress that

“no judge should take any official action in a case in another circuit in the absence

of a completed intercircuit assignment.” Id. at 1057 (guideline 13). The

assignment of Judge Cote here circumvents the certificate of necessity

requirement.

Third, RBS will suffer direct prejudice in every decision made pursuant to

the “Coordination Judge” provisions. Being subject to the rulings of a judge

without any authority to enter them is a harm not correctable on appeal. The


26

Second Circuit, for example, has held that appeal from a final judgment is not an

adequate alternative to mandamus relief where—as here—the district court creates

“an entirely sui generis proceeding” with “an ad hoc mix” of procedural rules that

“is governed by no express statutory authority.” Stein v. KPMG, LLP, 486 F.3d

761–62 (2d Cir. 2007); see also United States v. Microsoft Corp., 147 F.3d 935,

954 (D.C. Cir. 1998) (“[A]t least at some point, even the temporary subjection of a

party to a Potemkin jurisdiction so mocks the party’s rights as to render end-of-the-

line correction inadequate.”). Whenever an order in this case is issued by a judge

in a different court, RBS has been harmed.28 And if the Protocol is not challenged

now, RBS’ objections may be mooted by compliance with Judge Cote’s orders.

See United States v. West, 672 F.2d 796, 799 (10th Cir. 1982) (“Any subsequent

review . . . would be for naught, because the damage would already be

accomplished.”); SG Cowen Sec. Corp. v. U.S. Dist. Court, 189 F.3d 909, 914 (9th

Cir. 1999) (“Compliance with a discovery order moots an appeal of that order.”).

28 Federal Rules of Civil Procedure 77(b) also prohibits the District Court from conducting a hearing “outside the district unless all the affected parties consent,” but any time a judge in New York holds a hearing on issues in the District of Kansas, that rule is violated.


27

C. The District Court’s Order Raises Novel and Important Questions Regarding District Courts’ Authority to Transfer Cases Outside of the Congressionally-Mandated System of Transfer and Judicial Designation.

This petition raises “new and important” issues of first impression—to RBS’

knowledge, this petition (along with the petitions simultaneously filed in the

Second and Ninth Circuits) is the first test of such an order in this Court (or in any

federal court), which weighs in favor of mandamus review. See Clyma, 594 F.3d

at 782 (substantive question was one of “first impression” where there was only

one related appellate decision). NCUA and the District Court have provided no

authority to support the entry of the “Coordination Judge” provisions, and while

RBS has demonstrated that the District Court’s order is clearly erroneous, none of

those cited authorities addresses the specific kind of proceeding that has been

created here.29 This petition raises novel questions concerning this Court’s ability

to control which judges serve within the Circuit, the ability of district courts to

engage in ad hoc partial “transfer” proceedings, and the ability of Article III judges

to cede their jurisdiction to courts in other circuits. All of these issues warrant

granting mandamus relief, as “[m]andamus is particularly appropriate . . . to

determine the construction of a federal procedural rule in a new context.”

Valenzuela-Gonzalez v. U.S. Dist. Court, 915 F.2d 1276, 1279 (9th Cir. 1990). 29 Cf. Perry v. Schwarzenegger, 591 F.3d 1147, 1159 (9th Cir. 2009) (“[T]he necessary ‘clear error’ factor does not require that the issue be one as to which there is established precedent.”).


28

Here, the question is whether a court may make a new procedure out of whole

cloth—issuing a writ would be “particularly appropriate” here. 30

D. Because The Challenged Order Is a Discovery Order, RBS Lacks an Adequate Alternative to Mandamus Relief.

The Protocol is a discovery order because it relates solely to the procedures

for resolving discovery disputes. This Court has held that “[i]nasmuch as

discovery orders are interlocutory orders not subject to review by appeal,”

jurisdiction to review discovery orders “must rest upon the All Writs Act, 28

U.S.C. § 1651(a).” West, 672 F.2d at 798. The Protocol here is similarly

interlocutory and non-appealable. In fact, this Court and other Courts of Appeals

have treated mandamus as a proper method of challenging orders analogous to the

Protocol, including scheduling orders,31 orders to transfer,32 orders consolidating

cases within a district,33 and orders referring disputes to special masters or

magistrate judges.34

30 The Protocol may also meet the fourth factor—in that it reflects an oft-repeated error—if, as NCUA claims, the kind of coordination present here “has been recommended for years by authorities such as the JPML and the [Manual for Complex Litigation],” and that the JPML, specifically, “has been making similar recommendations for decades.” (PA 501.) But tellingly, NCUA has been unable to point to a single order containing anything like the “Coordination Judge” provisions. 31 See, e.g., United States v. Coppa, 267 F.3d 132, 138–39 (2d Cir. 2001). 32 See, e.g., Cessna, 348 F.2d at 691. 33 See, e.g., In re Repetitive Stress Injury Litig., 11 F.3d at 373–74; In re Fibreboard Corp., 893 F.2d 706, 711 (5th Cir. 1990) (“The core problem is that


29

VI. CONCLUSION

The Coordination Judge provisions have no basis in federal law and

contradict principles of jurisdiction. A writ should issue to strike these provisions

of the Protocol and vacate all orders entered pursuant to those provisions.

DATED: July 24, 2014 Respectfully Submitted,

/s/ R. Alexander Pilmer

R. Alexander Pilmer David I. Horowitz Tammy A. Tsoumas Derek M. Milosavljevic Gavin C.P. Campbell KIRKLAND & ELLIS LLP 333 South Hope Street Los Angeles, CA 90071 Telephone: (213) 680-8400 Facsimile: (213) 680-8500 [email protected] [email protected] [email protected] [email protected] [email protected]

Counsel for Defendants-Petitioners RBS Securities Inc., RBS Acceptance Inc. and Financial Asset Securities Corp.

[the order], while offering an innovative answer to an admitted crisis in the judicial system, is . . . beyond the scope of federal judicial authority.”). 34 See, e.g., La Buy v. Howes Leather Co., 352 U.S. 249 (1957) (special master); In re United States, 10 F.3d 931, 933–34 (2d Cir. 1993) (magistrate judge).


STATEMENT REGARDING ORAL ARGUMENT

Oral argument is requested. This petition involves an unprecedented

procedural order that affects cases against RBS in three different circuits where

billions of dollars are at issue. Multiple other cases not involving RBS are

currently subject to the same order. Given the novel and important questions

raised by this petition, RBS would appreciate the opportunity to address any

questions from the Court.


CERTIFICATE OF COMPLIANCE

I certify that this petition complies with the page limitations of Fed. R. App.

21(d), and that this petition complies with the typeface requirements of Fed. R.

App. P. 32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6)

because it has been prepared in a proportionally spaced typeface using Microsoft

Word in 14-point Times New Roman style.


R. Alexander Pilmer


CERTIFICATE OF DIGITAL SUBMISSION AND PRIVACY REDACTIONS

I certify (1) that all required privacy redactions have been made; (2) that the

hard copies of any pleading to be submitted to the clerk’s office are exact copies of

this ECF filing; and (3) that this digital submission has been scanned for viruses

with the most recent version of a commercial virus scanning program, Microsoft

Forefront Endpoint Protection, and according to the program is free of viruses.


R. Alexander Pilmer


CERTIFICATE OF SERVICE

I hereby certify that I electronically filed the foregoing petition with the Clerk of the Court for the United States Court of Appeals for the Tenth Circuit by using the appellate CM/ECF system on July 24, 2014.

I hereby certify that on July 24, 2014, I served the foregoing document on the counsel listed below as indicated:

Stephen M. Tillery Michael E. Klenov Greg G. Gutzler Steven M. Berezney Tamara M. Spicer KOREIN TILLERY LLC 505 North Seventh Street, Suite 3600 St Louis, MO 63101-1625 Email: [email protected] [email protected] [email protected] [email protected] [email protected] [via email]

David C. Frederick Mark C. Hansen Joseph S. Hall Wan J. Kim Scott K. Attaway KELLOGG, HUBER, HANSEN, TODD, EVANS & FIGEL P.L.L.C. Sumner Square 1615 M Street, N.W., Suite 400 Washington, D.C. 20036-3209 Email: [email protected] [email protected] [email protected] [email protected] [email protected] [via email and U.S. Mail]

Norman E. Siegel Rachel E. Schwartz STUEVE SIEGEL HANSON LLP 460 Nichols Road, Suite 200 Kansas City, MO 64112 Email: [email protected] [email protected] [via email]

George A. Zelcs KOREIN TILLERY LLC 205 N. Michigan Ave., Suite 1950 Chicago, IL 60601 Email: [email protected] [via email]

Counsel for Plaintiff National Credit Union Administration Board


COUNSEL FOR DEFENDANT: Nomura Home Equity Loan, Inc. Barbara S. Steiner Matthew J. Thomas Casey T. Grabenstein JENNER & BLOCK LLP 353 North Clark Street Chicago, IL 60654-3456 Email : [email protected] [email protected] [email protected]\ [via email and U.S. Mail]

Michael Thompson Faiza Berquist HUSCH BLACKWELL LLP 4801 Main Street, Suite 1000 Kansas City, MO 64112 Email: [email protected] [email protected] [via email]

Novastar Mortgage Funding Corp. Michael Thompson Faiza Berquist HUSCH BLACKWELL LLP 4801 Main Street, Suite 1000 Kansas City, MO 64112 Email: [email protected]@huschblackwell.com [via email]

William F. Alderman ORRICK, HERRINGTON & SUTCLIFFE LLP The Orrick Building 405 Howard Street San Francisco, CA 94105 Email : [email protected] [via email and U.S. Mail]

Wachovia Mortgage Loan And Trust LLC; Wachovia Capital Markets, LLC Jeffrey J. Kalinowski Richard H. Kuhlman BRYAN CAVE LLP One Metropolitan Square 211 North Broadway Suite 3600 St. Louis, MO 63102 Email: [email protected] [email protected] [via email]

William Perry Brandt BRYAN CAVE LLP One Kansas City Place 1200 Main Street, Suite 3500 Kansas City, MO 64105-2100 Email: [email protected] [via email]


David Halleck Fry Hannah E. Shearer MUNGER, TOLLES & OLSEN LLP 560 Mission Street, 27th Floor San Francisco, CA 94105 Email: [email protected] [email protected] [via email]

Christian Kendrick Wrede MUNGER, TOLLES & OLSEN LLP 355 South Grand Avenue, 35th Floor Los Angeles, CA 90071-1560 Email: [email protected] [via email and U.S. Mail]

I further certify that on July 24, 2014, a copy of the foregoing document was served on the following by U.S. Mail:

The Honorable John W. Lungstrum United States District Court Judge United States District Court for the District of Kansas 500 State Ave, Kansas City, KS 66101

RBS was unable to obtain contact information for the following unrepresented party: Lares Asset Securitization Inc.

On this 24th day of July 2014,

/s/ R. Alexander Pilmer R. Alexander Pilmer


TABLE OF CONTENTS FOR ADDENDUM

April 10, 2014 - Master Discovery Protocol (11-cv-2340, ECF No. 314)

Add. 1 - 11

May 27, 2014 - Memorandum & Order (11-cv-2340, ECF No. 356)

Add. 12 - 17


UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

NATIONAL CREDIT UNION ADMINISTRATION BOARD, etc., Plaintiff, v.

MORGAN STANLEY & CO., et al., Defendants.

And other NCUA Actions.

Case No. 13-cv-6705 (DLC) Case No. 13-cv-6719 (DLC) Case No. 13-cv-6721 (DLC) Case No. 13-cv-6726 (DLC) Case No. 13-cv-6727 (DLC) Case No. 13-cv-6731 (DLC) Case No. 13-cv-6736 (DLC)

UNITED STATES DISTRICT COURT DISTRICT OF KANSAS

NATIONAL CREDIT UNION ADMINISTRATION BOARD, etc., Plaintiff,

v.

RBS SECURITIES, INC., f/k/a GREENWICH CAPITAL MARKETS, INC., et al., Defendants. And other NCUA Actions.

Case No. 11-cv-2340 & 2649 (JWL) Case No. 12-cv-2591 (JWL) Case No. 12-cv-2648 (JWL) Case No. 13-cv-2418 (JWL)

Case 2:11-cv-02340-JWL-JPO Document 314 Filed 04/10/14 Page 1 of 11

Add.1


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UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

WESTERN DIVISION

NATIONAL CREDIT UNION ADMINISTRATION BOARD, etc., Plaintiff,

v. RBS SECURITIES, INC., f/k/a GREENWICH CAPITAL MARKETS, INC. et al., Defendants. And other NCUA Action.

Case No. 11-cv-5887 (GW) Case No. 11-cv-6521 (GW)

MASTER DISCOVERY PROTOCOL

HON. DENISE COTE, HON. JOHN W. LUNGSTRUM, and HON. GEORGE H. WU, District

Judges; and HON. JAMES P. O’HARA, Magistrate Judge:

WHEREAS, Plaintiff the National Credit Union Administration Board, as liquidating agent

for four failed corporate credit unions1 (the “credit unions”) (“NCUA”), is pursuing the above-

captioned actions in the Southern District of New York (the “SDNY Actions”), the District of

Kansas (the “Kansas Actions”), and the Central District of California (the “California Actions” and,

collectively with the SDNY Actions and Kansas Actions, the “Actions”), pertaining to the purchase

by the credit unions of residential mortgage-backed securities (“RMBS”);

WHEREAS, the S.D.N.Y. Actions are assigned to and are being coordinated by the

Honorable Denise Cote;

1 The four failed corporate credit unions are: Western Corporate Federal Credit Union; U.S. Central Corporate Credit Union; Southwest Corporate Federal Credit Union; and Members United Corporate Federal Credit Union.


Add.2


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WHEREAS, the Kansas Actions are assigned to and are being coordinated by the

Honorable John W. Lungstrum and the Honorable James P. O’Hara;

WHEREAS, the California Actions are assigned to and are being coordinated by the

Honorable George H. Wu;

WHEREAS, discovery orders have been entered in some of the Actions but discovery

remains in its initial stages;

WHEREAS, the parties conferred but did not reach agreement on a proposed coordination

order among the Actions, and on March 28 and on April 4, 2014 made written submissions;

WHEREAS, the question of coordination was discussed at an April 2, 2014 videoconference

in the Actions;

WHEREAS, it appearing that the Actions share common issues and overlapping parties and

will involve common discovery, and that pretrial proceedings in all Actions should be coordinated to

avoid unnecessary conflicts and expense, conserve judicial resources, and secure the just, speedy, and

inexpensive disposition of all Actions;

WHEREAS, it is necessary and expected that all parties will confer in good faith with each

other whenever required by the Court to do so, and where it will promote the efficient management

of the Actions;

WHEREAS, it is necessary and expected that all of the Defendants will confer in good faith

with each other and make an effort to agree upon a joint course of action whenever required by the

Court to do so, and where it will promote the efficient management of the Actions;

IT IS HEREBY ORDERED, for all Actions, as follows:

1. Superseding Effect of this Master Discovery Protocol Order

This Master Discovery Protocol Order shall serve as the discovery protocol in all Actions,

and thereby shall supersede any previous discovery order entered in any Action. Any party may seek


Add.3


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permission to deviate from the provisions in this Order upon a showing of good cause by following

the procedure set forth in Section 2 below. This Order does not affect any stay of discovery entered

in any Action. E.g., NCUA v. RBS Securities Inc., et al., 11-cv-2340 & 2649 (JWL)(JPO) (D. Kan.

Oct. 24, 2013); NCUA v. Goldman Sachs & Co., et al., 11-cv-6521 (GW) (C.D. Cal. Sept. 5, 2013).

To the extent that any discovery is proceeding in an Action, however, it shall proceed under the

protocol set forth here.

2. Procedure for Presenting Discovery Dispute

To avoid unnecessary conflicts and inconsistencies in the rulings in the Actions, Judge Cote

is designated as the “Coordination Judge” for all Actions. All discovery applications and disputes

shall be brought to the Coordination Judge in the form of a two-page letter, with copies

simultaneously provided to the other three Judges. Following consultation with Judges Lungstrum

and/or O’Hara, and Judge Wu, the Coordination Judge will endeavor to respond promptly.

All applications and disputes regarding discovery in any Action will be filed in the lead case

pending in the Southern District of New York (currently 13 Civ. 6705). If the application or dispute

applies to fewer than all Actions, then the submission should be filed as well in the Action or

Actions to which it applies. The discovery parameters and limitations set forth in the ruling by the

Coordination Judge on the application or dispute will be given effect in all Actions, unless the ruling

indicates otherwise.

3. Protective Order

A Master Protective Order, which has been separately entered into and approved, will

govern these Actions.

4. Electronic Discovery


Add.4


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The parties shall produce and exchange documents in the Actions pursuant to the Protocol

for the Production of Data and the Protocol for the Production Format of Loan Files, which have

been separately entered into and approved.

5. Procedures for Loan File Reunderwriting

The parties shall cooperate in the production and reunderwriting of the loan files, as set

forth in the Loan File Reunderwriting Protocol, which has been separately entered into and

approved.

6. Document Production and Written Discovery

a) Documents produced in any Action will be treated as though produced in all Actions.

b) Written discovery (e.g., interrogatory responses and responses to requests for admission)

produced in any Action will be treated as though produced in all Actions.

c) Notwithstanding the above, the use of such discovery in the prosecution or defense of

any Action is subject to a decision by the judge presiding over the Action.

7. Interrogatories2

a) NCUA may serve up to 25 interrogatories on each Defendant Group across the

Actions involving that Defendant Group.

2 “Defendant Group” refers to any of the following groups of defendants: Barclays Defendant (Barclays Capital Inc.); Credit Suisse Defendants (Credit Suisse Securities (USA) LLC and Credit Suisse First Boston Mortgage Securities Corp.); Goldman Sachs Defendants (Goldman, Sachs & Co. and GS Mortgage Securities Corp.); Morgan Stanley Defendants (Morgan Stanley & Co., Inc., n/k/a Morgan Stanley & Co. LLC and Morgan Stanley Capital I Inc.); RBS Defendants (RBS Securities, Inc. f/k/a RBS Greenwich Capital Markets, Inc., RBS Acceptance, Inc., f/k/a Greenwich Capital Acceptance Inc., and Financial Asset Securities Corp.); UBS Defendant (UBS Securities, LLC); Wachovia Defendants (Wachovia Capital Markets, LLC, n/k/a Wells Fargo Securities, LLC, and Wachovia Mortgage Loan and Trust, LLC); Nomura Defendants (Nomura Asset Acceptance Corp. and Nomura Home Equity Loan, Inc.); and NovaStar Defendant (NovaStar Mortgage Funding Corp.).


Add.5


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b) Defendants may collectively serve up to 25 interrogatories directed at each credit union

and 10 interrogatories directed at NCUA across the Actions. Interrogatory responses

may be used by any party across the Actions.

c) Any interrogatories served before March 28, 2014 in any of the Actions shall remain

active and valid and shall count against the totals set forth in Sections 7(a) and 7(b)

above.

8. Requests for Production

a) For any requests for production that pertain to a liquidated credit union, Defendants

will collaborate and serve one set of requests for documents on NCUA across the

Actions involving that liquidated credit union. For any requests for documents that

pertain to a Defendant Group, NCUA will serve consolidated requests for production

on each Defendant Group across the Actions.

b) By April 18, 2014, NCUA and each Defendant Group shall use best efforts to agree on

a set of search terms and relevant time periods that each Defendant Group will employ

to locate and gather electronic documents for the Actions to which that Defendant

Group is party. Also by that date, NCUA and all Defendants shall use best efforts to

agree on a set of search terms and relevant time periods that NCUA will employ to

locate and gather the electronic documents of each credit union and for NCUA for all

Actions. The Parties shall inform all Judges of any agreement, or their respective

positions in the event of any disagreement, on April 18, 2014.

c) By April 18, 2014, NCUA and each Defendant Group shall use best efforts to agree on

a list of custodians and electronic and hard-copy repositories that each Defendant

Group will search for relevant documents. Also by that date, NCUA and all

Defendants shall use best efforts to agree on a list of custodians and electronic and


Add.6


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hard-copy repositories that NCUA will search for relevant documents from NCUA and

each credit union. The Parties shall inform all Judges of any agreement, or their

respective positions in the event of any disagreement, on April 18, 2014.

d) Parties may request, and negotiate in good-faith, the supplementation of search terms,

time periods, custodians, and repositories during the course of discovery.

e) The parties agree to confer in good faith regarding how to identify non-privileged,

responsive documents, subject to asserted objections, that are not amenable to

identification through electronic searches using search terms, custodians, and

repositories, or that are amenable to being identified categorically.

f) Any requests for production served before March 28, 2014 in any of the Actions shall

remain active and valid.

9. Requests for Admission

a) NCUA may serve up to 50 requests for admission on each Defendant Group across the

Actions.

b) Defendants may collectively serve up to 25 requests for admission on each credit union

and 10 requests for admission on NCUA across the Actions.

c) The limitation on the number of requests for admission does not apply to requests for

admission regarding the existence, non-existence, authenticity, or foundation for the

admissibility of any document.

10. Fact Depositions

a) The parties shall confer and attempt to reach agreement on the number of fact

depositions. Their proposals regarding any limitations on fact depositions shall be

submitted by September 19, 2014. There shall be no limit on the number of Rule


Add.7


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30(b)(6) depositions. The parties shall meet and confer regarding Rule 30(b)(6)

depositions and may proceed with such depositions at any time.

b) Fact depositions of a party witness taken in any of the above-captioned cases will be

deemed to have been taken in all of the above-captioned cases in which that party is a

plaintiff or defendant. The fact deposition of a party witness will be deemed to have

been taken in actions involving another Defendant Group (1) where the other

Defendant Group is also a defendant for an RMBS at issue in the fact deposition and

NCUA provides notice of such fact deposition to the other Defendant Group; (2) by

agreement of the parties; or (3) upon a showing of good cause. Fact depositions of

non-party witnesses will be deemed to have been taken in all of the above-captioned

cases across all of the Actions.

c) No fact deponent shall be required to be deposed more than once across all of the

Actions, except by agreement of the parties or a judicial Order.

d) All parties shall produce the transcripts of testimony and affidavits/affirmations,

including all exhibits, from any and all RMBS matters, including all civil, criminal, or

regulatory matters, in which it or one of its officers or employees was a party. The

testimony shall be treated as if taken in the Actions. The parties shall endeavor to not

subject witnesses to the same questioning for which a transcript was previously

provided. Each party shall produce existing transcripts and affidavits/affirmations,

including all exhibits, by May 15, 2014, and future transcripts and

affidavits/affirmations, including all exhibits, within two weeks after a final transcript of

a deposition is available, and two weeks after a witness has signed an

affidavit/affirmation.


Add.8


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e) The parties shall agree in advance on a system of numbering deposition exhibits to

ensure that they employ unique exhibit numbers across the Actions suitable for use at

trial and in all motion papers and other submissions to the various Courts.

f) In any Action, all parties to that Action shall have the right to depose any witness who

has not previously been deposed, and who is designated to testify at trial, before the

witness begins testifying at trial.

g) Any deposition limits that will be set will apply to depositions of party fact witnesses

only, and do not apply to expert depositions, Rule 30(b)(6) depositions, or depositions

of non-parties. NCUA and Defendants shall work together to minimize the scope and

burden associated with such depositions.

h) Nothing in this order shall preclude any party or third-party from seeking a protective

order or other relief with respect to the deposition of any individual witness.

11. Expert Disclosures

a) Expert disclosures shall take place after the applicable fact discovery period, with

submissions of expert reports by the party bearing the burden of proof on an issue on

August 14, 2015, rebuttal expert reports on October 16, 2015, and any reply expert

reports on November 20, 2015.

b) If Defendants have re-underwritten any set of loans other than the sampled loans

identified by NCUA, Defendants shall submit any expert reports regarding that re-

underwriting on August 14, 2015.

c) If Defendants have re-underwritten the NCUA sampled loans, Defendants shall submit

any expert reports regarding that re-underwriting on October 16, 2015.

d) Expert reports shall be produced separately in each Action, absent agreement of the

parties or leave of the Court.


Add.9


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12. Pre-Trial Schedule

The following pre-trial schedule shall apply to each of the Actions, vacating any prior

schedules in any particular Action:

a) Fact discovery to be completed by July 17, 2015. Each party shall make a significant

document production by June 6, 2014 and shall substantially complete its document

production by October 31, 2014. Depositions as to party fact witnesses may begin on

October 31, 2014. Party Rule 30(b)(6) depositions and non-party depositions may

proceed before October 31, 2014.

b) Expert discovery to be completed by January 15, 2016.

c) Any summary judgment motions are to be filed separately in an Action no later than

February 5, 2016, and fully submitted by March 25, 2016.

13. Trial Schedule

a) The SDNY trials shall proceed in two tranches, the first occurring in June 2016, and

the second in September 2016. All counsel will reserve both of these trial dates.

b) Case assignment into the two SDNY trial tranches shall await the completion of fact

discovery. A conference shall be scheduled for September 2015 to make case

assignments. Defense counsel may, however, at any time prior to the completion of

fact discovery, make a request for case assignment into the two trial tranches.


Add.10


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c) In the Kansas and California Actions, trial dates shall await the completion of fact

discovery, provided that all trials shall be completed by March 2017. Conferences will

be scheduled for September 2015 in the Kansas and California Actions to discuss a

schedule for trials in those Actions.

SO ORDERED:

Dated: 04/10/2014 s/ Denise L. Cote United States District Court Judge

Dated: 04/10/2014 s/ John W. Lungstrum United States District Court Judge Dated: 04/10/2014 s/ George H. Wu United States District Court Judge Dated: 04/10/2014 s/ James P. O’Hara United States Magistrate Judge


Add.11


IN THE UNITED STATES DISTRICT COURTFOR THE DISTRICT OF KANSAS

NATIONAL CREDIT UNION )ADMINISTRATION BOARD, )

)Plaintiff, )

)v. ) Case No. 11-2340-JWL

) (Consolidated withRBS SECURITIES, INC., et al., ) Case No. 11-2649-JWL)

)Defendants. )

)_______________________________________)

MEMORANDUM AND ORDER

This matter comes before the Court on the motion by defendants RBS Securities

Inc., RBS Acceptance Inc., and Financial Assets Securities Corp. (collectively “RBS”)

to modify the Master Discovery Protocol (Doc. # 329), in which defendant Nomura

Home Equity Loan, Inc. (“Nomura”) joined (Doc. # 331). For the reasons set forth

below, the motion is denied.

1. On April 10, 2014, after considering written submissions and oral

argument, this Court issued a Master Discovery Protocol order (“the MDP”) that was

filed in this case (Doc. # 314) and in the related cases in this district brought by plaintiff.

The MDP was also filed in similar cases pending in the Southern District of New York

and the Central District of California, and it was signed by the undersigned and

Magistrate Judge O’Hara of this Court, Judge Cote of the New York court, and Judge


Add.12


Wu of the California court. The MDP provided that it would serve as the discovery

protocol in all of the actions in the three courts and that any party could seek leave to

deviate from its provisions upon a showing of good cause. The MDP also provided for

a Coordination Judge, as follows:

To avoid unnecessary conflicts and inconsistencies in the rulingsin the Actions, Judge Cote is designated as the “Coordination Judge” forall Actions. All discovery applications and disputes shall be brought tothe Coordination Judge in the form of a two-page letter, with copiessimultaneously provided to the other three Judges. Following consultationwith Judges Lungstrum and/or O’Hara, and Judge Wu, the CoordinationJudge will endeavor to respond promptly.

. . . The discovery parameters and limitations set forth in the rulingby the Coordination Judge on the application or dispute will be giveneffect in all Actions, unless the ruling indicates otherwise.

By their present motion, defendants request that the Court “strike the ‘Coordination

Judge’ provisions from the [MDP] and hold that any discovery disputes arising in this

matter will be resolved by this Court, according to the Rules of Practice of this District,

the laws of this District, and the rules of this Court.”

2. Defendants argue that because these cases were not transferred as part of

a multi-district litigation, and because other statutory procedures allowing for the

assignment of judges to other districts were not followed here, there is no legal authority

that would allow Judge Cote or any other judge from another district to rule on disputes

and issue binding orders in cases pending in this Court, which rulings would violate

principles of jurisdiction. The Court rejects this argument, however, because it is based

on a mistaken premise. In fact, this Court does not understand or intend the MDP to

2


Add.13


provide for rulings by Judge Cote that are binding in the Kansas cases. The MDP

expressly requires Judge Cote to consult with a judge from this district on any discovery

dispute. To the extent that an issue affects or applies to a Kansas case, it will be decided

by a Kansas judge (after consultation in accordance with the MDP’s procedure), and no

order will be effective in the Kansas cases unless it is signed by a Kansas judge and filed

in this Court. Defendants’ concerns about majority rule among the judges are

unfounded—if this Court’s judges do not agree with their colleagues from California and

New York with respect to a particular dispute, or if the law applicable in the Kansas

cases dictates a different result, then the dispute will have a different outcome in these

cases, which will be reflected in the Court’s resulting order. Indeed, the parties remain

free in any dispute to argue that particular circumstances dictate a different result in this

Court than in the other courts. Thus, because the Coordination Judge provisions in the

MDP will not be used to allow another court’s judge to decide disputes and issue orders

in this case, the Court rejects this basis for striking the Coordination Judge provisions

from the MDP.1

3. Defendants also argue that the MDP’s Coordination Judge provisions

violate Fed. R. Civ. P. 77(b), which states that “no hearing—other than one ex

1Although the judges of this Court did consult and decide how the issues wouldbe resolved for purposes of the Kansas cases, did authorize Orders to be issued bearingthis Court’s caption and listing the names of the judges of this Court, and did cause theresulting orders to be filed in this Court, in a few recent instances the signature of aKansas judge was inadvertently omitted from the orders. The Court will issue ordersnunc pro tunc to give those unsigned orders effect in the Kansas cases.

3


Add.14


parte—may be conducted outside the district unless all the affected parties consent.” See

id. Again, however, defendants’ argument is based on the mistaken premise that Judge

Cote would be making the rulings in the Kansas cases. The MDP requires that any

written arguments be submitted also to the judges in Kansas, who will then issue any

rulings from this district. In addition, in the event of an order filed here, the Court will

also cause to be filed the parties written submissions on that issue. Any joint hearings

that may fall within the scope of Rule 77(b)2 may be conducted in this district as well,

for instance by telephone or video conference. Because the MDP’s Coordination

Judge’s provisions do not on their face violate Rule 77(b), there is no basis to strike

them.

4. The Court also rejects defendants’ argument that the MDP’s Coordination

Judge provisions violate this Court’s local rules. Defendants have not explained how

those provisions violate the local rules other than to complain about the MDP’s provision

for two-page letters. The rules of this Court, however, do not guarantee litigants a

certain number of pages for arguing motions. Indeed, it common practice for courts to

exercise their inherent authority to provide page limits for certain briefs. Moreover, the

MDP expressly allows parties to seek leave to deviate from its terms for good cause, and

2Defendants have not addressed plaintiff’s argument that Rule 77(b)’s requirementthat “hearings” be held within the district would not apply to pretrial “conferences” atwhich discovery matters may be discussed and pending motions may be disposed of. SeeFed. R. Civ. P. 16(c)(2) (listing possible matters for consideration at any pretrial“conference”).

4


Add.15


any party remains free to request additional pages for argument when necessary and

appropriate.

5. In its separate reply brief, Nomura appears also to argue generally against

coordination of these cases in the different courts. First, defendants’ original briefs

discussed only the legal authority for the specific Coordination Judge dispute-resolution

procedure and did not challenge coordination generally, and the Court ordinarily does

not entertain arguments raised for the first time in a reply brief. See, e.g., U.S. Fire Ins.

Co. v. Bunge N. Am., Inc., 2008 WL 3077074, at *9 n.7 (D. Kan. Aug. 4, 2008) (citing

Minshall v. McGraw Hill Broadcasting Co., 323 F.3d 1273, 1288 (10th Cir. 2003)).

Moreover, the same concerns raised by Nomura would also be present with any

coordination with cases to which Nomura is not a party, and even if the Kansas cases

were not coordinated with the New York and California actions, there would be at least

some coordination among the Kansas cases (as has already occurred). At any rate, as

demonstrated by the entry of the MDP in the Kansas cases, the Court is persuaded that

coordination among the three courts generally and the Coordination Judge provisions

specifically make sense and will aid the just, speedy, and (relatively) inexpensive

resolution of discovery disputes in these actions. Finally, in response to Nomura’s

specific concerns, the Court is dedicated to making sure that the interests of all parties

are protected, and as noted above, any party remains free to request additional

opportunities to make sure that its positions are fully litigated.

5


Add.16


IT IS THEREFORE ORDERED BY THE COURT THAT the RBS defendants’

motion to modify the Master Discovery Protocol (Doc. # 329), in which defendant

Nomura joined (Doc. # 331), is hereby denied.

IT IS SO ORDERED.

Dated this 27th day of May, 2014, in Kansas City, Kansas.

s/ John W. Lungstrum John W. LungstrumUnited States District Judge

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