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In re Processed Egg Products Antitrust Litigation

United States District Court, E.D. Pennsylvania

October 22, 2019

IN RE PROCESSED EGG PRODUCTS ANTITRUST LITIGATION THIS DOCUMENT APPLIES TO ALL DIRECT ACTION PLAINTIFF CASES

          MEMORANDUM

          GENE E.K. PRATTER, UNITED STATES DISTRICT JUDGE

         Introduction

         With trial a little over a month away, Heinz no longer wanted its egg claim in the same basket as its fellow Direct Action Plaintiffs (DAPs). Plaintiff H.J. Heinz Company, L.P. moved to sever its claims from those of its co-plaintiffs in this multidistrict litigation in the Eastern District of Pennsylvania and transfer its claim to the Northern District of Illinois, to be consolidated with the Kraft Plaintiffs' action owned by the same parent company, The Kraft Heinz Company. Heinz argues that severing and transferring its claim would be judicially economic and convenient for the courts and parties involved. Because Heinz failed to adequately establish its need to sever and transfer its claim, its motion is denied.

         I. Background

         The facts of this case are well documented in the Court's prior rulings. See, e.g., In re Processed Egg Products Antitrust Litig, 206 F.Supp.3d 1033 (E.D. Pa. 2016).[1] To briefly summarize this decade-old litigation, the plaintiffs allege that the defendants participated in a multi-prong price-fixing scheme designed to decrease the supply of eggs and thereby increase egg prices. At issue in this motion is whether Plaintiff Heinz can sever its claims from those of its co-plaintiffs in Winn-Dixie Stores, Inc. et al. v. Michael Foods, Inc. et al, No. 11-510, and transfer its claim for consolidation with the Kraft Plaintiffs' action which was recently remanded from this Court to the Northern District of Illinois. See Kraft Foods Global, Inc. et al. v. United Egg Producers et al, No. 11-8808 (N.D. 111.) (Doc. No. 15).

         Heinz, alongside its co-plaintiffs, filed Winn-Dixie Stores, Inc. et al. v. Michael Foods, Inc. e/a/., No. 11:510, on January 12, 2011. Rose Acre Farms, Inc., United Egg Producers, Inc. (UEP), and United Export Marketers, Inc. (USEM) are the remaining defendants in the Heinz action. The Kraft Plaintiffs-Kraft Foods Global, Inc., The Kellogg Co., General Mills, Inc., and Nestle USA, Inc.-filed a separate case, Kraft Foods Global, Inc. v. United Egg Producers et al, on December 12, 2011 in the Northern District of Illinois. The Judicial Panel on Multidistrict Litigation transferred the Kraft Action to this Court on January 9, 2012. After this transfer, both Heinz and Kraft were among the other DAPs involved in this multidistrict litigation.

         Pursuant to 28 U.S.C. § 1407(a) and this Court's Case Management Order No. 20 (Doc. No. 822), the Kraft Plaintiffs filed an uncontested motion for a suggestion to the Judicial Panel to remand Kraft Foods Global, Inc. v. United Egg Producers et al. to the Northern District of Illinois, and the Court granted this request. Or. Granting Remand (Doc. No. 1917); see 28 U.S.C. § 1407(a); Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26, 35 (1998) (holding that cases transferred to a multidistrict litigation must be remanded to their original district for trial). The Judicial Panel issued a conditional transfer order transferring the Kraft Action to the Northern District of Illinois on August 16, 2019. See Conditional Transfer Or., No. 12-88 (Doc. No. 71).[2] The case was assigned to Judge Charles R. Norgle on September 16, 2019. Rose Acre, UEP, and USEM are among the remaining defendants in the Kraft Action.[3] On September 18, 2019, Heinz filed this motion to sever and transfer its claim.

         Unrelatedly, Kraft and Heinz merged into a new corporate entity, The Kraft Heinz Company, on July 2, 2015. As a result of the merger, Kraft Heinz became the owner of the claims brought by both Kraft and Heinz in this multidistrict litigation. Heinz asserts that both cases continued to be litigated as separate matters after the merger "[b]ecause Kraft Foods Global and Heinz had different co-plaintiffs and counsel in their respective actions, subject to different fee and cost agreements." Heinz' Mem. in Supp. of Mot. to Sever and Transfer Claim at 2 (Doc. No. 1970-1).

         II. Legal Standards

         A. Severance

         The Federal Rules of Civil Procedure give district courts broad discretion in deciding whether to sever a case by way of severing parties or claims. See, e.g., BancMortgage Fin. Corp. v. Guarantee Title & Trust Co., No. 99-2932, 2000 WL 1521600, at *1 (E.D. Pa. Oct. 6, 2000). Federal Rule of Civil Procedure 21 states: "On motion or on its own, the court may at any time, on just terms, add or drop a party. The court may also sever any claim against a party." In deciding whether to sever, courts consider "convenience of the parties, avoiding prejudice, and promoting expedition and economy." Graudins v. Retro Fitness, LLC, 921 F.Supp.2d 456, 468 (E.D Pa. 2013) (citing BancMortgage, 2000 WL 1521600, at *2); see also Official Comm. of Unsecured Creditors v. Shapiro, 190 F.R.D. 352, 355 (E.D. Pa. 2000). "A claim may be severed ... for the purpose of facilitating transfer. Where the administration of justice would be materially advanced by severance and transfer, a court may properly sever the claims against one or more defendants for the purpose of permitting the transfer of the action against other defendants." Cain v. N.Y. State Bd. of Elections, 630 F.Supp. 221, 225-26 (E.D.N.Y.1986) (citations omitted).

         B. Transfer[4]

         A district court may decide "[f]or the convenience of the parties and witnesses, in the interest of justice," to transfer any civil action to any other district or division where the action might have been brought. 28 U.S.C. § 1404(a). Section 1404(a) grants district courts "broad discretion to determine, on an individualized, case-by-case basis, whether convenience and fairness considerations weigh in favor of transfer." Jumara v. State Farm Ins. Co., 55 F.3d 873, 883 (3d Cir. 1995) (citing Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 30-31 (1988)). In making their determinations, district courts typically balance various private and public interests related to the convenience and fairness of selecting the appropriate venue. In re Howmedica Osteonics Corp., 867 F.3d 390, 401 (3d Cir. 2017) (citing Jumara, 55 F.3d at 879).

         While there is no definitive set of factors that must be considered prior to transfer, in Jumara v. State Farm Insurance Company, the Third Circuit Court of Appeals enumerated many public and private factors courts have considered when determining whether to transfer an action pursuant to § 1404(a). 55 F.3d at 879. Private interests include: "plaintiffs forum preference as manifested in the original choice; the defendant's preference; whether the claim arose elsewhere; the convenience of the parties as indicated by their relative physical and financial condition; the convenience of the witnesses-but only to the extent that the witnesses may actually be unavailable for trial in one of the fora; and the location of books and records . . . ." Id. at 879 (citations omitted). Public interests include: "the enforceability of the judgment; practical considerations that could make the trial easy, expeditious, or inexpensive; the relative administrative difficulty in the two fora resulting from court congestion; the local interest in deciding local controversies at home; the public policies of the fora; and the familiarity of the trial judge with the applicable state law in diversity cases." Id. at 879-80 (citations omitted).

         In addition to the Jumara factors, "courts in our district have held that where there is a strong likelihood of consolidation with a related action, a transfer of venue is warranted." Villari Brandes & Kline, P.C v. Plainfield Specialty Holdings II, Inc., No. 09-2552, 2009 WL 1845236, at *5 (E.D. Pa. June 26, 2009) (citing Prudential Ins. Co. of Am. v. Rodano, 493 F.Supp. 954, 95 (E.D. Pa. 1980); Maxlow v. Leighton, 325 F.Supp. 913, 915-17 (E.D. Pa. 1971)); see Palagano v. NVIDIA Corp., No. 15-1248, 2015 WL 5025469, at *3 (E.D. Pa. Aug. 25, 2015). "[T]hepresence of a related action in the transferee forum is such a powerful reason to grant a transfer that courts do so even where other Jumara factors, such as the convenience of the parties and witnesses, would suggest the opposite." Villari Brandes & Kline, P.C., 2009 WL 1845236, at *5 (collecting cases); see also Elan Suisse Ltd. v. Christ, No. 06-3901, 2006 WL 3838237, at *4 (E.D. Pa. Dec. 29, 2006).

         The movant has the burden to establish the need for a transfer. Jumara, 55 F.3d at 879 (citations omitted). "The party seeking a transfer should support its motions with affidavits and other documentation that establishes that the interests of justice and convenience of the parties would best be served by a transfer." One World Botanicals Ltd. v. Gulf Coast Nutritionals, Inc.,987 F.Supp. 317, 326 (D.N.J. 1997) (citing Plum Tree, Inc. v. Stockment,488 F.2d 754, 755-57 (3d Cir. 1973)). A district court should not transfer a case ...


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