Case 1:21-md-02989-CMA Document 450 Entered on FLSD Docket 01/10/2022 Page 1 of 17
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`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF FLORIDA
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`CASE NO. 21-2989-MDL-ALTONAGA/Torres
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`In re:
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`JANUARY 2021 SHORT SQUEEZE
`TRADING LITIGATION
`_________________________________/
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`This Document Relates to the Actions in the
`Other Broker Tranche
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`ORDER
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`THIS CAUSE came before the Court on Defendant, Apex Clearing Corporation’s Rule 12
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`Motion to Dismiss Plaintiffs’ Amended Consolidated Other Broker Tranche Class Action
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`Complaint [ECF No. 422], filed on October 15, 2021. Plaintiffs filed a [Response] in Opposition
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`[ECF No. 435], to which Defendant filed a Reply [ECF No. 440]. The Court has carefully
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`considered the Amended Consolidated Class Action Complaint (“Amended CCAC”) [ECF No.
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`410], the parties’ written submissions, the record, and applicable law. For the following reasons,
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`the Motion is granted.
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`I.
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`BACKGROUND
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`This putative class action is brought on behalf of Defendant’s customers and other
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`individual investors who suffered losses as a result of Defendant’s decision to block them from
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`purchasing shares of AMC Entertainment Holdings, Inc. (“AMC”), GameStop Corporation
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`(“GME”), and Koss Corporation (“KOSS”) for nearly three-and-a-half hours on January 28, 2021.
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`(See Am. CCAC ¶¶ 1–2, 29, 67, 93). Defendant is a broker-dealer for certain direct customers and
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`provides clearing broker services to introducing broker-dealers and their customers. (See id. ¶¶ 1,
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`24–25).
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`CASE NO. 21-2989-MDL-ALTONAGA/Torres
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`Leading up to January 28, 2021, individual investors began purchasing large numbers of
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`shares of AMC, GME, and KOSS. (See id. ¶¶ 3, 57, 59, 64). The increased demand for these
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`stocks drove share prices up and led to a “short squeeze.”1 (See id. ¶¶ 59–64). In a “short squeeze,”
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`individual investors like Plaintiffs typically “stand to benefit . . . as the value of the stocks they
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`purchased increases. Short sellers, on the other hand, risk further losses, as stock prices rise as a
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`natural consequence of market forces.” (Id. ¶ 63 (alteration added)).
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`In response to the ongoing market volatility, at approximately 10:31 a.m.2 on January 28,
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`2021, Defendant “blocked its direct customers and directed its [i]ntroducing [b]roker-[d]ealers to
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`block [their] [c]ustomers from purchasing shares of AMC, GME, and KOSS.” (Id. ¶ 67 (alterations
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`added); see also id. ¶¶ 68–72, 74–75).
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`Defendant has maintained it restricted trading due to potential future collateral
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`requirements the National Securities Clearing Corporation (“NSCC”)3 “appeared it may impose
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`on [Defendant] as part of the margin system NSCC maintains to comply with the [Securities and
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`Exchange Commission]’s standards for covered clearing agencies.” (Id. ¶ 77 (alterations added;
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`quotation marks omitted)). Specifically, Defendant received an NSCC report at 8:30 a.m.
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`projecting substantially increased collateral requirements. (See id. ¶ 76).
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`Yet Defendant did not take any action to “confirm the higher collateral number” from the
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`NSCC. (Id. ¶ 80). Moreover, documents submitted to regulators reveal Defendant knew its NSCC
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`collateral deposit requirement was lower than initially expected at 10:00 a.m. — approximately 30
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`1 In a “short squeeze,” short sellers are pressured to purchase the affected stocks at inflated, and continually
`rising, prices in order to cover their losses and prevent potentially greater losses. (See Am. CCAC ¶ 62).
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` 2
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` All times refer to the Central Time Zone.
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` 3
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` The NSCC “is the central counterparty that clears cash transactions in the U.S. equities markets, netting
`securities deliveries and payments among NSCC’s clearing members, and guaranteeing completion of
`trades even if one party to the transaction defaults.” (Am. CCAC ¶ 32).
`2
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`minutes before it implemented the trading restrictions. (See id. ¶¶ 76, 78, 80). And despite having
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`CASE NO. 21-2989-MDL-ALTONAGA/Torres
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`the opportunity to confirm the lower number on a call with the Depository Trust and Clearing
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`Corporation4 at 10:47 a.m., Defendant waited until 1:55 p.m. to lift the trading restrictions. (See
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`id. ¶¶ 76, 78–80). In any event, Defendant has subsequently admitted it was never unable to meet
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`its capital requirements. (See id. ¶¶ 83–84).
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`As a result of Defendant’s one-way trading restrictions, Plaintiffs were prevented from
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`purchasing additional shares of these stocks, the prices of these stocks fell, and Plaintiffs were
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`forced to either sell at artificially suppressed prices or continue holding their shares despite
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`depreciating values. (See id. ¶¶ 2, 6–7, 65).
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`Plaintiffs assert claims for negligence, breach of fiduciary duty, and tortious interference
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`with a business relationship. (See id. ¶¶ 100–123). Plaintiffs, Erik Chavez (see id. ¶¶ 14–17) and
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`Peter Jang (see id. ¶¶ 18–21), did not file lawsuits in other districts that were then transferred to
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`the Court through the Judicial Panel on Multidistrict Litigation (“JPML” or “Panel”), nor did they
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`file a separate action in this District that was then consolidated with this multidistrict litigation
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`(“MDL”). Instead, Plaintiffs assert claims related to the events of January 28 for the first time
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`directly in this MDL. (See generally id.).5
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`4 The Depository Trust Clearing Corporation “keeps a record of the stocks owned through the clearing
`brokerage firms for NSCC members, including [Defendant], and establishes financial requirements for
`clearing brokerage firm members, which include deposit requirements designed to reduce risk to the
`DTCC.” (Am. CCAC ¶ 31 (alteration added)).
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` Plaintiffs Chavez and Jang first asserted their claims in the Consolidated Class Action Complaint (see
`[ECF No. 359] ¶¶ 70–77), in response to which Defendant filed a Motion to Dismiss [ECF No. 405].
`Plaintiffs then filed the Amended CCAC, thereby rendering moot the initial Motion to Dismiss.
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` 5
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`3
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`CASE NO. 21-2989-MDL-ALTONAGA/Torres
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`Defendant moves to dismiss the Amended CCAC on the grounds that: (1) Plaintiffs’ claims
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`are not properly before the Court as part of this MDL proceeding (see Mot. 22–24)6; (2) Plaintiffs
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`lack Article III standing (see id. 24–28); (3) Plaintiffs fail to state claims upon which relief can be
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`granted (see id. 28–57, 61–62); and (4) Plaintiffs’ state law tort claims are preempted by federal
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`securities laws (see id. 57–61). Because the Court agrees that Plaintiffs’ claims have not been
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`properly consolidated in this MDL, and hence the Court lacks subject matter jurisdiction, the Court
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`does not reach Defendant’s remaining arguments.
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`II.
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`LEGAL STANDARD
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`
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`Subject matter jurisdiction must be established before a case can proceed on the merits.
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`See Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 93–95 (1998). This is because “[f]ederal
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`courts are courts of limited jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S.
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`375, 377 (1994) (alteration added). It is presumed that a federal court lacks jurisdiction in a case
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`until the plaintiff demonstrates the court has jurisdiction over the subject matter. See id. (citing
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`Turner v. Bank of N. Am., 4 U.S. 8, 11 (1799); McNutt v. Gen. Motors Acceptance Corp. of Ind.,
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`298 U.S. 178, 182–83 (1936)). “[B]ecause a federal court is powerless to act beyond its statutory
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`grant of subject matter jurisdiction, a court must zealously insure that jurisdiction exists over a
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`case[.]” Smith v. GTE Corp., 236 F.3d 1292, 1299 (11th Cir. 2001) (alterations added; citations
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`omitted).
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`A defendant may attack subject matter jurisdiction under Rule 12(b)(1) in two ways — a
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`facial attack or factual attack. See Menchaca v. Chrysler Credit Corp., 613 F.2d 507, 511 (5th Cir.
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`1980). A facial attack asserts a plaintiff has failed to allege a basis for subject matter jurisdiction
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`in the complaint. See id. (citation omitted). In a facial attack, the plaintiff’s allegations are taken
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`6 The Court uses the pagination generated by the electronic CM/ECF database, which appears in the headers
`of all court filings.
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`4
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`as true for purposes of the motion, see id. (citation omitted); and the plaintiff is afforded safeguards
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`CASE NO. 21-2989-MDL-ALTONAGA/Torres
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`like those provided in challenging a Rule 12(b)(6) motion raising the failure to state a claim for
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`relief, see Lawrence v. Dunbar, 919 F.2d 1525, 1529 (11th Cir. 1990) (citation omitted). A district
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`court may sua sponte convert a motion to dismiss under Rule 12(b)(6) to a Rule 12(b)(1) motion
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`to dismiss relying on a facial challenge to subject matter jurisdiction. See McElmurray v. Consol.
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`Gov’t of Augusta-Richmond Cnty., 501 F.3d 1244, 1247, 1251 (11th Cir. 2007).
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`In contrast to a facial challenge, a factual attack “challenges the existence of subject matter
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`jurisdiction in fact, irrespective of the pleadings, and matters outside the pleadings, such as
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`testimony and affidavits, are considered.” Menchaca, 613 F.2d at 511 (citation omitted). In a
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`factual attack, courts are free to weigh the evidence to satisfy themselves they have the power to
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`hear the case. See Lawrence, 919 F.2d at 1529 (citations omitted). No presumption of truth
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`attaches to the plaintiff’s allegations, and the existence of disputed material facts does not prevent
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`the trial court from evaluating for itself the merits of the jurisdictional claim. See id. (citations
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`omitted). “In the face of a factual challenge to subject matter jurisdiction, the burden is on the
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`plaintiff to prove that jurisdiction exists.” OSI, Inc. v. United States, 285 F.3d 947, 951 (11th Cir.
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`2002) (citations and footnote call number omitted).
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`“A dismissal for lack of subject matter jurisdiction is not a judgment on the merits and is
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`entered without prejudice.” Stalley ex rel. U.S. v. Orlando Reg’l Healthcare Sys., Inc., 524 F.3d
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`1229, 1232 (11th Cir. 2008) (citing Crotwell v. Hockman-Lewis Ltd., 734 F.2d 767, 769 (11th Cir.
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`1984)).
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`III. ANALYSIS
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`Defendant presents a factual challenge to the Court’s subject matter jurisdiction over
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`Plaintiffs’ claims under 28 U.S.C. section 1407(a) and the Supreme Court’s decision in Lexecon
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`5
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`Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998). (See Mot. 22–24; Reply 34–
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`CASE NO. 21-2989-MDL-ALTONAGA/Torres
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`36). Specifically, Defendant argues both Lexecon and Section 1407 require cases consolidated in
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`an MDL to be remanded to their originating courts once pretrial proceedings have concluded. (See
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`Mot. 22). Because Plaintiffs asserted their claims for the first time directly in the MDL, their
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`claims do not have an originating “home” court to return to (see id. 23); and there is no apparent
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`statutory authority that would permit the Court, sitting in its capacity as custodian of the MDL
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`member cases, to accept new complaints or new claims by new plaintiffs directly within the MDL
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`proceeding (see id.; Reply 35). Therefore, Defendant contends the Court lacks subject matter
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`jurisdiction over Plaintiffs, Chavez and Jang’s claims. (See Mot. 23; Reply 34–36).7 The Court
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`agrees.
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`Section 1407 sets forth the procedure by which actions may be added to an MDL. The
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`statute was enacted to authorize the transfer and centralization of existing actions filed in different
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`districts that share common facts. See Gelboim v. Bank of Am. Corp., 574 U.S. 405, 410 (2015)
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`(citing H.R. Rep. No. 1130, 90th Cong., 2d Sess., 2 (1968)). Upon a determination that
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`consolidation would promote convenience and efficiency, the JPML may transfer such actions to
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`a “transferee” district for consolidated pretrial proceedings. See 28 U.S.C. §§ 1407(a)–(b). After
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`the JPML authorizes an MDL and transfers actions to a transferee district, “[a]ny party or counsel
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`in actions previously transferred under Section 1407 shall promptly notify the Clerk of the Panel
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`of any potential tag-along actions in which that party is also named or in which that counsel
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`appears.” J.P.M.L. R. 7.1(a) (alteration added). The Clerk may then “enter a conditional order
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`7 Although there are some features of Section 1407 that suggest the issue is a defect in venue, the Court
`treats it as an issue of subject matter jurisdiction because the parties address it as such in their briefing and
`other courts that have considered the propriety of direct filing have likewise treated it as a matter of subject
`matter jurisdiction. Regardless of whether the defect is one of venue or subject matter jurisdiction, the fate
`of Plaintiffs, Chavez and Jang’s claims remains the same.
`6
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`transferring that action to the previously designated transferee district court[.]” Id. 7.1(b)
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`CASE NO. 21-2989-MDL-ALTONAGA/Torres
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`(alteration added).
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`There is one exception to this process: “[p]otential tag-along actions filed in the transferee
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`district do not require Panel action.” Id. 7.2(a) (alteration added). To invoke this exception, a
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`party filing a tag-along action in the transferee district “should request assignment of such action[]
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`to the Section 1407 transferee judge in accordance with applicable local rules.” Id. (alteration
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`added). Under the Southern District of Florida’s Local Rules, counsel is instructed to inform the
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`court if an action is similar or related to another action or proceeding then pending before the court.
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`See L.R. 3.8. If appropriate, the court will then transfer the newly-filed action to the judge
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`presiding over the existing proceedings. See S.D. Fla. Internal Operating Procedures 2.15.00.
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`A close review of the language of the MDL statute and Panel rules indicates that a
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`plaintiff’s claims are properly before an MDL court only where the plaintiff has first asserted his
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`or her claims in a separate action. For example, Section 1407 limits those “actions [which] may
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`be transferred to any district for coordinated or consolidated pretrial proceedings” to “civil actions
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`involving one or more common questions of fact [that] are pending in different districts[.]” 28
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`U.S.C. § 1407(a) (alterations and emphases added); see In re Mortg. Elec. Registration Sys. (Mers)
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`Litig., No. 09-md-02119, 2016 WL 3931820, at *11 (D. Ariz. July 21, 2016) (“[Section] 1407(a)
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`indicates that all actions must first be filed and pending before that action may be transferred for
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`consolidated pretrial proceedings.” (alteration added; citation omitted)).
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`Similarly, a tag-along action is defined as “a civil action pending in a district court which
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`involves common questions of fact with either (1) actions on a pending motion to transfer to create
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`an MDL or (2) actions previously transferred to an existing MDL[.]” J.P.M.L. R. 1.1(h) (alteration
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`and emphasis added). Both the statute and the Rules thus presuppose the existence of separate
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`7
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`“civil actions” that are “pending” in different districts prior to consolidation and transfer into an
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`MDL. The sole exception to Panel action likewise contemplates the filing of a separate, individual
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`action. See id. 7.2(a) (referring to “potential tag-along actions filed in the transferee district” rather
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`than directly in an MDL (emphases added)).
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`As stated, Plaintiffs, Chavez and Jang, did not assert their claims in any separate civil
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`action. They did not have any separate civil action pending which could have been transferred to
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`the Court by the JPML, either in the first instance upon creation of the MDL or in a later tag-along
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`action. Plaintiffs did not file a tag-along action in this District or in any court, for that matter, nor
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`did they request consolidation or assignment of their claims to the undersigned. In short, Plaintiffs
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`did not abide by the procedures prescribed in Section 1407 and the JPML Rules for joining this
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`MDL. See In re Mortg. Elec. Registration Sys., 2016 WL 3931820, at *6 (“[I]t is clear that neither
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`. . . Section 1407, the Rules of Procedure of the [JPML], nor the Local Rules permit a transferee
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`court to join a new plaintiff in the MDL when such plaintiff never filed his own case or had his
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`case transferred to the court by the [JPML].” (alterations added)).
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`Plaintiffs’ failure to assert their claims in a separate action(s) not only directly contravenes
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`the procedures set forth by statute and Panel Rules, but it is also inconsistent with the Supreme
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`Court’s directive that MDL member cases be remanded to their originating courts upon completion
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`of pretrial proceedings. Section 1407 requires MDL transferee courts, upon the conclusion of
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`pretrial proceedings, to remand “[e]ach action . . . to the district from which it was transferred[.]”
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`28 U.S.C. § 1407(a) (alterations added); see also In re FCA US LLC Monostable Elec. Gearshift
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`Litig., No. 16-md-2744, 2017 WL 6402992, at *3 (E.D. Mich. Mar. 21, 2017) (“Section 1407
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`makes clear that the role of a transferee court is to act as a judicial caretaker of actions that come
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`from somewhere else, manage those actions to ready them for trial (or until they are resolved by
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`8
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`motion or settlement), and then send them back for trial.” (citation omitted)), reconsideration
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`CASE NO. 21-2989-MDL-ALTONAGA/Torres
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`denied, 2017 WL 6402991 (E.D. Mich. Mar. 23, 2017); In re: Soc’y Ins. Co. Covid-19 Bus.
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`Interruption Prot. Ins. Litig., MDL No. 2964, 2021 WL 3290962, at *6 (N.D. Ill. Aug. 1, 2021)
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`(“The MDL statute is clear in its division of labor between the transferor and transferee district
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`courts, contemplating that the case will originate in its proper home district . . . and then later return
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`to that district for trial.” (alteration added; citation omitted)).
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`The Supreme Court emphasized this statutory language in Lexecon and reiterated the
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`transferee court’s “obligat[ion]” to send all transferred actions back to their originating districts.
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`Lexecon, 523 U.S. at 34 (alteration added).8 See also id. at 35 (explaining that the statute imposes
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`an express “remand duty”); id. at 40 (noting the statute’s “straightforward language imposing the
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`Panel’s responsibility to remand”; quoting the legislative history demonstrating that Congress
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`intended the remand requirement to be obligatory); In re FCA US, 2017 WL 6402992, at *3
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`(explaining the Supreme Court in Lexecon held that cases in a Section 1407 MDL “must return”
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`to their home districts (emphasis in original; citation omitted)).
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`Thus, both Section 1407 and Lexecon make clear that, “[i]n the unique procedural world
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`of an MDL, the authority of the transferee court to handle the case . . . ends on conclusion of
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`pretrial proceedings.” In re Farmers Ins. Exch. Claims Representatives’ Overtime Pay Litig.,
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`MDL No. 33-1439, 2008 WL 4763029, at *3 (D. Or. Oct. 28, 2008) (alterations added; citing
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`Lexecon, 523 U.S. at 36–37); see also In re FCA US, 2017 WL 6402992, at *3 (“The transferee
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`court is without power to take any further action in the individual cases once [pretrial] proceedings
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`are concluded.” (alteration added; citing Lexecon, 523 U.S. at 28)). This is so because “[c]ases
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`8 In Lexecon, the Supreme Court held that a transferee district court did not have the authority under section
`1404(a) to transfer an individual MDL action from the originating district to itself for trial, because Section
`1407 mandates that MDL member cases be remanded at the conclusion of pretrial proceedings. See 523
`U.S. at 34–37, 40.
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`9
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`consolidated for MDL pretrial proceedings ordinarily retain their separate identities” throughout
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`the MDL process. Gelboim, 574 U.S. at 413 (alteration added; footnote call number omitted).
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`Indeed, Section 1407 refers to a multitude of individual “actions”; it does not create “any
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`monolithic multidistrict action[.]” Id. (alteration added; citation, quotation marks, and footnote
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`call number omitted); see also Lexecon, 523 U.S. at 37 (“Section 1407 [does not] imbu[e]
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`transferred actions with some new and distinctive . . . character[.]” (alterations added)). MDL
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`member cases are “intended to resume their independent status once the pretrial stage of litigation
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`is over.” In re Mortg. Elec. Registration Sys., 2016 WL 3931820, at *8 (citation and quotation
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`marks omitted). And the obligation to remand “each” transferred action, as set forth in Section
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`1407 and Lexecon, reflects that intention.
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`The addition of plaintiffs directly in an MDL tangibly frustrates these principles. Plaintiffs
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`who assert their claims for the first time in an MDL’s master pleading lack a case capable of
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`retaining or resuming a separate identity. Moreover, the practice leaves transferee courts without
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`options at the conclusion of pretrial proceedings, as direct-filed cases do not have a transferor
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`“home” court to which the transferee court can remand them. See J.P.M.L. R. 1.1(j) (“‘Transferor
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`district’ is the federal district court where an action was pending prior to its transfer pursuant to
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`Section 1407, for inclusion in an MDL, and where the Panel may remand that action at or before
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`the conclusion of pretrial proceedings.” (emphases added)); see also In re Packaged Ice Antitrust
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`Litig., No. 08-md-1952, 2011 WL 6178891, at *8 (E.D. Mich. Dec. 12, 2011) (“Were the Court to
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`permit the addition of these [p]laintiffs, the Court would be without options at the time of
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`remand[.]” (alterations added)); In re: Soc’y Ins. Co., 2021 WL 3290962, at *6 (agreeing with
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`defendant’s observation that direct filing by new plaintiffs puts “Lexecon rights at stake, given that
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`there is no obvious transferor court to which to remand those plaintiffs’ claims for trial[,]” and
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`10
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`requiring new plaintiffs to file actions in their home districts before seeking transfer into the MDL
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`(alteration added)); In re Farmers Ins. Exch., 2008 WL 4763029, at *3 (claims by new plaintiffs,
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`which “were not transferred . . . through proper MDL procedures but, rather, were simply added
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`by fiat, . . . had no ‘home federal court’ to which [the MDL court] could eventually remand them”
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`(alterations added)); In re Mortg. Elec. Registration Sys., 2016 WL 3931820, at *10 (“This Court
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`has no ‘home court’ to remand [newly-added plaintiff]’s action to at the conclusion of pretrial
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`proceedings because [his] claim was never filed in any court nor transferred to this Court by the
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`[JPML] or by Local Rule.” (alterations added; citation omitted)); In re FCA US, 2017 WL
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`6402992, at *3 (“[I]n the case of the newly-named plaintiffs who have never filed any lawsuit
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`anywhere, in any court, there is no ‘transferor court’ from which this Court could inherit its
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`authority over their claims[,]” and to which the transferee court could remand them. (alterations
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`added; citation omitted)).
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`Simply put, the direct addition of new plaintiffs’ claims in an MDL is “at odds” with the
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`statutory scheme established by Congress. Id. (“The idea that an MDL proceeding is an
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`environment that can spawn fresh actions by new plaintiffs is at odds with [Section 1407].”
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`(alteration added)); see also In re Mortg. Elec. Registration Sys., 2016 WL 3931820, at *7 (Adding
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`new plaintiffs by amendment in an MDL “directly contradicts the appropriate procedures
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`designated in [Section] 1407 for consolidating cases for pretrial proceedings.” (alteration added;
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`citation omitted)); In re: Soc’y Ins. Co., 2021 WL 3290962, at *6 (concluding “it is improper to
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`add new plaintiffs . . . ‘directly’ to [an] MDL” because “[t]he MDL statute is clear” (alterations
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`added)).
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`The Court — sitting in its capacity not as an ordinary district court, but as an MDL
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`transferee court — plainly only has jurisdiction over MDL member cases properly transferred or
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`11
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`consolidated under Section 1407 and the accompanying JPML Rules. See 28 U.S.C. § 1407(f)
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`(permitting the Panel to prescribe additional rules). It therefore follows, using elementary logic,
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`that a transferee court does not have jurisdiction over an action that was never “filed” or
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`“pending[,]” within the meaning of Section 1407. Id. § 1407(a) (alteration added); J.P.M.L. R.
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`1.1(h), 1.1(j), 7.1, 7.2(a). It is obvious that an unfiled case does not invoke federal subject matter
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`jurisdiction in any federal court, let alone an MDL transferee court. See 15 Fed. Prac. & Proc.
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`Juris. § 3866 (4th ed.) (A transferee judge’s authority “does not extend to . . . un-transferred federal
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`cases[] or unfiled claims.” (alterations and emphasis added; footnote call number omitted)). In
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`other words, a transferee court “does not have subject matter jurisdiction to adjudicate an action
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`that is lacking in original federal jurisdiction.” In re Mortg. Elec. Registration Sys., 2016 WL
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`3931820, at *8 (citation and quotation marks omitted); see also In re Packaged Ice, 2011 WL
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`6178891, at *8–9 (Adding new plaintiffs directly to an MDL “ignore[s] basic Article III principles
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`and . . . bypasse[s] the appropriate MDL process for consolidation of these plaintiffs’ claims.”;
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`“While an MDL court has ‘substantial discretion’ with regard to consolidated cases, [it does] ‘not
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`have the power to override the application of substantive legal standards.’ The Court cannot
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`simply ‘assimilate’ these proposed Plaintiffs’ claims into this MDL action.” (alterations added;
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`citation omitted)).
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`The weight of authority further supports the conclusion that an MDL transferee court lacks
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`subject matter jurisdiction over claims by new plaintiffs asserted for the first time directly in an
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`MDL proceeding. See In re Mortg. Elec. Registration Sys., 2016 WL 3931820, at *5–11
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`(dismissing new plaintiff’s claims for lack of subject matter jurisdiction because “[a] plaintiff may
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`not unilaterally add actions in the MDL that have not been pending in federal court elsewhere or
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`which were not transferred to the transferee court through the MDL process” (alteration added;
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`citation omitted; collecting cases)); In re Farmers Ins. Exch., 2008 WL 4763029, at *5 (“I have
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`CASE NO. 21-2989-MDL-ALTONAGA/Torres
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`discovered no authority for this court, as an MDL transferee court, to exercise subject matter
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`jurisdiction over state law claims not transferred by the MDL Panel and [therefore] over which
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`this court lacks original jurisdiction.” (alteration added)); In re Packaged Ice, 2011 WL 6178891,
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`at *8–9; In re EpiPen (Epinephrine Injection, USP) Mktg., Sales Pracs. & Antitrust Litig., 17-md-
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`2785, 2021 WL 2585065, at *76–77 (D. Kan. June 23, 2021), reconsideration denied, 2021 WL
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`4948269, at *12–13 (D. Kan. Oct. 25, 2021); see also In re: Soc’y Ins. Co., 2021 WL 3290962, at
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`*6 (“The Court has also not been able to find persuasive caselaw that explains precisely, with
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`regard to statutory and precedential authority, how plaintiffs may be added ‘directly’ to an
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`MDL[.]” (alteration added)); In re FCA US, 2017 WL 6402992, at *2–4.9 The Court agrees with
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`the analyses undertaken in these cases and finds that it lacks subject matter jurisdiction over
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`Plaintiffs, Chavez and Jang’s claims.
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`Plaintiffs cite In re Takata Airbag Products Liability Litigation, 379 F. Supp. 3d 1333 (S.D.
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`Fla. 2019), to support their addition of new plaintiffs directly into the MDL. There, at first glance,
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`the transferee court appears to have permitted direct filing, in the same manner Plaintiffs, Chavez
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`and Jang, seek to do in this case. See id. at 1336–37, 1338. But, as Defendant points out (see
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`Reply 34), a closer look at the record reveals that the plaintiffs who allegedly “direct-filed” in
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`Takata were actually added via amendment to an existing — separate — underlying civil action
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`(S.D. Fla., Case No. 14-cv-24009). See In re FCA US, 2017 WL 6402992, at *3 (“None of the
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`cases cited by the plaintiffs endorsed attempts by parties to add newly-named individual plaintiffs
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`9 Cf. In re KBR, Inc., 736 F. Supp. 2d 954, 978 (D. Md. 2010) (striking consolidated MDL complaint where
`plaintiffs added new plaintiffs “nowhere to be found in the original forty-three . . . complaints Plaintiffs
`filed in this action”); In re Motor Fuel Temperature Sales Pracs. Litig., No. 07-md-1840, 2008 WL
`7708967, at * 3–4 (D. Kan. Nov. 18, 2008) (denying motion to amend consolidated complaint to add new
`plaintiffs, or to add new plaintiffs in the underlying cases already consolidated in the MDL but permitting
`them to file new cases in the underlying jurisdictions).
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`Case 1:21-md-02989-CMA Document 450 Entered on FLSD Docket 01/10/2022 Page 14 of 17
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`without explicitly making them parties to a specific, underlying, properly-transferred case.”). By
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`CASE NO. 21-2989-MDL-ALTONAGA/Torres
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`contrast, Chavez and Jang are not affiliated with an underlying civil case number in this District,
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`let alone a proper home district.
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`In addition, the cases relied on by the Takata court are inapposite. See Takata, 379 F. Supp.
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`3d at 1338–39. For example, the plaintiffs in Heartland Payment Systems did not file directly into
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`the MDL, as Plaintiffs here have attempted to do. Rather, they filed their own separate suit in the
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`Southern District of Texas, asserting diversity jurisdiction, and then moved to consolidate their
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`suit with actions already consolidated and transferred to that district by the JPML, under Panel
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`Rule 7.2(a). See In re Heartland Payment Sys., Inc. Customer Data Sec. Breach Litig., MDL No.
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`2046, 2011 WL 1232352, at *4 (S.D. Tex. Mar. 31, 2011).
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`Likewise, in In re Managed Care Litigation, one case (Humana) was filed in the Southern
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`District of Florida, and six others were transferred from the Southern District of Mississippi by the
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`JPML to this District for consolidation with the Humana case. See 150 F. Supp. 2d 1330, 1334
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`(S.D. Fla. 2001). “Apparently[,] each [Southern District of Mississippi] [p]laintiff filed [an
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`amended] complaint directly [in the Southern District of Florida] in anticipation of [their] case[s]
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`being transferred from the Southern District of Mississippi . . . by the MDL Panel.” Id. at 1336
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`n.5 (alterations added). Nothing in the opinion, however, suggests those plaintiffs attempted to
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`add new plaintiffs in their amended complaints. See id. Because the amended complaints merely
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`“reiterat[ed]” the allegations of the original transferred complaints, the court declined to dismiss
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`them on that basis. Id. (alteration added).
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`Unlike the present situation, each of the purportedly “direct-filed” complaints in these cases
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`had its own separate case number and retained its identity throughout the MDL. Thus, although
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`the Takata court relies on these cases in support of permitting the addition of new plaintiffs directly
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`in an MDL, neither case actually stands for that proposition or contemplates “direct filing” in the
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`CASE NO. 21-2989-MDL-ALTONAGA/Torres
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`manner Plaintiffs have done here.10
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` The Takata court also cites In re Vioxx Products Liability Litigation, 478 F. Supp. 2d 897
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`(E.D. La. 2007). In Vioxx, the court entered a direct filing order — an entirely separate procedure
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`whereby the defendant waived venue obje