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Consumer Financial Protection Bureau v. Nationwide Biweekly Administration, Inc.

United States District Court, N.D. California

July 21, 2015



RICHARD SEEBORG, District Judge.


Plaintiff Consumer Financial Protection Bureau ("CFPB") brings this action against defendants Nationwide Biweekly Administration, Inc., Loan Payment Administration LLC ("LPA"), and Daniel S. Lipsky for allegedly deceiving consumers about Nationwide's "Interest Minimizer" ("IM") program. Under the IM program, customers send their mortgage payments in installments to Nationwide, which holds the funds and then forwards payments to the mortgage lender in advance of the monthly due date. Plaintiff avers that defendants made knowing misrepresentations to consumers about the timing and the amount of savings that typical enrollees would gain through the program.

Defendants move to transfer the matter to the Southern District of Ohio pursuant to 28 U.S.C. § 1404(a). They contend that transfer is warranted because plaintiff's choice of forum deserves only minimal consideration in this instance, and that the Southern District of Ohio is far more convenient for the parties and potential witnesses than the Northern District of California. Plaintiff, in turn, claims that its choice of forum deserves especially strong deference and that the subject matter of this case has substantial connections to this District. Because defendants fail to make a sufficiently strong showing of inconvenience to upset plaintiff's choice of forum, and do not establish that the other § 1404(a) factors significantly weigh in their favor, the motion to transfer venue will be denied.


CFPB is an independent agency of the United States charged with regulating the offering and provision of consumer financial products and services under federal consumer financial law. Defendant Nationwide is an Ohio corporation based in Xenia, Ohio. Nationwide acts as a custodian of consumer funds and transmits funds from consumers to their mortgage lenders or servicers. That activity constitutes a consumer financial product or service covered by the Consumer Financial and Protection Act ("CFPA"). Defendant LPA is a wholly-owned subsidiary of Nationwide and an Ohio LLC and resident involved in marketing and supporting Nationwide's services. Defendant Lipsky is the founder, president, sole officer, and sole owner of Nationwide and is a resident of the Southern District of Ohio. He has managerial responsibility for Nationwide and LPA, and he is alleged to have formulated, directed, controlled, or participated in the acts and practices of Nationwide and LPA at issue in this action.

CFPB's complaint asserts claims under the CFPA, 12 U.S.C. §§ 5531(a), 5536(a), 5564(a), 5565, and the Telemarketing and Consumer Fraud and Abuse Prevention Act, 15 U.S.C. § 6105(d), and its implementing regulation, the Telemarketing Sales Rule, 16 C.F.R. §§ 310.1-9 (2010). CFPB avers defendants knew that during the first few years of enrollment in the IM program, most customers would pay more in fees to Nationwide than they would save. It alleges that defendants knew a substantial percentage of customers would leave the IM program before saving any money. CFPB claims that despite this knowledge, defendants led customers to believe that they would save a substantial amount upon enrollment in the program.

Defendants argue that the balance of factors under 28 U.S.C. § 1404(a), particularly the convenience of the witnesses and local interest in the controversy, warrants transfer to the Southern District of Ohio, and that plaintiff's choice of forum should be accorded little weight. In opposition, plaintiff contends defendants have not met their burden to show that the interests of justice demand transfer. Plaintiff further avers that its choice of forum deserves substantial deference due to a special venue provision in the CFPA that allows it to bring suit in this District. CFPB additionally claims that this District has significant connections to this case[1] and that pending litigation in California state court weighs against transfer.[2]


Neither party disputes that venue in either district would be proper. Rather, defendants request transfer to the Southern District of Ohio upon application of the Section 1404(a) factors. Section 1404(a) provides that "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil matter to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). The purpose of the section is to "prevent the waste of time, energy and money and to protect litigants, witnesses and the public against unnecessary inconvenience and expense." Van Dusen v. Barrack, 376 U.S. 612, 616 (1964) (internal citations and quotation marks omitted). The district court has broad discretion when weighing a motion for transfer, and must always make an individualized determination. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (citation omitted).

The analysis considers both public factors which speak to the interests of justice, and private factors, which bear on the relative convenience of each forum to the parties and witnesses. Jones v. GNC Franchising, Inc., 211 F.3d 495, 498 (9th Cir. 2000). To support their motion for transfer, the defendants must demonstrate: (1) that the venue is proper in the transferor district; (2) that the transferee district is one where the action might have been brought; and (3) that the transfer will serve the convenience of the parties and witnesses, and will promote the interests of justice. See Goodyear Tire & Rubber Co. v. McDonnell Douglas Corp., 820 F.Supp. 503, 506 (C.D. Cal. 1992).

If venue is proper in either district, a district court evaluates several further (private and public) factors: (1) plaintiff's choice of forum; (2) convenience to the parties; (3) convenience to witnesses; (4) ease of access to the evidence; (5) familiarity of each forum with the applicable law; (6) feasibility of consolidation with other claims; (7) any local interest in the controversy; and (8) the relative court congestion and time of trial in each forum. See Williams v. Bowman, 157 F.Supp.2d 1103, 1106 (N.D. Cal. 2001). The burden of demonstrating that transfer is appropriate rests on the moving party. Commodity Futures Trading Comm'n v. Savage, 611 F.2d 270, 279 (9th Cir.1979). As neither party disputes that venue would be proper either here or in the Southern District of Ohio, the outcome of this motion hinges on defendants' showing that these further factors weigh in favor of transfer.


A. Plaintiff's Choice ...

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