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Platinum Partners Value v. Td Bank

August 2, 2011


The opinion of the court was delivered by: Falk, U.S.M.J.



Before the Court is the motion of Defendant TD Bank, N.A. ("Defendant") to transfer venue to the Southern District of Florida pursuant to 28 U.S.C. § 1404(a). [CM/ECF No. 11.] The motion is opposed. The Honorable Esther Salas, U.S.D.J., referred the motion to the Undersigned. No oral argument was heard. Fed. R. Civ. P. 78(b). For the reasons that follow, Defendant's motion to transfer is granted, and the case is transferred to the United States District Court for the Southern District of Florida.


Plaintiffs Platinum Partners Value Arbitrage Fund, L.P. ("Platinum"), Centurion Structured Growth LLC ("Centurion"), and Level 3 Capital Fund LP ("Level 3") (collectively "Plaintiffs") are all Delaware limited liability financial funds with their principal places of business in New York. (Compl., ¶¶ 5-7.) Defendant TD Bank, N.A. is the American subsidiary of Canada-based Toronto-Dominion Bank with its principal place of business in New Jersey. (Compl., ¶ 8.)*fn1

On December 13, 2010, Plaintiffs commenced this action against TD Bank seeking to recover more than $100 million lost in the highly publicized, large-scale Ponzi scheme perpetrated by imprisoned former Florida lawyer Scott W. Rothstein ("Rothstein") through the now bankrupt Florida law firm of Rothstein, Rosenfeldt, Adler, PA ("RRA"). (Compl., ¶¶ 1-2, 36.) The Rothstein scheme involved offering potential investors and lenders the opportunity to purchase stakes in structured settlements allegedly secured by Rothstein and RRA. (Compl., ¶¶ 17-18.) Rothstein would inform the investors and lenders that the settlement details were confidential, but that the settlement funds were being held in escrow accounts at a TD Bank in South Florida. (Compl., ¶¶ 19-20.) To put investors and lenders at ease, Rothstein allowed would-be investors to review TD Bank escrow account statements to confirm the amount of settlement funds available. (Id.) In 2009, Rothstein's scheme imploded. (Compl., ¶¶ 37-39.) It was revealed that the structured settlements Rothstein had purportedly secured were essentially fictional. (Id.) In November 2009, Rothstein pleaded guilty to criminal racketeering, fraud, and money laundering, and he is presently serving a 50 year sentence in federal prison in Florida.

Plaintiffs' Complaint alleges that they loaned hundreds of millions of dollars to Florida investment firm Banyon 1030-32 ("Banyon") for the purposes of investing in the proceeds of settlements allegedly secured by Rothstein and RRA. (Compl., ¶¶ 29-31.) Plaintiffs claim they only loaned the money to Banyon to invest in the Rothstein scheme after conducting due diligence, including traveling to TD Bank in Florida to review escrow account statements. (Compl., ¶ 24.) Plaintiffs allege that, during these visits, they were provided with bank statements and cover letters generated by at least three different TD Bank employees confirming amounts contained in RRA's trust accounts. (Compl., ¶ 25.) Plaintiffs claim that these statements were false, and that TD Bank, through its representatives, negligently or fraudulently misrepresented the security of the escrow accounts and their balances, thereby facilitating the scheme and defrauding Plaintiffs into investing in the phantom settlements. (Compl., ¶ 26.)

On March 14, 2011, TD Bank filed a motion to transfer this case to the United States District Court for the Southern District of Florida. Currently pending in Florida is a raft of litigation relating to the Rothstein scheme, including seven cases involving TD Bank.*fn2 In some of those cases, the same parties here are involved in litigation over similar issues and claims.*fn3 Defendant contends the existence of various proceedings in Florida weigh in favor of transfer. Defendant further contends that the allegations in this case all arise out of conduct originating in Florida, and that transfer is appropriate in the interests of justice and for the convenience of the witnesses and parties involved.*fn4

Plaintiffs oppose transfer. They argue that New Jersey is TD Bank's principal place of business and a convenient forum; that the operative facts and relevant witness have not crystallized and do not support transfer; that discovery would not be easier in Florida; and that the Florida litigation is spread among various courts and judges and that there is no coordination between the pending actions, minimizing the relevance of the related pending litigation.


A. Transfer Pursuant to Section 1404(a)

28 U.S.C. § 1404(a) provides federal courts with authority to transfer a case to another district "where it may have been brought," when doing so is "[f]or the convenience of parties and witnesses," or in "the interests of justice." 28 U.S.C. §1404(a). The purpose of transfer is to "prevent the waste of 'time, energy, and money' and to protect litigants, witnesses, and the public against unnecessary inconvenience and expense.'" Ricoh Co., Ltd. v. Honeywell, Inc., 817 F. Supp. 473, 479 (D.N.J. 1993) (quoting Van Dusen v. Barrack, 376 U.S. 612, 616 (1964)). The decision to transfer is a discretionary one. See, e.g., Lafferty v. St. Riel, 495 F.3d 72, 76 (3d Cir. 2007); Superior Oil v. Andrus, 656 F.2d 33, 42 (3d Cir. 1981) ("[A] district court has broad discretionary power under [§ 1404(a)] to transfer any civil action to any other district where it might have been brought.").

B. Adequate Transferee Forum

The transfer statute limits the ability to transfer to a district or division where the case "might have been brought." 28 U.S.C. ยง 1404(a). Another district is proper if that district would be a proper venue for the action and that forum is capable of asserting subject matter jurisdiction over the claim and personal jurisdiction over the defendants. See Yang v. Odom, 409 F. Supp. 2d 599, 604 (D.N.J. 2006). This case could have been bought in the Southern District of Florida. TD Bank is a defendant in multiple actions pending in ...

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