Judge praises progress of Wells Fargo alleged insurance scheme case as mediation looms

SANTA ANA -- Multidistrict litigation related to Wells Fargo allegedly issuing unwanted automobile insurance policies appears "to be moving along well" as attorneys prepare for their first mediation next month in San Francisco while motions to dismiss are scheduled for hearing in June, a U.S. judge said Monday.

At a status conference, Judge Andrew J. Guilford briefly summarized his standard speech on settlements, then told the eight attorneys before him, "You guys are too experienced for me to hit you with all of that. Good luck on your settlement discussions."

Co-lead counsel Roman M. Silberfeld of Robins Kaplan LLP in Los Angeles said he and the other plaintiffs' attorneys are working with opposing counsel to set "informal interviews of some of the key people involved in the liability aspects of the case" in preparation for a May 8 session with mediator Eric D. Green, a principal at Resolutions LLC, in Boston, who has handled previous Wells Fargo matters.

"We have every confidence that that will happen, and we'll see where we are at the end of that process," Silberfeld said.

David C. Powell of McGuireWoods LLP in San Francisco, who represents Wells Fargo, said he's fine starting settlement discussions before motions to dismiss are heard on June 4. Powell filed one for Wells Fargo, and Corey Worcester of Quinn Emanuel Urquhart & Sullivan LLP, in New York, filed one for co-defendant National General Insurance Company.

"We think the motions to dismiss should be granted, but there's always uncertainty in cases ... so we would like to start settlement discussions now," Powell said Monday. "We are always looking to see if there's a way to resolve the case."

The Judicial Panel on Multidistrict Litigation last October centralized the litigation for consolidated pretrial proceedings before Guilford, calling him "an experienced transferee judge who we are confident will steer this litigation on a prudent course" in an order and noting that key entities and witnesses are located within the Central District of California. While the litigation involved two actions in the Northern District of California and one in the Southern District of New York, 11 of the 14 pending related actions were filed in California, and three were before Guilford, according to the Oct. 18 order from 3rd U.S. Circuit of Appeals Judge Marjorie O. Rendell, the panel's acting chair.

Alleging a kickback scheme between Wells Fargo and National General, attorneys at Robins Kaplan and Baron & Budd PC in Los Angeles filed a 103-page consolidated class action complaint on Jan. 26 asserting eight claims for relief on behalf of a nationwide class. The claims are: fraud by concealment, unjust enrichment, three violations of the Racketeer Influenced and Corrupt Organizations Act and single violations of the Bank Holding Company Act, Consumer Legal Remedies Act and California Unfair Competition Law. The complaint also seeks to make state claims for classes in Colorado, Illinois, Indiana, Minnesota, Mississippi, Missouri, New Jersey, Tennessee, Wisconsin and Wyoming. In re Wells Fargo Collateral Protection Insurance Litigation, ML17-2797 (C.D. Cal., filed Oct. 18, 2017).

The plaintiffs are 14 Wells Fargo customers who said they were issued collateral protection insurance policies they did not want or need in connection with automobile loans they obtained through the bank.

Silberfeld was joined in court Monday by Robins partner Aaron M. Sheanin, Roland K. Tellis and Mark P. Pifko of Baron & Budd, and David S. Casey Jr. of Casey Gerry Schenk Francavilla Blatt & Penfield LLP in San Diego.

Powell and Worcester were joined by Alicia A. Baiardo of McGuireWoods LLP.