If at first you don’t succeed, try, try again.
That would appear to be the philosophy behind Howard Hanna’s latest courtroom maneuver in the largest Burnett copycat case (known as Gibson), in which Judge Stephen R. Bough in the Western District of Missouri (who also oversaw Burnett) recently denied the company’s request to move the case to another district.
In a filing Dec. 19, lawyers representing Howard Hanna—one of a shrinking number of brokerages who have not settled class-action seller lawsuits—asked Bough to clarify the previous order, claiming that he had failed in his ruling to address a fundamental objection Howard Hanna had made as it sought to have the case moved to Pennsylvania.
“(Howard Hanna) does not transact business in Missouri or have any contacts in Missouri relating to Plaintiffs’ claim—indeed, no (Howard Hanna) entity has ever represented a client in a real estate transaction in Missouri or participated in a local realtor association in Missouri,” the filing read. “The Court stated that Hanna Holdings has affiliates in Missouri—it does not, and Plaintiffs do not even allege that it does—and held that Hanna Holdings transacted business in Missouri even though it is not licensed to do business in Missouri, has no agents, affiliates, subsidiaries, and does not engage in any activity inside the state of Missouri.”
Arguing that it made practical and legal sense to transfer the case, the Howard Hanna lawyers asked Bough to “clarify” his order. Only minutes later, Bough responded to deny the request, saying briefly that plaintiffs had already shown that he had jurisdiction in the case.
That wasn’t enough for Howard Hanna, which less than an hour after the denial filed another “motion to clarify,” writing that Bough “still did not address” the request to move the case—a somewhat unusual back and forth.
“Because neither the December 16 order nor the December 19 order addressed (Howard Hanna’s) motion to transfer…(Howard Hanna) requests that the Court clarify and address the balance of the motion,” the second filing read.
Bough finally provided slightly more clarity at around 6 p.m. local time, again denying the request but adding that in the end, it was up to him to decide whether transferring the case was appropriate, and cited an Eighth Circuit ruling in another case that stated “(i)n general, federal courts give considerable deference to a plaintiff’s choice of forum.”
It was not clear if that would be the end of the dispute. A lawyer representing Howard Hanna did not immediately respond to a request for comment.
Besides the legal jurisdiction argument, Howard Hanna had repeatedly emphasized to Bough that having the case take place in Missouri would be inconvenient and potentially expensive. They had also argued that because the class in this case is intended to be national (unlike Burnett, which was confined to Missouri), there is no reason to prefer Missouri over any other court.
In his first order denying the transfer, Bough cited antitrust law stating that “venue is proper” based on the fact that defendants “in the ordinary and usual sense ‘transacts business…’ of any substantial character.” He also claimed that Howard Hanna “receives yearly referral program income and controls affiliates in this District.”
In its filing yesterday, Howard Hanna confirmed it did receive some referrals from Missouri, but added that “a small amount of referral income” should not be enough to establish a claim that the company was “transacting business” in Missouri.
Back in the spring, in a separate case filed by homebuyers rather than sellers, Howard Hanna successfully argued that an Illinois court did not have jurisdiction over the company based largely on its lack of presence in the state, resulting in those claims being dismissed.
The plaintiffs behind that case refiled the lawsuit, however—choosing Pennsylvania as the district.
