United States District Court, D. Minnesota
Jessica J. Nelson and Donald G. Heeman, FELHABER LARSON,
Peter Evan Calamari, David Lawrence Elsberg, and Isaac
Nesser, QUINN EMANUEL URQUHART & SULLIVAN, LLP, Anthony
Paul Alden and Johanna Yao Ong, QUINN EMANUEL URQUHART &
SULLIVAN, LLP, and Jeffrey Alan Lipps and Jennifer A.L.
Battle, CARPENTER LIPPS & LELAND LLP, for plaintiff.
Robin Markowitz, STINSON LEONARD STREET LLP, for both
A. Noteboom, W. Anders Folk, Timothy P. Griffin, William
Thomson, and Rachel Davis, STINSON LEONARD STREET LLP, and
Amanda Flug Davidoff and James Harris Congdon, SULLIVAN &
CROMWELL LLP, for First Tennessee Bank, N.A.
ORDER DENYING PLAINTIFF'S MOTION TO DISQUALIFY
R. TUNHEIM Chief Judge
individual matters before this court, ResCap Liquidating
Trust v. First Tennessee Bank, N.A. (“First
Tennessee”) and ResCap Liquidating Trust v.
WMC Mortgage, LLC, (“WMC”), both
filed January 23, 2017, are two of dozens of lawsuits that
Plaintiff ResCap Liquidating Trust (“ResCap”) has
filed against mortgage loan originators over the course of
many years. (Compl., Jan. 23, 2017, Case No. 17-194, Docket
No. 1; Compl., Jan. 23, 2017, Case No. 17-198, Docket No. 1.)
In January 2015, well before the filing of these two
individual matters, the Court consolidated for pretrial
purposes the related cases then pending before United States
District Judge Susan Richard Nelson. (Administrative Order,
Jan. 27, 2015, Case No. 13-3451, Docket No. 100; see
also Am. Administrative Order, Jan. 29, 2015, Case No.
13-3451, Docket No. 102.) Thus, shortly after ResCap filed
the complaints in First Tennessee and WMC,
the Court reassigned the matters to the consolidated
proceeding before Judge Nelson. (Clerk's Notice of
Initial Case Assignment, Case No. 17-198, Jan. 23, 2017,
Docket No. 2; Am. Administrative Order, Jan. 25, 2017, Case
No. 17-194, Docket No. 5; Administrative Order, Jan. 24,
2017, Case No. 17-198, Docket No. 5.)
February 10, 2017, attorneys from the law firm Stinson
Leonard Street (“Stinson”) filed a notice of
appearance in First Tennessee. (See Notice
of Appearance, Feb. 10, 2017, Case No. 17-194, Docket No. 7.)
Shortly thereafter, Judge Nelson sua sponte recused,
pursuant to 28 U.S.C. § 455, because her spouse is a
member of the Stinson firm. (Order of Recusal &
Reassignment, Feb. 13, 2017, Case No. 17-194, Docket No. 10.)
An attorney from Stinson first appeared in WMC on
February 21, 2017. (See Letter to Magistrate Judge,
Feb. 21, 2017, Case No. 17-198, Docket No. 7.) Relying on a
prior order (the “December Order”) disqualifying
Stinson when a different defendant in the consolidated action
- Impac Funding Corporation (“Impac”) - retained
Stinson mid-stream in ongoing litigation, (see Mem.
Op. & Order (“December Order”), Dec. 8, 2016,
Case No. 13-3451, Docket No. 2023), ResCap now requests that
the Court prohibit Stinson from representing Defendants First
Tennessee Bank, N.A. (“First Tennessee”) and WMC
Mortgage, LLC (“WMC”).
Court noted in the December Order, (see Id. at 12),
the Eighth Circuit reviews orders disqualifying counsel
carefully because “the potential for abuse by opposing
counsel is high.” Droste v. Julien, 477 F.3d
1030, 1035 (8th Cir. 2007). Disqualifying a
party's counsel of choice is an “extreme
measure” that “should be imposed only when
absolutely necessary.” Macheca Transp. Co. v.
Phila. Indemn. Ins. Co., 463 F.3d 827, 833
(8th Cir. 2006) (citations omitted). The party
seeking disqualification bears the burden of showing that
this outcome is warranted, see A.J. by L.B. v.
Kierst, 56 F.3d 849, 859 (8th Cir. 1995), but
if there are genuinely “legitimate doubts, ” they
“must be resolved in favor of disqualification, ”
Olson v. Snap Prods., Inc., 183 F.R.D. 539, 542 (D.
the motion at hand, the Court finds the situation in
First Tennessee and WMC distinguishable
from the circumstances giving rise to the December Order.
Most importantly, First Tennessee and WMC retained Stinson
attorneys less than a month after service of process; in
contrast, Impac retained Stinson attorneys almost two years
after Judge Nelson took the reins in that case. (See
December Order at 15.) While there is the danger that some
inefficiency will result from separate proceedings, (see
id.), Judge Nelson has invested very little time in
First Tennessee or WMC (cf. Id. at
15-16 (explaining that Stinson should be disqualified in part
because Judge Nelson had already “overseen numerous
pre-trial disputes” in the Impac litigation
and there were “discovery disputes that have not yet
become the subject of a formal motion and that [would] likely
relate back to earlier decisions Judge Nelson has made in the
case”).) And while the potential for judge-shopping
will always be present when a judge is related to a local
attorney, the Court finds First Tennessee's and WMC's
retention of Stinson from the outset does not raise the same
red flags as Impac's mid-litigation retention of Stinson.
(See Id. at 14-15.) Balancing all the relevant
circumstances, the Court finds that disqualification of
Stinson attorneys is not warranted.
on the foregoing, and all the files, records, and proceedings
herein, IT IS HEREBY ORDERED that Plaintiff ResCap
Liquidating Trust's Motion to Disqualify Counsel [Case
No. 13-3451, Docket No. 2247] in the individual matters of
ResCap Liquidating Trust v. First Tennessee Bank,
N.A., Case ...