Panel denies Houston lawyer's request for MDL status of lone case

Steve Korris Apr. 15, 2009, 4:44pm


AUSTIN – In a fantastic feat of forum shopping, Houston lawyer David "Mac" McKeand applied for multi district jurisdiction over a single case.

It didn't work.

On April 2 the state's Multidistrict Litigation Panel denied McKeand's petition to take charge of a mortgage fraud suit he sought to pursue for 157 homeowners.

Panel members wrote that "the case does not meet the criteria for MDL transfer."

They chose not to disturb a decision of former Harris County District Judge Levi Benton, who dismissed 156 cases in December because McKeand had not paid filing fees.

McKeand filed suit in 2005 on behalf of Cottage Gardens Home Buyers Association, claiming developer Michael Martz illegally inflated home prices in the subdivision.

Along with Martz, he sued different defendants over different transactions.

Defendants pleaded that McKeand committed misjoinder by mixing distinct cases.

Judge Benton agreed. He ordered McKeand to sever the case into 157 cases and pay a filing fee for each one.

He allowed a single claim to continue on the single fee that McKeand had already paid.

McKeand sought a writ of mandamus against Benton at the First District appeals court in Houston, but judges there upheld Benton.
McKeand didn't sever the cases, so in 2006 Benton severed them.

Benton instructed the district clerk to assign case numbers, collect fees and randomly distribute the cases among Harris County judges.
McKeand appealed again, without success.

Still he didn't pay the fees, so in 2008 Benton dismissed every claim but one.

McKeand didn't take a third shot at the First District. He asked Benton for rehearing and he petitioned the multi district panel to take over.

He pleaded to the panel that Benton's order for random distribution among judges qualified the litigation for multi district treatment.

He argued that his motion for rehearing kept all cases open.

"In every single transaction, plaintiffs were fraudulently induced into purchasing these homes, often paying more than twice the actual value," he wrote.

For developer Martz, attorney Carl Schultz of Houston answered on March 11 that McKeand simply refused to comply with orders.

Schultz wrote, "To permit the moving party to now accomplish what other courts have refused to permit would amount to granting a collateral attack on the orders of those courts."

For lender Community Home Loan, attorney Katherine Mize of Houston wrote on March 16 that Benton gave ample notice and opportunity to pay the fees.

She wrote that multi district jurisdiction applies to a single transaction or occurrence.

"Because each home purchase was a separate transaction involving separate lenders, the same transaction or occurrence was not involved," she wrote.

The panel sent McKeand back to Benton's court with his single claim.

Texas legislators established the panel in 2003, to coordinate pretrial proceedings for similar cases in different courts.

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