1 2 3 4 IN THE UNITED STATES DISTRICT COURT 5 FOR THE NORTHERN DISTRICT OF CALIFORNIA 6 7 Case No. 24-cv-01358-MMC

IN RE WELLS FARGO MORTGAGE

8 MODIFICATION LITIGATION ORDER GRANTING DEFENDANT'S

MOTION TO CONSOLIDATE; DENYING

9 PRADO'S MOTION TO INTERVENE;

VACATING HEARING

10

11 Before the Court are the following two motions: (1) defendant Wells Fargo Bank, 12 N.A.'s ("Wells Fargo") Motion to Consolidate Other Action, filed October 15, 2024, 13 whereby Wells Fargo seeks to consolidate the above-titled action with Prado v. Wells 14 Fargo & Co., 24-cv-05105 ("the Prado Action"); and (2) Proposed Intervenor Barbara 15 Prado's ("Prado") Motion to Intervene, filed October 16, 2024, whereby Prado seeks an 16 order severing the claims of some of the plaintiffs in the instant action and consolidating 17 those severed claims with the Prado Action. The motions have been fully briefed. 18 Having read and considered the papers filed in support of and in opposition to the 19 motions, the Court deems the matters appropriate for decision thereon, VACATES the 20 hearing scheduled for December 13, 2024, and rules as follows. 21 The operative complaint in the above-titled action, specifically, the Consolidated 22 Class Action Complaint ("CCAC"), filed July 8, 2024, consists of claims made on behalf of 23 thirteen individuals who seek to proceed on their own behalf and on behalf of a putative 24 class. Plaintiffs allege in the CCAC that each said plaintiff either had or currently has a 25 mortgage serviced by Wells Fargo, and each asserts claims based on harm he/she 26 states occurred as a result of "multiple systematic errors in [Wells Fargo's] automated 27 decision-making software," which software Wells Fargo allegedly used to determine 1 plaintiffs' respective "eligibility for a government-mandated mortgage modification (and 2 other modifications for which a borrower might be eligible)." (See CCAC ¶¶ 3-5.) 3 Plaintiffs allege that, of the thirteen named plaintiffs, six lost their homes as a result of 4 Wells Fargo's alleged erroneous software ̶ two due to foreclosure (see CCAC ¶¶ 132- 5 33, 153-54), two by selling their respective homes to avoid foreclosure (see CCAC 6 ¶¶ 113, 166), one by transferring his home to Wells Fargo to avoid foreclosure (see 7 CCAC ¶ 142), and one whose home was "lost" in a manner not further described by 8 plaintiffs (see CCAC ¶ 124). Plaintiffs allege the remaining seven named plaintiffs did 9 receive loan modifications, but that, as a result of the alleged erroneous software, they 10 were required to "pay a higher mortgage payment" than they otherwise would have had 11 to pay (see CACC ¶¶ 179, 187, 197, 204, 312). 12 In her Class Action Complaint ("Prado CAC"), filed August 13, 2024, Prado alleges 13 claims on her own behalf and on behalf of a putative class, all said claims based on an 14 allegation that Wells Fargo, the loan servicer, modified their mortgage loans, but that, as 15 a result of Wells Fargo's having "committed errors in connection with the modification," all 16 were "overcharged" on their "mortgage loan accounts." (See Prado CAC ¶¶ 3, 39, 87.) 17 A court may consolidate two actions where those actions "involve a common 18 question of law or fact." See Fed. R. Civ. P. 42(a). 19 Here, Wells Fargo argues the Prado Action should be consolidated with the 20 above-titled action, for the asserted reason that common questions of law and fact exist, 21 namely, "whether [p]laintiffs can prove that Wells Fargo erred regarding mortgage loan 22 modifications for its customers," whether "any alleged errors were unlawful," and whether 23 borrowers were "thereby injured" (see Def.'s Mot. at 1:4-6), and because "the CCAC 24 entirely subsumes the Prado class" (see id. at 6:23-24). Plaintiffs in the above-titled 25 action "support [Wells Fargo's] request." (See Pls.' Response at 1:3-4.)1 26 1 Additionally, plaintiffs agree with Wells Fargo's proposal that, in the event the two 27 actions are consolidated, plaintiffs should be afforded leave to file an amended 1 By contrast, Prado, in her motion, argues that the Court should sever from the 2 instant action and consolidate with her claims the claims of the seven plaintiffs who, like 3 Prado, received loan modifications, which claims would then proceed in the Prado Action; 4 in other words, only individuals who lost their homes would remain as plaintiffs in the 5 instant action. In the alternative, Prado, in her opposition to Wells Fargo's motion, argues 6 that, if the Prado Action and the instant action are consolidated, the Court should require 7 that the resulting consolidated action consist of two separate putative classes, i.e., one 8 class consisting of persons who did not receive a loan modification and a separate class 9 of persons who did. 10 The Court finds, for the reasons stated by Wells Fargo, that the above-titled action 11 and the Prado Action share common issues of law and fact. The Court also finds 12 consolidation of the two actions is, in some manner, appropriate, and next considers the 13 above-referenced competing proposals. 14 In that regard, the Court first notes that Prado's proposed manner of consolidation 15 is based on her assertion that a conflict exists between plaintiffs who did not receive a 16 loan modification and those who did, and that such asserted conflict would defeat or is 17 likely to defeat certification of a class consisting of both. The Court, however, is not 18 persuaded that any such conflict exists, as there is no showing that the two groups of 19 plaintiffs have either taken or appear likely to take antagonistic positions, let alone 20 antagonistic positions with regard to a "fundamental" issue. See In re Online DVD-Rental 21 Antitrust Litig., 779 F.3d 934, 942 (9th Cir. 2015) (holding "[o]nly conflicts that are 22 fundamental to the suit and that go to the heart of the litigation prevent a plaintiff from 23 meeting the Rule 23(a)(4) adequacy requirement"). 24 To the extent Prado relies on the principle that a class representative, to be 25 adequate, must "suffer the same injury as the class members," see General Telephone 26 Co. v. Falcon, 457 U.S. 147, 156 (1982) (internal quotation and citation omitted), and 27 characterizes the alleged injuries incurred by a putative class member who lost a home 1 overcharged, the Court likewise is unpersuaded. The instant action, as discussed above, 2 || includes named plaintiffs who allegedly suffered the loss of a home and others who 3 || allegedly were overcharged. Consequently, even if the two groups of putative class 4 members may, at some point in the litigation, "have differing interests,” plaintiffs in the 5 || instant case may be able to demonstrate they are adequate class representatives. See, 6 || e.g., Blackie v. Barrack, 524 F.2d 891, 908-11 (9th Cir. 1975) (finding named 7 representatives were adequate in action where defendants allegedly conspired to 8 || "artificially inflate[ ]" price of company's stock by making false statements over two-year 9 || period; rejecting argument representatives were inadequate because "some class 10 |} members [would] desire to maximize the inflation existing on a given date while others 11 [would] desire to minimize it"; noting existence of "numerous named representatives . . . 12 who purchased throughout the class period, and who thus [would] probably represent 5 13 || whatever conflicting interests there [might be]"). 14 Accordingly, Wells Fargo's motion to consolidate is hereby GRANTED, and 8 15 || Prado's motion to intervene is hereby DENIED. é 16 Lastly, Prado, in her motion, requests her counsel of record be appointed a third G 17 || interim class counsel in the above-titled action, along with the two attorneys the Court 5 18 || previously appointed as interim class counsel (see Doc. No. 27), and Wells Fargo, in its 19 reply, requests the Court amend its order appointing two interim class counsel to allow 20 || only one attorney or firm to so serve. Both such requests are hereby DENIED, neither 21 Prado nor Wells Fargo having shown good cause exists to either expand or reduce the 22 || number of interim class counsel. 23 IT IS SO ORDERED. 24 25 || Dated: December 6, 2024 fa Chat

INE M. CHESNEY

26 United States District Judge 27 28