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Case 1:05-cv-00231-EJD

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CHARMAN.

UNITED STATES OF AMERICA JUDICIAL PANEL ON MULTIDISTRICT LITIGATION
MEMBERS:
Judge John F. Keenan Unitcd States District Court Southern Dimlet ofNew York Judge D. Lowell lensen United States Dirhiet Court Nonhern Dishict of California Judge J. Frederick Motz Untted States Disvict Court Disuict ofManland
Judge Roben L. Miller Jr.

Judge Wm. Tcrrell Hodges United Stater District Court Middle Dlshlct of Flortda

DIRECT REPLY TO:

United Slates District Court Northern Dcstrlct oflndiana
Judge Kathryn H. Vratil United S m s Damlet Coun Dtsuict of Kansas
Judge David R. Hanren

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Michael I. Beck Clerk of the Panel One Columbus Circle, NE Thurgood Mpnhall Federal Judicta Budding ~ o o ~ 5 2 5 5 , ~ Lobby onh Warhmgton. D.C.ZOO02 Telephone: 202 502 2800 \202] 502-2888 Fax: hnp://~.jpmi.~r~o~N.gov

United Ststes Caun of Appeals Eighth Circuit

December 6,2005

TO INVOLVED COUNSEL Re: MDL-1727 -- In re COBRA Tax Shelters Litigation
Carmel Partners, et a1 v. United States ofAmerica, S.D. Indiana, C.A. No. 1:04-1661 Gary Woods, etc. v. UnitedStates ofAmerica, W.D.Texas, C.A. No. 5:05-216 Gary Woods, etc. v. UnitedStates ofAmerica, W.D. Texas, C.A.No. 5:05-217

Dear Counsel:
I am enclosing a copy of a Panel transfer order filed today in the above-captioned matter.

The Rules of Procedure of the Judicial Panel on Multidistrict Litigation, 199 F.R.D. 425 (2001), and specifically, Rules 1.1,7.4 and 7.5, refer to "tag-along"actions. Please familiarize yourself with these for your future reference. With regard to Rule 7.5, you need only provide this office with a copy of the complaint which you feel qualifies as a "tag-along" action and informally request that our "tag-along" procedures be utilized to transfer the action to the transferee district. If you have any questions regarding procedures used by the Panel, please telephone this office.

Michael J. Beck Clerk of the Panel

Enclosure

JPML Form 35

Case 1:05-cv-00231-EJD

Document 58-2

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JUDICIAL PANEL ON M'JLTlDlSTRlCT LITIGATION

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RELEASED FOR PUBLICATION DOCKET NO. 1727

DEC - 6 2005
CLERK'S OFFICE
FILED

BEFORE THE JUDICIAL PANEL ON MUL TIDISTRICT LITIGA TlON
IN RE COBRA TAX SHELTERS LITIGA TION
Carmel Partners, et al. v. United States ofAmerica, S.D. Indiana, C.A. No. 1:04-1661 G a y Woods, etc. v. United States of America, W.D. Texas, C.A. No. 5:05-216 Gary Woods, etc. v. United States of America, W.D. Texas, C.A. No. 5:05-217

BEFORE W M TERRELL HODGES, CHAIRMAN, JOHN F'. KEENAN, D. LOWELL JENSEN, J. FFREDERICK MOTZ, ROBERT L. MILLER, JR., KA T H R W H . VRATILAND DA VID R. HANSEN, JUDGES OF THE PANEL

TRANSFER ORDER
This litigationcurrentlyconsists ofone action in the Southern District of Indianaandtwo actions in the Western District of Texas. Defendant United States moves the Panel, pursuant to 28 U.S.C. 5 1407, for an order centralizing this litigation in the Southern District of ~ndiana.All plaintiffs in these actions oppose the motion. On the basis of the papers filed and hearing session held, the Panel finds that these three actions involve common questions of fact, and that centralization under Section 1407 in the Southern District of Indiana will serve the convenience of the parties and witnesses and promote the just and efficient conduct of this litigation. These actions share allegations concerning the propriety of a generic tax product known as "Currency Options Bring Reward Alternatives" (COBRA), which the Internal Revenue Service has identified as an abusive tax shelter. Centralization under Section 1407 is necessary in order to eliminate duplicative discovery, prevent inconsistent pretrial rulings, and conserve the resources of the parties, their counsel and the judiciary. Plaintiffs argue in opposition to centralization that resolution ofthis litigation will likely depend on facts unique to each action. Plaintiffs suggest that informal coordination of discovery would be preferable tisection 1407 centralization. We disagree. Transfer under Section 1407 will offer the benefit ofplacing all actions in this docket before a single judge who can structure pretrial proceedings to accommodate all parties' legitimate discovery needs while ensuring that the common party and witnesses are not subjected to discovery demands that duplicate activity that will or has occurred in other actions. Discovery with respect to any case-specific issues can also proceed concurrently with discovery on common issues. In re Joseph F. Smith Patent Litigation, 407 F.Supp. 1403, 1404 (J.P.M.L. 1976). We are persuaded that the Southern District of Indiana.is a preferable transferee forum for this litigation. The Southern District of Indiana has 1) the first-filed action; 2) the support of the common

Case 1:05-cv-00231-EJD

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defendant to this litigation; and 3) the resources that this complex tax matter is likely to require. Additionally, the action in the Southern District of Indiana has progressed somewhat further than the Western District of Texas actions.
IT IS THEREFORE ORDERED that, pursuant to 28 U.S.C. 5 1407, the actions pending in the Western District of Texas are transferred to the Southern District of Indiana and, with the consent of

that court, assigned to the Honorable John D. Tinder for coordinated or consolidated pretrial proceedings with the action already pending in that district.

FOR THE PANEL:

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Wm. Terrell Hodges Chairman