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Karnas v. McCarter & English — court severed claims and transferred them to three districts

Reported / Citable

Case
Dominik Karnas, et al. v. McCarter & English, LLP, et al.
Court
United States District Court for the Southern District of Florida
Judge
ROY K. ALTMAN
Date Decided
July 28, 2026
Docket No.
24-cv-20480-ALTMAN
Topics
Venue transfer; Severance; Personal jurisdiction; Class actions

Background

The court had stayed this consolidated action pending resolution of a motion to dismiss in a related case, Karnas v. Cuban. After dismissing the related case for lack of personal jurisdiction in December 2025, the plaintiffs sought to reopen this case and to sever and transfer claims against several defendants.

The plaintiffs requested transfer of claims against Ketchum and the NBA to the Southern District of New York, and claims against Tracy McGrady to the Northern District of Texas. The NBA and Ketchum agreed, in the alternative, that New York was the appropriate forum; McCarter & English argued that claims against it belonged in the District of New Jersey. The plaintiffs did not respond to McCarter’s New Jersey venue argument.

The Court’s Holding

Judge Altman denied the motion to reopen but granted the transfer motion in part. The court concluded that the administrative stay could not continue after the related Cuban action had been dismissed for lack of personal jurisdiction; continuing it would leave the parties in an indefinite suspension. But reopening was unnecessary because an administrative closing did not prevent severance, transfer, or further settlement administration.

Under Rule 21 and 28 U.S.C. § 1404(a), the court severed the claims against Ketchum and the NBA and transferred them to the Southern District of New York. It severed and transferred the McGrady claims to the Northern District of Texas, and severed and transferred the McCarter claims to the District of New Jersey. The court held that plaintiffs forfeited any opposition to New Jersey as the forum for McCarter by failing to answer its arguments.

Key Takeaways

  • An administrative stay tied to a related case ends when its stated predicate is resolved; it cannot become an indefinite suspension.
  • A court may sever defendant-specific claims under Rule 21 and transfer them to different districts.
  • Failing to respond to a party’s venue arguments can forfeit opposition to the requested forum.

Why It Matters

The order illustrates how a court can untangle a consolidated, multi-defendant action after jurisdictional developments in related litigation. Rather than keep the matter dormant, the court directed claims to forums connected to the relevant defendants and alleged conduct while leaving the case administratively closed.

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