75 F.R.D. 702 (S.D.Cal. 1977), MDL 161, In re U.S. Financial Securities Litigation

Docket Nº:M.D.L. 161.
Citation:75 F.R.D. 702
Opinion Judge:TURRENTINE, District Judge.
Party Name:In re U.S. FINANCIAL SECURITIES LITIGATION.
Attorney:Milberg & Weiss, New York City, for plaintiffs in Fabrikant v. Stewart, et al. (74-282-T) and Fabrikant v. Stewart, et al. (74-283-T). Alvin K. Hellerstein, Stroock & Stroock & Lavan, New York City, for plaintiffs in Decatur Income Fund, et al. v. Touche, Ross & Co., et al. (74-284-T), Lutheran B...
Case Date:June 24, 1977
Court:United States District Courts, 9th Circuit, Southern District of California
 
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Page 702

75 F.R.D. 702 (S.D.Cal. 1977)

In re U.S. FINANCIAL SECURITIES LITIGATION.

M.D.L. No. 161.

United States District Court, S.D. California.

June 24, 1977

In complex securities litigation wherein 18 cases had been consolidated for trial and five classes certified, the District Court, Turrentine, J., held that because intricate accounting problems lay at the heart of the cases and in light of the complexity of the applicable laws and legal theories and the complicated interrelationships of the many parties and because a trial lasting for two years or more was likely, the inability of a jury to handle the case and render a fair decision warranted striking demands for jury trial.

Ordered in accordance with opinion.

Milberg & Weiss, New York City, for plaintiffs in Fabrikant v. Stewart, et al.

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(74-282-T) and Fabrikant v. Stewart, et al. (74-283-T).

Alvin K. Hellerstein, Stroock & Stroock & Lavan, New York City, for plaintiffs in Decatur Income Fund, et al. v. Touche, Ross & Co., et al. (74-284-T), Lutheran Brotherhood v. Touche, Ross & Co., et al. (74-285-T), American Automobile Association, et al. v. Touche, Ross & Co., et al. (74-354-T).

Fred C. Aldridge, Jr., Stradley, Ronon, Stevens & Young, Philadelphia, Pa., cocounsel for plaintiffs in Decatur Income Fund, et al., v. Touche, Ross & Co., et al. (74-284-T), Lutheran Brotherhood v. Touche, Ross & Co., et al. (74-285-T), American Automobile Association, et al., v. Touche, Ross & Co., et al. (74-354-T).

Dewitt A. Higgs, Joe N. Turner, Higgs, Fletcher & Mack, San Diego, Cal., co-counsel for plaintiffs in Decatur Income Fund, et al. v. Touche, Ross & Co., et al. (74-284-T), Lutheran Brotherhood v. Touche, Ross & Co., et al. (74-285-T), American Automobile Association et al. v. Touche, Ross & Co., et al. (74-354-T), Mellon Bank, N.A., v. Touche, Ross & Co., et al. (74-288-T).

Irving Morris, Cohen, Morris & Rosenthal, P. A., Wilmington, Del., for plaintiff in Penn Mart Realty Co. v. U.S. Financial, Inc. et al. (74-281-T).

J. Tomlinson Fort, Reed, Smith, Shaw & McClay, Pittsburgh, Pa., for plaintiffs in Mellon Bank, N.A., v. Touche, Ross & Co., et al. (74-288-T).

Winthrop Allegaert, Tufo, Johnston & Allegaert, New York City, for plaintiffs in Colonial Ventures, Inc., et al. v. Touche, Ross & Co., et al. (Tag-along).

S. Stewart Frazer, Dallas, Tex., for plaintiff in Great Commonwealth Life Ins. Co. v. R. H. Walter, et al. (74-287-T).

Allan J. Reniche, Sullivan, Jones & Archer, San Diego, Cal., for plaintiffs in First National Bank of Toledo, et al. v. U.S. Financial, Inc., et al. (74-286-T).

Paul Hamilton, Pacht, Ross, Warne, Bernhard & Sears, Inc., Los Angeles, Cal., for plaintiff in Foote v. R. H. Walter, et al. (73-508-S).

Crake, Ward, Whittemore, Aquirre & Seiderwurm, San Diego, Cal., for plaintiff in Risque v. Walter (73-312-T).

Richard S. Kraut, Securities and Exchange Comn., Washington, D. C., for plaintiff in Securities and Exchange Commission v. U.S. Financial, Inc., et al. (74-92-S).

Ralph W. Dau, O'Melveny & Meyers, Los Angeles, Cal., Paul A. Peterson, White, Price, Peterson & Robinson, San Diego, Cal., and Thomas N. Thomason, Cohen & Freeman, Los Angeles, Cal., co-counsel for defendant Union Bank.

Kevin J. Quinn, Rifkind, Sterling & Soloman, Inc., Beverly Hills, Cal., and J. Ronald Trost, Shutan & Trost, Los Angeles, Cal., co-counsel for defendant U.S. Financial.

Carl Robert Aron, Rubin, Baum, Levin, Constant & Friedman, New York City, and Fredman, Silverberg & Levis, Inc., San Diego, Cal., co-counsel for defendant James C. Wilson.

J. Asa Rountree, Debevoise, Plimption, Lyons & Gates, New York City, for defendants Philip Hampton, Philip D. Reed, Edwin Singer, Thomas W. Smith, Walter N. Thayer and Whitcom Inv. Co.

Abraham G. Levin, Rubin, Baum, Levin, Constant & Friedman, New York City, for defendants H. Wilkins Crosby, William W. Fox, Dirk C. Kok, Jr., Robert M. Overall and Victor J. Schulman.

Edward W. Keane, Sullivan & Cromwell, New York City, for defendant John L. Weinberg.

Wallace R. Peck, Jennings, Engstrand & Henrikson, San Diego, Cal., for defendant Charles H. Dietz.

Gerald L. McMahon, Seltzer, Caplan, Wilkins & McMahon, San Diego, Cal., and Mitchell L. Lathrop, MacDonald, Halsted & Laybourne, Los Angeles, Cal., Co-counsel for defendants Richard W. Arneson, Jr., Dennis P. Hill, A-H Properties, Bayview Inv. and Coastal Land Corp. (In SEC only).

George S. Delafield, Augustine, Delafield & Hrusoff, San Diego, Cal., for defendant George C. Coquillard.

Page 704

Gary H. Giesler, Knapp, Stevens, Grossman & Marsh, Los Angeles, Cal., for defendant Angelo Adams.

McInnis, Fitzgeral, Rees & Sharkey, A Professional Corp., San Diego, Cal., Emile Z. Berman and A. Harold Frost, New York City, co-counsel for defendant David G. Leaverton.

Luke R. Corbett, Scales, Patton, Ellsworth & Corbett, San Diego, Cal., and Loren E. Weiss, Brainard, Speyer & Weiss, San Diego, Cal., for defendants Robert S. Walter and Robert H. Walter.

Robert D. Rosenbaum, Arnold & Porter, Washington, D. C., co-counsel for defendants Brown, Wood, Ivey, Mitchell & Petty.

Irwin F. Woodland and Ana Marie Stern, Gibson, Dunn & Crutcher, Los Angeles, Cal., for Touche, Ross & Co.

Freedman, Levy, Kroll & Simonds, Washington, D. C., co-counsel for Walter P. Gribben.

Luce, Forward, Hamilton & Scripps, San Diego, Cal., for defendant Ernest C. Hickson.

Thomas C. Harden, Newby & Harden, San Diego, Cal., for defendant Robert C. Liuzzi.

Stacy L. Wallach, Tenzer, Greenblatt, Fallon & Kaplan, New York City, for defendant Robert G. Stewart.

Ronald L. Styn, Marinos & Styn, San Diego, Cal., for defendants Jiyun Nakaji, Wiliam B. Moeser and Thomas H. Nielsen.

George H. Kolb, Wynne, Jaffe & Tinsley, Dallas, Tex., for defendant Daniel N. Salerno.

J. David Black, Petty, Andrews, Tufts & Jackson, San Francisco, Cal., for defendant Richard G. Abbott.

Albert Thomson, Linde, Thomson, Van Dyke, Fairchild & Langworthy, Kansas City, Mo., for defendant First Cal. Co., Inc.

Stone & Youngberg, San Francisco, Cal., for Stone & Youngberg.

Edward W. Keane, Sullivan & Cromwell, New York City, for defendants Goldman, Sachs & Co. and Various other ‘ Underwriter Defendants.’

Paul R. Kennerson, Gibson & Kennerson, San Diego, Cal., for defendants L. L. Gordon, Bernard F. Coggan and Maurice Atschuler.

Carl J. Schuck, Brenton F. Goodrich, Overton, Lyman & Prince, Los Angeles, Cal., co-counsel for defendants John L. Weinberg, Goldman, Sachs & Co., Various other ‘ Underwriter Defendants', Philip Hampton and Philip D. Reed, Edwin Singer, Thomas W. Smith, Walter N. Thayer and Whitcom Inv. Co.

Michael L. Kirby, Post, Kirby, Wideman & Noonan, James K. Eckmann, Robert B. Coffin, Luce, Forward, Hamilton & Scripps, San Diego, Cal., for defendant Societe Generale de Banque.

Richard W. Millar, Jr., Millar & Heckman, Newport Beach, Cal., for defendants Consol. Equity Companies, James M. Taylor, J. L. Schram and Dickson G. Pratt.

Donovan, Leisure, Newton & Irvine, New York City, for defendant A. G. Becker, Inc.

John R. Ferguson, Cleveland, Ohio, for defendants Mosser Const., Inc., Robert H. Moyer, E. M. Otermat and Robert G. Weiler.

Friedman, Heffner, Kahan & Dysart, San Diego, Cal., for defendant Robert N. Gould.

Gary L. Fitzgerald, in pro. per., Vice President, Group Manager Swan Const., Inc.

Harold H. Litten, in pro per.

Richard Hunt, Jackson, Wyo., Robert D. Smith, La Jolla, Cal., Burton H. Alden, La Mesa, Cal., Robert B. Yerby, Metairie, La., Ellis Gravette, La Jolla, Cal., Morgan Wright, La Mesa, Cal., R. G. King & Company, Const., and Nat. Community Builders, San Diego, Cal., for defendants.

William L. O'Bryon, in pro. per.

James M. O'Hern, in pro. per.

Richard G. Abbott, in pro. per.

Mitchell L. Lathrop, Macdonald, Halsted & Laybourne, Los Angeles, Cal., for Richard A. Gant, V. Frank Asaro and Gant and Asaro, a co-partnership.

Page 705

Francis F. Quittner, Special Counsel to Musick, Peeler & Garrett, Los Angeles, Cal., for the Official Creditors' Committee in the Chapter XI Bankruptcy Proceedings.

Herbert Katz, Federal Bankruptcy Court, San Diego, Cal., referee in bankruptcy proceedings.

Robert A. Seefried, Executive Atty., and Patricia D. Howard, Clerk of the Panel, Jud. Pan. Mult. Lit., Washington, D. C., David P. Curnow, Asst. U.S. Atty., San Diego, Cal., R. H. Walter, Laguna Hills, Cal., Mitchell L. Lathrop, Macdonald, Halsted & Laybourne, San Diego, Cal., Jeremy Ets-Hokin, San Francisco, Cal., William S. Lerach, Milberg & Weiss, San Diego, Cal. and Law, Nagel & Clark, Denver, Colo., for interested parties.

MEMORANDUM OPINION AND ORDER

TURRENTINE, District Judge.

The court's proposal to strike all demands for jury trial in the U.S. Financial cases was heard on May 31, 1977. The court, taking into account the issues raised in the written memoranda submitted by the various parties, and considering the matters presented during oral argument, hereby orders all demands for jury trial in the U.S. Financial cases stricken, and directs that the cases be consolidated for trial before the court sitting without a jury.

In essence, the court has made this order because these cases are too complex to be tried before a jury. In the following discussion, the nature of the U.S. Financial cases will first be outlined; next, the scope of the litigation and the task facing the finder of fact will be considered; and finally the state...

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