Girsh v. Jepson, Civ. A. No. 72-2035.
| Decision Date | 19 March 1973 |
| Docket Number | Civ. A. No. 72-2035. |
| Citation | 355 F. Supp. 1104 |
| Parties | Meyers L. GIRSH et al. v. Robert S. JEPSON, Jr., et al. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
David Berger, Leonard Barrack, Philadelphia, Pa., for plaintiffs.
Paul J. Donnelly, Philadelphia, Pa., and Gary D. Stabile of Gibson, Dunn & Crutcher, Los Angeles, Cal., for defendants Fund Management Corp., Portfolio Management Corp., Merrill Bothamley, Robert S. Jepson, Jr., Gerald L. Salzman, Donald I. Reifler, Hubert I. Rosenblum, and Robert J. McGuinness.
Daniel Mungall, Jr., Philadelphia, Pa., for New American Fund, Inc., and William K. Gumpert, and Richard B. Leng.
John G. Harkins, Jr., Philadelphia, Pa., for Price Waterhouse & Co.
Stuart H. Savett, Philadelphia, Pa., for Donald I. Reifler.
The Court is presented with a motion for change of venue under 28 U.S.C. § 1404(a) by eight of the named defendants in this case, Fund Management Corporation, Portfolio Management Corporation, Merrill Bothamley, Robert S. Jepson, Jr., Gerald L. Salzman, Donald I. Reifler, Hubert I. Rosenblum and Robert J. McGuinness. The above named defendants are joined in their motion by New America Fund, Price Waterhouse & Co., William K. Gumpert and Richard Leavitt. The defendants request that this action be transferred from the United States District Court for the Eastern District of Pennsylvania to the United States District Court for the Central District of California.
The plaintiffs in this case are stockholders in the defendant corporation, New America Fund, Inc. The plaintiffs bring this suit under Rule 23 of the Federal Rules of Civil Procedure as a class action as well as on behalf of themselves. The plaintiffs allege that the defendants violated Section 10(b) of the Securities and Exchange Act of 1934 15 U.S.C. § 78j(b) and Rule 10b-5— promulgated thereunder by the Securities and Exchange Commission by making material misrepresentation and omissions in the registration statement of New America Fund dated September 20, 1968 and in annual and quarterly reports of New America Fund for the years 1969 and 1970.
The plaintiffs allege that the defendants violated Section 34(b) of the Investment Company Act of 1940 15 U.S. C. § 80a-33(b) and of Section 36(a) of the Investment Company Act of 1940 15 U.S.C. § 80a-35(a), by engaging in acts and practices constituting breaches of fiduciary duty involving personal misconduct.
The plaintiffs also allege in a derivative suit that certain individual defendants entered into a joint venture to acquire shares of New America Fund for their personal gain and in violation of their fiduciary duty to New America Fund and its stockholders. There is a second derivative suit brought by two stockholders on behalf of New America Fund to terminate the joint venture discussed in the first derivative suit.
The defendants support their motion with a number of arguments. The most compelling are that eleven of the thirteen potential witnesses are living in California; one-quarter of the shareholders and shares are in California; the directors and other witnesses have their business in California and would be able to conduct their business without substantial interruption; all of the proof must come from the defendants' records and the expense involved in transferring the records would be of great financial detriment to the defendant. Also, the defendants contend that the situs of the alleged fraudulent activities occurred in the California area, and that the period of time in which a civil trial will commence is considerably shorter in the Central District of California than in the Eastern District of Pennsylvania.
The plaintiffs in rebuttal state that the plaintiff has a right to his choice of forum and there is a heavy burden on the defendant to overcome the plaintiffs' choice when there is a request for venue transfer. The plaintiffs also argue that this burden has not been overcome. The action is a class action which becomes in essence a multistate action of national scope; and the plaintiffs have great latitude to choose their forum. Finally, the plaintiffs argue that one of the plaintiffs lives in the Eastern District and four others live in close proximity which adds to the considerable burden which the defendants must overcome to change their choice of forum. As well, the plaintiffs argue that although stockholders are found all over the United States, the majority of stockholders and the majority of shares are in closer proximity to the Eastern District of Pennsylvania than the Central District of California.
In determining whether a change of venue must be made, the Court must use its discretionary function most judiciously especially where the question is close as in the situation at bar. In weighing the evidence and oral testimony, the heavy burden on the defendant must be met with facts that are convincing and...
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Hayes v. Fireman's Fund Mortg. Corp.
...to pay deference to a plaintiff's choice of forum despite the fact the plaintiff might bring suit on behalf of a class. Girsh v. Jepson (E.D.Pa.1973), 355 F.Supp. 1104. The Federal courts are split on this issue. The trial court expressly declined to follow the district courts' rulings and ......
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Blender v. Sibley
...in the trial is make-weight, and is far outweighed by the needs of the active participants in this litigation. See Girsh v. Jepson, 355 F.Supp. 1104, 1106 (E.D.Pa.1973). Lastly, there are two additional factors which are relevant here: the pendency of a related action in the transferee dist......
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Blanning v. Tisch
...and the material documents are located in the same city. Cf. Herbst v. Able, 278 F.Supp. 664, 667 (S.D.N.Y.1967); Girsh v. Jepson, 355 F.Supp. 1104, 1107 (E.D.Pa.1973); Zorn v. Anderson, supra, 263 F.Supp. at In sum, if only the convenience of parties and witnesses were at issue, I would de......
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Kisko v. Penn Central Transp. Co.
...in which the basis for the motion is primarily the inconvenience to witnesses of the forum chosen by the plaintiff. See Girsh v. Jepson, 355 F.Supp. 1104 (E.D.1973), remanded on other grounds, 521 F.2d 153 (3d Cir. 1975). The lower court in Girsh was of the view that the lives of witnesses ......