New York City Mun. Securities Litigation, Matter of
| Decision Date | 02 March 1978 |
| Citation | 572 F.2d 49 |
| Parties | Fed. Sec. L. Rep. P 96,412 In the Matter of NEW YORK CITY MUNICIPAL SECURITIES LITIGATION. Petition of the FIRST NATIONAL BANK OF BOSTON for a Writ of Mandamus. Docket 77-3077. |
| Court | U.S. Court of Appeals — Second Circuit |
Ropes & Gray, G. Marshall Moriarty, and Paul B. Galvani, Boston, Mass., and Breed, Abbott & Morgan, Thomas A. Shaw, Jr., New York City, for petitioner.
Before FRIENDLY, MULLIGAN and MESKILL, Circuit Judges.
Pursuant to 28 U.S.C. § 1407(e), The First National Bank of Boston (the Bank) seeks a writ of mandamus to review an order of the Judicial Panel on Multidistrict Litigation (JPML) in In re New York City Municipal Securities Litigation, 439 F.Supp. 267. The order granted requests by plaintiffs to transfer to the District Court for the Southern District of New York for coordinated or consolidated pretrial proceedings two actions, Truncell v. The First National Bank of Boston and Friedlander v. The First National Bank of Boston, which had been brought against the Bank in the District of Massachusetts. The complaints in the Massachusetts actions alleged violations of the federal securities laws in connection with the marketing of New York City securities during 1974 and 1975. The Bank had initially been named as a defendant in actions brought by the same plaintiffs against it and other defendants in the District Court for the Southern District of New York for the same violations but had secured dismissal under the section of the National Bank Act, 12 U.S.C. § 94, which provides that actions and proceedings against a national banking association "may be had . . . within the district in which such association may be established," a venue provision which the Supreme Court has held to be mandatory and exclusive. See Radzanower v. Touche Ross & Co., 426 U.S. 148, 152, 96 S.Ct. 1989, 48 L.Ed.2d 540 (1976). These two actions remain pending in the Southern District of New York against other defendants as do four others raising similar questions. In addition, the Bank of America had likewise obtained dismissal from the Truncell and Friedlander actions under 12 U.S.C. § 94. These plaintiffs then brought actions against it in the Northern District of California and upon stipulation two judges in that district transferred the California actions to the Southern District of New York for coordinated or consolidated pretrial proceedings. There are, therefore, a total of ten actions now pending.
Before the JPML the Bank objected that the proposed transfer of the Massachusetts actions to the Southern District of New York for coordinated or consolidated pretrial proceedings pursuant to 28 U.S.C. § 1407 1 would circumvent the national bank venue statute, 12 U.S.C. § 94, which, as said in Charlotte National Bank v. Morgan, 132 U.S. 141, 145, 10 S.Ct. 37, 33 L.Ed. 282 (1889), quoted in Mercantile National Bank v. Langdeau, 371 U.S. 555, 561-62 n.12, 83 S.Ct. 520, 9 L.Ed.2d 523 (1963), and in Radzanower, supra, 426 U.S. at 156, 96 S.Ct. at 1994, was enacted "for the convenience of those (banking) institutions, and to prevent interruption in their business that might result from their books being sent to distant counties." The JPML rejected this contention, as it had previously done, before Radzanower, in In re Great Western Ranches Litigation, 369 F.Supp. 1406 n.1 (Jud.Pan.Mult.Lit.1974), and after Radzanower, in In re Investors Funding Corp. of New York Securities Litigation, 437 F.Supp. 1199 (Jud.Pan.Mult.Lit.1977), and In re Falstaff Brewing Corp. Antitrust Litigation, 434 F.Supp. 1225, 1229-30 (Jud.Pan.Mult.Lit.1977). In Falstaff the JPML said:
We emphasize that defendant national banks need not worry about a transferee court's entering an order requiring that their documents be moved outside their home districts for trial because transfers under Section 1407 are for pretrial only and the actions against them will be remanded to their home districts for trial. See Rule 11, R.P.J.P.M.L., 65 F.R.D. 253, 260-63 (1975). Moreover, we note that transfer of an action under Section 1407 does not mean that all discovery must take place in the transferee district. For example, depositions of witnesses may still occur where they reside, see Fed.R.Civ.P. 45(d)(2), and of course any party may request an order from the transferee court that its documents be inspected at its offices or at another convenient location in or near the city in which it is located, see Manual for Complex Litigation, Part I, § 2.50 (rev.ed.1973).
Judge Weinfeld, concurring in Falstaff, would have included in the transfer order a specific provision that discovery or inspection of the records of national bank defendants should be had only in each bank's home district.
We begin by noting that § 1407, unlike §§ 1404 and 1406, authorizes transfer of an action to "any district" and not simply to a district where the action could have been brought. The use of this different language was deliberate; indeed, the limitation in § 1404 was one of the reasons why it was necessary to enact § 1407, see Report of the Co-Ordinating Committee of the Judicial Conference on Multiple Litigation Recommending New Section 1407, Title 28, reprinted as an Appendix to In re Plumbing Fixture Cases, 298 F.Supp. 484, 499-500 (Jud.Pan.Mult.Lit.1968); H.R.Rep.No.1130, 90th Cong., 2d Sess., reprinted in 2 U.S.Code Cong. & Admin.News, pp. 1898, 1900 (1968). However, neither this difference in language nor the JPML's point that the Massachusetts actions were brought in the districts required by 12 U.S.C. § 94 and remain there in a state of suspended animation awaiting the conclusion of the pretrial proceedings completely answers petitioner's objection. Pretrial proceedings that normally would occur in Boston may now take place in New York. While the purposes of § 94 may be accommodated by an order that the bank's documents be inspected only in its home district, such an order must be requested of the transferee judge and will not issue automatically. See Manual for Complex Litigation, Part I, § 2.50 (rev.ed.1973). Moreover the pretrial proceedings encompassed by § 1407 include summary judgment, and history has indicated that once the limited transfer has occurred, the transferor district is not likely to see the case again. Realistically, therefore, the question must be faced whether, by exacting § 1407, Congress intended to override to this extent the venue provision of the National Bank Act, as it clearly did the various venue provisions of Title 28, ch. 87.
We have no doubt that it did. Even if § 1407 is to be regarded as a partial repeal of 12 U.S.C. § 94, it...
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