Peyser v. General Motors Corporation

• Decision Date: 24 January 1958
• Citation: 158 F. Supp. 526
• Parties: Paul J. PEYSER, Plaintiff, v. GENERAL MOTORS CORPORATION and E. I. Du Pont De Nemours and Company, Defendants. Arlyne ZUCKER, a stockholder of General Motors Corporation, suing on behalf of herself and all other stockholders similarly situated and on behalf of and in the right of General Motors Corporation, Plaintiff, v. GENERAL MOTORS CORPORATION and E. I. Du Pont De Nemours and Company, Defendants. Rita GOTTESMAN and Maria Mattiello, Plaintiffs, v. GENERAL MOTORS CORPORATION and E. I. Du Pont De Nemours and Company, Defendants.
• Court: U.S. District Court — Southern District of New York

158 F. Supp. 526

Paul J. PEYSER, Plaintiff, v. GENERAL MOTORS CORPORATION and E. I. Du Pont De Nemours and Company, Defendants.

Arlyne ZUCKER, a stockholder of General Motors Corporation, suing on behalf of herself and all other stockholders similarly situated and on behalf of and in the right of General Motors Corporation, Plaintiff, v. GENERAL MOTORS CORPORATION and E. I. Du Pont De Nemours and Company, Defendants.

Rita GOTTESMAN and Maria Mattiello, Plaintiffs, v. GENERAL MOTORS CORPORATION and E. I. Du Pont De Nemours and Company, Defendants.

United States District Court S. D. New York.

January 24, 1958.

Netter & Netter, New York City, Edward Rothenberg, Arthur Netter, New York City, of counsel, for plaintiff Paul J. Peyser.

Morris J. Levy, New York City, for plaintiff Arlyne Zucker.

William Rosenfeld, New York City, for plaintiffs Rita Gottesman and Maria Mattiello.

George A. Brooks, New York City, for defendant General Motors Corporation.

Frank H. Gordon, New York City, Hugh B. Cox, Washington, D. C., Covington & Burling, Washington, D. C., of counsel, for defendant E. I. Du Pont De Nemours and Company.

IRVING R. KAUFMAN, District Judge.

Defendant, E. I. du Pont de Nemours and Company moves to transfer three actions pending against it in this district to the United States District Court, for the District of Delaware, sitting at Wilmington, Delaware, pursuant to Section 1404(a), 28 U.S.C.A.¹

All three suits, which shall be considered together for purposes of this motion, arise out of du Pont's ownership of approximately 25% of the total outstanding common stock of defendant, General Motors Corporation, which stock ownership was recently found by the Supreme Court, United States v. E. I. Du Pont De Nemours & Co., 1957, 353 U.S. 586, 77 S.Ct. 872, 1 L.Ed.2d 1057, to violate Section 7 of the Clayton Anti-Trust Act. 15 U.S.C.A. § 18.

These are derivative suits by stockholders of defendant, General Motors, seeking to recover on behalf of the corporation from defendant, du Pont, substantial profits which accrued to the latter out of transactions between the two corporations which allegedly violated both the Clayton Act, 15 U.S.C.A. § 12 et seq. and du Pont's fiduciary obligation as controlling stockholder. Two of the complaints² also seek damages for alleged overpayment by General Motors on the contracts.

All of the plaintiffs are New York residents except plaintiff, Maria Mattiello, who resides in New Jersey.

Defendant du Pont is a Delaware corporation having its principal place of business in Wilmington, Delaware. Its production and sales activities are carried on in many states and it maintains an office in the Southern District of New York.

General Motors, the nominal defendant, is a Delaware corporation, with its principal offices in New York and Detroit. In its affidavit General Motors assets that it has 35 operating divisions in the United States, located in 21 cities. Since none of these operating divisions is centered in the Southern District of New York or the District of Delaware, General Motors neither joins in nor opposes the motion to transfer, but rather takes the position that it is a decentralized organization which will be greatly inconvenienced by suit in any jurisdiction.

In resolving a motion of this kind I must weigh the convenience of trial in New York as against trial in Wilmington to determine in which place the trial can better be conducted without oppression to either party.³

It is asserted on behalf of du Pont that inasmuch as Wilmington, Delaware, is the situs of its principal place of business and the place where its Board of Directors meet and also the location of its principal administrative and executive offices, convenience of the parties and the ends of justice will be better served by a transfer of the trial to that city. More specifically, it is alleged that all the company's files and records except those currently in use in the branch offices and plants throughout the country are maintained in its main offices in Wilmington and that most of the witnesses whom the moving defendant will have occasion to call in its behalf are employed by du Pont in or around Wilmington. It is du Pont's position that if compelled to bring these witnesses to New York for trial it will not only bear increased expenses but the absence of these employees from Wilmington would disrupt the normal operations of the company and would result in substantial expense, inconvenience and confusion.

Du Pont makes a similar assertion in regard to its records, contending that transportation of the bulky files would be costly and further expense would be caused by the need to rent additional space to house such files in New York.

The affidavit of plaintiff, Paul J. Peyser,⁴ answers du Pont's assertions by alleging that in order to establish their cases plaintiffs intend to call du Pont's competitors in the finishes and fabrics fields. These witnesses will testify as to their attempts to sell to General Motors and will be prepared to compare their products with du Pont's from the standpoint of price, quality and service. He cites Thomas' Registry of American Manufacturers which indicates that none of these competitors is located in Wilmington. Of approximately 45 competitors of du Pont in the fabrics field, located in 26 cities, 17 are in and around the City of New York. Of approximately 50 enamel competitors in 26 cities, 8 are in and around the City of New York. The affidavit further asserts that because of du Pont's dominant position in these two fields, many of the competitors may be reluctant to testify against it. If so, it is contended, the 100 mile limitation on subpoenas provided in Rule 45(e), Fed. Rules Civ.Proc. 28 U.S.C.A., would prove a greater handicap in Delaware than in New York.

The Peyser affidavit further asserts that du Pont's fabrics and finishes department operates 11 plants, none of which is located in Wilmington, Delaware. Three of these plants are located in Parlin, New Jersey, Fairfield, Connecticut, Newburgh, New York; all of which are within a 60 mile radius of New York City. Most of the other 8 plants are closer to New York City than they are to Wilmington.

Indeed, du Pont's affidavit admits that the sales of fabrics and finishes were handled by the Detroit Office. Negotiations were conducted by sales personnel of that office with purchasing representatives of General Motors whose offices also are in or near Detroit. The contracts were effectuated in Detroit and filed there. Thus du Pont takes the position that the business records relating to sales of finishes and fabrics are located in Wilmington "and/or" Detroit and the responsible personnel are in Wilmington and Detroit.

While it is true that a transfer may be ordered under § 1404(a) upon a lesser showing of inconvenience than would be required to warrant a dismissal under the doctrine of forum nonconveniens, Norwood v. Kirkpatrick, 1955, 349 U.S. 29, 75 S.Ct. 544, 99 L.Ed. 789, the burden nevertheless is upon the movant to show that the convenience of the parties and the interests of justice will be better served in the other district. Plaintiffs' right to choose the forum is still a relevant consideration, so that where the interests are evenly balanced transfer should be denied. Nor are judges required to draw hair lines to determine where the equities preponderate in a situation where they are nearly in balance.⁵ The moving party must make a clear-cut showing that when all the interests are considered, trial would more conveniently proceed and the interests of justice would be better served in the other district.

Thus more is required of the movant than the mere assertion that it may call a designated number of witnesses at the trial. Of greater importance to a judge in determining a motion of this type is the materiality of the matter to which these witnesses will testify. National Tea Company v. The Marseille, D.C.S.D.N.Y.1956, 142 F. Supp. 415, 416; Jenkins v. Wilson Freight Forwarding Co., D.C.S.D.N.Y. 1952, 104 F.Supp. 422, 424; Keller-Dorian Colorfilm Corp. v. Eastman Kodak Co., D.C.S.D.N.Y.1949, 88 F.Supp. 863, 866.

The movant should endeavor to provide the court with a list of its principal witnesses and their locations, along with a brief statement of the matter to which it is anticipated they will be called upon to testify. Though I recognize...