The opinion of the court was delivered by: HERLANDS
HERLANDS, District Judge:
Defendants move to transfer this action to the United States District Court for the District of Idaho, Northern Division, pursuant to 28 U.S.C. § 1404(a), on the grounds that such transfer is for the convenience of the parties and the witnesses, in the interest of justice. The United States District Court for the District of Idaho, Northern Division, sits at Coeur d' Alene, Idaho, in the center of the Idaho mining district, about 403 miles north of Boise, Idaho, and 322 miles east of Seattle, Washington.
28 U.S.C. § 1404(a) provides in pertinent part:
For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.
The action, commenced in this district by the SEC on May 19, 1965, seeks (1) a permanent injunction against the defendants to restrain them "from engaging in the purchase and sale of any security on the basis of information with respect to material facts relating to Hecla Mining Company or any other company acquired by said defendants by virtue of their positions with respect to Hecla Mining Company, or such other company which information has not been made available to all security holders thereof and other public investors"; (2) an order directing defendants "to make restitution to each person from whom said defendants purchased Hecla stock between June 28 and September 10, 1963, and to each person to whom said defendants sold, or sold short, Lucky Friday stock between June 28 and September 10, 1963"; and (3) an order permanently enjoining the individual defendant "from failing to file timely and correct reports with the plaintiff, as required by Section 16(a) of the Securities Exchange Act of 1934, with respect to any equity security (other than exempted security) which is registered pursuant to Section 12 of the Act while said defendant is directly or indirectly the beneficial owner of more than ten per centum of such security or while said defendant is an officer or director of the issuer of such security."
The complaint pleads two causes of action. As to both causes, the complaint alleges that both the corporate defendant ("Golconda") and the individual defendant ("Magnuson") have engaged, are engaged, and are about to engage in acts constituting violations of Section 10(b) of the Securities Exchange Act of 1934 (hereinafter "the 1934 Act"), 15 U.S.C. § 78j(b), and of Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5; and that Magnuson has engaged, is engaged, and is about to engage in acts constituting violations of Section 16(a) of the 1934 Act, 15 U.S.C. § 78p(a).
The first cause of action charges an improper use of inside information by both defendants. The following allegations are made: That the terms of a proposed merger of Hecla and Lucky Friday on an exchange basis of 1.5 shares of Hecla for one share of Lucky Friday were approved by the Lucky Friday Board of Directors on September 6, 1963 and by the Hecla Board of Directors on September 9, 1963;
That the terms of this proposed merger were first announced to the public by the boards of directors of both companies on September 10, 1963;
That prior to September 10, 1963 and beginning in January, 1962, the matter of a possible merger between Hecla and Lucky Friday was discussed by the Hecla Board of Directors (including Magnuson);
That the market price of Lucky Friday stock was twice as high as the market price of Hecla stock; and that Hecla directors became informed that a fair exchange ratio would be on the basis of between 1.2 and 1.5 shares of Hecla stock for each share of Lucky Friday stock;
That the Golconda directors were advised by Magnuson that, in the event of the inevitable merger between Hecla and Lucky Friday, the exchange ratio would probably be between 1.5 to 1.6 shares of Hecla for each share of Lucky Friday;
That the defendants knew, at all material times, that a public announcement of a merger between Hecla and Lucky Friday at an exchange ratio different from the ratio of the market prices of the stocks of the two companies prevailing at the time of such an announcement would, under ordinary market conditions, tend to cause the ratio of the market prices of these stocks to coincide with the ratio of the proposed exchange; that, thus, in January, 1962 the defendants knew that, if it were publicly announced that Hecla and Lucky Friday would merge on the basis of 1.5 shares of Hecla stock for each share of Lucky Friday stock, the market reaction would cause the market price of Lucky Friday stock (which was at that time twice as high as that of Hecla stock) to be lowered and the market price of Hecla stock to be raised, until the ratio of the market price of the Lucky Friday stock to that of Hecla stock would approach 1.5 to 1;
That, therefore, the defendants, armed with the inside information which had not been disclosed to the public bought Hecla stock (the market price of which they knew would go up when the public would become aware of the merger on the basis of 1.5 shares of Hecla for each Lucky Friday share); and the defendants sold or sold short Lucky Friday stock (the market price of which they knew would go down when the public would become aware of the merger on the basis of 1.5 shares of Hecla stock for each Lucky Friday share);
That, on certain dates in 1962 and 1963 (detailed in the complaint), defendants sold or sold short Lucky Friday stock and bought Hecla stock;
That, after the merger was publicly announced and as expected, the market price of Lucky Friday stock declined and the market price of Hecla rose; that, thereafter, because the market price of Lucky Friday stock declined, Golconda covered its short position in Lucky Friday stock at a profit.
The second cause of action charges that Magnuson engaged in fifteen transactions in Hecla stock during certain specified months in 1963 and 1964, which transactions Magnuson failed to report to the SEC within ten days of the month in which each transaction occurred, as required by Section 16(a) of the 1934 Act. It is also alleged that Magnuson did not file the reports required by Section 16(a) with respect to these fifteen transactions until December 30, 1964, which date was well after said defendant knew that the SEC was investigating his activities in connection with Hecla stock. Moreover, it is alleged that Magnuson filed a false report with the SEC in October, 1963.
Consideration will now be given to the factors relevant to the question whether a transfer to Idaho would be for the convenience of the parties and the witnesses, in the interest of justice.
One observation must be made preliminarily: the plaintiff has brought this case in this forum under the venue privilege explicitly afforded it by Section 27 of the 1934 Act, 15 U.S.C. § 78aa. Indisputably, the plaintiff's choice of forum is not an absolute and uncontrolled privilege. Nevertheless, it may be stated as a general proposition that, unless the balance of convenience is clearly in favor of the defendants, the plaintiff's choice of forum should not be disturbed. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 91 L. Ed. 1055, 67 S. Ct. 839 (1947); Ford Motor Co. v. Ryan, 182 F.2d 329 (2d Cir. 1950); cert. denied, 340 U.S. 851, 95 L. Ed. 624, 71 S. Ct. 79 (1950).
What District Judge (now Court of Appeals Judge) Irving R. Kaufman said in Peyser v. General Motors Corp., 158 F. Supp. 526, 529 (S.D.N.Y. 1958) is an apposite starting point:
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 non-conveniens, 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. The moving party ...