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Olinick v. Dempster Brothers Inc.

decided: August 8, 1966.

A. OLINICK & SONS, PLAINTIFF-PETITIONER,
v.
DEMPSTER BROTHERS, INC., DEFENDANT-RESPONDENT. A. OLINICK & SONS, PETITIONER, V. HONORABLE MATTHEW T. ABRUZZO, UNITED STATES DISTRICT JUDGE, EASTERN DISTRICT OF NEW YORK, RESPONDENT



Waterman, Moore and Friendly, Circuit Judges. Friendly, Circuit Judge (concurring).

Author: Moore

MOORE, Circuit Judge:

In this case, a plaintiff whose case has been ordered transferred under 28 U.S.C. § 1404(a) from the Eastern District of New York to the Eastern District of Tennessee seeks to obtain review of the order of transfer. The motion papers present the following picture.

Plaintiff, A. Olinick & Sons (Olinick), is a family partnership engaged in the scrap metal business in Brooklyn. Defendant, Dempster Brothers, Inc. (Dempster), is a Tennessee corporation with its principal place of business in Knoxville, Tennessee, engaged in the manufacture and sale of hydraulically operated equipment, including scrap metal processors. It has never qualified to do business in New York State and maintained no office, telephone listing, or salesmen in the state. According to the affidavits before the District Court, Dempster had 447 employees on August 16, 1965; Olinick had 12 employees on September 30, 1965.

In February 1962, having heard of the virtues of Dempster's products from a manufacturer's representative, two Olinick partners, Oscar and David Olinick, went down to Knoxville to investigate the possibility of ordering a large "baler shear" which would both compress and cut scrap metal. Olinick agreed to buy the machine for a total purchase price of $135,000, after negotiations in part in Knoxville and in part by phone and mail between Knoxville and Brooklyn. The parts were delivered in the early part of 1963 and were assembled in Brooklyn by employees of Dempster, working together with employees of Olinick.

From the first use of the machine, Olinick complained that it was defective: that it was not made to specifications, that it did not handle the capacity of scrap originally anticipated, and that it broke down with distressing regularity. On several occasions Dempster sent teams of servicemen to Brooklyn to work on the machine. In January 1963, David and Oscar Olinick went to Knoxville, together with a lawyer from Cincinnati, to discuss the problem with Dempster. Dempster offered to reduce the price of the machine to $35,000, the amount Olinick had already paid. According to Dempster, Olinick agreed to this, provided that Dempster would agree to furnish further parts for the machine. According to Olinick, no agreement was reached in Knoxville, except that Dempster experts were to go to Brooklyn to discuss what could be done to salvage the machine. In any case, Dempster experts did go to Brooklyn and did agree on a list of parts and information to be furnished to Olinick. Dempster's counsel in Tennessee then drafted a proposed settlement agreement which formed the basis of an agreement between the parties, signed by Dempster in Tennessee and, on February 25, 1964, by Olinick, apparently in Brooklyn.

On July 12, 1965, Olinick brought suit against Dempster in the Supreme Court of New York, County of Kings, seeking damages in the amount of $500,000 for breach of warranty, negligence and failure to perform, all grounded on alleged defects in the machine which "were the result of the negligent design, manufacture, assembly, and inspection thereof by Dempster." In addition the complaint requested the rescission of the agreement of February 25, 1964, on the grounds that at the time of its execution Dempster had fraudulently failed to disclose the existence of certain grave defects in the machine known by Dempster but not readily discoverable; or, in the alternative, for $300,000 in damages for failure by Dempster to perform the repairs promised under the agreement of February 25, 1964.

Dempster removed the action to the District Court for the Eastern District of New York and moved that the case be transferred to the Eastern District of Tennessee, Northern Division (at Knoxville), pursuant to 28 U.S.C. § 1404(a). After hearing oral argument on two occasions and considering affidavits, supplemental affidavits, and memoranda of law, the District Court ordered the case transferred, pointing out among other factors that the defense expected to call more witnesses, and that the case would proceed to trial far more quickly in the Eastern District of Tennessee than in the Eastern District of New York. The District Court certified in the manner prescribed by 28 U.S.C. § 1292(b) that it considered the case appropriate for interlocutory appeal. Olinick now seeks review from the order of transfer, either by way of an interlocutory appeal under 28 U.S.C. § 1292(b), or by way of mandamus.

1. The Mode of Review

A threshold question is whether the proper mode of review is by interlocutory appeal or by mandamus. The difference between the two is not necessarily large. Under each, the Court of Appeals has total discretion -- akin to that exercised by the Supreme Court on petitions for certiorari -- in deciding whether or not to permit review. E.g., In re Josephson, 218 F.2d 174, 183 (1st Cir. 1954); S.Rep. No. 2434, 85th Cong., 2d Sess., 1958 U.S.Code Cong. and Admin.News, p. 5257. Although in mandamus the trial court is named as a party, where the writ is sought simply to review the merits of its transfer order, its participation is purely nominal. See Rapp v. Van Dusen, 350 F.2d 806 (3d Cir. 1965). Moreover, the scope of judicial review under the two procedures may be very much the same. See Humble Oil & Ref. Co. v. Bell Marine Serv. Inc., 321 F.2d 53, 56-57 (5th Cir. 1963).

Nevertheless, litigants aggrieved by the grant or denial of a § 1404(a) motion are entitled to guidance as to which route they should pursue, the more especially because of the frequent pronouncements that mandamus will not lie if review by appeal is available. E.g., Ex parte Fahey, 332 U.S. 258, 260, 67 S. Ct. 1558, 91 L. Ed. 2041 (1947); Roche v. Evaporated Milk Ass'n, 319 U.S. 21, 63 S. Ct. 938, 87 L. Ed. 1185 (1943); 1 Moore, Federal Practice para. 0.147 at p. 1973 (2d ed. 1964).

It is important to note that Olinick here does not urge that the District Court considered an improper factor in deciding the motion to transfer, or that it ordered the case transferred to a district which was not one where the action "might have been brought," within the meaning of 28 U.S.C. § 1404(a). In the latter case, there may well be "a controlling question of law as to which there is substantial ground for difference of opinion," and "an immediate appeal from the order may materially advance the ultimate termination of the litigation," 28 U.S.C. § 1292(b), since the Court of Appeals for the circuit in which the transferee district is located might hold that the transfer was improper and that a retransfer and a new trial was necessary, even after trial. See Olberding v. Illinois Cent. R.R., 346 U.S. 338, 74 S. Ct. 83, 98 L. Ed. 39 (1953); cf. Continental Grain Co. v. The Barge FB L-585, 364 U.S. 19, 80 S. Ct. 1470, 4 L. Ed. 2d 1540 (1960); Foster-Milburn Co. v. Knight, 181 F.2d 949 (2d Cir. 1950).

Instead, Olinick contends that the District Court considered proper factors -- location of parties, witnesses, and documents; convenience to the parties; and docket conditions in the alternative districts, see Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-509, 67 S. Ct. 839, 91 L. Ed. 1055 (1947); cf. Platt v. Minnesota Mining & Mfg. Co., 376 U.S. 240, 243-244, 84 S. Ct. 769, 11 L. Ed. 2d 674 (1964) -- but reached the wrong result.

The Courts of Appeals have been far from unanimous in deciding whether § 1292(b) is available to one seeking to review the disposition of a § 1404(a) transfer motion for erroneous evaluation of proper factors. The Fifth Circuit stoutly affirms that it is available, and that mandamus is accordingly inappropriate. Humble Oil & Ref. Co. v. Bell Marine Serv. Inc., 321 F.2d 53 (5th Cir.1963); In re Humble Oil & Ref. Co., 306 F.2d 567 (5th Cir.1962). The Third and Sixth Circuits just as stoutly hold that it is not available. Standard v. Stoll Packing Corp., 315 F.2d 626 (3d Cir.1963); Bufalino v. Kennedy, 273 F.2d 71 (6th Cir.1959). We have not addressed ourselves directly to the problem, although we have suggested that "orders granting or denying motions for transfers pursuant to the provisions of 28 U.S.C. § 1404(a) are * * * not appealable except by resort to ...


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