The opinion of the court was delivered by: LASKER
Defendant Curtis Publishing Company ("Curtis") moves to transfer this action to the United States District Court for the Eastern District of Pennsylvania pursuant to Section 1404(a) of Title 28, U.S.C. Plaintiff counter-moves to stay the prosecution of Bok v. Ackerman, a suit pending in the Eastern District of Pennsylvania, described below. The motions are discussed seriatim.
This suit is one of several brought in the aftermath of the now terminated control by defendant Martin S. Ackerman ("Ackerman") and defendant Perfect Film & Chemical Corp. ("Perfect") of defendant Curtis and its well known publications, including the Saturday Evening Post. The action is a stockholder's derivative suit on behalf of Curtis and its wholly owned subsidiary Saturday Evening Post Co. ("Post Co."). Jurisdiction is established by Section 27 of the Securities Exchange Act of 1934, as amended (15 U.S.C. § 78aa). The complaint alleges violations of Section 10(b) of the Act (15 U.S.C. § 78j(b)) and Rule 10b-5 thereunder.
The elaborate complaint contains nine "counts," each of which describes a different way in which Ackerman or Perfect, or both, allegedly "looted" Curtis alone or Curtis and one or more of its subsidiaries.
The relief sought includes an accounting for all profits, rescission of sales of Curtis assets to Perfect, and appointment of a receiver for Curtis and Post Co.
At the time the motion to transfer was argued, two suits were pending in the United States District Court for the Eastern District of Pennsylvania in relation to the subject matter and one in the New York State Supreme Court, New York County. The New York state court action has since been stayed pending "final determination of the actions in the Federal Courts."
Of the two cases pending in the Eastern District of Pennsylvania, one (Bok v. Ackerman) was, like the present action, a stockholder's derivative suit brought on behalf of Curtis. The other (The Curtis Publishing Company v. Perfect Film & Chemical Corp.) was brought directly by Curtis after its board of directors was no longer under the dominance of Ackerman. Curtis now moves to transfer the proceeding herein to the Eastern District of Pennsylvania. Before discussing the merits of the motion, it is to be noted that the Bok and Curtis cases have been consolidated in the Eastern District of Pennsylvania and are untried sub judice before Judge Higginbotham. Since the argument of the motion which forms the basis of the present opinion, substantial progress has been made towards settling the consolidated cases before Judge Higginbotham.
The interrelationship between the instant suit and the Pennsylvania litigation is a primary factor in determining both the motion to transfer and the motion to stay. Counsel on both sides are in dispute as to whether there is any substantial difference between the scope of the Wolf complaint on the one hand and the scope of the Bok and Curtis on the other. In particular, plaintiff's counsel contends that the Pennsylvania suits do not cover allegations contained in Counts 2, 3, and 5 of the Wolf complaint.
Bearing in mind the critical nature of a determination as to whether the scope of the Bok and Curtis complaints is as broad as that of the complaint before me, I have carefully analyzed and compared them. I conclude that, although the language and method of expression understandably, if not inevitably, vary between the Wolf and the Pennsylvania complaints, nevertheless, for the purposes determinative of this motion, the substance and scope of the Pennsylvania complaints is as broad as that of Wolf, and the Pennsylvania complaints encompass all the transactions covered by the Wolf complaint.
Title 28, U.S.C. § 1404(a), provides:
"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."
In the instant case there is neither doubt nor dispute that the case "might have been brought" in the Eastern District of Pennsylvania. As stated in Wyndham Associates v. Bintliff, 398 F.2d 614, 620 (2d Cir. 1968):
"Section 27 of the Securities Exchange Act provides that suit to enforce liabilities under the Act or any rule or regulation thereunder may be brought in any district wherein any act or ...