currently housed in Florida and likely to be necessary for the litigation.
The New York plaintiffs resist transfer by attempting to characterize River Road, despite the defendants presently named and the legal theories presently asserted in the pleadings, as essentially involving New York parties, New York documents and witnesses, and events occurring in New York. The crux of their argument is that they have concluded a "settlement in principle" that releases all defendants in River Road other than Josephthal and Jacobs. Should such a settlement be executed, the plaintiffs predict that the principal issue that will remain in River Road will be whether Josephthal can make out a due diligence defense against § 12(2) liability, an issue that the plaintiffs believe will not require use of documents or witnesses in Florida. In any event, the plaintiffs predict that substantial discovery of documents and witnesses in Florida will be unnecessary, because the Examiner's report and a deposition of the Examiner will suffice to establish the misrepresentations underlying River Road, because the parties to River Road will stipulate to the existence of misrepresentations in Sheffield's offering materials, or because the settlement, if it is ever executed, will require its signatories to make themselves available for testimony in New York. Furthermore, plaintiffs have reached an agreement with the Ganz plaintiffs to coordinate discovery in the two actions in order to reduce duplicative discovery in the two actions. Plaintiffs therefore argue that transfer to Florida is unnecessary and would prejudice them by miring the plaintiffs in class litigation, whereas the plaintiffs believe that they could obtain a trial sooner in New York, especially if the supposed settlement-in-principle matures into an actual settlement that would "streamline" River Road.
The plaintiffs' characterization of River Road as mostly involving New York parties and requiring proof available in New York does not describe the action as it currently stands but rather describes the action as the plaintiffs hope it might evolve in the future. No settlement has yet been presented to this Court despite plaintiffs' assurances in their brief that a settlement-in-principle had been achieved as of December 7, 1994, nor have the plaintiffs included a draft settlement agreement in their motion papers.
Moreover, the plaintiffs' predictions that the need for proof about the existence of misrepresentations in Sheffield's offering materials rests on the speculative possibility that the defendants will concede this issue or content themselves with the Examiner's report and testimony, but the defendants have not indicated that they intend to so limit the issues or sources of proof. To the contrary, Josephthal and Jacob's answer to the River Road complaint asserts as an affirmative defense that "all facts material to the offering of the Notes were appropriately disclosed in the April 1992 Term Sheet . . . ." Josephthal and Jacob's Amended Answer at P 138. Plaintiffs' predictions about the future character of River Road are therefore entitled to little weight.
On the facts as they now stand, transfer is warranted to allow a single court to manage both Ganz and River Road. By concluding an agreement to coordinate discovery with the Ganz plaintiffs expressly "to avoid duplication for plaintiffs, defendants, and third party subpoenaed witnesses," Ashinoff Affidavit, Ex. A at 2, the plaintiffs have confirmed what is apparent from the complaints in the two actions: River Road and Ganz involve common parties litigating common issues of law and fact. This district has held that:
The presence of related litigation in the transferee forum weighs heavily in favor of transfer, since litigation of related claims in the same tribunal results in "more efficient conduct of pretrial discovery, saves witnesses time and money in both trial and pretrial proceedings, and avoids duplicative litigation and inconsistent results, thereby eliminating unnecessary expense to the parties while at the same time serving the public interest."
National Union Fire Insurance Company of Pittsburgh, PA v. Turtur, 743 F. Supp. 260, 263 (S.D.N.Y. 1990) (quoting Nieves v. American Airlines, 700 F. Supp. 769, 773 (S.D.N.Y. 1988)); see also Berg, 576 F. Supp. at 1243 ("Pendency of such a related action in the transferee forum weighs heavily in favor of transfer") (Pollack, J.)). While the discovery coordination agreement between the River Road and Ganz plaintiffs recognizes the problem posed by litigating two related actions in different fora, it does not eliminate the potential for duplicative trial testimony or the inconsistent resolution of discovery disputes.
The plaintiffs also represent that they intend to opt out of Ganz if the Note Class is certified and pursue their claims exclusively in River Road. Even if the plaintiffs were to opt out of Ganz, transfer would still be justified. Even if consolidation of the actions were to become impossible because of the River Road plaintiffs' election to opt out of Ganz, "having the actions litigated in the same geographical area would still facilitate the coordination of pre-trial discovery, and save the time and energies of the witnesses, the parties, and the attorneys." National Union Fire Insurance Co. v. Turtur, 743 F. Supp. 260, 264 n. 3 (S.D.N.Y. 1990) (transferring New York action related to action in Texas federal court despite possibility that the Texas action would be remanded to state court).
Transfer would also serve the convenience of the parties and witnesses. By assuming that the supposed settlement-in-principle will eventuate in an actual settlement releasing all defendants except for Josephthal and Jacobs, the plaintiffs have avoided addressing the substantial Florida contacts present in the case as it stands today. Most of the River Road defendants are Florida residents; as indicated at the beginning of this opinion, several of these Florida defendants have indicated a preference for litigating their defenses in the Southern District of Florida. Only one of the plaintiffs and one of the defendants are New York residents. Moreover, those who appear to be the key non-party witnesses are located in Florida. The River Road complaint makes frequent reference to the reports prepared by the Examiner, a Florida resident, and the Miami office of Price Waterhouse. The River Road plaintiffs essentially concede, through their submission of an affidavit from class counsel in Ganz, that testimony from those who prepared these reports will be crucial in proving the occurrence of the misrepresentations alleged as the basis for the claims in River Road. Pucillo Affidavit at P 10 ("I believe that the Examiner's Report and testimony from those who prepared these reports will largely dispose of [the issue whether there were misrepresentations]."). Thus, the convenience of the majority of parties and key witnesses favors transfer to the Southern District of Florida.
Finally, the plaintiffs argue that, because River Road was filed before the cases consolidated into Ganz were filed, River Road should not be transferred. The plaintiffs claim the benefits of the "first-filed" rule to defeat the motion to transfer. See Manufacturers Hanover Trust Co. v. Palmer Corp., 798 F. Supp. 161, 166 (S.D.N.Y. 1992) (noting that in considering transfer motions, "'the well-settled principle rule in this Circuit [is] that "where there are two competing lawsuits, the first suit should have priority, absent the showing of balance of convenience . . . or special circumstances giving priority to the second,'") (quoting First National Bank and Trust Co. v. Simmons, 878 F.2d 76, 79 (2nd Cir. 1989)). However, the first-filed rule does not supersede the inquiry into the balance of convenience required under § 1404(a):
the Court's focus in deciding whether to transfer this action remains overall convenience and efficiency in the administration of justice. Thus, despite the 'first-filed' rule, the Court would not hesitate to order transfer if defendants were otherwise able to meet their burden.