The opinion of the court was delivered by: Robert Sweet, Senior District Judge [ Page 1]
Defendants Alliance Capital Management, L.P. ("Alliance Capital") and Alfred Harrison, John D. Carifa and Mark D. Gersten (collectively, the "Alliance Capital Defendants") have moved, pursuant to 28 U.S.C. § 1404 (a), to transfer this action brought by plaintiffs Patrick J. Goggins and Laura H. Goggins to the United States District Court for the District of New Jersey. For the reasons set forth below, the motion is granted.
This action was commenced on December 13, 2002. On April 11, 2003, the Alliance Capital Defendants moved to transfer the action to the District of New Jersey. On June 10, 2003, defendants Alliance Premier Growth Fund, Inc. (the "Fund") and Ruth Block, David H. Dievler, John H. Dobkin, William H. Foulk, Jr., James M. Hester, Clifford L. Michel and Donald J. Robinson (collectively, the "Outside Directors") filed a motion in response to the motion filed by the Alliance Capital Defendants and in support of the motion to transfer this action to the District of New Jersey. On the same day, the plaintiffs filed a memorandum in opposition to the motion for a transfer of venue. On June 20, 2003, the Alliance Capital Defendants filed a brief in further support of their motion to transfer venue. Oral argument was heard on June 25, 2003, at which time the motion was considered fully submitted. [ Page 2]
Plaintiffs Patrick J. Goggins and Laura H. Goggins allege that they purchased Fund shares between October 31, 2000 and February 14, 2002 (the "Class Period"). The Goggins reside in Dade County, Florida, where Patrick Goggins maintains a law practice.
Defendant Alliance Premier Growth Fund, Inc. is a registered investment company under the Investment Company Act of 1940, 15 U.S.C. § 80-1 et seq. Plaintiffs allege that the Fund's principal place of business is in Secaucus, New Jersey.
Defendant Alliance Capital Management, L.P. is a Delaware limited partnership with its principal place of business in New York City, and at all times was the Fund's investment advisor. Alliance Capital provides investment advice, portfolio management, and other services to the Fund, and the Fund compensates Alliance Capital for those services.
Defendant John D. Carifa is the Fund's President and Chairman of the Board of Directors. He is also President, Chief Operating Officer, and a director of Alliance Capital Management Corporation ("ACMC"), the general partner of Alliance Capital. Defendant Alfred Harrison is the Fund's Executive Vice President and primary portfolio manager, and is also a director of ACMC. Defendant Mark D. Gersten is alleged to be the Fund's Principal [ Page 3]
Financial and Accounting Officer. Defendants Ruth Block, David H. Dievler, John H. Dobkin, William H. Foulk, Jr., James M. Hester, Clifford L. Michel and David J. Robinson are Directors of the Fund.
The plaintiffs in this action allege that Alliance Capital violated federal securities law by causing the Fund to purchase shares of Enron stock in late 2000 and to hold them until early 2002. Plaintiffs allege that the defendants failed to follow the Fund's investment strategies and objectives by causing the Fund to invest in Enron without properly researching it, and thereafter by ignoring warning signs about Enron's financial condition as the Fund continued to accumulate and hold Enron shares. According to plaintiffs, these failures made the Fund's registration statements and prospectuses materially false and misleading in violation of federal securities law.
Plaintiffs also allege that Frank Savage, an ACMC director, was an Enron board member throughout the Class Period and had special knowledge of Enron's fraudulent use of Special Purpose Entities to create false and misleading financial statements.
A similar action, captioned Benak v. Alliance Capital Management, L. P., No. 01 Civ. 5734 ("Benak"), is currently pending in the United States District Court for the District of New Jersey. [ Page 4]
Benak is a consolidated action comprising six derivative lawsuits filed on behalf of the Fund against Alliance Capital. The plaintiffs in Benak also allege violations of federal securities laws based on Alliance Capital's investment in Enron.
One of the six cases now consolidated with Benak, captioned Roy v. Alliance Capital Management, L.P., No. 8:01-cv-2449-T-24MSS, was first brought in the United States District Court for the Middle District of Florida. The plaintiff in Roy refused to consent to a transfer to the District of New Jersey. Alliance Capital subsequently moved to transfer the Roy case to New Jersey for consolidation with other cases pending in the District, and the motion was granted. The court found that "transfer of th[e] case to the District of New Jersey is necessary to preserve judicial resources and to avoid the potential for inconsistent judgments." Roy v. Alliance Capital Management, L.P., No. 8:01-cv-2449-T-24MSS, (M.D. Fla. Mar. 13, 2002) (slip op., p. 7).
The allegations in this action also overlap with those asserted in an action captioned Lawrence E. Jaffe Pension Plan v. Alliance Capital Management, L.P., No. 02 Civ. 7342 ("Jaffe"), which was filed in this District on September 12, 2002. The Honorable Naomi Reice Buchwald ordered Jaffe transferred to the District of New Jersey on March 24, 2003 for consolidation with the Benak action. In granting ...