In Re King Resources Company Securities Litigation

352 F.Supp. 975 (1972)

In re KING RESOURCES COMPANY SECURITIES LITIGATION.
State of Ohio v. Crofters, Inc., et al., S.D.Ohio, Civil Action No. 72-138.

No. 79.

Judicial Panel on Multidistrict Litigation.

November 17, 1972.

Before ALFRED P. MURRAH, Chairman, and JOHN MINOR WISDOM, EDWARD WEINFELD^[*], EDWIN A. ROBSON^[*], WILLIAM H. BECKER, JOSEPH S. LORD, III, and STANLEY A. WEIGEL^[*], Judges of the Panel.

OPINION AND ORDER

PER CURIAM.

In the initial opinion and order in this litigation, four actions brought by holders of King Resources common stock and debentures against King Resources Company and others were consolidated for coordinated pretrial proceedings in the District of Colorado. In re King Resources Company Securities Litigation, 342 F.Supp. 1179 (J.P.M.L.1972). One of the defendants in the above-captioned action pending in the Southern District of Ohio has moved, pursuant to 28 U.S.C. § 1407, for an order transferring that action to the District of Colorado for inclusion in the coordinated or consolidated pretrial proceedings. Plaintiff State of Ohio is the only party opposed to transfer. On the basis of the papers filed and the hearing held, we find that transfer of the State of Ohio action to Colorado will serve the convenience of the parties and witnesses and promote the just and efficient conduct of the litigation.

The State of Ohio alleges that, in connection with its purchase of two notes of King Resources Company, having a total value of eight million dollars, defendants violated the federal securities laws by disseminating false and misleading information and withholding material information regarding the financial condition of King Resources. Similar securities laws violations are alleged against the same principal defendants in the actions already transferred to Colorado.

Despite the fact that plaintiff State of Ohio and the plaintiffs in the transferred actions purchased different securities through different marketing channels, all plaintiffs will most certainly proceed along similar lines of inquiry concerning the financial condition of King Resources and its general operations and transactions with others. This means, of course, that depositions of common witnesses will be noticed and that the documents and records of the common defendants will be subjected to intensive inspection by each group of plaintiffs. Transfer of the State of Ohio case to Colorado for participation in the coordinated pretrial proceedings is, therefore, necessary to avoid duplication in discovery, unnecessary inconvenience to the parties and their witnesses, and the possibility of inconsistent pretrial rulings.

Plaintiff contends that nine of the twelve claims set forth in its complaint concern defendants not involved in any of the transferred cases and should remain in the Southern District of Ohio for further proceedings. We have not been persuaded, however, that proof of those claims will not involve discovery duplicating that being pursued in the transferee district. We think the best course of action is to transfer all claims to the District of Colorado where the transferee judge can determine which claims, if any, do not involve common discovery and are appropriate for remand. An expeditious procedure for remand of cases or claims by the Panel is provided in the Panel's recently amended Rule 15.^[1]

It is therefore ordered that State of Ohio v. Crofters, Inc., et al., S.D.Ohio, Civil Action No. 72-138, be, and the same hereby is, transferred to the District of Colorado and assigned to the Honorable Sherman G. Finesilver for coordinated or consolidated pretrial proceedings.

NOTES

[*] Although Judges Weinfeld, Robson and Weigel were unable to attend the hearing, they have, with the consent of all parties, participated in this decision.

[1] See Rule 15 of the Rules of Procedure of the Judicial Panel on Multidistrict Litigation, 55 F.R.D. LT.