Fed. Sec. L. Rep. P 92,849 Ernest Klein v. Walston & Co., Inc.

432 F.2d 936, 1970 U.S. App. LEXIS 6707

• Court: Court of Appeals for the Second Circuit
• Decided: October 29, 1970
• Docket: 142, Docket 34735
• Status: Published

Opinion

PER CURIAM:

Plaintiff’s complaint, filed in the District Court for the Eastern District of New York in 1969, sought damages in connection with securities transactions in 1959, with respect to which defendant had secured a judgment in the Supreme Court of New York for New York County in 1961. The complaint alleged claims based on contract and fraud, and also under the Securities Exchange Act of 1934. The common law claims had been alleged in an action brought by plaintiff in 1964 in the Supreme Court for Kings County, which was pending undetermined. On defendant’s motion Judge Bartels entered an order staying proceedings in the federal action until final determination of this state action.

The order was well within the judge’s discretion. See Mottolese v. Kaufman, 176 F.2d 301 (2 Cir. 1949). While because of the exclusive jurisdiction of the federal courts to enforce the Securities Exchange Act of 1934, § 27, the state court will not be able to determine certain claims asserted in the federal suit but not advanced in the state action, it can authoritatively determine the common law claims and perhaps also defenses such as res adjudicata and the statute of limitations that may be dispositive of the 1934 Act claims as well. Particularly in these days of congested calendars the judge was amply justified in not allowing litigation of these hoary claims to occupy the energies of two courts at the same time.

Affirmed.