H. L. Green Company, Inc. v. The Honorable Lloyd F. MacMahon

312 F.2d 650
CourtCourt of Appeals for the Second Circuit
DecidedFebruary 25, 1963
Docket27326
StatusPublished
Cited by47 cases

This text of 312 F.2d 650 (H. L. Green Company, Inc. v. The Honorable Lloyd F. MacMahon) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
H. L. Green Company, Inc. v. The Honorable Lloyd F. MacMahon, 312 F.2d 650 (2d Cir. 1963).

Opinions

LUMBARD, Chief Judge.

This is a petition for a writ of mandamus to set aside an order of Judge MacMahon transferring the petitioner’s action under § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C.A. § 78j(b) from the District Court for the Southern District of New York to the District Court for the Southern District of Alabama, pursuant to 28 U.S.C. § 1404(a).1 The primary contentions are that such transfer was improper because the Alabama statute of limitations would not have permitted the action to have been commenced there, and because Alabama law would be less favorable than New York law on a common law claim sought to be added to the complaint by a motion to amend already pending at the time of the motion to transfer the action. We hold these contentions to be irrelevant to the propriety of the transfer because of the continuing applicability of the New York statute of limitations, and — if it would have been proper for the New York district court to allow the amendment— the relevant New York common law. Thus we have no reason to believe that there will be any prejudice to the plaintiff in this respect. We find no merit in the plaintiff’s other grounds for the invocation of our mandamus power to set aside the transfer.

The plaintiff, a New York corporation, on October 29, 1958, purchased all the stock of the Olen Company, Inc., which owned a number of department stores in the southern states, and merged it into itself. This action was commenced in the district court on January 7, 1960, seeking damages of $4,000,000 under § 10(b) of the Securities Exchange Act of 1934 for alleged misrepresentations of the fiscal status of Olen which induced H. L. Green to carry out the merger. The defendant Herschel Harris was executive vice-president of Olen, and after the merger was hired as a vice-president of H. L. Green. The other defendants, Lewie F. Childree, Homer E. Kerlin, and James R. Lawrence were partners in the accounting firm of Lewie F. Childree & Co., which prior to the merger had certified various financial statements of Olen. All of the defendants are residents of Mobile, Alabama, which is in the Southern District of Alabama; service of process was had upon them under the nationwide service provisions of the Securities Exchange Act, 48 Stat. 902, 15 U.S.C.A. § 78aa,2 and venue was properly laid in the Southern District of New York as a “district wherein any act or transaction constituting the violation occurred.” Ibid.

Since the defendants are all residents of the Southern District of Alabama, the action “might have been brought” there as well, as is required for transfer under § 1404(a), Hoffman v. Blaski, 363 U.S. 335, 80 S.Ct. 1084, 4 L.Ed.2d 1254 (1960). Petitioner makes no substantial argument that the district court for any other reason lacked the [652]*652power to make the transfer.3 Where, as in the case at bar, the court has acted within its power, mandamus will issue only in a “really extraordinary cause,” Torres v. Walsh, 221 F.2d 319, 321 (2 Cir.), cert. denied, 350 U.S. 836, 76 S.Ct. 72, 100 L.Ed. 746 (1955); Magnetic Engineering & Mfg. Co. v. Dings Mfg. Co., 178 F.2d 866, 870 (2 Cir. 1950).

The petition evidences no special circumstances which would lead us to question Judge MacMahon’s determination that the convenience of parties and witnesses would better be served by trial in Alabama than by trial in New York. All of the defendants reside in Alabama, and, although the plaintiff’s main office is in New York City, it has a division office in Mobile. There appears to be no good reason to question Judge MacMahon’s acceptance of the defendants’ verified statements that they intend to call a large number of persons employed by Olen in Alabama as witnesses. Likewise, whether the defendants’ motion to transfer was barred by laches was within the district judge’s discretion.

A more serious problem is, however, presented by the plaintiff’s claim that its case will be prejudiced on the merits by the application, as a result of transfer, of a different statute of limitations to its statutory claim and by the application of a different substantive law, as well as a different statute of limitations, to the common law claim it has moved to join with the statutory claim. The prejudice that the plaintiff would suffer, if the substantive effects of the transfer were as it claims, would be so great that we find it appropriate to consider its arguments on this petition. We find, however, that there is little likelihood of substantive prejudice. Although we recognize that our views on the course which this case should take after the transfer to the Alabama district court will not be binding on that court, we think it appropriate to set forth briefly what we believe to be the law. Cf. Headrick v. Atchison, T. & S. F. Ry. Co., 182 F.2d 305 (10 Cir. 1950.)

A plaintiff may not resist the transfer of his action to another district court on the ground that the transferee court will or may interpret federal law in a manner less favorable to him. We agree with the Court of Appeals for the Fourth Circuit that if there is a conflict of views among circuits, “this presents a matter for consideration by the Supreme Court on application for certiorari, not for consideration by a district judge on application for transfer * * *. We have no sympathy with shopping around for forums.” Clayton v. Warlick, 232 F.2d 699, 706 (4 Cir. 1956); see Torres v. Walsh, 221 F.2d 319 (2 Cir.), cert. denied, 350 U.S. 836, 76 S.Ct. 72, 100 L.Ed. 746 (1955). The federal courts comprise a single system applying a single body of law, and no litigant has a right to have the interpretation of one federal court rather than that of another determine his case.

However, insofar as the federal courts apply state law, they apply the laws of fifty separate jurisdictions, rather than one. A certain amount of forum shopping inevitably results from our federal system; a plaintiff may, within the limits imposed by process and venue requirements, choose the state whose law will be applied to his action by his power to choose the court in which he will institute his action. We find nothing in the language or policy of § 1404(a) which would sanction its use by a defendant to defeat this choice by the plaintiff. Indeed, we find this result to be compelled by the concept of the federal courts as a single system. Although as a mat-[653]*653ter of federal policy a case may be transferred to a more convenient part of the system, whatever rights the parties have acquired under state law should be unaffected. The case should remain as it was in all respects but location. Headrick v. Atchison, T. & S. F. Ry. Co., 182 F.2d 305 (10 Cir. 1950); see Magnetic Engineering & Mfg. Co. v. Dings Mfg. Co., 178 F.2d 866, 868 (2 Cir. 1950).

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312 F.2d 650, Counsel Stack Legal Research, https://law.counselstack.com/opinion/h-l-green-company-inc-v-the-honorable-lloyd-f-macmahon-ca2-1963.