In re Homemakers Franchise Litigation

337 F. Supp. 1342, 1972 Trade Cas. (CCH) 73,844, 1972 U.S. Dist. LEXIS 15138

• Court: United States Judicial Panel on Multidistrict Litigation
• Decided: February 11, 1972
• Docket: No. 91
• Status: Published

Opinion

OPINION AND ORDER

PER CURIAM.

This motion for transfer involves two actions between the same parties in two different districts — the Northern District of California and the Southern District of Florida. Marvin W. Meyer, the common defendant, has moved for transfer of the Florida action to California for pretrial proceedings. Homemakers, Inc., the common plaintiff, opposes transfer. No basis for transfer under Section 1407 having been demonstrated, we deny the motion.

Meyer, through several corporations owned by him,¹ was a franchisee of Homemakers ² at six different locations in California, Missouri and Florida. A dispute between Meyer and Homemakers concerning the franchise agreements arose in 1970 and Homemakers commenced these actions immediately thereafter.³ Both complaints allege breaches of the franchise contracts and infringements of the service mark and seek damages and an injunction to prevent Meyer from using the service mark. In both jurisdictions Meyer has filed similar counterclaims, alleging fraud in the sale of the franchises, invalidity of the “Homemakers” mark, and violation of the federal antitrust laws.⁴

The litigation has apparently been marked by the parties’ inability to cooperate in pretrial proceedings. The California court appointed a magistrate for the purpose of recommending a discovery schedule, which is now in effect, although further disagreements concerning discovery have occurred in that case. At one point the parties entered into an agreement concerning use in the Florida action of discovery taken in California. They are now unable to agree on the scope of their agreement. Meyer maintains that they intended all discovery to be taken in California and usable in Florida. Homemakers asserts that they intended this only as to depositions.

The impetus for this motion came from the efforts of the Florida court to move the action pending there toward trial. Meyer moved to stay proceedings in that action or to transfer it to California for trial. The Florida court denied the motion, set a briefing schedule for outstanding motions and indicated that a final pretrial conference would be held in late 1971 with trial shortly thereafter. Meyer then filed the motion for transfer with the Panel.

In support of his motion, Meyer states that complex common issues of fact are raised by his counterclaims concerning the validity of the “Homemakers” mark, the existence of fraud in Homemakers’ inducement to Meyers to contract, and Homemakers’ alleged violations of the antitrust laws. He urges that unless both actions are assigned to a single judge, duplication of effort and possibly inconsistent results will follow. He explains the lateness of his motion by stating that he believed that either his motion to transfer the Florida case or the agreement concerning use of California discovery would eliminate the problem of duplication.

Homemakers asserts that Meyer is attempting to appeal from the decision of the Florida court denying transfer and setting the case for trial. It argues that the court’s decision must be presumed to have a sound basis in fact and attempts to demonstrate that the Florida action is, in fact, more advanced than the California action and ready for trial. Homemakers also contends that the only common question of fact concerns the enforceability of its franchising program and that neither the complaints nor the counterclaims raise complex issues of fact. Finally, it contends that transfer would delay trial of the Florida action.

The existence of limited common questions of fact is demonstrated by the similar allegations of the complaint and, more significantly, the counterclaims. However, we are not convinced that these few questions are sufficiently complex to require transfer under Section 1407 for the convenience of the parties or the just and efficient conduct of the litigation. In re Scotch Whiskey Antitrust Litigation, 299 F.Supp. 543 (J.P. M.L.1969). The Florida court has already concluded that the action pending there is ready for trial and should not be transferred. As our past decisions indicate, see In re Master Key Antitrust Litigation, 320 F.Supp. 1404 (J.P.M.L. 1971), we show great deference to district court decisions of motions under 28 U.S.C. § 1404(a) in actions brought before us. And we can find no basis for reaching a conclusion contrary to that of the Florida district court in the present case.

It is therefore ordered that the motion for transfer of the actions listed on the attached Schedule A be, and hereby is, denied.

SCHEDULE A

Northern District of California

Homemakers, Inc. v. Homemakers Services of SF Inc., et al. Civil Action C-70-1176-A J Z

Southern District of Florida

Homemakers, Inc. v. Homemakers Services Fla., Inc., et al. Civil Action 70-791-Civ-CF

1 . Those corporations, which join in the motion, are Homemakers Services SP, Inc., Homemakers Redwood City, Inc., Homemakers Services Florida, Inc. and Homemakers Miami, Inc.

2 . Homemakers is said to be in the business of acting as an employment contractor for domestic and medically related services and of franchising others to conduct similar businesses under the service mark “Homemakers.” Additional defendants, joining in Homemakers’ opposition to transfer, are its subsidiary, Homemaker International, its parent, The Upjohn Co., and its president, Edward J. Wilsman.

3 . The California action names Meyer and the two California franchisee corporations, Homemakers Services SF and Homemakers Redwood City, as defendants. The Florida action names Meyer and the two Florida franchisee corporations, Homemakers Services Florida and Homemakers Miami, as defendants.

4 . Each counterclaim has certain counts not duplicated in the other. For example, the Florida counterclaim alleges violations of the federal securities laws in connection with the sale of plaintiff’s franchises. Similar allegations were dismissed without prejudice in the California action. The Florida counterclaim also alleges Homemakers’ piracy of Meyer’s Florida employees. No similar allegations are made in California.