In re Viatron Computer Systems Corp. Litigation

86 F.R.D. 431, 1980 U.S. Dist. LEXIS 10856
CourtDistrict Court, D. Massachusetts
DecidedApril 4, 1980
DocketNo. MDL-138-T
StatusPublished
Cited by8 cases

This text of 86 F.R.D. 431 (In re Viatron Computer Systems Corp. Litigation) is published on Counsel Stack Legal Research, covering District Court, D. Massachusetts primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Viatron Computer Systems Corp. Litigation, 86 F.R.D. 431, 1980 U.S. Dist. LEXIS 10856 (D. Mass. 1980).

Opinion

MEMORANDUM

TAURO, District Judge.

There are two matters pending before this court concerning the trial of these eases. One is this court’s order to show cause why the Viatron cases1 should not be consolidated for trial in Boston. The other [432]*432is Arthur Andersen’s motion to consolidate the trials of Stewart v. Bennett and Arthur Andersen & Co. v. Arthur D. Little, Inc., CA 80-212-T (D.Mass.). A hearing on both matters was held on March 27, 1980. This memorandum summarizes the court’s reasoning which appears more completely in the transcript of that hearing. That transcript is incorporated herein by reference.

I.

The question as to whether the Viatron cases should be consolidated for trial in the District of Massachusetts was first raised by this court in a show cause order on February 14, 1980. Counsel for the plaintiffs in Sanders and Stewart favor consolidation. Defendant Arthur Andersen has argued that such a consolidation would be unauthorized and inadvisable.

The first issue concerns this court’s authority to transfer the Sanders case to this District for trial. Under the terms of the multidistrict litigation statute, 28 U.S.C. § 1407, a remand of Sanders to its original district of New York would appear to be appropriate, now that pretrial discovery has ceased. As Andersen concedes, however, the prevailing case authority squarely upholds the power of a multidistrict litigation transferee court to transfer a case to itself for trial. See, e. g., Pfizer, Inc. v. Lord, 447 F.2d 122 (2d Cir. 1971); see Weigel, The Judicial Panel on Multidistrict Litigation, Transferor Courts and Transferee Courts, 78 F.R.D. 575, 581 and nn. 42-43 (1978) (citing cases). Indeed, Rule 11(b) of the Judicial Panel expressly allows such transfers. See In re Air Crash Disaster Near Chicago, 111. on May 25, 1979, 476 F.Supp. 445, 450 (Jud.Pan.Mult.Lit. 1979) (noting that most multidistrict cases are never remanded partly because of transfers for trial ordered by transferee courts under § 1404(a)).

Andersen argues that these authorities have misconstrued the intent of Congress and have overreached the powers granted by § 1407. But this court is persuaded that the legislative history cited by Andersen does not compel a rejection of the prevailing view. As recognized by both the Second Circuit, see Pfizer, supra, at 124, and the Judicial Panel, see In re Koratron, 302 F.Supp. 239, 242 (Jud.Pan.Mult.Lit. 1969), the limitations on transfer contained in § 1407 affect only the Judicial Panel, not the transferee court. As a transferee court, this court retains the power to transfer granted to all federal district courts by 28 U.S.C. § 1404(a).2

Even assuming this court does have power to transfer Sanders to this court for trial, Andersen offers three arguments against doing so. First, Andersen contends that the added complexity of consolidation will create a serious risk of jury confusion. Second, since Sanders presents an unsettled question involving the application of New York statute of limitations and conflicts law, that case should be remanded for trial in New York. Third, Andersen disputes the plaintiffs’ assertion that the convenience of the parties and witnesses justifies transfer.

At the March 27 hearing, this court announced its intention to try both of the Viatron cases in order to spare a judge in the Southern District from having to familiarize himself with the long history and complex issues of this litigation.3 Both sides stated that they had no objection, as of now, with this court trying both cases. At issue, however, is where Sanders should be tried by me, and whether or not Sanders and Stewart should be consolidated or tried [433]*433seriatim. Neither the potential for jury confusion nor the resolution of New York law are relevant to the choice of where this court will try the Sanders case. Nevertheless, because the court also stated its present inclination to have a joint trial of the Sanders and Stewart claims against Andersen, Andersen’s arguments about jury confusion and New York law have been considered by me.

Andersen suggests that a trial of both section 11 and Rule 10b-5 claims will seriously prejudice its right to a fair jury trial because the differing standards of liability and damages of the two causes of action will lead to jury confusion. This problem would exist even without a consolidated trial, however, since the Stewart complaint alleges both section 11 and Rule 10b-5 claims. Moreover, this court is satisfied that a combination of appropriate jury instructions and carefully drafted special interrogatories will substantially reduce or eliminate the risk of jury confusion.

Andersen counters by pointing out that the Sanders complaint alleges facts and Rule 10b-5 liability theories not found in Stewart. The court is convinced, however, that the substantial factual and legal overlap in Sanders and Stewart justifies a consolidated trial.4 Failure to consolidate, on the other hand, would waste the resources of both the parties and the court in the separate trials of largely redundant cases.

On the issue of deciding questions of New York law, the court concludes that remanding Sanders to New York would accomplish nothing. First, the court has already announced its intention to try the Sanders case for the reasons described earlier. Sitting in the Foley Square courthouse will not, by itself, aid this court’s consideration of those unsettled questions. Second, any federal judge trying Sanders would be faced with the same task: predicting how the New York Court of Appeals will ultimately decide those questions. That task can only be performed by resort to the public sources of information available to all courts, regardless of their jurisdiction or location. Third, the responsibility for acquainting the court with those sources remains that of the counsel who have appeared in these cases from their beginning. See Eubank Heights Apartments, Ltd. v. Lebow, 615 F.2d 571 at 573 (1st Cir. 1980). (“It is not our primary obligation to be acquainted with Massachusetts law; counsel owe a duty to the court”) (footnote omitted).

On this issue, Andersen further argues that Van Dusen v. Barrack, 376 U.S. 612, 644-46, 84 S.Ct. 805, 823-24,11 L.Ed.2d 945 (1964), requires a remand of Sanders. Van Dusen involved the application of § 1404(a) to a diversity suit involving federal courts in Pennsylvania and Massachusetts. The Court noted the desirability of having unsettled state law ruled on by a District Court in that state.

Two crucial distinctions separate this litigation from Van Dusen. First, these cases are not before this court on diversity.

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86 F.R.D. 431, 1980 U.S. Dist. LEXIS 10856, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-viatron-computer-systems-corp-litigation-mad-1980.