Kirschner Bros. Oil, Inc. v. Pannill

697 F. Supp. 804, 1988 U.S. Dist. LEXIS 12298, 1988 WL 112619
CourtDistrict Court, D. Delaware
DecidedOctober 24, 1988
DocketCiv. A. 88-54 (LON)
StatusPublished
Cited by22 cases

This text of 697 F. Supp. 804 (Kirschner Bros. Oil, Inc. v. Pannill) is published on Counsel Stack Legal Research, covering District Court, D. Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kirschner Bros. Oil, Inc. v. Pannill, 697 F. Supp. 804, 1988 U.S. Dist. LEXIS 12298, 1988 WL 112619 (D. Del. 1988).

Opinion

OPINION

LONGOBARDI, District Judge.

Kirschner Brothers Oil, Inc. (“Kir-schner”), as the representative of a class, has sued Pannill Knitting Co. (“Pannill”), Pannill’s directors (Messrs. Pannill, Decker, Middleton, Bennett, Butler, Wadman and Malt), Venture Lending Associates I (“Venture I”), Venture Lending Associates II (“Venture II”), Merrill Lynch Interfunding, Inc. (“Interfunding”), Merrill Lynch Capital Markets (“Merrill Lynch”) and Bear, Stearns & Co. (“Bear, Stearns”) for alleged violations of the Securities Act of 1933, 15 U.S.C. § 77k, (“ ’33 Act”) and the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), (“ ’34 Act”).

Prior to June, 1986, Pannill filed a registration statement and prospectus with the Securities and Exchange Commission for a nationwide public offering of its common stock. Complaint, Docket Item (“D.I.”) 1, ¶¶ 24, 50. The other Defendants assisted Pannill with the filing, with subsequent public representations related to the offering and with sales throughout the country. Id., If 42. The complaint alleges that Pan-nill’s offering materials and representations contained false and misleading information about Pannill’s manufacturing, distribution and expansion. Id., till 25, 33. *806 Pannill, joined by all the other Defendants, has moved under Title 28, section 1404(a) of the United States Code to transfer this case to the United States District Court for the Western District of Virginia.

Pannill is a Delaware corporation with its principal place of business in Martinsville, Virginia. Messrs. Pannill, Decker and Middleton work and reside in Martinsville. Messrs. Bennett, Butler and Wadman work and reside in New York City. Mr. Malt resides in Boston. Venture I and Venture II are Delaware limited partnerships with their principal places of business in New York City. Interfunding, Merrill Lynch and Bear, Stearns all have their principal place of business in New York City. Kir-schner’s principal place of business is in Haverford, Pennsylvania. Kirschner does not claim to be a Delaware corporation.

Under Title 28, section 1404(a) of the United States Code, the Court may transfer this case if it originally might have been brought in the Western District of Virginia, if the transfer would provide greater convenience for the parties and witnesses and if the transfer would serve the interests of justice. No party claims that this action originally could not have been brought in the Western District of Virginia. Under Title 28, section 1891(b) of the United States Code, venue is proper in the Western District of Virginia: Defendants sold stock through an allegedly misleading prospectus and made allegedly false or misleading disclosures throughout the country and in that District in claimed violation of the ’33 Act and the ’34 Act.

The moving party has the burden of showing that the convenience of the parties and witnesses favors transfer. Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3rd Cir.1970). Ordinarily, the “plaintiff’s choice of a proper forum is a paramount consideration in any determination of a transfer request.” Id. If the plaintiff chooses a forum which is not his “home turf” and which has no connection to any of the acts giving rise to the lawsuit, however, the convenience to the plaintiff of litigating in his chosen forum is not as great. This reduction in convenience lessens the defendant’s burden to show that the balance of convenience favors transfer. Pall Corp. v. Bentley Laboratories, Inc., 523 F.Supp. 450, 452 (D.Del.1981); General Instrument Corp. v. Mostek Corp., 417 F.Supp. 821, 822-23 (D.Del.1976); Burroughs Wellcome Co. v. Giant Food, Inc., 392 F.Supp. 761, 763 (D.Del.1975).

The District of Delaware is not Kir-schner’s “home turf.” This Court has defined “home turf” as “the forum closest to the [plaintiff’s] home in which [plaintiff] could effect personal service over the principal defendant.” Mayer v. Development Corporation of America, 396 F.Supp. 917, 932 n. 26 (D.Del.1975). The district closest to Kirschner’s principal place of business in Haverford, Pennsylvania, is the Eastern District of Pennsylvania. The claim could have been brought in that District because Defendants sold stock through an allegedly misleading prospectus and made allegedly false and misleading disclosures throughout the country, including the Eastern District of Pennsylvania. Kirschner’s “home turf”, therefore, is the Eastern District of Pennsylvania, not the District of Delaware. 1

Although the District of Delaware has some connection to the acts giving rise to this lawsuit by virtue of the nationwide sale of Pannill’s stock and Pannill’s public representations, none of the parties contends that any of Defendants’ actions which resulted in the alleged violations occurred in this District; no one alleges that Plaintiffs were harmed in Delaware. The District of Delaware, therefore, has no connection with this lawsuit. The absence of such a connection and the choice of a forum that is not Kirschner’s “home turf” reduce Defendants’ burden to show that transfer would result in greater convenience to the parties and witnesses.

Defendants have shown that transferring this case would favor the overall convenience of the parties and witnesses. The principal place of business of Pannill, the main Defendant, is located in Martins- *807 ville, Virginia, which is in the Western District of Virginia. Substantially all of the corporate records relevant to Pannill’s manufacturing, distribution and expansion are located in Martinsville. Affidavit of John G. Decker, D.I. 23, Exhibit A, ¶ 4. The presence of these documents within the transferee district would be of considerable convenience to Defendants during trial. In contrast, no relevant documents are located in Delaware, no witnesses reside or conduct business in Delaware and no parties conduct business in Delaware. Given this lack of connection with this State, the incorporation of some of the Defendants in Delaware is of little consequence. Kaiser Indus. Corp. v. Wheeling-Pittsburgh Steel Corp., 328 F.Supp. 365, 369 (D.Del.1971) (“mere fact that Delaware is the plaintiffs’ choice of forum and the defendant’s state of incorporation will not, standing alone, prevent this Court from transferring the suit to another forum”); Quandt v. Beech Aircraft Corporation, 317 F.Supp. 1009, 1012 (D.Del.1970) (plaintiff’s choice of forum is not controlling “when the forum chosen is only the statutory home state of the defendant corporation”).

Three key party witnesses work and reside in Martinsville. Messrs. Pannill, Decker and Middleton are directors and senior managers of Pannill. D.I. 23, Exhibit A, ¶ 10. Their personal knowledge about allegations in the complaint will be a crucial part of the trial testimony. Id. As the three top executives of Pannill, one of them will probably have to be present at the trial at all times. Because they all reside in Martinsville, id.,

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Bluebook (online)
697 F. Supp. 804, 1988 U.S. Dist. LEXIS 12298, 1988 WL 112619, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kirschner-bros-oil-inc-v-pannill-ded-1988.