Opinion
No. 145.
February 25, 1974.
Before ALFRED P. MURRAH, Chairman, and JOHN MINOR WISDOM, EDWARD WEINFELD, EDWIN A. ROBSON, WILLIAM H. BECKER, JOSEPH S. LORD, III, and STANLEY A. WEIGEL, Judges of the Panel.
OPINION AND ORDER
This litigation arises out of an intra-corporate dispute between three musicians and their manager, Terry Knight. The musicians filed an action in the Southern District of New York against Knight seeking rescission of their various business agreements and charging Knight with fraud, securities laws violations and mismanagement of the parties' corporation, Grand Funk Railroad Enterprises, Ltd. While that action was pending, the musicians embarked independently on a nationwide concert tour performing as Grand Funk Railroad, a trademark secured by the corporation. Knight concurrently brought twenty-nine trademark infringement actions around the country against the performers and local concert organizers seeking either to enjoin or recover profits from the performances.
The Panel ordered all parties to show cause why these actions should not be transferred to one district for coordinated or consolidated pretrial proceedings under 28 U.S.C. § 1407. The performers, Knight, and a few local defendants support transfer of all the actions to the Southern District of New York. On the other hand, the majority of the local municipal auditorium defendants are strongly opposed to transfer. On the basis of the pleadings filed and the hearing held, we find that transfer of these actions at this time would neither serve the convenience of the parties and witnesses nor promote the just and efficient conduct of the litigation.
The parties favoring transfer argue that the actions share common questions of fact concerning the validity and ownership of the trademark. They also assert that transfer to a single district will eliminate the possibility of inconsistent pretrial decisions on motions to stay proceedings which are pending in several of the infringement actions.
The parties opposing transfer argue that the infringement actions do not share any significant common questions of fact with each other because discovery in those actions will focus on the promotional activities which varied widely with each concert. The concert organizers also assert that they are merely third-parties to the underlying dispute between Knight and the performers. And they stress that since the original action in New York is at an advanced stage of discovery, transfer of the infringement actions may delay a decision on the underlying issue of trademark ownership.
These actions appear to contain limited common questions concerning the ownership of the Grand Funk Railroad trademark. And on its surface this litigation appears to resemble the actions in the Butterfield Patent Infringement Litigation, which we transferred to a single district for coordinated or consolidated pretrial proceedings. In re Butterfield Patent Infringement Litigation, 328 F. Supp. 513 (Jud.Pan.Mult.Lit. 1970). But there are significant distinguishable differences. In the Butterfield litigation, for example, plaintiff alleged that his patent on a corneal contact lens was being directly infringed by established rival lens producers. The present litigation, however, was spawned by an intra-corporate struggle for control; and Knight implicated the concert organizers, whose interests in the trademark were purely transitory, in an unsuccessful effort to block each concert and force the performers to recognize him as a minority shareholder. In addition, there was little, if any, discovery on the common issues in the Butterfield actions at the time of transfer; but in the present infringement actions discovery on the ownership issue is almost complete and that question is nearly ripe for decision in the original action filed in the Southern District of New York. As a result of the advanced stage of pretrial proceedings in the original action, we find that transfer of all the subsequently filed infringement actions to the Southern District of New York at this time would needlessly entangle third parties in the fundamental dispute and only tend to delay the expeditious handling of that action.
Furthermore, the Panel must weigh any benefit that transfer would provide in the way of eliminating the possibility of inconsistent pretrial decisions against the efficient administration of the litigation as a whole. It is clear that the discovery involving defendants' alleged infringement will focus on localized factual issues concerning the nature, scope, extent and effect of the alleged promotional activities. And inasmuch as the issue of trademark ownership is near the trial stage, transfer of these actions at this time will neither serve the convenience of the majority of the parties and witnesses nor promote the just and efficient conduct of the litigation. Our denial of transfer, however, is without prejudice to any party's right to renew their efforts toward coordinated or consolidated pretrial proceedings under Section 1407 if they feel future circumstances so require.
It is therefore ordered that transfer of these actions to a single district for coordinated or consolidated pretrial proceedings under 28 U.S.C. § 1407 be, and the same hereby is, denied, without prejudice to the right of any party to move for transfer at a later time.
SCHEDULE A Southern District of Alabama Eastern District of Arkansas Central District of California Northern District of California District of Colorado Southern District of Georgia Southern District of Indiana Southern District of Iowa District of Kansas District of Maryland District of Massachusetts
Terry Knight, etc. v. The City of Mobile, Alabama, Civil Action et al. No. 7522-73-H Terry Knight, etc. v. Arkansas Livestock Show Civil Action Assn., et al. No. LR73C-49 Terry Knight, etc. v. The Forum of Inglewood, Civil Action Inc., et al. No. 72-2817-MML Terry Knight, etc. v. Oakland-Alameda County Civil Action Coliseum, Inc., et al. No. 72-2179-LHB Terry Knight, etc. v. City and County of Denver, Civil Action Colorado, d/b/a Denver Coliseum, et al. No. C-4719 Terry Knight, etc. v. City of Savannah, Georgia, Civil Action et al. No. 3072 Terry Knight, etc. v. City of Evansville, et al. Civil Action No. 73-C-8 Terry Knight, etc. v. Veterans Memorial Auditorium Civil Action Commission, et al. No. 73-24-1 Terry Knight, etc. v. Wichita State University Civil Action Intercollegiate Athletic Association, Inc., et al. No. W-5061 Terry Knight, etc. v. The Mayor and City Council Civil Action of Baltimore, et al. No. 72-1242-H Terry Knight, etc. v. Boston Garden Corp., Civil Action et al. No. 72-3646-G Terry Knight, etc. v. City of Springfield, Massachusetts, Civil Action et al. No. 72-3743-G District of Nebraska District of Nevada Eastern District of New York Southern District of New York Middle District of North Carolina Western District of Oklahoma Eastern District of Pennsylvania District of Rhode Island District of South Carolina Eastern District of Tennessee Terry Knight, etc. v. City of Omaha, et al. Civil Action No. CV73-0-137 Terry Knight, etc. v. Gana Productions, Inc., Civil Action et al. No. 1954 Terry Knight, etc. v. County of Nassau, et al. Civil Action No. 72-C1629 Terry Knight, etc. v. Levinson Ross, et al. Civil Action No. 72 Civ. 3996 Terry Knight, etc. v. Madison Square Garden Civil Action Corp., et al. No. 72 Civ. 5110 Terry Knight, etc. v. American Broadcasting Civil Action Company, Inc., et al. No. 73 Civ. 346 Mark Farner, et al. v. Terry Knight, et al. Civil Action No. 72 Civ. 2026 Terry Knight, etc. v. Arlen Realty Development Civil Action Corp., et al. No. 73 Civ. 3484 Terry Knight, etc. v. City of Winston-Salem, Civil Action etc. No. C-60-WS-73 Terry Knight, etc. v. Oklahoma City Public Civil Action Property Authority, et al. No. Civ. 73-60B Terry Knight, etc. v. Spectrum Arena, Inc., et Civil Action al. No. 72-2312 Terry Knight, etc. v. Providence Civic Center Civil Action Authority, et al. No. 5076 Terry Knight, etc. v. Concept Entertainment Civil Action Industries, Inc., et al. No. 73-152 Terry Knight, etc. v. City of Knoxville, Tennessee, Civil Action et al. No. 8173 Middle District of Tennessee Western District of Tennessee Eastern District of Virginia Southern District of West Virginia Terry Knight, etc., v. James Armistead, et al. Civil Action No. 6878 Terry Knight, etc. v. City of Memphis, Tennessee, Civil Action et al. No. 73-56 Terry Knight, etc. v. City of Richmond, Virginia, Civil Action et al. No. 48-73-R Terry Knight, etc. v. National Shows, Inc., et Civil Action al. No. CH-73-CA-29