Opinion
No. 350.
September 8, 1978.
OPINION AND ORDER
In October 1974, a federal grand jury sitting in the Southern District of New York handed down an indictment against Saks Company, Genesco, Inc. (d/b/a Bonwit Teller), Bergdorf Goodman, Inc. and two individuals. The indictment charged that defendants, in violation of Section 1 of the Sherman Act, conspired to fix the retail price of women's outer clothing in the New York City metropolitan area. The Government also filed a companion civil action in the Southern District of New York against the three corporate defendants. The criminal defendants all pleaded nolo contendere and paid fines imposed by the district court. A consent decree was entered against the defendants in the Government's civil action in June 1977.
Soon after the indictment was handed down, seven private actions involving allegations similar to those in the indictment were filed in the Southern District of New York. The district court in these actions certified a class consisting of certain New York City area customers of the corporate defendants indicted by the Government. See Dennis v. Saks Co., et al., 1975-2 CCH Trade Cases ¶ 60,396 (S.D.N.Y. 1975). A settlement in these actions has been approved by the court.
Presently before the Panel are seven other private actions pending in three federal districts: three in the Northern District of Illinois, three in the Eastern District of Pennsylvania, and one in the Southern District of New York.
An eighth apparently related action has been filed by a private party in the District of Massachusetts. While the plaintiff in this action has informed the Panel by letter that she opposes transfer of her action under 28 U.S.C. § 1407, this action came to the attention of the Panel too late to be included in the Panel's hearing on this matter. Because of our disposition of the motion now before us, no further action will be taken at this time concerning this Massachusetts action.
The three corporations indicted by the Government are named as defendants in each of the seven actions before the Panel. No other defendants are involved in these actions. The complaints in the actions under consideration by the Panel, except for the market areas involved therein, track the Government's allegations, and basically allege that, beginning at least as early as the mid or late 1960's, the defendants and various unnamed co-conspirators have conspired, in violation of Section 1 of the Sherman Act, to fix the price of women's clothing. The complaints in the Illinois and Pennsylvania actions and the complaint in the New York action allege that defendants' conspiratorial conduct affected the price of women's clothing purchased by defendants' charge account customers residing in, respectively, 1) the Chicago area, 2) the Philadelphia area, and 3) the State of New York (excluding the New York City area) or the District of Columbia.
The complaints define "women's clothing" as "ready to wear items of women's outerwear, such as dresses, suits and coats, excluding shoes, millinery and accessories."
Each of the seven actions was filed as a purported class action. In the Pennsylvania actions, which have been consolidated for all purposes, the court has certified a class of all charge account customers of the defendants who have billing addresses in Delaware or specified Pennsylvania and New Jersey counties located in the Philadelphia area, and who have purchased a specified amount of women's clothing from defendants' stores located in the Philadelphia and New York City areas. See Axelrod v. Saks Co., 77 F.R.D. 441 (E.D.Pa. 1978). In the New York action, the court has certified a class of all charge account customers of the defendants with billing addresses in the District of Columbia or the State of New York (except members of the class certified in Dennis, supra, 1975-2 CCH Trade Cases ¶ 60,396) who have purchased a specified amount of women's apparel from defendants' stores located in the New York City area. See Kromer v. Saks Co., et al., 1977-2 CCH Trade Cases ¶ 61,771 (S.D.N.Y. 1977). Plaintiffs in the Illinois actions seek to represent charge account customers of the defendants residing in the Chicago metropolitan area who have purchased a specified amount of women's clothing from defendants' stores located in that area. Two of the three Illinois actions have been consolidated for all purposes. A motion by defendants to consolidate the third, relatively recently filed Illinois action with these two actions is presently pending.
Substantial discovery has already taken place in most of the actions before the Panel. For example, counsel for all parties in the Pennsylvania actions and in the New York action have arranged, without the need for judicial involvement, for the voluntary production by defendants of all documents produced by defendants in Dennis, supra, and many of these documents have also been provided to plaintiffs in the Illinois actions. In addition, most parties in these actions have already responded to interrogatories. Finally, numerous discovery motions are sub judice in the Eastern District of Pennsylvania.
These seven actions are before the Panel on the motion of plaintiffs in two of the three Illinois actions for transfer, pursuant to 28 U.S.C. § 1407, of the seven actions to a single district for coordinated or consolidated pretrial proceedings. Movants have not suggested a transferee district. Plaintiffs in the remaining five actions, as well as all three defendants, oppose Section 1407 transfer of these actions.
We conclude that transfer under Section 1407 would not necessarily serve the convenience of the parties and witnesses or promote the just and efficient conduct of this litigation. Accordingly, we deny the motion to transfer.
While movants acknowledge that there may be some unique factual issues involved in, respectively, the Philadelphia, Chicago and New York actions because of the local markets and different classes involved in those actions, movants argue that common questions of fact clearly predominate in this litigation. In each action, movants contend, plaintiffs will seek discovery from a "common core" of the defendants' headquarters' personnel concerning, inter alia, meetings of a New York "trade association or meeting group" that was apparently a co-conspirator; policy and pricing responsibilities and determinations; contacts with competitors; and communications with manufacturers and other third parties. In addition, movants assert, many other identical witnesses may be involved in each action, and there will be duplicative requests for access to grand jury materials located in New York. Thus, movants argue, Section 1407 proceedings are necessary in this litigation to avoid duplication of discovery, prevent conflicting pretrial rulings, and conserve the efforts of the parties and the judiciary.
While we agree that these actions involve significant common questions of fact regarding alleged corporate policy decisions made by defendants' top managerial personnel, and that the presence of these issues commends Section 1407 transfer, on balance we are persuaded that this factor is outweighed by the advanced stage of pretrial proceedings in these actions, particularly the Pennsylvania and New York actions. For example, classes have been certified in the Pennsylvania and New York actions and plaintiffs in those actions emphasize that they have reviewed thousands of documents voluntarily produced by the defendants. Inclusion of the actions now before us in coordinated or consolidated pretrial proceedings would, we are convinced, disrupt the orderly progress which is being made in the Pennsylvania and New York actions and would result in no overriding benefits to the litigation as a whole. See In re Photocopy Paper, 305 F. Supp. 60, 61-62 (Jud.Pan.Mult.Lit. 1969). Several other factors also help tip the scales against transfer in the context of this particular litigation: (1) because the three Pennsylvania actions and two of the three Illinois actions have already been consolidated for all purposes in their respective districts, only a relatively small number of actions are actually before the Panel; (2) the classes already certified or sought in each respective district do not overlap; (3) all parties except the moving plaintiffs in two Illinois actions oppose transfer; (4) at the Panel hearing on this matter, defendants offered to stipulate that the depositions of their top management witnesses may be used in each action; and (5) most of the parties have otherwise already demonstrated their willingness voluntarily to cooperate in the elimination of duplicative discovery.
In addition, we note that notices of a particular deposition could be filed in every action, thereby making the deposition applicable in each action; the parties could seek to agree upon a stipulation that any discovery relevant to actions in more than one district may be used in those actions; and any party could seek orders from the three district courts directing the parties to coordinate their pretrial efforts. See In re Commercial Lighting Products, Inc. Contract Litigation, 415 F. Supp. 392, 393 (Jud. Pan.Mult.Lit. 1976). See also Manual for Complex Litigation, Parts I and II, § 3.11 (rev. ed. 1977). Also, consultation and cooperation among the three concerned district courts, if deemed appropriate by those courts, coupled with the cooperation of the parties, would minimize the possibility of conflicting pretrial rulings. See In re Raymond Lee Organization Inc. Securities Litigation, 446 F. Supp. 1266, 1268 (Jud.Pan. Mult.Lit. 1978).
IT IS THEREFORE ORDERED that the motion pursuant to 28 U.S.C. § 1407 to transfer the actions listed on the following Schedule A be, and the same hereby is, DENIED, without prejudice to the right of any party to seek transfer under Section 1407 if a significant change of circumstances occurs.
DOCKET NO. 350
Schedule A
Northern District of Illinois Civil Action No .
Marietta Bratta, et al. v. Saks Co., 74C-3513 et al.
Ruth Rosin, et al. v. Saks Co., et al. 76C-3662
Roslyn L. Tabloff, et al. v. Saks 77C-4309 Co., et al.Southern District of New York
Sarel Kromer v. Saks Co., et al. 77-Civ. 2914
Eastern District of Pennsylvania
J. Axelrod, et al. v. Saks Co., et al. 76C-3805
Mitzi Adis, et al. v. Saks Co., et al. 76-4011
Lois Squires v. Saks Co., et al. 77-172