In re Holiday Magic Securities and Antitrust Litigation (433 F. Supp. 1125)

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433 F.Supp. 1125, Fed. Sec. L. Rep. P 96,116, 1977-2 Trade Cases P 61,630

Judicial Panel on Multidistrict Litigation.
James J. Ward, et al. v. Holiday Magic, Inc., et al.,
N.D. California,
Civil Action No. C-74-1067-LHB.
No. 124.
July 6, 1977.

Plaintiffs in an action which had been consolidated with others under rules relating to multidistrict litigation moved for remand to the transferor court. The Judicial Panel on Multidistrict Litigation held that remand was not indicated. Motion denied.

Plaintiffs in action which had been consolidated with others under rules relating to multidistrict litigation failed to provide adequate support for their motion to have the case remanded to transferor court.


FN* Judges Becker and Lord took no part in the consideration or decision of this matter.



The Panel previously transferred all actions in this litigation to the Northern District of California and, with the consent of that court, assigned them to the Honorable Lloyd H. Burke for coordinated or consolidated pretrial proceedings pursuant to 28 U.S.C. s 1407. In re Holiday Magic Securities and Antitrust Litigation, 368 F.Supp. 806 (Jud.Pan.Mult.Lit.1973); 372 F.Supp. 1167 (Jud.Pan.Mult.Lit.1974); 375 F.Supp. 1400 (Jud.Pan.Mult.Lit.1974); 384 F.Supp. 1403 (Jud.Pan.Mult.Lit.1974). Plaintiffs in the Ward action have moved the Panel for an order remanding Ward to its transferor court, the Northern District of Illinois. Several defendants in Ward oppose remand.

In March 1974, Judge Burke established a class composed of all persons who had purchased Holiday Magic distributorships or securities of any of the Holiday Magic companies. Two months later, Judge Burke approved a settlement between certain corporate, estate, trust and individual defendants and all members of that class. [FN1] The Ward plaintiffs had opted out of the settling class and currently are prosecuting their action solely against defendants not included in the settlement.

FN1. Plaintiffs in Ward, as well as the defendants in one other action, appealed the court-approved class action settlement to the United States Court of Appeals for the Ninth Circuit. The Ward plaintiffs subsequently withdrew their appeal, and in the other appeal the Court of Appeals for the Ninth Circuit recently affirmed the settlement. Marshall v. Holiday Magic, Inc., 550 F.2d 1173 (9th Cir. 1977).

Although in actions other than Ward several non-settling claims are still pending before Judge Burke, according to the parties' statements in the record before us there has been little or no activity regarding these claims because of, inter alia, the appeal of the class settlement. In addition, the Holiday Magic companies are involved in bankruptcy proceedings in the Northern District of California, and all actions against those companies have been stayed by order of the bankruptcy court. Plaintiffs in Ward concede that there has been only limited discovery in Ward and that pretrial proceedings are not complete in that action. Nevertheless, they argue, remand is appropriate at this time because Ward is the only action in this litigation actively being prosecuted in the transferee district. These plaintiffs also maintain that they will be prejudiced by continued participation in pretrial proceedings in the transferee district because of certain pretrial rulings made by Judge Burke. [FN2]

FN2. Judge Burke has ruled that some named plaintiffs in Ward, residents of Illinois, must give their depositions in the Northern District of California. In addition, Judge Burke denied without prejudice the Ward plaintiffs' motion for leave to file a second amended complaint which sought to change certain allegations to conform to discovery and to narrow the class on whose behalf Ward is brought.

The Panel's Rules of Procedure provide that the Panel shall consider the question of remand on the motion of any party, on the suggestion of the transferee court or on the Panel's own initiative. Rule 11(c), R.P.J.P.M.L., 65 F.R.D. 253, 261 (1975). In considering the question of remand, the Panel has consistently given great weight to the transferee judge's determination that remand of a particular action at a particular time is appropriate because the transferee judge, after all, supervises the day-to-day pretrial proceedings. See, e. g., In re IBM Peripheral EDP Devices Antitrust Litigation, 407 F.Supp. 254, 256 (Jud.Pan.Mult.Lit.1976). The transferee judge's notice of suggestion of remand to the Panel is obviously an indication that he perceives his role under Section 1407 to have ended. In re Air Crash Disaster Near Dayton, Ohio, on March 9, 1967, 386 F.Supp. 908, 909 (Jud.Pan.Mult.Lit.1975). Absent a notice of suggestion of remand from the transferee judge to the Panel, any party advocating remand before the Panel bears a strong burden of persuasion. We rule that movants have not met this burden here and that the motion for remand is premature. Judge Burke has become thoroughly familiar with the issues in this entire litigation and is in the best position to determine the future course of Ward and the non-settling claims in other actions in the transferee district in relation to each other, in relation to the recently affirmed class action settlement, and in relation to the bankruptcy proceedings. Plaintiffs' apparent dissatisfaction with some of Judge Burke's pretrial rulings is clearly not a factor to be taken into consideration by the Panel in exercising its discretion under Section 1407. The Panel has neither the statutory authority nor the inclination to review decisions of district courts, whether they are transferor or transferee courts. See In re Molinaro/Catanzaro Patent Litigation, 402 F.Supp. 1404, 1406 (Jud.Pan.Mult.Lit.1975); In re Glenn W. Turner Enterprises Litigation, 368 F.Supp. 805, 806 (Jud.Pan.Mult.Lit.1973).

IT IS THEREFORE ORDERED that the motion for remand of the action entitled James J. Ward, et al. v. Holiday Magic, Inc., et al., N.D.California, Civil Action No. C-74-1067-LHB, to the Northern District of Illinois pursuant to 28 U.S.C. s 1407 be, and the same hereby is, DENIED. Jud.Pan.Mult.Lit. 1977

In re Holiday Magic Securities and Antitrust Litigation 433 F.Supp. 1125, Fed. Sec. L. Rep. P 96,116, 1977-2 Trade Cases P 61,630


This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).

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