IN RE: Cessna Aircraft Distributorship Antitrust Litigation

Case MDL No. 123 Document 2 Filed 04/30/15 Page 1 of 14
EE ar TALPA o AY SEBEFORE THE JUDICIAL PANEL i REA - RE
MULTIDISTRICT LITIGATION HRY	21 1973 Lo EERE
IN RE CESSNA AIRCRAFT DISTRIBU~- ) SAT ay ER Co
TORSHIP ANTITRUST LITIGATION ) DOCKET“NO. 123.7 oo
OPINION AND ORDER 3% :
BEFORE ALFRED P. MURRAH, CHAIRMAN, AND JOHN MINOR WISDOM*, E BE -
EDWARD WEINFELD, EDWIN A. ROBSON, WILLIAM H. BECKER, CEL oo
JOSEPH S. LORD, III*, AND STANLEY A. WEIGEL, JUDGES OF THE PANEL : Ea
PER CURIAM ~
This litigation consists of three actions pending in
federal court in either Kansas City, Kansas, or across the Missouri
River in Kansas City, Missouri. White Industries, a party to all a
three actions, moves the Panel for an order transferring the oo
Kansas action under 28 U.S.C. §1407 to the Western District of
Missouri for coordinated or consolidated pretrial proceedings.
We find, and all parties generally agree, that these actions involve
common questions of fact and that transfer of the Kansas action
to the Western District of Missouri for coordinated or consolidated
pretrial proceedings pursuant to Section 1407 will serve the
convenience of the parties and witnesses and will promote the just
and efficient conduct of the litigation. |
Plaintiff White Industries has brought actions against
Cessna Aircraft in the District of Kansas and the Western District R
of Missouri on behalf of a class of Cessna aircraft dealers in :
the United States, alleging violations of the Robinson-Patman Act
*Although Judges Wisdom and Lord were unable to attend the } :
Panel hearing, they have, with the consent of all parties,
participated in this decision. h

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and Section 1 of the Sherman Act. Also pending in the Western
District of Missouri is an action brought by Cessna Finance
Corporation against White Industries and its chief executive
officer seeking payment on certain notes and security agreements
executed by defendants in favor of Cessna Finance. In that action,
defendant White Industries has counterclaimed against Cessna Finance
and filed a third-party complaint against Cessna Aircraft, alleging
violations of the federal antitrust laws similar to those asserted
by White Industries in the two class action suits.
All parties agree that White Industries' antitrust claims
are appropriate for coordinated or consolidated pretrial proceed-
[ ings pursuant to Section 1407. And we find that such proceedings
will insure that duplication of common discovery and inconsiszent
class determinations are prevented. In re Career Academy Ant:-
trust Litigation, 342 F. Supp. 753,754 (J.P.M.L. 1972).
Because the federal courts wherein these actions are
pending are within a short driving. distance of each other, the
selection of either court as the transferee forum for this litigation
willl not inconvenience any of the parties. The parties, however,
prefer the Western District of Missouri as the transferee forum
and the Honorable William H. Becker of that district has agrezd
to serve as the transferee judge for this litigation. We fing,
therefore that the action pending in the District of Kansas
iwust be transferred under Section 1407 to the Western Districc
® of Missouri and with the consent of that court assigned to
Judge Becker.

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Cessna Finance, however, objects to having its claim
against White Industries, which is based on contractual obligations,
included in the coordinated or consolidated pretrial proceedings.
Also, Cessna Finance has moved the Missouri court pursuant to
Rule 42, Fed. R. Civ. P., to sever all allegations in White
Industries' counterclaim and third-party complaint alleging viola-
tions of the federal antitrust laws and consolidate them with
the White Industries action against Cessna Aircraft pending in
the Western District of Missouri.
Inasmuch as both Missouri actions are already pending
® in the transferee district and assigned to Judge Becker for all
purposes, the guestion of whether Cessna Finance's contract claim
should be included in the coordinated or consolidated pretrial
proceedings should be decided by the transferee court. In re
Convenient Food Mart Franchise Litigation, 350 F. Supp. 1166,
1168 (J.P.M.L. 1972). Furthermore, Cessna Finance's Rule 42
motion is a pretrial motion and may be properly addressed to
the transferee judge for resolution.
IT IS THEREFORE ORDERED that the action listed on
the attached Schedule A and pending in the District of Kansas
be, and the same hereby is, transferred to the Western District
of Missouri and, with the consent of that court, assigned to
the Honorable William H. Becker for coordinated or consolidated
@ pretrial proceedings pursuant to 28 U.S.C. §1407 with the actions
pending in that district.

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®o SCHEDULE A DOCKET NO. 123
DISTRICT OF KANSAS
White Industries, Inc. v. Delbert L. Civil Action
Roskam, et al. No. KC 3518
WESTERN DISTRICT OF MISSOURI
White Industries, Inc. v. The Cessna Civil Action
Aircraft Co. No. 20245-4
Cessna Finance Corp. v. White Civil Action
Industries, Inc., et al. No. 19925-4

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JUDICIAL PANEL On
FULTIZISTRICT LITIGATION
FLED
3EFORE THE JUDICIAL PAJEL YAY Te a70
0d aun 2 Er
JULTIDISTRICT LITIGATION BATE Rs	! lebih Ln LEE PSAP
GLEN	OF THE pam
I0 i CISS5JA AIRCRAFT DISTRIZUTORSAHLI? ) DUCKETT 40. 123 SEH
AdTITRYST LITIGATION )
The Cessna Aircraft Co. v. Skyways, Inc.)
et al., D.Kansas, C.A, No. 76-109~-6C 3
OPINION AdD ORDLR
BEFORE JOHN MINOR WISDOM, CHAIRMAN, AND EDVARD WEINFELD,
EDWIN A. ROBSON, STANLEY A. WEIGEL, ANDREW A. CAFFREY,* AND
R0Y ©. HARPER, JUDGES OF THE PANEL.
PER CURIAM
Tn lav 1972, pursuant fo Zo 1.8.0, S1a07, he Panel ceniral-
ized three actions (vDL-123 actions) in this litigation
CB the Western District of Hissouri before the HonorableWilliam H. Becker. In re Cessna Aircraft Distributorship
Antitrust Litigation, 359 F.Supp. 543 (J.P.M.L. 1973). The
MDL-123 actions were each filed in earlv 1972.
White Industries, Inc. (White) filed two of the MDL-123
actions on behalf of a nationwide class of retail dealers
of The Cessna Aircraft Co. (Cessna). In 1974 Judge Becker
issued an order certifying two nationwide classes of Cessna
dealers from January 1, 1960 to April 14, 1963 and from April
14, 196% to June 5, 1974, respectively.t/ The complaints
* Judge Catflirey was unable to attend the hearing in this
matter but has, with the consent of all parties, participated
in this decision on the basis of the pleadings and the transcript
of the hearing.
@- About a year later the Court of Appeals for the EighthCircuit held that this order was not appealable. In re Cessna
Aircraft Distributorship Antitrust Litigation, 518 F.2d 213
(8th Cir.), cert. Tented 475 0.8. 947 (197%).

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: CUDICHAL PANEL on
MULTIVISTRICT LITIGATION
® SEIEFOE THE JUDICIAL PAJAL i
IEFOE TH ny Hoy ie 1°79
AJUTIDISTRICT LITIGATION BATHION TL ny	M EASTFE TEVN ed
rn CLERK	OF The poor
Id Ri CISS3JA AIRCRAFT DISTRIZUTORSHIP ) DOCKET G0. 12370 dedi
ANTITRUST LITIGATION )
The Cessna Aircraft Co. v. Skyways, Inc.)
et al., D.Kansas, C.A, No, 76-109-6C 1}
OPINIOS AND ORDER
BEFORE JOHN MINOR WISDOM, CHAIRMAN, AND EDWARD WEINFELD,
EDWIN A. ROBSON, STANLEY A. UEIGEL, ANDREW A. CAFFREY,* AND
R0Y W. HARPER, JUDGES OF THE PANEL.
PER CURIAM
In ltav 1272, pursuant to Zo UL8.C. [LEUT, the Parmel cenfral-
ized Chree actions (DL-123 actions) in this litigation
@- the Western District of Hissouri before the HonorableWilliam H. Becker. In re Cessna Aircraft Distributorship
Antitrust Litigation, 359 F.Supp. 543 (J.P.M.L. 1973). The
MDL-123 actions were each filed in earlv 1972.
White Industries, Inc. (White) filed two of the MDL-123
actions on behalf of a nationwide class of retail dealers
of The Cessna Aircraft Co. (Cessna). In 1974 Judge Becker
issued an order certifying two nationwide classes of Cessna
dealers from January 1, 1960 to April 14, 1968 and from April
14, 1968 to June 5, 1974, respectively.l/ The complaints
* Judge Caffrey was unable to attend the hearing in this
matter but has, with the consent of all parties, participated
in this decision on the basis of the pleadings and the transcript
of the hearing.
@: About a year later the Court of Appeals for the EighthCircuit held that this order was not appealable. In re Cessna
Aircraft Distributorship Antitrust Litigation, 318 F.2d 213
(8th Cir.), cert. Jerio 473 0.5. 947 (19735).

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in both actions allege, generally, that Cessna's dual pricing Csystem constitutes discriminatory pricing prohibited by the
Robinson-Patman Act, that receipt of such discriminatory
prices by Cessna distributors is unlawful under the Robinson-
Patman Act, and that Cessna, Cessna distributors and certain
individuals conspired in violation of Section I of tie Sherman
. Act to eliminate competition by "hite and other Cessna dealers
with Cessna distributors. Cessna and certain Cessna distributors
are defendants in one of these actions. Other Cessna distrib-
utors are defendants in the second action. Cessna officers
and Cessna affiliates are defendants in both actions. On
september 10, 1975, after “'hite, as class renrasentative,
and the distributor defendants had entered into settlement
agreements, Cessna and certain of its officers and affiliates Csought leave to file a cross-claim against most of the distrib-
utors in the Western District of Missouri. The cross-claim
alleged that 1) sixteen individuals and/or distributors knowingly
induced and received discriminatory price treatment from
Cessna in violation of the Robinson-Patman Act; 2) the cross-claim
defendants breached distributorship contracts by falsely
reporting that all sales made by the cross-claim defendants
were made only to authorized Cessna dealers; and 3) cross-claimants
were entitled to indemnification from cross-claim defendants for
any antitrust liability of the cross-claimants arising from cross-
claim defendants' sales to other than Cessna dealers. Judge
Becker denied leave to file the crossclaim.2/ On June 8,
27 Judge	3ecker's	ruling was affirmed by the Court of Appeals ®for the £ighth Circuit. In re Cessna Distributorship Antitrust
Litigation, 532 F.2d 64 (8th Cir. 197/60.

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® 1976, Judge Becker approved the class settlements with the :
distributors and dismissed the actions against the distributor
defendants.
The third MDL-123 action was brought by Cessna Finance
Corporation (Cessna Finance) against White. Cessna Finance
alleges that White and its chief executive officer executed
certain notes and security agreements in favor of Cessna
Finance and that defendant White has failed to make the required
payments. In response to the complaint, White filed a counter-
claim against Cessna Finance and a third-party complaint
against Cessna alleging violations of the federal antitrust
laws similar to the allegations in the two above-mentioned
actions.
® The above-captioned action (Skyways) was brought in the
District of Kansas on March 6, 1976, by Cessna and certain
of its officers and affiliates (the Cessna parties) against
the same sixteen individuals and/or distributors who were
the subject of the disallowed cross-claim in Judge Becker's
court. The allegations of the complaint track the allegations
in the cross-claim. On May 2, 1978, the Honorable Frank G. Theis
dismissed the Cessna parties' Robinson-Patman Act claim,
holding, inter alia, that the Cessna parties did not have
standing to sue. He also dismissed the indemnification claim,
holding, inter alia, that the Cessna parties could not assert
a claim for indemnification until a judgment had been entered
against them. Judge Theis ruled that the breach of contract
®

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claim stated a cause of action, pending further resolution
of statute of limitations and fraudulent concealment issues.
Pursuant to 23 U.S.C. §1407, the Cessna narties move
the Panel to transfer Skywavs to the Western District of
Missouri for coordinated or consolidated nretrial oroceedingzs
with the MDL-123 actions pending there. White and defendants
in Skyways oppose transfer.
We conclude that transfer of Skyways under Section 1407
would not necessarily serve the convenience of the parties
and witnesses or promote the just and efficient conduct of
this litigation and, accordinzlv, we deny the motion to transfer
Skyways. B
The Cessna parties argue that Skyways and the MDL-123 C
actions share questions of fact and that transfer of Skyways |
is thus necessary to prevent duplicative discovery, avoid
inconsistent pretrial rulings, and render more manageable
the handling of the claims in Skyways. While we recognize
the existence of common questions of fact between Skyways
and the MDL-123 actions, a mere showing that such questions
exist is not sufficient, in and of itself, to warrant transfer
by the Panel.
As a result of the unique history of this docket,the
Panel is now presented with a situation in which the transferee
judge has already formally ruled upon the appropriateness
of inclusion in the litigation in the transferee district
of the very claims now raised by the Cessna parties in Skyways. C

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@.. Judge Becker denied leave to file the cross-claim in .
the MDL-123 actions, he found that permitting such leave
would result in "untimeliness and prejudice as a matter of
faced’ to the distributors and the other parties in the
litigation. The Panel has long recognized that the successful
use of Section 1407 can only occur in an atmosphere of trust,
confidence, comity and good will among the district courts
and the Panel. See In re Plumbing Fixtures Antitrust Litigation, 0
298 F.Supp. 484, 496 (J.P.M.L. 1968). In light of Judge Becker's H
ruling, we find that transfer of Skyways under Section 1407
would undercut that atmosphere in the context of this docket.
As transferee judge, Judge Becker has a special vantage point
with respect to the conduct of coordinated or consolidated
@.. . proceedings, and we give great weight to his determina-
tion that inclusion of the Skyways claims in the litigation
in the transferee district would be contrary to the interests
of justice.
Furthermore, we note that the actions in the transferee
district have been pending for more than six years, that
the Cessna parties delayed asserting their cross-claim in
the transferee district for three years, and that the Cessna
parties have now waited for more than two years after the
filing of Skyways to move for transfer of Skyways under Section
1407. Under these circumstances, we cannot conclude that
the Cessna parties have met their burden of persuading us
that transfer of Skyways would promote the just and efficient
@... of this litigation.37Transcript	of Proceedings before the Honorable William H.
Becker, Report of Pretrial Conference, Sept. 10, 1975, p.

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IT IS THEREFORE ORDERED that the motion to transfer the
action entitled The Cessna Aircraft Co. v. Skyways, Inc.,
et al., D. Kansas, C.A. No. 76-109-6C, be, and the same hereby
is, DENIED.
ANDREW A. CAFFREY AND ROY W. HARPER, JUDGES OF THE PANEL,
dissent from this opinion.

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Ta :
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.” The Ward plaintiffs had
opted out of the settling class and currently are prosecuting
their action solely against defendants not included in the
settlement.
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
1/	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
C affirmed the settlement. Marshall v. Holiday Magic, Inc., 550	F.2d 1173 (9th cir. 1977).

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¢
® action in this litigation actively being prosecuted in thetransferee 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. y
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 1l(¢), 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,
394 F. Supp. 796, 797 (J.P.M.L. 1975). The transferee judge's
notice of suggestion of remand to the Panel is cbviously 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 (J.P.M.L. 1975). Absent
a notice of suggestion of remand from the transferee judge to
the Panel, any party advocating remand before the Panel bears
2/ 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 tonarrow the class on whose behalf Ward is brought.

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“+, strong burden of persuasion. We rule that movants have not
°o 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 noz the inclination to review decisions
9 of district courts, whether they are transferor or
transferee courts. See In re Molinaro/Catanzaro Patent
Litigation, 402 F. Supp. 1404, 1406 (J.P.M.L. 1975); In re
Glenn W. Turner Enterprises Litigation, 368 F. Supp. 805, 806
(J.P.M.L. 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. §1407 be,
and the same hereby is, DENIED.
@