IN RE: Ascot Oils, Inc., Securities Litigation

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gL PANE oy
BEFORE THE JUDICIAL PANEL MULTISSTRICT UloATion +
ON FILED ch ,
MULTIDISTRICT LITIGATION . Soo Ts
JUN	17 1977 HoT =
IN RE ASCOT OILS, INC. SECURITIES ) DOCKET NO. 28},7rp, oo :ATRICIAD. Howarp = a
LITIGATION ) CLERR OF THEPAARD ES
OPINION AND ORDER :
—_—
BEFORE JOHN MINOR WISDOM, CHAIRMAN, AND EDWARD WEINFELD, Le SRAISIREDWIN A. ROBSON, WILLIAM H. BECKER, JOSEPH S. LORD, III. Ho
STANLEY A. WEIGEL, AND ANDREW A. CAFFREY, JUDGES OF THE no. Te
PANEL So
erat) . . te - - . : )
PER CURIAM
On February 27, 1976, the Securities and Exchange
Commission (SEC) filed an action in the Western District of oo
Louisiana against Ascot Oils, Inc., four related corporations, Co
and fourteen officers and employees of the various ’ |
} iol {I
corporations. The SEC charges that the defendants violated pi
the registration and antifraud provisions of the federal S oo
securities laws concerning the offer and sale of fractional ‘
undivided working interests in oil and gas leases. Co
Subsequently, two related actions were brought by
private litigants in two federal districts: one each in the IEE
Eastern District of Louisiana and the District of Maryland. SRE
The complaint in each action basically tracks the complaint
in the SEC's action. The complaint in the District of Maryland
action also includes claims based upon violations of state oC Co CL
securities statutes, inter alia. Nine common parties are
named as defendants in each of these actions. Although the Co
complaint in the Eastern District of Louisiana action names a

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number of corporate and individual defendants not included
@ in the District of Maryland action, all these additional
defendants are allegedly related to Ascot, the primary
defendant in these actions.
The Panel issued an order to show cause why the two private
actions should not be transferred to a single district for
coordinated or consolidated pretrial proceedings pursuant
to 28 U.S.C. s1407. > only the plaintiff in the District
of Maryland action opposes transfer.
We find that these actions involve common questions of
fact and that transfer of the District of Maryland action
to the Eastern District of Louisiana for coordinated or
consolidated pretrial proceedings under Section 1407 with the
0 action pending there will best serve the convenience of the
parties and witnesses and promote the just and efficient
conduct of the litigation.
The Maryland plaintiff argues that the actual damages
sought in the Eastern District of Louisiana action are
approximately eight times greater than the losses he suffered,
and thus discovery in the District of Maryland action will
be comparatively less extensive and less costly than discovery
in the Eastern District of Louisiana action. If these
actions are transferred for Section 1407 proceedings, this
plaintiff states, he might unnecessarily become involved in
I/ All parties waived their right to oral argument and,
accordingly, this matter was submitted for decision on the
() basis of the papers filed. See Rule 14, R.P.J.P.M.L., 65F.R.D. 253, 264 (1975).

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[ costly and lengthy discovery proceedings and disputes whichhave no bearing on his action. The Maryland plaintiff also
points out that there are only two actions in this litigation,
and suggests that the parties may be able to minimize
their overall expenses and eliminate the possibility of
duplicative discovery through voluntary cooperation among
counsel, thus gaining many of the advantages of Section 1407
proceedings.
We are not persuaded by these arguments. Although our
review of the complaints in these actions reveals that the
Eastern District of Louisiana action is broader in scope
than the District of Maryland action, it is clear that the
complaints raise numerous virtually identical questions of fact
® concerning defendants' allegedly fraudulent activities. We
conclude that these common factual issues, particularly in
light of the fact that these actions share nine common
defendants, are complex enough, with the discovery so time-
consuming, as to justify transfer. Cf. In re Scotch
Whiskey Antitrust Litigation, 299 F. Supp. 543, 544 (J.P.M.L.
1969). Absent transfer under Section 1407, discovery might
be needlessly duplicated and there would be a danger of
inconsistent pretrial rulings. and while informal
coordination of discovery among parties and their counsel is
commendable in all complex litigation, transfer of these
actions to a single district pursuant to Section 1407 will
®

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[ ensure the streamlining of discovery and all other pretrial
proceedings as well. See In re Celotex Corporation
"pechnifoam" Products Liability Litigation, 68 F.R.D. 502,
504 (J.P.M.L. 1975).
We are confident that the Maryland plaintiff will
experience a net savings of time, effort and expenses by
Section 1407 treatment and the accompanying utilization of
techniques recommended in the Manual for Complex Litigation.
For example, since plaintiff shares a common interest with
the plaintiffs in the Eastern District of Louisiana action
in establishing the liability of the nine common defendants,
plaintiffs can pool their efforts through the judicious
use of lead counsel and liaison counsel. See Manual for
® Complex Litigation, Part I, §§1.90 - 1.93 (rev. ed. 1973).
Moreover, the transferee judge may in his discretion take
appropriate steps to minimize the expenses of any litigant
who does not want to participate in pretrial proceedings
which he believes will not affect his interests. See, e.9.,
id. at part I, §2.31.
The Eastern District of Louisiana is clearly the more
appropriate transferee district. Plaintiffs in the Eastern
District of Louisiana action and all responding defendants,
including four common defendants, favor transfer to that
district. Moreover, eight of the nine common defendants
reside or are headquartered in Louisiana, and thus many of the
®

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-5~
® relevant documents and witnesses presumably are located
there. See In re Caesar's Palace Securities Litigation,
385 F. Supp. 1256, 1258 (J.P.M.L. 1974).
IT IS THEREFORE ORDERED that the action listed on the
following Schedule A and pending in the District of Maryland
be, and the same hereby is, transferred to the Eastern
District of Louisiana and, with the consent of that court,
assigned to the Honorable Jack M. Gordon for coordinated
or consolidated pretrial proceedings, pursuant to 28 U.S.C.
§1407, with the action pending in that district and listed
on Schedule A.
®
®

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SCHEDULE A
DOCKET NO. 281
EASTERN DISTRICT OF LOUISIANA .
Nathan L. Miller, et al. v. Ascot 0Q0ils, Inc., Civil Action
et al. - No. 76-2808
DISTRICT OF MARYLAND
Robert Austin Milch v. Ascot Oils, Inc., Civil Action
et al. No. 76-924