IN RE: Hawaiian Hotel Room Rate Antitrust Litigation

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BEFORE THE JUDICIAL PANEL CN Ee
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MULTIDISTRICT LITIGATION SLB Cn : A
| sho en V7) ooIN RE HAWAIIAN HOTEL ROOM RATE ) DOCKET NO. 3903 a . J.
ANTITRUST LITIGATION ) n oo
OPINION AND ORDER
BEFORE JOHN MINOR WISDOM, CHAIRMAN, AND EDWARD WEINFELD, a.
EDWIN A. ROBSON, JOSEPH S. LORD, III, STANLEY A. WEIGEL%*, . So
ANDREW A. CAFFREY, AND ROY W. HARPER, JUDGES OF THE PANEL Co
PER CURIAM oo | |
Following a federal grand jury investigation of the
Hawaiian hotel industry, an indictment was filed in the Co
District of Hawaii on November 17, 1976, against a hotel
trade association and several companies engaged in the hotel Co
business in Hawaii. A companion Government civil enforcement
action, naming the trade association, four of the indicted
hotel ccmpanies and three unindicted hotel companies, was
also filed. In both actions the Gevernment alleged that the
defendants and unnamed co-conspirators violatasd the federal
antitrust laws by conspiring to fix and maintain (i) hotel room
rates in Hawaii and (ii) commissions and concessicns granted to } - -
travel agents and tour operators in connection with the
booking of rocms in defendants’ hotels. The Government's
criminal action apparently was concluded cn May 10, 1977,
following nolo contendere pleas by the defendants. :
*Judge Weigel recused himself and took no part in the con- =
sideration or decision of this matter.

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’'Y After the Government actions were instituted, five
private actions were filed in five federal districts:
the District of Hawaii, the Northern District of California,
the Central District of California, the Northern District
of Illinois and the Eastern District of New York. The
seven hotel company defendants in the Government civil
action are named as defendants in each of the five private
actions. The New York action also includes certain tour
operators as defendants. All five of the private actions
are brought as class actions,	and the complaint in each
action tracks some or all of the allegations in the Govern-
ment actions. Plaintiffs in the Hawaii and Illinois actions
charge defendants with fixing room rates. These plaintiffs
® generally seek to represent all persons who since January 1,
1973, have paid $250 or more for the use of rooms at any
hotel operated	by the defendants in Hawaii. Plaintiffs in
each of the two California actions allege that defendants
fixed travel agent commissions and concessions. These
plaintiffs generally seek to represent all persons whc under-
took to secure purchasers for the use of defendants' hotel
rooms in Hawaii. Plaintiffs in the New York action incorporate
both the room rate and travel agent claims in their complaint,
and they seek to represent all persons who since 1966 pur-
chased a prepaid package tour of Hawaii and stayed in a hotel
managed by defendants. |
®

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The seven defendants common to the five private actions
® move the Panel for an order pursuant to 28 U.S.C. §1407
transferring the four actions pending in districts other than
the District of Hawaii to that district for coordinated or
consolidated pretrial proceedings with the private action
pending there. All parties agree on the desirability of
transferring these five actions to a single district for
pretrial, but plaintiffs in the five actions urge that the
central District of california, rather than the District of
Hawaii, be selected as the transferee forum. we find that
the private actions involve common questions of fact and
that their transfer to the District of Hawaii under section
1407 will best serve the convenience of the parties and wit-
® nesses and promote the just and efficient conduct of thislitigation.
As is often true in multidistrict antitrust litigation,
the private actions raise common questions of fact concerning
the existence, Scope and effect of the alleged conspiracy.
and therefore transfer is necessary in order to prevent
duplication of discovery, eliminate the possibility of in-
consistent pretrial rulings, and streamline the rest of the
pretrial proceedings as well. See, £:.9-- In re Beef Industry
Antitrust Litigation, 419 F. Supp. 720. 721 (J.P.M.L. 1976) .
section 1407 centralization is especially important to ensure
consistent treatment of the class action issues. See In IE
Folding Carton Antitrust Litigation, 415 F. Supp. 384, 386
® (J.P.M.L. 1976) .

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® The major arguments raised by plaintiffs in favor of
the Central District of California as the transferee forum
are that California is the geographic center of the
litigation, that the named plaintiffs and the great
majority of the putative class members reside in the
continental United States, and that travel to Hawaii would
render the litigation more time consuming and expensive.
On balance, however, we are of the view that the
District of Hawaii 1s the preferable transferee forum.
The familiarity with this litigation that the Honorable
Samuel P. King has developed as a result of presiding over
the grand jury proceedings and the Government criminal and
civil actions is an important factor favoring the District
® of Hawaii. See In re South Central States Bakery Products
Antitrust Litigation, _ _ F. Supp. ____, ____ (J.P.M.L.,
filed July 11, 1977) (slip opinion at 8); In re Griseofulvin
Antitrust Litigation,	395 F. Supp. 1402, 1403 (J.P.M.L. 1975).
Transfer to that district also will best facilitate the
coordination of the private actions with the seminal Govern-
ment civil action that is still pending there. See In re
Folding Carton Antitrust Litigation, supra, 415 F. Supp. at
386. In addition, the documents on which the grand jury
relied in returning its indictment and which are likely to
be sought by the private litigants are located in the
District of Hawaii. Id. And since much of the conduct at
®

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issue allegedly occurred in Hawaii, it is likely that other
® relevant documents as well as key witnesses are located
there.
We note that the judicious use of liaison counsel, lead
counsel and steering committees could eliminate the need
for most counsel to travel to the transferee district.
See Manual for Complex Litigation, Part I, §§1.90-1.93 (rev.
ed. 1973). Furthermore, since the parties and witnesses
ordinarily do not attend pretrial conferences or hearings,
it is unlikely that any of the named plaintiffs or putative
class members will ever be required to travel to the
transferee forum for pretrial under Section 1407. And,
under the provisions of Fed. R. civ. P. 45 (4) (2), deposi-
® tions of witnesses will probably occur in proximity to where
they reside. See In re Radiation Incident at Washington,
D.C. on April 5, 1974, 400 F. Supp. 1401, 1403 (J.P.M.L.
1975). :
IT IS THEREFORE ORDERED that, pursuant to 28 U.S.C.
§1407, all actions listed on the following Schedule A and
pending in districts other than the District of Hawaii be,
and the same hereby are, transferred to the District of
Hawaii and, with the consent of that court, assigned to the
Honorable Samuel P. Xing for coordinated or consolidated
pretrial proceedings with the action listed on Schedule 2A
and pending in that district.
®

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® Schedule A
Docket No. 303
CENTRAL DISTRICT OF CALIFORNIA Civil Action No.
Packer Society Hill Travel Agency, 77-1493-MML
Inc. v. ITT Sheraton Corp. of America,
et. al.
NORTHERN DISTRICT OF CALIFORNIA
Diplomat Travel Service, Inc. V. C-77-0304-WHO
: ITT Sheraton Corp. of America, et al.
DISTRICT OF HAWAII
Charles K. Schanker, et al. v. 77-0082
The Sheraton Corp., et al.
NORTHERN DISTRICT OF ILLINOIS
James S. Baer v. The Sheraton Corp., 77-C-1313
® et al.
EASTERN DISTRICT OF NEW YORK
Susan Berger, et al. v. Sheraton Corp. 76-C-2278
of america, et al.