IN RE: Iowa Beef Processors Confidential Business Documents Litigation

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3 Clg 2 2 Hany ER oo	BEFORE THE JUDICIAL PANEL HE FANEL Cho
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4 MULTIDISTRICT LITIGATION
5 IN RE IBP CONFIDENTIAL BUSINESS DOCUMENTS ) DOCKET NO. 428
LITIGATION )
6 OPINION AND ORDER RET
7 _— - EEE
BEFORE ANDREW A. CAFFREY, CHAIRMAN, AND ROY W. HARPER, SRT
8 CHARLES R. WEINER, EDWARD S. NORTHROP, ROBERT H. SCHNACKE, }
FREDERICK A. DAUGHERTY, AND SAM C. POINTER, JR., JUDGES
9 OF THE PANEL.
0 PER CURIAM |
This litigation consists of four actions pending in - :
1 oo
three districts as follows: two actions in the Northern so
2 CL
District of Iowa, and one action each in the Southern District : :
3 of Towa and the District of Minnesota. Presently before
4 the Panel is a motion, pursuant to 28 U.S.C. §1407, filed : TE
5 by Iowa Beef Processors, Inc. (IBP) (plaintiff in one of : :
6 the actions in the Northern District of Iowa and defendant
7 or co-defendant in the remaining actions) and attorneys oo
Edward W. Rothe and Lee A. Freeman, Sr., (co-defendants ERE
8 ; EE
in the Southern District of Iowa and Minnesota actions) Co -
9 .
for centralization of all actions in the Northern District
0 of Iowa for coordinated or consolidated pretrial proceedings.
1 I. BACKGROUND SE on
2 A. Prior Panel Proceedings in a Related Docket :
3 In MDL-315, In re Iowa Beef Processors Employment ~
4 Termination Contract Litigation, the Panel considered transfer -
of three actions pending in the Southern District of Iowa, -
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} the Northern District of Iowa, and the Southern District | = SRE
, of New York, respectively (the MDL-315 actions). ) co
; The complaints in two of the MDL-31S5 actions, the N 3
Northern District of Iowa action and the New York action :
3
(IBP actions), were virtually identical. Plaintiff in
those two actions was IBP. Defendants included Hughes SEAL OPI
’ A. Bagley, a former employee of IBP; Hans Aarsen, another I
former employee of IBP; four attorneys, Irving Stern, Albert J. CLT
3 Krieger, Lex Hawkins and John A. Cochrane; and three officers
) of the Amalgamated Meat Cutters and Butcher Workmen of :
) North America, AFL-CIO (Butchers Union), as representatives B .
of a defendant class, pursuant to Fed.R.Civ.P. 23.2, consisting oo
of all members of the Butchers Union. Both complaints or
| filed by IBP charged that in early 1977 the defendants,	} | :
| including Hawkins and Cochrane, conspired to obtain from Lo
: | defendants Bagley and Aarsen confidential information and :
) | documents about IBP's operation; that disclosure of these
) | documents would be damaging to IBP and would be helpful
7 | to Cochrane and Hawkins in an antitrust action (the packer oo BE Co
. | action) in which they were representing the plaintiff, Coe :i
| Meat Price Investigators Association (MPIA), against IBP :)
| and other defendants in the Southern District of Towa 1	) :
that the disclosures by Bagley violated not only his fiduciary no .
.
oo | aI I/ This action was transferred by the Panel to the Northern E co; District of Texas for inclusion in the centralized pretrial
| proceedings in MDL-248, In re Beef Industry Antitrust Litigation, :
. i| 432 F. Supp. 211 (J.P.M.L. 1977). .	i :
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o 1 duties to IBP but also the terms of a contract (the settlement
2 agreement) that had been entered into between him and IBP
3 in connection with Bagley's separation from his employment
4 with IBP; and that the disclosures by Aarsen violated his
5 fiduciary duties to his former employer. In these actions
| IBP sought damages, and declaratory and injunctive relief.
© The Southern District of Iowa action (Hawkins) was
’ instituted by Hawkins and Cochrane. Defendants were IBP
8 and £dward W. Rothe and Lee Freeman, Sr., two attorneys
9 for IBP. Plaintiffs in Hawkins alleged that defendants,
10 by instituting the IBP actions, had abused the judicial
11 process in an attempt 1) to unfairly obtain documents assembled
12 by Hawkins and Cochrane in connection with their prosecution
®. | of the packer action in MDL-248; 2) to deny Hawkins and
| Cochrane access to information and documents concerning |
14 | IBP which were necessary to prosecution of the packer action;HE and (3) to hinder Hawkins and Cochrane in their prosecution
16 | of the packer action. Plaintiffs in Hawkins further alleged
17 | that the settlement agreement executed by IBP and Bagley | :
18 : | was void and unenforceable, and that the attempt to enforce
19 | that agreement by filing the IBP actions was actually a
20 | form of harassment. Plaintiffs in Hawkins requested a |	| declaratory judgment that the settlement agreement wasi
24 void, injunctive relief and damages.
22 | Hawkins and Cochrane moved the Panel for an order |
23 | pursuant to 28 U.S.C. §1407 transferring the two IBP actions0. to the Southern District of Iowa for coordinated or consolidated
25 | pretrial proceedings with Hawkins. IBP, Freeman and Rothe|

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1 opposed transfer.
2 The Panel held oral argument on the motion in MDL-315
3 on September 30, 1977, in Boston, Massachusetts. During
a the course of argument defendants in the New York IBP action
consented to waive any objection to venue and jurisdiction
> in the Iowa IBP action. Counsel for IBP then stated that
6 IBP would dismiss its New York action, effectively leaving
7 only two actions before the Panel. At that point, the
8 Panel members conferred and then, in a ruling from the
9 bench, announced that the Panel would deny transfer because
10 only two actions were remaining in the litigation.
11 B. The Actions Presently Before the Panel :
Two of the actions presently before the Panel were
12 also before the Panel in MDL-315. Those actions are the
13 IBP action in the Northern District of Iowa and Hawkins
14 in the Southern District of Iowa.
15 On November 17, 1977, the Southern District of Iowa
16 court dismissed Hawkins because of improper venue. The
17 court concluded that venue in Hawkins could only arise
18 where the claimed abuse of process arose, and that the abuse
of process claim arose in the Northern District of Iowa
+o by IBP's filing of its action there. On appeal the United States
20 Court of Appeals for the Eighth Circuit affirmed the dismissal
21 as to Cochrane's claim but reversed as to Hawkins' claim,
22 holding that the service of the allegedly abused process
23 on Hawkins in the Southern District of Iowa was more significant
24 for venue than the filing of IBP's lawsuit and the issuance
0s of the process in the Northern District of Iowa. The Court

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® 1 of Appeals also stated that the service of process on Cochrane2 in the District of Minnesota would support venue there.
3 The Eighth Circuit held, additionally, that the Hawkins-Cochrane
4 abuse of process claim was not a compulsory counterclaim
to IBP's lawsuit in the Northern District of Iowa. Cochrane
> v. Iowa Beef Processors, Inc., 596 F.2d 254 (8th Cir. 1979),
© cert. denied, 99 S.Ct. 2848 (1979).
7 Consistent with the ruling of the Eighth Circuit,
8 Cochrane filed the Minnesota action (Cochrane) against
9 IBP, Rothe and Freeman in June, 1979. The allegations
10 track completely the allegations in Hawkins.
11 The fourth action (Bagley) presently before the Panel
was brought in October, 1979, by Bagley against IBP in
® the Northern District of Iowa. Bagley alleges that IBP
13 1) is guilty of abuse of process as a result of naming
14 Bagley a defendant in the IBP action; 2) has maliciously
15 caused Bagley's former employer to terminate Bagley's employment;
16 3) has made it difficult for Bagley to secure future employment;
17 4) has libeled Bagley; and 5) has invaded Bagley's privacy.
18 IBP filed motions, pursuant to 28 U.S.C. §1404(a),
19 in both Hawkins and Cochrane to transfer each action to
the Northern District of Iowa, where the IBP and Bagley
20 actions are pending. On January 16, 1980, the Southern
21 District of Iowa court found transfer of Hawkins under
22 Section 1404(a) blocked by the Eighth Circuit's ruling
23 that the Northern District of Iowa was not a district
@.. where Hawkins' claim might have been brought. On February
5 13, 1980, the Minnesota court denied IBP's Section 1404(a)

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1 motion to transfer Cochrane for the same reason offered
2 by the Hawkins court. At the same time, the court in Cochrane
3 stayed further proceedings in Cochrane pending a final
4 determination by the court in the IBP action on the issue
5 of the validity of the IBP-Bagley settlement agreement.
6 IT. HOLDING AND REASONING OF THE PANEL
As noted above, IBP moves the Panel to centralize
7 the four actions in this litigation in the Northern District
8 of Iowa for coordinated or consolidated pretrial proceedings.
9 Hawkins, Cochrane and Bagley oppose centralization. The
10 officers of the Butchers Union named as defendants in the
11 IBP action in the Northern District of Iowa have stated
12 that they neither support nor oppose the motion to transfer.
We find that the four actions involve common questions
+ of fact and that transfer of the actions pending in
14 districts other than the Northern District of Iowa to that
15 district for coordinated or consolidated pretrial proceedings
16 with the actions pending there will best serve the convenience
17 of the parties and witnesses and promote the just and efficient
18 : conduct of the litigation.
19 Opponents to centralization assert that movants have
20 not demonstrated that any common questions of fact among
the actions in this litigation are so complex and that
21 accompanying discovery will be so time-consuming as to
22 warrant transfer. Rather, opponents argue that individual
23 questions predominate in their respective actions, and
24 they urge that resolution of these actions will be needlessly
25 delayed if centralized with the IBP action for coordinated

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® 1 or consolidated pretrial proceedings. Opponents to transfer
2 contend that the benefits of Section 1407 proceedings can
3 be achieved without transfer through voluntary cooperation
4 among the concerned parties, counsel and courts. Accordingly,
opponents urge the Panel to remain consistent with its
> decision in MDL-315 by denying transfer of the actions
6 in the present docket.
7 We find these arguments unpersuasive. Several issues
8 in each of the four actions raise substantial common factual
9 questions. For example, the issue of the validity of the
10 Bagley-IBP settlement agreement will be present not only
11 in the IBP action and Bagley, but also in Hawkins and Cochrane
because plaintiffs in the latter two actions seek a declaratory
® judgment that the settlement agreement is void. Similarly,
13 movants represent that (1) the conspiracy, alleged in the
14 IBP action, to induce Bagley to turn over IBP documents
15 to Hawkins and Cochrane 1s also relevant to the other three
16 actions because a key part of IBP's defense in the three
17 abuse of process actions will be that IBP had no ulterior
18 motive in filing the IBP action but instead sought redress
19 for damages wrought by a conspiracy aimed at IBP; and 2)
discovery regarding the thousands of IBP documents allegedly
20 given to Hawkins and Cochrane by Bagley, which will show
21 the type of confidential information Hawkins and Cochrane
22 received through Bagley, is relevant to all four actions
23 because it will demonstrate the damage done to IBP by the
@.. conspiracy alleged in the IBP action, and it will help |
25 to establish a defense to the claims against IBP in the

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1 other three actions. Centralization under Section 1407
2 is thus necessary in order to avoid duplication of discovery,
3 prevent inconsistent pretrial rulings and conserve judicial
4 resources.
. Opponents' suggestion of voluntary or informal cooperation
among the parties, counsel and courts involved in the litigation
® is commendable. These opponents, however, were also parties
7 to the actions in MDL-315, and they have had, since the
8 Panel's denial of transfer in that docket, an opportunity
9 to establish a program of informal coordination that would
10 avoid duplicative discovery, minimize the risk of inconsistent
11 pretrial rulings, and expedite pretrial proceedings. No
12 successful program has yet been implemented, and thus we
are convinced that centralization of these actions in a
13 | single district under Section 1407 is necessary in order
14 | to ensure the streamlining of discovery and all other pretrial
15 | proceedings as well. See In re Gas Meter Antitrust Litigation,
16 | 464 F. Supp. 391, 393 (J.P.M.L. 1979), The transferee judge,
17 | of course, has the authority to schedule any pretrial pro-
18 | ceedings that are unique to particular parties, claims
19 | or actions to proceed concurrently with the common pretrial
proceedings, thereby permitting the litigation to proceed
20 expeditiously in all areas. See In re Multi-Piece Rim
21 | Products Liability Litigation, 464 F. Supp. 969, 974 (J.P.M.L.
22 1979). Moreover, the transferee judge has power to provide
23 | that no party need participate in pretrial proceedings
24 | unrelated to that party's interests. See, e.g., Manual for
95 | Complex Litigation, Parts I & II, §§2.31 (rev. ed. 1977}.

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[
o 1 The Northern District of Iowa is clearly the most
2 appropriate transferee district for this docket. Two
3 actions, including the IBP action, which is the seminal
4 action in this litigation, are already pending there.
5 IBP's corporate offices are located in a Nebraska suburb
6 of Sioux City, Iowa, and thus many key witnesses and
relevant documents are likely to be found in and around
7
the Northern District of Iowa. See In re LTV Cor Securities
8 Litigation, 470 F. Supp. 859, 862 (J.P.M.L. 1979). Furthermore,
9 the familiarity with this litigation that the Honorable
10 Edward J. McManus has developed as a result of presiding
11 over pretrial proceedings to date in the IBP action is
12 an important factor favoring selection of the Northern
9 3 District of Iowa as the transferee forum. See In re	1 | =Fe 21 Ie
!
Griseofulvin Antitrust Litigation, 395 F. Supp. 1402, 1403
14
| (J.M.P.L. 1975).15
IT IS THEREFORE ORDERED that, pursuant to 28 U.S.C.
i6 | §1407, the actions listed on the following Schedule A and17 | pending in districts other than the Northern District of|
18 | Iowa be, and the same hereby are, transferred to the Northern
19 District of Iowa and, with the consent of that court, assigned
20 to the Honorable Edward J. McManus for coordinated ori
1 consolidated pretrial proceedings with the actions listed
21 I
| on Schedule A and pending in that district.22 ||
23
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1 DOCKET NO. 428 .
2 To SCHEDULE A
3
NORTHERN DISTRICT OF IOWA
4 Iowa Beef Processors, Inc. v. Patrick C.A. No. C-77-4040
5 E. Gorman, et al.
Hughes A. Bagley v. Iowa Beef C.A. No. 2 C 79-4087
6 Processors, Inc.
7 SOUTHERN DISTRICT OF IOWA
8 Lex Hawkins v. Iowa Beef Processors, C.A. No. 77-219-2Inc., et al.
9 DISTRICT OF MINNESOTA
10 John A. Cochrane v. Iowa Beef C.A. No. 3-79-304
Processors, Inc., et al.
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