IN RE: Viatron Computer Systems Corporation Securities Litigation

Case MDL No. 138 Document2 Filed 05/01/15 Page 1 of8
® DOCKET NO. 138 ML UAT FAKR BEFORE THE JUDICIAL PANEL ON MULTIDISTRICT, LITIGATION	JURIS 1872
IN RE VIATRON COMPUTER SYSTEMS CORPORATION (SECURITIES LITIGATION
ORDER
It appearing that all parties to the actions listed on
the attached Schedule A agree on the desirability of transferring
the action pending in the Southern District of New York to the
District of Massachusetts for coordinated or consolidated pretrial
proceedings under 28 U.S.C. §1407 with the actions pending in that
district before the Honorable Joseph L. Tauro and the Panel, having
found, upon the basis of the complaints, the papers submitted and
the hearing held, that these actions involve common questions of
fact and that transfer would serve the convenience of the parties
and witnesses and further the just and efficient conduct of the
litigation,
IT IS ORDERED that the action on the attached Schedule A
pending in the Southern District of New York be, and the same here-
by is, transferred to the District of Massachusetts and, with the
[1] consent of that court, assigned to the Honorable Joseph L. Tauro=~" for coordinated or consolidated pretrial proceedings under 28 U.S.C.
§1407 with the actions pending in that district and listed on
Schedule A. ;
FOR THE PANEL:
eo ——
Alfred P. Murrah
Chairman

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® SCHEDULE A DOCKET NO. 138
DISTRICT OF MASSACHUSETTS
David S. Stewart, et al. v. Edward Civil Action
M. Bennett, et al. No. 71-3022-T
Channing Securities, Inc. V. Civil Action
Shields & Co., Inc. No. 72-3375-T
SOUTHERN DISTRICT OF NEW YORK
Jules Sanders, et al. v. Edward Civil Action
M. Bennett, et al. No. 73 Civ. 780

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B RIA EE
- HLL TAT Go So
BEFORE THE JUDICIAL PANEL ee EE
ON NIC ra nen Po Cl
MULTIDISTRICT LITIGATION bev bo S554DoT co : » RE N Ea L
In re Viatron Computer Systems ) Tete ELT
Corporation Securities Litigation )) DOCKET NO. 138
American General Shares, Inc. v. )
Rockwell Corp., et al., 5.D.N.Y., ) RE
C.A. No. 75 Civ 5668 ) oa
OPINION AND ORDER EI
BEFORE JOHN MINOR WISDOM, CHAIRMAN, AND EDWARD WEINFELD¥,
EDWIN A. ROBSON, STANLEY A. WEIGEL, ANDREW A. CAFFREY,
AND ROY W. HARPER, JUDGES OF THE PANEL.
PER CURIAM .
The Panel, pursuant to 28 U.S.C. §1407, previously oo
centralized this group of actions in the District of
Massachusetts and assigned the actions to the Honorable
Joseph L. Tauro for coordinated or consolidated pretrial
proceedings. In re Viatron Computer Systems Corporation 5
Securities Litigation, MDL No. 138 (J.P.M.L., filed.June :
13, 1973) (unpublished transfer order). The actions
in the transferee district were brought as individual :
or class actions on behalf of purchasers of common stock
or subordinated debentures of Viatron Computer Systems
Corporation (Viatron). Defendants in one or more of
the actions include individual officers and directors
BS Judge Weinfeld took no part in the decision of this .
matter. cL

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. = 2 - .
of Viatron; Viatron's accountants; Shields and Co., Inc. oo ER oo
| (Shields), allegedly the principal underwriter of Viatron EE Eh
| common stock and debenture offerings; other underwriters Co NE
of Viatron offerings; and two suppliers of computer parts
to Viatron. The claims in these actions concern allegedly
false statements and omissions of material information
in connection with, inter alia, a 1969 Viatron debenture EE
offering. 7
The above-captioned action (New York action) was |
commenced in 1975 by American General Shares, Inc. (American),
the successor in interest to Channing Securities, Inc. :
(Channing) .%/ Defendants are Shields and the two Viatron
suppliers which are named as defendants in the actions | |
in the transferee district. The claims in the New York E
action concern allegedly false statements and omissions
of material information in connection with, inter alia,
the same 1969 Viatron debenture offering that is at issue
in the actions in the transferee district. American
seeks to represent a class of purchasers of those 1969
Viatron debentures.
On August 9, 1976, Judge Marvin E. Frankel entered
an order staying all proceedings in the New York action
on the following terms:
T7Channing	was a purchaser of a number of Viatron ~
debentures and is the named plaintiff in two of the actions Co Co
in the transferee district. In addition, American was SE
allowed to intervene as a plaintiff in a third action :
in the transferee district.

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1. All pretrial discovery activities
and other proceedings taken and conducted
by any party in the Boston actions shall
be deemed to have been taken also in the
New York action, subject to the rights
of the parties under the Federal Rules
of Civil Procedure and Rules of Evidence.
2. Subject to a final order trans-
ferring this case to the District Court
for the District of Massachusetts for
coordinated or consolidated pretrial pro-
ceedings pursuant to [Rule 9, R.P.J.P.M.L.,
78 F.R.D. 561, 567-68 (1978)], all further
proceedings herein, including the filing
of answers or other responsive pleadings
by the defendants, are hereby stayed pending
the final determination of the Boston
actions.
3. In the event that the case is
transferred pursuant to [Panel] Rule 9,
the stay of pretrial proceedings in this
action is vacated and further pretrial .
proceedings shall be subject to the direction
of the transferee judge.
In a letter dated August 24, 1978 addressed to the
clerk of the Panel, with copies to all parties, Shields
made the following statement concerning the New York
action:
Developments since the date of Judge
Frankel's order indicate the advisability
of transferring [the New York action]
to the District of Massachusetts. Since
that date Shields and the other underwriter
defendants have reached agreement in prin-
ciple with the plaintiff in this action
and the plaintiffs in the already consoli-
dated actions to settle and dismiss the
claims against the underwriters in these
litigations. (The non-underwriter defendants
would remain in the actions.) The under-
writers and the plaintiffs expect to submit
the appropriate settlement papers to the
court in the near future. Settlement
will be greatly expedited and simplified
if all the actions are pending in one
forum.

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The Panel, pursuant to Rule 10(b), R.P.J.P.M.L., ®
78 F.R.D. 561, 568 (1978), subsequently ordered the parties
to show cause why the New York action should not be trans-
ferred to the District of Massachusetts for inclusicn
in the coordinated or consolidated pretrial proceedings pending
there. Shields and American favor transfer. Arthur D. Little,
Inc., one of the Viatron suppliers which is named as
a defendant in the New York action and in an action in
the transferee district, opposes transfer. No other party
has responded. Under Panel Rule 8(b), id. at 567, the
non-responding parties are treated as acquiescing to
the Panel action contemplated in the show cause order.
We find that the New York action ‘involves common Cquestions of fact with the actions in the transferee
district and that transfer of the New York action to
the District of Massachusetts for inclusion in the co-
ordinated or consolidated pretrial proceedings occurring
in that district will serve the convenience of the parties
and witnesses and promote the just and efficient conduct
of this litigation.2/
Little admits that the claims in the New York action
duplicate claims already involved in the transferee district,
but denies that this identity of issues is sufficient
7] ALLparties waived their right to oral argument and therefo
this matter was submitted for decision on the basis of the pare)filed. See Rule 14, R.P.J.P.M.L., 78 F.R.D. 561, 572 (1978).

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i oo
® to justify transfer. The real reason that Shields favors
transfer, Little contends, is the convenience that would
accrue to Shields if all proceedings relating to Shields’
anticipated settlement are conducted in one district.
This is an insufficient reason to justify transfer, Little
asserts, since the provision in Judge Frankel's stay
order that "all pretrial discovery activities and other
proceedings taken and conducted by any party in the Boston
actions shall be deemed to have been taken also in the
New York action," and principles of res judicata, would
be sufficient to ensure the applicability to the New
York action of any settlement as to Shields in the transferee
C district. Little argues that transfer would merely result
in substantial inconvenience to the parties and disruption
of ongoing proceedings in the transferee district.
When the minimal conveniences which would result to Shields
from transfer are weighed against the inconveniences
which would result to many other parties, the equities
are against transfer, Little stresses.
We find these arguments unpersuasive. The commonality
in factual issues between the New York action and the
actions in the transferee district is apparent. Though
Judge Frankel's stay order has operated effectively to
prevent duplication of discovery	and. other pretrial efforts
C between the New York action and the actions in the trans-feree district, we are of the opinion that recent develop-
ments in this litigation now render transfer of the New

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York action appropriate. Judge Frankel recently resigned ®
from the bench. Rather than require a new judge to become
familiar with the New York action and to determine the |
effect on any further proceedings	in the New York action
of the stay order in the New York action and the settlement
proceedings in the transferee district, it would be more
efficient to transfer the New York action and allow the
transferee judge, who is most familiar with the nuances
of this litigtion, to resolve any further pretrial issues
and to conduct settlement proceedings with respect to
all actions in this litigation. See In re Investors |
Funding Corporation of New York Securities Litigation,
F.Supp. ___, ___ {J.p.M.L., filed December 1, : C1978) (slip opinion at 4-5).
IT IS THEREFORE ORDERED that, pursuant to 28 U.S.C.
§1407, the action entitled American General Shares, Inc.
v. Rockwell Corp., et al., S.D.N.Y., C.A. No. 75 Civ
5668, be, and the same hereby is, transferred to the
District of Massachusetts and, with the consent of that
court, assigned to the Honorable Joseph L. Tauro for
coordinated or consolidated pretrial proceedings with
the actions pending there.
®