IN RE: Mutual Funds Sales Antitrust Litigation

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BEFORE THE CHAE PANEER. 1] Sor
MULTIDISTRICT LITIGATION JUL25 1973
fg De YARD
OPINION AND ORDER
BEFORE ALFRED P. MURRAH*, CHAIRMAN, AND JOHN MINOR WISDOM,
EDWARD WEINFELD, EDWIN A. ROBSON, WILLIAM H. BECKER¥*,
JOSEPH S. LORD, III, AND STANLEY A. WEIGEL, JUDGES OF THE PANEL
PER CURIAM
In December 1972 plaintiff Haddad filed a treble damage
action in the District of Columbia alleging that defendants had
violated the federal antitrust laws by combining and conspiring
to restrain trade in the purchase	and sale of mutual fund secu--
rities;	to keep the prices of such securities at artificial and
non-competitive levels; and to prevent the development of second-
ary dealer and brokerage markets in those securities. Plaintiff
Haddad purports to represent all purchasers of capital stock of
any load mutual fund. In February 1973 the United States brought
a civil antitrust enforcement action in the District of Columbia
against the National Association of Securities Dealers and others.
Like the Haddad action, the United States' complaint contains
allegations of combinations and conspiracies among the defendants
to violate the Sherman Act by preventing and restraining the trade
: Although Judges Murrah and Becker were not present at
the hearing, they have, with the consent of all parties,
participated in this decision.

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of mutual fund shares in a secondary market. Subsequent to the
filing of the government action, numerous other private treble
damage actions alleging antitrust violations similar to those
alleged in the Haddad and government actions were brought against
substantially the same defendants. Plaintiffs in these additional
actions also purport to represent classes of investors in load
mutual funds.
There are presently 23 private civil actions pending
in the Southern District of New York and two in the District
of Columbia. The broker-dealer defendants named in the Haddad
action move the Panel for an order transferring all of the private
actions to the District of Columbia for coordinated or consoli-
dated pretrial proceedings pursuant to 28 U.S.C. §1407. All parties
except certain New York parties agree that transfer of all actions
to the District of Columbia is appropriate. We find that these
actions involve common questions of fact and that transfer to
the District of Columbia will best serve the convenience of the
parties and witnesses and promote the just and efficient conduct
of the litigation.
The New Yorkparties who oppose transfer assert that
the conspiracies alleged in their actions are entirely separate
from the single conspiracy alleged in the Haddad action in the
District of Columbia and, consequently, involve different questions
of fact. We disagree. The conspiracy alleged in Haddad is indus-
try-wide in scope and, a fortiori. encompasses the various con-
spiracies alleged in the other private actions. As a result,
there are questions of fact common to all actions, making transfer

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necessary in order to avoid duplication of discovery.
In addition, plaintiff Haddad seeks to represent a class
which encompasses the same classes that New York plaintiffs seek
to represent. And we have frequently held that the possibility
for conflicting class determinations under Rule 23 of the Federal
Rules of Civil Procedure is an important factor favoring transfer
of all actions to a single district. ‘See In re Public Air Travel
Tariff Litigation,	~_ F. Supp. (3.P.M.L., filed July 3, 1973);
In re Career Academy Antitrust Litigation, 342 F. Supp. 753, 754
(J.P.M.L. 1972). Furthermore, there are two preliminary questions
common to all actions in this litigation: whether the alleged
acts complained of by plaintiffs are exempt from the antitrust laws
by operation of the Securities Exchange Act of 1934 or the Invest-
ment Company Act of 1940; and whether the doctrine of primary
jurisdiction is applicable. Transfer of all actions to a single
district for coordinated or consolidated pretrial proceedings,
therefore, will eliminate the potential for inconsistent pretrial
rulings on these common issues. See In re Plumbing Fixtures,
298 F. Supp. 484, 490-92 (J.P.M.L. 1968).
Although certain parties favor the Southern District :
of New York as the transferee district, we find that the District
of Columbia is clearly the most appropriate forum for this 1liti-
gation. Both the government enforcement action and the Haddad
action are assigned to the Honorable Howard F. Corcoran in the
District of Columbia. While we cannot transfer the government
action or order it included in coordinated or consolidated
pretrial proceedings, 28 U.S.C. §1407(g), we think that judicial

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efficiency would be promoted by having all actions under the
supervision of the ‘same judge. See In re Ampicillin Antitrust
Litigation, 315 PF. Supp. 317, 319 (J.P.M.L. 1970). Moreover,
pretrial proceedings on the preliminary issues of primary juris-
diction and exemption from the antitrust laws have already
commenced and are progressing expeditiously in the District of
Columbia. Furthermore, many of the relevant documents and expected
witnesses are located in the District of Columbia and the majority
of the parties favor that district as the transferee forum.
IT IS THEREFORE ORDERED that the actions listed on
the attached Schedule A be, and the same hereby are, transferred
to the District of Columbia and, with the consent of that court,
assigned to the Honorable Howard F. Corcoran for coordinated or
consolidated pretrial proceedings pursuant-to 28 U.S.C. §1407.

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SCHEDULE Aa DOCKET NO. 135
SOUTHERN DISTRICT OF NEW YORK
= Zao tnltl OF NEW YORK	NE
Elsie Saplin & Bernard Saplin v. Merrill Civil Action
Lunch, Pierce, Fenner & Smith, Inc., et al. No. 73 Civ. 828
Jean L. Freed, etc. v. Vance Sanders & Civil Action :
Company, Inc., et al. No. 73 Civ. 895
Seymour Rogovin, et al v. Wellington Civil Action
Management Company, et al. No. 73 Civ. 909
Samuel R. Siegel U/S/E Retirement Plan, Civil Action
et al. v. The Dreyfus Corp., et al. No.. 73 Civ. 984
John Wion v. Union Service Distributor, Civil Action
Inc., et al. No. 73 Civ. 949
Newton H. Kaplan v. Putnam Management Co., Civil Action
et al, No. 73 Civ. 1003
Jerry Zolo & Eileen Zolo v. Arnold . Civil Action
Bernhard & Co., Inc., et al. No. 73 Civ. 1004
Ella Gifford V. Anchor Corp., et al. Civil Action
Robert Ma¥Keéwich, etc. V. Wellington Civil Action
Management Co, No. 73 Civ. 1312
Roger Goetzel v. Fidelity Management Civil Action
~ & Research Co., et al. © No. 73 Civ. 1317
Morris Greenspan & Bernard Greenspan, etc. Civil Action
Vv. National Securities & Research Coxrp.., No. 73 Civ. 1354	et al.
Samuel Tisser v. Anchor Growth Fund, et © Civil Action
al. No. 73 Civ. 1355
Lewis Gurkin v. Thorndike, Doran, Paine Civil Action
& Lewis, Inc., et al. ’ + No. 73 Civ. 1364
Robert Markewich, etc. v. Vance, Sanders Civil Action
& Co., Inc., et al. No. 73 Civ, 1370
Ann Brunell v. Shareholders Management Civil Action
Co., et al, No. 73 Civ. 1496
Robert Markewich, etc. v. Lord, Abbett Civil Action
& Co., et al. No. 73 Civ. 1452
Robert Markewich, etc. v. Continental Civil ActionInvestment Corp., et al. No. ‘73 Civ. 1503

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SCHEDULE A DOCKET NO. 135
SOUTHERN DISTRICT OF NEW YORK (Continued)
A. Edward Morrison v. Keystone Custédian Civil Action
Funds, Inc. No. 73 Civ. 1504
Harry Kurach v. Howard Stein, et al. Civil Action
No. 73 Civ, 1516
A. Edward Morrison v. F. Eberstadt & Civil Action
Co., et al. - No. 73 Civ. 1568
A. Edward Morrison v. Union Service Civil Action
Distributor, et al. No. 73 Civ. 1607
A. Edward Morrison v. Enterprise Fund Civil Action :
Jack Gluck, et al. v. E. W. Axe Civil Action
: & Co., et al. No. 73 Civ. 1254
" DISTRICT OF COLUMBIA
Genevieve M. Haddad, etc. v. The Crosby Civil Action
Corp., et al. No. 2454-72
Arthur Gross, et al. v. National Civil Action
Association of Securities Dealers, et al. No. 426-73