Court Opinion

ID: 6922518
Source: CourtListenerOpinion
Date Created: 2022-07-23 23:06:45.215162+00
Date Added: 2024-06-11T16:06:50.441067
License: Public Domain

FRIENDLY, Circuit Judge
(dissenting).
At the argument on this petition I advanced what seemed a practical suggestion that would have eliminated the need for either of the opinions here written. This was to defer ruling on the petition and leave the stay of the transfer in effect until the Supreme Court had decided the Brouk case, at which time action appropriate under the circumstances could be taken. Counsel for petitioner regarded the suggestion as a second best - — perhaps the very best obtainable if we were to reject his contentions with respect to convenience in the usual sense, as we all agree in doing. Although defendants’ counsel did not express themselves, they could have had no proper ground to oppose, assuming that we would have conditioned continuation of the stay on petitioner’s not engaging in discovery or similar proceedings in the Southern District in the interim. For reasons I do not understand, my brothers decline to follow this simple and to me attractive course; instead they allow the transfer to the District of Minnesota, accompanying this with some unsolicited advice to that court as to its future conduct, which, however sensible, appears to be unseemly and to constitute the clearest evidence that transfer at the present juncture is not “in the interest of justice,” 28 U.S.C. § 1404(a), even if it is within the power of the District Court, which I question.
I perceive no basis for doubting that the provision in 28 U.S.C. § 1404(a) that a district court may transfer a civil action only to another district “where it might have been brought” requires not only jurisdiction over the defendants and proper venue, as decided in Hoffman v. Blaski, 363 U.S. 335, 80 S.Ct. 1084, 4 L. Ed.2d 1254 (1960), but jurisdiction of the court to entertain the claim, as Judge Fee held in Arvidson v. Reynolds Metals Co., 107 F.Supp. 51 (W.D.Wash.1952). If the complaint here did not set forth a claim cognizable under the Investment Company Act and Federal jurisdiction was grounded only on diversity of citizenship, jurisdiction over the individual defendants could not have been obtained in the District of Minnesota, although one of them, Purcell, could have been, and was, served in the Southern District of New York, where he resided, and the action could proceed against him in the transferor district although it could not *72have been brought in the transferee. Indeed, the case would be a fortiori to Hoffman v. Blaski since, unlike the moving defendants there, Purcell has not waived objections to jurisdiction or venue in Minnesota by seeking a transfer. Moreover, even as to the defendants who could have been sued in either district, plaintiff ought not be sent to a forum which would dismiss his Investment Company Act claim for lack of jurisdiction over the subject matter. I do not read Clayton v. Warlick, 232 F.2d 699 (4 Cir. 1956), as being to the contrary although I am not certain I agree with all the implications of what was said; the claim there asserted, for patent infringement, was surely one which the transferee court had jurisdiction to entertain.1
For these reasons I should think it clear that if the motion to transfer had come before the District Judge for decision just after the Eighth Circuit had decided Brouk v. Managed Funds, Incorporated, in January 1961, dismissing a complaint against directors under the Investment Company Act “for lack of jurisdiction of the subject matter of the claim against them,” 286 F.2d at 918, he would have been bound to deny the motion, and we would have been bound to issue the writ if he had not. We would not have thought it proper to make the detailed examination of the claim as to jurisdiction under the Investment Company Act that ultimately led us to a conclusion contrary to the Eighth Circuit’s in Brown v. Bullock, 294 F.2d 415 (2 Cir. 1961), over a dissent by one of our brothers, when such a determination could not have had the slightest effect on the District Court for Minnesota; at least for this limited purpose, we should have taken the “law” in the Eighth Circuit to be what the Eighth Circuit said it was.
I cannot see any basis for reaching a different result now. Brown v. Bullock settles the law in the Second Circuit, unless the Supreme Court should later settle it otherwise, and we might be pardoned for having enough confidence in that decision to hope it would be followed in circuits that have not yet encountered the problem. However, it would be quite unrealistic to expect this of the Eighth. Neither, as we have repeatedly been warned, are we to draw from the Supreme Court’s grant of certiorari in Brouk any inferences as to the likely result in that Court. Of course, if the Supreme Court should reverse the Brouk decision on a basis that would sustain the Investment Company Act claim asserted in the instant complaint, our action here will have done no harm. But I cannot agree the opposite is true; if the Supreme Court should affirm in Brouk, we will have premitted the transfer of an action based solely on diversity of citizenship to a district, where, as against the individual defendants, it could not have been brought. I would wait and see.
On Petition for Rehearing
PER CURIAM.
The petition for mandamus was denied in the light of all the circumstances of this case, including the grant of certiorari in Brouk v. Managed Funds, Inc., 286 F.2d 901 (8th Cir.), cert, granted, 366 U.S. 958, 81 S.Ct. 1921, 6 L.Ed.2d 1252 (1961). Petitioner now requests rehearing of the matter, on the grounds that the Brouk case has been settled; that the writ of certiorari will be vacated as moot; and that the apparent conflict between Brouk and the decision of this Court in Brown v. Bullock, 294 F.2d 415 (2nd Cir. 1961) will not be soon resolved. Even if we were to assume that there has been a complete settle* *73ment, and that the writ will be dismissed as moot — facts which are not at all certain,1 we think rehearing of the petition unnecessary and inappropriate.
Enough doubt exists whether Brouk intended to eliminate all possibility of jurisdiction under the Investment Company Act, 15 U.S.C. 80a-l, et seq.,2 and whether, if so, the Eighth Circuit would adhere to such a ruling in view of the granting of certiorari in that case, the extensive consideration given to the question in Brown v. Bullock, supra, and the trend of scholarly opinion, e. g., 75 Harv.L.Rev. 634 (1962); Eisenberg & Phillips, Mutual Fund Litigation — New Frontiers for the Investment Company Act, 62 Colum.L.Rev. 73, 91-96, 104 (1962), so that the transferee court would be required to assume jurisdiction in the first instance in order to consider the substantial question thus raised. Montana-Dakota Utilities Co. v. Northwest Public Service Co., 341 U.S. 246, 71 S.Ct. 692, 95 L.Ed. 912 (1951); Bell v. Hood, 327 U.S. 678, 66 S.Ct. 773, 90 L.Ed. 939 (1946); Fielding v. Allen, 181 F.2d 163 (2nd Cir.), cert. denied Ogden Corp. v. Fielding, 340 U.S. 817, 71 S.Ct. 46, 95 L.Ed. 600 (1950). Since it has been found that “the balance of convenience of parties and witnesses is overwhelmingly in favor of transfer,”3 we must decline to interfere with this transfer pursuant to 28 U.S.C. § 1404(a) on a petition for mandamus.
Rehearing denied.

. The Eighth Circuit regarded its dismissal in Brouk as jurisdictional, 286 F. 2d at 918. Hence there is no occasion to consider problems raised by Bell v. Hood, 327 U.S. 678, 66 S.Ct. 773, 90 L. Ed. 939 (1946), cf. Montana-Dakota Utilities Co. v. Northwestern Public Service Co., 341 U.S. 246, 71 S.Ct. 692, 95 L.Ed. 912 (1951), or to speculate on whether assertion of the federally based claim in tho Minnesota forum would suffice to carry the nonfederal claim under the pendent jurisdiction doctrine.

. The Court has considered three affidavits prepared by counsel for the parties, and an equal number of accompanying legal memoranda. From these papers it appears that only one fact is clear: final steps have not been taken to consummate settlement of the consolidated actions considered in Brouk, and the Supreme Court has not yet vacated its writ of certiorari as being moot.

. See Ackert v. Bryan, No. 27240, 2nd Cir., January 3, 1962, 299 F.2d 69.

. Ackert v. Bryan, supra, 299 F.2d 68.