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405 F.Supp. 313

In re BESTLINE PRODUCTS SECURITIES & ANTITRUST LITIGATION.

Vivian L. Black

v.

Bestline Products, Inc., W.D. Tex., Civil Action

No. A-74-CA-69

Jeff Eastman

v.

Bestline Products, Inc. W.D. Tex., Civil Action

No. A-75-CA-51

Toni Hollingsworth

v.

Bestline Products, Inc., W.D. Tex., Civil Action

No. A-75-CA-52

Earl Schwettmann

v.

Bestline Products, Inc., W.D. Tex., Civil Action

No. A-75-CA-63

No. 162.

Judicial Panel on Multidistrict Litigation.

OPINION AND ORDER

PER CURIAM.

The Panel has previously transferred all actions in this litigation to the Southern District of Florida and, with the consent of that court, assigned them to the Honorable James Lawrence King for coordinated or consolidated pretrial proceedings pursuant to 28 U.S.C. 1407. [FN1A] Defendant Bestline Products, Inc. now moves the Panel for an order transferring the above- captioned actions to the Southern District of Florida for centralized pretrial processing with the litigation currently pending there. All plaintiffs oppose transfer.

FN1A. In re Bestline Products Securities & Antitrust Litigation, 375 F.Supp. 926 (Jud. Pan. Mult. Lit. 1974).

We find that these tag-along actions involve questions of fact common to the actions previously transferred to the Southern District of Florida and that their transfer to that district for coordinated or consolidated pretrial proceedings pursuant to 28 U.S.C. 1407 will best serve the convenience of the parties and witnesses and promote the just and efficient conduct of this litigation.

*314 Plaintiffs in all four actions are disgruntled former Bestline distributors who allege that Bestline committed various violations in connection with its multilevel marketing system for biodegradable cleaning agents. Specifically, the plaintiff in Black charges defendant with violations of Section 12 of the Securities Act of 1933, while plaintiffs in Hollingsworth, Eastman and Schwettmann allege violations of common law fraud and the Texas Deceptive Trade Practices Act.

Plaintiffs argue that transfer is inappropriate because the Texas state law claims asserted in three of these four actions are not involved in the Florida litigation. We disagree.

Although three of the Texas actions raise legal theories not presently before the transferee court, all four of these tag-along issues with the Florida litigation concerning the nature and operation of Bestline's marketing program. This commonality of factual questions underlies all legal theories alleged in the four actions before us. Thus, transfer will prevent duplication of discovery and eliminate the possibility of inconsistent pretrial rulings. And any unique questions relating to Texas state law can easily be decided by the transferee judge in the course of the proceedings.

Moreover, inasmuch as discovery in the previously transferred actions has progressed to a considerable degree, procedures are available whereby such discovery can be utilized by the parties in these four actions and, as a result, they will no doubt experience savings of time, effort and expenses. See Manual for Complex Litigation, Parts I and II, Sec. 3.11 (rev. ed. 1973).

It is therefore ordered that, pursuant to 28 U.S.C. 1407, the above- captioned actions be, and the same hereby are, transferred to the Southern District of Florida and, with the consent of that court, assigned to the Honorable James Lawrence King for coordinated or consolidated pretrial proceedings with the actions previously transferred to that district.

375 F.Supp. 926.

Fed. Sec. L. Rep. P 94,542, 1974-1 Trade Cases P 75,069

(Cite as: 375 F.Supp. 926) In re BESTLINE PRODUCTS SECURITIES AND ANTITRUST LITIGATION. No. 162. Judicial Panel on Multidistrict Litigation. April 29, 1974.

Proceedings were instituted upon common defendant's motion for transfer of all actions to single district for coordinated or consolidated pretrial proceedings. The Judicial Panel on Multidistrict Litigation held that actions which stood factually isolated from other actions would not be transferred; and that common questions of fact concerning alleged pyramidal recruiting and marketing techniques of common defendant in general securities and antitrust actions and similar class allegations of nationwide groups of common defendant's distributors warranted transfer of actions for purpose of discovery to single district where discovery had progressed further than in any of other actions and where a great number of relevant documents were located.

Order in accordance with opinion.

[1] FEDERAL COURTS k156

170Bk156

Actions which stood factually isolated from other actions would not be transferred for coordinated or consolidated pretrial proceedings with general securities and antitrust actions. 28 U.S.C.A. 1407.

[2] FEDERAL COURTS k156

170Bk156

Common questions of fact concerning alleged pyramidal recruiting and marketing techniques of common defendant in general securities and antitrust actions and similar class allegations of nationwide groups of common defendant's distributors warranted transfer of actions for purpose of discovery to single district where discovery had progressed further than in any of other actions and where a great number of relevant documents were located. 28 U.S.C.A. 1407; Fed.Rules Civ.Proc. rule 23, 28 U.S.C.A.

*927 Before ALFRED P. MURRAH, [FN1] Chairman, and JOHN MINOR WISDOM, EDWARD WEINFELD, EDWIN A. POBSON, WILLIAM H. BECKER, JOSEPH S. LORD, III, and STANLEY A. WEIGEL, Judges of the Panel.

FN1. Judge Murrah was unable to attend the hearing and, therefore, took no part in the consideration or decision of this matter.

OPINION AND ORDER

PER CURIAM.

This litigation consists of nine actions in eight different districts involving an alleged multilevel marketing system for biodegradable cleaning products operated by Bestline Products, Inc. Plaintiffs in seven of the actions are disgruntled former Bestline distributors who allege common law fraud and violations of federal securities and antitrust laws by Bestline, its former directors and agents. The other two actions, both filed in the Northern District of California, appear to be only marginally related to the seven general securities and antitrust actions. Common defendant Bestline originally moved the Panel for transfer of all the actions to the Southern District of Florida for coordinated or consolidated pretrial proceedings pursuant to 28 U.S.C. 1407. Bestline has since withdrawn its support for transfer of the California actions. Plaintiffs in actions filed in Wisconsin and Louisiana, however, oppose transfer of their respective actions. We find that all the actions, except the two actions pending in the Northern District of California, contain common questions of fact and that their transfer to the Southern District of Florida will be for the convenience of the parties and witnesses and promote the just and efficient conduct of the litigation.

[1] We agree with the parties that the Forsland and Anspach actions in the Northern District of California bear no significant factual relationship to the other actions. The Forsland action is a purely contractual dispute between Bestline and a former distributor; and the Anspach action involves a dispute concerning the terms of an alleged agreement under which plaintiff Anspach manufactured some of Bestline's products in Mexico. Since these two actions stand factually isolated, no purpose would be served by transferring them under Section 1407 for coordinated or consolidated pretrial proceedings with the general securities and antitrust actions.

[2] The parties opposing transfer of their actions to the Southern District of Florida assert that because of the varying scope of each plaintiff's allegations, there are not sufficient common questions of fact to warrant transfer under Section 1407. They also contend that some of the actions do not involve the types of complexities for which Section 1407 procedures were designed. We do not agree. The wide-ranging legal contentions in all the actions present common questions of fact concerning the alleged pyramidal recruiting and marketing techniques of Bestline. And four of the actions contain similar Rule 23 class allegations on behalf of nationwide groups of Bestline distributors. Therefore, transfer of these actions to a single district will prevent duplicative discovery and avoid the possibility of inconsistent *928 class determinations by the transferor courts.

The Southern District of Florida is the most appropriate transferee district. Discovery in the action pending there has progressed further than discovery in any of the other actions, and a great number of relevant documents are located in Miami.

It is therefore ordered that transfer of the actions entitled Paul Anspach v. Bestline Products, Inc., et al., N.D.Cal., Civil Action No. C-73-1282-RFP and Dorothy Forsland v. Bestline Products, Inc., N.D.Cal., Civil Action No. C-73- 775-ACW, listed on Schedule A, is denied.

It is further ordered that the remaining actions listed on Schedule A pending in districts order than the Southern District of Florida be, and the same hereby are, transferred to the Southern District of Florida and, with the consent of that court, assigned to the Honorable James Lawrence King for coordinated or consolidated pretrial proceedings pursuant to 28 U.S.C. 1407 with the action already pending in that district and listed on Schedule A.

SCHEDULE A

----------

Eastern District of Wisconsin

-----------------------------

Phillip Ammerman, et al. v. Civil Action

Bestline Products, Inc. No.70-C-448

Northern District of California

-------------------------------

Paul Anspach v. Bestline Civil Action

Products, Inc., et al. No. C-73-1282-RFP

Dorothy Forsland v. Bestline Civil Action

Products, Inc. No. C-73-775-ACW

Eastern District of Louisiana

-----------------------------

Francis A. Bienvenue, et al. v. Civil Action

Bestline Products, Inc., et al. No. 73-2779

Southern District of New York

-----------------------------

Peter Marion, et al. v. Bestline Civil Action

Products, Inc., et al. No. 73 Civ. 4533

Western District of Wisconsin

-----------------------------

Henry S. Kjentvet, et al. v. Civil Action

Bestline Products, Inc., et al. No. 73-C-276

Eastern District of New York

----------------------------

Samuel Tisser v. Bestline Civil Action

Products, Inc. No. 73-C-914

Middle District of Tennessee

----------------------------

Gene Whittenburg, et al. v. Civil Action

Bestline Products Co., Inc., et No. 7014

al.

Southern District of Florida

----------------------------

Peter Piambino, et al. v. Civil Action

William E. Bailey, et al. No. 73-1230-Civ



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