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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