Pennsylvania court might be a convenient tribunal. The sole test of exercise of jurisdiction has been whether the suit actually involves the internal affairs of a foreign corporation,' and it cannot be denied that these counts do involve the internal affairs of the company as the Pennsylvania courts have interpreted those words.
The Supreme Court in the Green Bay case, although it noted the decision of the Circuit Court of Appeals of the Second Circuit in Weiss et al. v. Routh et al., 2 Cir., 149 F.2d 193, 159 A.L.R. 658, to the effect that the federal court in a diversity case is required to apply the local rule of forum non conveniens, expressly refrained from ruling upon the point. In view of the fact that almost all of the opinion is devoted to discussing general principles for the guidance of the federal courts, without reference to state rule, it can hardly be assumed that the Court was ready to sanction Weiss v. Routh, supra, as a fully acceptable statement of the law. In fact, if any inference at all is to be drawn from the mention of the case, it would appear to be in the opposite direction. The opinion in the Green Bay case nowhere suggests that the discretion of the court to decline jurisdiction on the ground of forum non conveniens is absolute. On the contrary, the principles governing and setting limits upon its exercise of discretion are carefully pointed out, and thus there seems to be no ground for Judge Hand's apprehension that if it be held that the considerations which will set the court in motion are peculiar and personal to itself, it would follow that the decision to accept jurisdiction is 'not controlled by any principle and may be at the judge's whim.'
Jurisdiction of subject matter and persons is not questioned. If it were, there would be not the slightest doubt that state law would be entirely without effect. The propriety of exercising jurisdiction is what is in issue -- a discretionary matter, very closely related to jurisdiction and involving the freedom of the federal courts to act in their own domain. It seems to me that the policy governing the primary question applies in a large degree to the related one, and that a federal court's discretion in the exercise of its jurisdiction should not be controlled by rules made by state courts for their own guidance.
What has just been said applies to the 1st, 2nd, 4th, 5th, 6th, 7th and 9th counts. One of these counts (the 6th) charges violation of the Securities Act of 1934, 15 U.S.C.A. § 78a et seq., and as to it, the reasons for not following the state rule are even stronger. The right under the statute is not derived from one of the states but from the United States, and the mode and place of enforcing that right are matters which belong to the federal courts.
We thus have a suit based on a number of causes of action some of which, had they been sued upon separately, would have been properly cognizable by this court and others not. As long as the suit remains entire and so includes the 3rd and 8th counts, it cannot be proceeded with without such degree of interference with the internal affairs of the company as forbids this court to entertain it. The defendants have moved to sever the causes of action in the complaint, and I think they are severable, but it is conceded that severance is a matter within the discretion of the court.
The plaintiff is opposing any severance at the present time. Whether he will continue to do so, in view of what has been decided in this opinion, I do not know. He may now be willing to agree to the severance and proceed in this court with the trial of all the causes of action except the 3rd and 8th. On the other hand, the two main brands are somewhat interrelated, and it may be that it would be unfair to him to compel him to try his case on the fraud and misconduct grounds here while at the same time depriving him of the opportunity to attack the two recapitalizations of the company which are complained of in the 3rd and 8th counts. He can try his suit as a whole in West Virginia, which is what the defendants want him to do. However, he brought it here as a whole and I think that if he desires to have it disposed of as such he is entitled to do so.
An order will, therefore, be entered that the entire complaint will be dismissed unless within twenty days the plaintiff either moves or stipulates for severance of the 3rd and 8th counts from the others, in which case the 3rd and 8th counts only will be dismissed.
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