The opinion of the court was delivered by: FOGEL
Plaintiff, a holder of the common stock of The New Yorker Magazine, Inc., instituted this derivative action alleging, inter alia, (1) a scheme by the defendants to defraud the Shareholders of The New Yorker Magazine, Inc. in order to benefit the heirs of the former chairman of the corporation; (2) the preparation and dissemination of a materially false and misleading proxy statement regarding investment policy; (3) a tender offer for 89,000 shares of the corporation in furtherance of the scheme to defraud the shareholders; and (4) waste, mismanagement, unjust enrichment and self-dealing by corporate fiduciaries.
All causes of action are founded upon either Sections 14(a) and (e) of the Securities Exchange Act of 1934, 15 U.S.C. § 78n(a) and (e); Rule 14(a)(9) promulgated thereunder by the Securities Exchange Commission; the common law of New York State, or all three sources. Jurisdiction of this court over the subject matter and parties is asserted under Section 27 of the Securities Exchange Act of 1934, 15 U.S.C. § 78aa, 28 U.S.C. § 1337, 28 U.S.C. § 1332 and the doctrine of pendent jurisdiction.
Defendants move for dismissal of the complaint pursuant to Rule 12(b)(2), Federal Rules of Civil Procedure, on the ground that the court lacks personal jurisdiction over the defendants, or, in the alternative, for transfer of this matter from the Eastern District of Pennsylvania to the Southern District of New York pursuant to 28 U.S.C. § 1404(a). Because our analysis of the facts agreed upon by all parties relating to the issue of transfer of this action has led us to conclude that the action should be transferred in accordance with controlling legal principles, it is unnecessary to pass upon that portion of the motion calling for dismissal because of lack of personal jurisdiction over the parties.
Notwithstanding the existence of broad venue provisions which have been enacted to "assure that the suit could be brought where the cause of action arose", United States v. National City Lines, 334 U.S. 573, 583, 68 S. Ct. 1169, 1175, 92 L. Ed. 1584 (1948), Congress has vested in the federal courts extensive discretionary powers to transfer cases under appropriate circumstances pursuant to the provisions of 28 U.S.C. § 1404(a).
This grant of discretion requires an "individualized, case-by-case consideration of convenience and fairness." Van Dusen v. Barrack, 376 U.S. 612, 622, 84 S. Ct. 805, 812, 11 L. Ed. 2d 945 (1964).
Consideration of the following undisputed facts has led us to conclude that the instant case should be transferred in accordance with the guidelines that have evolved in the pertinent case law.
(1) Corporate defendant's headquarters are located in New York City and defendant corporation maintains no place of business in Pennsylvania.
(2) Only 5.8% of the shareholders of record have Pennsylvania addresses, and they hold approximately 2.4% of the shares of capital stock.
(3) Subscription sales in Pennsylvania amount to approximately 4.86% of total subscription sales of the magazine; newsstand circulation in Pennsylvania approximates 4% of total newsstand circulation; revenue emanating from Pennsylvania advertisers amounts to approximately 1.86% of net advertising revenues.
(4) All of the defendant directors and key officers of the corporation reside or work in the New York City metropolitan area.
(5) Nearly all the individual defendants are actively engaged in the daily operations of The New Yorker Magazine, Inc.
(6) All non-party witnesses for the defendants work in New York City including the attorneys and executors for the Estate of Raoul Fleischmann and the team of ...