The opinion of the court was delivered by: BRODERICK
Before the Court is a motion by defendant Tesoro Petroleum Corporation ("Tesoro"), under 28 U.S.C. § 1404(a), to transfer these actions to the Western District of Texas. The actions, one derivative and one on behalf of various classes of Tesoro shareholders and traders in Tesoro securities, allege that defendants Tesoro, Lazard Freres and Company ("Lazard"), an investment banking firm, and several officers and directors of Tesoro, engaged in a pattern of misconduct which included or will include manipulation of the price of Tesoro's stock, attempts to sell Tesoro's interest in a subsidiary, Trinidad-Tesoro, repurchase by Tesoro of its own publicly-held securities for the defendants' personal benefit, illegal payments to foreign governments, and dissemination of false and misleading statements to Tesoro shareholders and traders and to governmental agencies investigating Tesoro's affairs, including the Department of Justice and the Securities and Exchange Commission. Claiming violations of federal and state securities laws and the Racketeer Influenced and Corrupt Organizations Act, as well as breaches of fiduciary duty and common law fraud, plaintiffs seek compensatory and punitive damages, preliminary and final injunctive relief, and attorney's fees.
Plaintiffs oppose the transfer motion, and both sides have filed memoranda with supporting affidavits.
Having considered these submissions and conferred with the parties, the Court has determined that defendant's motion must be granted and the case transferred to the Western District of Texas.
The governing statute, 28 U.S.C. § 1404(a) provides in pertinent part:
For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought.
Since defendant's principal place of business is in the Western District of Texas and since several of its officers and directors reside there, there is no question that this action "might have been brought" there under the broad venue provisions of the Securities and Exchange Act of 1934, 15 U.S.C. § 78aa, Polin v. Conductron Corporation, 340 F. Supp. 602, 604 (E.D. Pa. 1972), and the parties have not disputed this point.
The Court must therefore, in its discretion, Solomon v. Continental Life Ins. Co., 472 F.2d 1043, 1045-46 (3d Cir. 1973), determine if the convenience of the parties and witnesses and the interests of justice require transfer. In most cases, the Court's discretion must be exercised with a recognition that the plaintiff's choice of forum "should not be lightly disturbed," and that the burden is on the party moving for transfer to establish that the balance of convenience of the parties weighs strongly in favor of transfer. Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970). It has been consistently held, however, that the weight accorded to plaintiff's choice of forum is considerably reduced in class and derivative actions, where each of many potential plaintiffs may claim the right to have the action heard in his home forum, and where the nominal plaintiff's role in the litigation is likely to be quite minimal. Koster v. Lumbermens Mutual Casualty Co., 330 U.S. 518, 67 S. Ct. 828, 91 L. Ed. 1067 (1947); Donnelly v. Klosters Rederi A/S, 515 F. Supp. 5 (E.D. Pa. 1981); Blender v. Sibley, 396 F. Supp. 300 (E.D. Pa. 1975); Galfand v. Chestnutt, 363 F. Supp. 296 (E.D. Pa. 1973); Polin, 340 F. Supp. at 606; McCrystal v. Barnwell County, 422 F. Supp. 219 (S.D. N.Y. 1976). Plaintiff's choice also receives less weight where the operative facts underlying the claim have occurred in another district. Kogok v. Fields, 448 F. Supp. 197, 201 (E.D. Pa. 1978); Culbertson v. Ford Motor Co., 531 F. Supp. 406, 407 (E.D. Pa. 1982).
Though plaintiff Bolton has indicated a desire in this case to be present at the pretrial and trial proceedings, it is unlikely, based on the allegations of the complaint and the affidavits of the parties, that he will offer testimonial or documentary evidence. For this reason, his convenience must give way to that of those witnesses whose evidence will be important in proving or disproving plaintiffs' allegations.
Moreover, while several courts have indicated that the policy of the broad special venue provision for securities actions, which gives plaintiffs a wide choice of fora, deserves consideration, Wyndham Associates v. Bintliff, 398 F.2d 614 (2d Cir. 1968); Freiman v. Texas Gulf Sulphur Corp., 38 F.R.D. 336 (N.D. Ill. 1965), such special venue provisions do not prevent the use of § 1404(a) in appropriate circumstances. Securities and Exchange Commission v. Savoy Industries, 190 U.S. App. D.C. 252, 587 F.2d 1149 (D.C. Cir. 1978).
The factors which a court must take into account in deciding a motion to transfer venue under § 1404(a) have frequently been set out. Van Dusen v. Barrack, 376 U.S. 612, 84 S. Ct. 805, 11 L. Ed. 2d 945 (1964); Supco v. Triangle Auto Spring Co., 538 F. Supp. 1187 (E.D. Pa. 1982); Mutual of Omaha Insurance Co. v. Dolby, 531 F. Supp. 511 (E.D. Pa. 1982). See Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 67 S. Ct. 839, 91 L. Ed. 1055 (1947). Those arguably relevant here, in addition to plaintiff's choice of forum, discussed previously, are the relative ease of access to sources of proof, including the location of parties, witnesses and documents, the availability of compulsory process for unwilling witnesses and the cost to obtain the testimony of willing witnesses, and other practical considerations of ease and fairness of the litigation, including the existence of related actions in the transferee district, disruption of the business or affairs of parties or witnesses, and the relative financial abilities of the parties to sustain the costs of litigation. Convenience of counsel is not a factor to be considered. Solomon v. Continental Life, 472 F.2d 1043, 1047; Weinberger v. Retail Credit Co., 345 F. Supp. 165, 168 (E.D. Pa. 1972). The Court must also take into account factors which affect the public interest, though not necessarily the convenience of the private litigants, such as the relative congestion of court dockets and the interest in having localized controversies settled "at home." Gulf Oil v. Gilbert, 330 U.S. at 509.
Movant Tesoro avers and argues that transfer is desirable in this case because Tesoro is headquartered in the Western District of Texas, where most of its officers, several of its directors, and virtually all of its personnel with decision-making authority reside. These persons will assist in the defense of the actions and be among the most significant witnesses at trial. Tesoro also avers that the issues raised by the litigation touch on much of Tesoro's recent business activity, and that litigation in Philadelphia would place an unnecessary strain on many individual defendants and disrupt the business of Tesoro and others, which disruption would be avoided by proceeding in the Western District of Texas. Further, Tesoro avers that the relevant transactions took place in Texas, that no witnesses or relevant documents are likely to be found in the Eastern District of Pennsylvania, that no defendant resides there, and that this District has no logical nexus with the facts and issues in this litigation. Finally, Tesoro avers that several securities class and derivative actions commenced against Tesoro several years ago, which are "identical in all material respects" to the present actions, have proceeded in the Western District of Texas, three upon transfer by the Judicial Panel on Multidistrict Litigation.
Plaintiffs' attorneys aver that the great majority of the witnesses necessary to the proof of their claims, including 14 whom they name, are subject to service of compulsory process from the Eastern District of Pennsylvania, but are not to be subpoenaed from the Western District of Texas. Plaintiffs argue the key witnesses to testify on their behalf are thus not Tesoro personnel in Texas, but rather include several Tesoro Board members and officers, including Tesoro's Director of Public Relations, who work or reside in New York City. Plaintiffs' attorneys also list as potential witnesses several officials of the New York Stock Exchange, officers and employees of Lazard and of several of Tesoro's banks, and various officials of the Justice Department and the Securities and Exchange Commission. All of these witnesses, plaintiff avers, are located in New York and Washington, D.C.
Plaintiffs aver that transfer to the Western District of Texas will affirmatively prejudice them as they will be unable to compel the appearance of these crucial witnesses live at trial. Plaintiffs also aver that Tesoro's annual report lists ...