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LEECH v. FIRST COMMODITY CORP.

December 10, 1982

RONALD H. LEECH, LOUIS M. McMASTER and ERMA L. McMASTER, his wife, WILLIAM D. HARMAN, WILLIAM A. JOHNSON and JANET C. JOHNSON, his wife, ELLIOTT SURVEYING, INC., by LAWRENCE R. ELLIOTT, President, RUTH M. JOHNSON, Plaintiffs
v.
FIRST COMMODITY CORPORATION OF BOSTON and STANLEY B. WASSER, Defendants



The opinion of the court was delivered by: MANSMANN

 This matter is before the Court on a Motion to Dismiss and incorporated in that Motion, an alternative Motion to Transfer, filed jointly by Defendant First Commodity Corporation of Boston ("FCCB") and Defendant Stanley B. Wasser. Eight Plaintiffs *fn1" brought this action as a result of Defendants' alleged fraud and negligence in the handling of Plaintiffs' commodities accounts. For the reasons set forth below, Defendants' Motion to Dismiss is denied. Defendants' alternative Motion to Transfer is granted but for reasons different from those advanced by Defendants. *fn2"

 * * *

 In November 1979, Plaintiff Leech responded to a newspaper advertisement by FCCB concerning purchases of gold commodities by sending a card to FCCB's Miami office. Shortly thereafter Mr. Wasser, who was at that time a commodities broker for FCCB in its Miami, Florida office, *fn3" telephoned Mr. Leech at his home in Washington County, Pennsylvania and later mailed him FCCB literature.

 At Mr. Wasser's request, Mr. Leech supplied him with the names, addresses and telephone numbers of others who were interested in purchasing commodities. Thereafter, all of the named Plaintiffs engaged in commodities transactions through Mr. Wasser as their broker. Mr. Wasser performed all of his commodities brokerage services for Plaintiffs in Miami.

 Mr. Wasser, from time to time, telephoned the Pennsylvania Plaintiffs from Miami, particularly Mr. Leech. *fn4" He also met with Mr. Leech in Miami but otherwise had no face-to-face contact with Plaintiffs outside of Florida.

 Plaintiffs allegedly suffered financial losses as a result of misrepresentations made by the Defendants as well as negligence in the handling of their commodities accounts. They brought this action pursuant to the Commodity Exchange Act, 7 U.S.C. § 1 et seq., alleging a violation of § 4b, 7 U.S.C. § 6b, as well as common law negligence and fraud based upon diversity, and presumably pendent, jurisdiction. Defendants have moved to dismiss *fn5" contending, inter alia, lack of in personam jurisdiction and improper venue.

 * * *

 A court may reverse the normal order of considering personal jurisdiction and venue when it is prudential to do so. Leroy v. Great Western United Corp., 443 U.S. 173, 180, 61 L. Ed. 2d 464, 99 S. Ct. 2710 (1979). We choose to do so here, particularly since the question of personal jurisdiction is the more difficult one and since resolution of the venue issue "resolves" the case before this Court.

 Venue in this case is governed by 28 U.S.C. § 1391(b). *fn7" That provision states:

 
A civil action wherein jurisdiction is not founded solely on diversity of citizenship may be brought only in the judicial district where all defendants reside, or in which the claim arose, except as otherwise provided by law. 28 U.S.C. § 1391(b).

 It is undisputed that all of the Defendants do not reside in this District. *fn8" Therefore, venue is proper only if the claim arose here.

 The determination of "where the claim arose" for purposes of federal venue under § 1391 is a federal question whose answer depends upon federal law. Leroy v. Great ...


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