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February 27, 1986


The opinion of the court was delivered by: WEBER


 On December 13, 1977, the Baltimore & Ohio Railroad Company (B&O) transferred virtually all of its non-rail assets to a wholly-owned company, Mid Allegheny Corporation (MAC). On that same date, without notice to B&O debenture holders, B&O declared a dividend-in-kind of MAC stock on B&O's common stock. In the first of the related actions which arose out of this transaction, plaintiffs who were holders of certain B&O convertible debentures as of December 13, 1977 claimed that the lack of notice deprived them of a valuable opportunity to participate in this dividend-in-kind by exercising their conversion options. This initial suit was commenced in our court on December 28, 1977. Pittsburgh Terminal Corp. v. Baltimore & Ohio Railroad Co., Civil Action No. 77-1455.

 A second suit was brought on January 22, 1979 by Monroe Guttman, the president and principal shareholder of Pittsburgh Terminal Corporation, and others, as B&O debentureholders on behalf of all debentureholders as of December 13, 1977, the date of the MAC dividend. Guttman v. The B&O, Civil Action No. 79-94. Class action certification was denied in Guttman on April 3, 1980. This denial was based at least in part the existence of a Stipulation by Defendants to treat all similarly situated debentureholders in the same manner as plaintiffs. The Pittsburgh Terminal Corporation case and the Guttman case were consolidated for trial. After two appellate reviews, liability has been determined in these cases, and plans are being made to notify all those eligible to participate in the remedy.

 A third case was filed on October 22, 1979, wherein plaintiffs sought to represent a class consisting of all debentureholders as of the time judgment is rendered, plus any debentureholders who had converted their debentures before the entry of final judgment. Lowry v. B&O, Civil Action No. 79-1504. On April 7, 1980 conditional class action status was granted to the Lowry plaintiffs but limited to those persons who purchased or converted their debentures after December 13, 1977. No further orders were issued governing the conduct of the case as a class action. On May 15, 1981, the district court granted summary judgment against the Lowry plaintiffs. On May 10, 1983, the Third Circuit issued an en banc decision in Lowry, dismissing all the Lowry plaintiffs' claims under the Federal Securities Laws and remanding the state claims to the district court. Lowry v. B&O, et al., 707 F.2d 721 (3d Cir. 1983) cert. den. 464 U.S. 893, 78 L. Ed. 2d 229, 104 S. Ct. 238 (1983). A motion for summary judgment in the Lowry case has been granted in favor of the defendants on this date. 629 F. Supp. 532.


 The present action was filed by Ciarlante on November 1, 1983 in the Southern District of New York a few weeks after the Supreme Court denied certiorari in Lowry. Ciarlante also filed a motion for class certification, but the New York District Court granted defendants' motion to transfer without granting class certification. The case was transferred and assigned to this court as related, since Ciarlante's claims arise out of circumstances identical to the related actions wherein a dividend-in-kind of MAC stock was declared on December 13, 1977 without notice to B & O debentureholders. Proceedings were stayed in this case and the motion for class certification was held under advisement while the parties pursued their appeals in Pittsburgh Terminal Corporation and Guttman. After the related appeals were finally determined, the defendants filed with this court a motion for summary judgment. All pending motions are now fully briefed and awaiting our decision.

 Ciarlante, who holds debentures acquired before December 13, 1977, as well as debenture acquired after December 13, 1977, *fn1" seeks to represent a class consisting of all holders of B&O debentures as of the time final judgment is rendered and all holders of debentures who have converted them into B&O common stock after December 13, 1977 and before final judgment is rendered. Plaintiff has predicated his class action on Fed.R.Civ.P. 23(b)(3) alleging predominance of common questions of fact and law and the superiority of a class action.

 Defendants argue that in light of the pending litigation, another class action would not be superior to available methods of fairly and efficiently adjudicating the matters in issue. We note in this regard that while the Pittsburgh Terminal case is not a class action, during its pendency, B & O entered into an agreement with the Trustee for the Debentures, Chase Manhattan Bank, whereby B&O agreed with Chase that if the Pittsburgh Terminal/Guttman plaintiffs prevailed "on the merits of their claims. . ., all holders of debentures as of December 15, 1977, whether or not they were subsequently converted, will be permitted to participate in the court judgment . . . on the same terms as the plaintiffs." (Affidavit of Robert F. Hochwarth, Esq., para. 4). Thus the remedy in the Pittsburgh Terminal/Guttman cases, by stipulation, will be made available to:

1) debentureholders on December 13, 1977 who still hold at the time of final judgment, and
2) debentureholders on December 13, 1977 who subsequently converted their debentures to B&O common stock.

 We see no reason now to assume that a class action in this case would provide a superior alternative for the fair and efficient adjudication of this controversy than that which has already been crafted in related actions. The Pittsburgh Terminal/Guttman case has unquestionably been vigorously and competently litigated. To the extent that Ciarlante seeks to represent plaintiffs similarly situated to those in Pittsburgh Terminal/Guttman to whom a remedy will by stipulation be made available, the motion for certification will be denied.

 The other categories of plaintiffs which Ciarlante seeks to represent are those who purchased their debentures after December 13, 1977. These plaintiffs are clearly already within the class certified in Lowry.2 Thus we see no reason to grant ...

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