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Schlenker v. Immucor

December 22, 2009

THOMAS SCHLENKER, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED PLAINTIFFS,
v.
IMMUCOR, INC., EDWARD L. GALLUP, GIOACCHINO DECHIRICO, RICHARD A. FLYNT, PATRICK D. WADDY, RALPH A. EATZ, ROSWELL S. BOWERS, JOHN A. HARRIS, JOSEPH E. ROSEN, MICHAEL S. GOLDMAN, AND JACK GOLDSTEIN, DEFENDANTS.



The opinion of the court was delivered by: DuBOIS, J.

MEMORANDUM

This is a securities fraud case in which a putative class of plaintiffs alleges that defendants violated sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Presently before the Court is Defendants' Motion to Transfer Action to the United States District Court for the Northern District of Georgia Pursuant to 28 U.S.C. § 1404(a) and prospective lead plaintiff Amalgamated Bank's response to the motion. Significantly, plaintiff Thomas Schlenker did not file a response to the motion and Amalgamated Bank does not object to the requested transfer. For the reasons set forth below, defendants' motion is granted and the case is transferred to the United States District Court for the Northern District of Georgia.

I. FACTS*fn1

Plaintiff Thomas Schlenker filed a Complaint on behalf of himself and all others similarly situated on September 21, 2009. The Complaint alleges that defendants -- Immucor, Inc. and several of its executives -- violated sections 10(b) and 20(a) of the 1934 Securities Exchange Act by failing to disclose allegedly unlawful business practices that included, among other things, price-fixing in the blood reagents industry. (Compl. ¶¶ 7, 70-84). Schlenker alleges that disclosure of these business practices after Immucor received a grand jury subpoena from the United States Department of Justice resulted in a $5.63 per-share drop in the sales price of its publicly-traded shares -- a decline of almost 27%. (Compl. ¶ 6). He seeks, among other things, compensatory damages in favor of himself and any others damaged as a result of defendants' failure to disclose adverse material facts related to the alleged price-fixing.

The City of Pontiac General Employees' Retirement System filed a putative class action Complaint almost one month before Schlenker, on August 27, 2009, in the Northern District of Georgia. See City of Pontiac Gen. Employees' Retirement Sys. v. Immucor, Inc., No. 1:09-CV-2351-TWT (N.D. Ga.). The City of Pontiac's Complaint was followed, on October 1, 2009, by the filing of a class action Complaint by Larry MacIntyre. See MacIntyre v. Immucor, Inc., No. 1:09-CV-2714-TWT (N.D. Ga.). MacIntyre voluntarily dismissed that case without prejudice on October 26, 2009. Both Complaints recite facts nearly identical to those in Schlenker's Complaint.

Motions to appoint a lead plaintiff and to approve selection of lead counsel are currently pending before both this Court and the Northern District of Georgia.

II. LEGAL STANDARD

The question before the Court is whether this case should be transferred to the Northern District of Georgia pursuant to 28 U.S.C. § 1404(a). 28 U.S.C. § 1404(a) permits transfer on venue grounds, and states: "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."Once a court determines that venue would be proper in another district, the court must consider "all relevant factors to determine whether on balance the litigation would more conveniently proceed and the interests of justice be better served by transfer to a different forum." Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995). The party moving to transfer venue bears the burden of establishing the need for the transfer. Id.; Miller v. Consol. Rail Corp., 196 F.R.D. 22, 24 (E.D. Pa. 2000).

The Third Circuit has set out a number of public and private interests to be considered when weighing a transfer pursuant to § 1404(a). Jumara, 55 F.3d at 879. "Private interests" include plaintiff's forum preference as manifested in the original choice; defendant's preference; whether the claim arose elsewhere; the convenience of the parties as indicated by their relative physical and financial condition; the convenience of the witnesses; and the location of books and records. Id. at 879. "Public interests" include the enforceability of the judgment; practical considerations that could make the trial easy, expeditious, or inexpensive; the relative administrative difficulty in the two fora resulting from court congestion; the local interest in deciding local controversies at home; the public policies of the fora; and the familiarity of the trial judge with the applicable state law in diversity cases. Id. at 879-80.

III. DISCUSSION

Section 1404(a) requires the Court to answer two questions: (1) Could the case have been brought in the Northern District of Georgia? (2) Is a transfer in the interest of justice?

A. Proper Venue

With respect to the first question -- whether this case have been brought in the Northern District of Georgia -- a securities class action may be brought "in any such district [wherein any act or transaction constituting the violation occurred] or in the district wherein the defendant is found or is an inhabitant or transacts business." 15 U.S.C. § 78aa (2000).

The Court concludes that the Northern District of Georgia is a district where this action might have been brought. Many of the alleged acts and transactions pleaded in the Complaint occurred in that district, many of the defendants are located in that district, and the defendants transact business in that district. (Compl. ¶14, 26-47.); (Aff. of Kendall H. Lioon.)*fn2 Moreover, because this is a case alleging violations of the 1934 Securities Exchange Act -- a law that allows for nation-wide service of process -- the Northern District of Georgia has personal jurisdiction over all of the defendants. SEC v. Carillo, 115 F.3d 1540, 1544 (11th Cir. 1997) (holding that "the applicable forum for minimum contacts purposes is the United States in cases where . . . the court's personal jurisdiction is invoked based on a federal statute authorizing nationwide or worldwide service of process."). In addition, the only plaintiff which responded to the transfer motion does not dispute that the Northern District of Georgia has the requisite jurisdiction and is a proper venue to adjudicate this case. See ...


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