OPINION
Petitioner filed this petition for a Writ of Mandamus or Prohibition requesting this Court to direct respondent to vacate its order transferring petitioner’s suit against Chesapeake Industries, Inc. to the District of Delaware. In support of the petition it is contended Delaware is not a district where the action “might have been brought” under 28 U.S.C. § 1404(a). Further, that even if an ability to raise the subject matter of the lawsuit by counterclaim in the transferee district is generally sufficient to satisfy the statute, transfer would be improper in this instance as A.J. could only have made such a counterclaim in Delaware with leave of the court. Further, petitioner asserts that respondent should not have considered the pendency of the Delaware action in deciding the transfer motion. The final contention is a claim that respondent abused its discretion in granting the motion to transfer.
In August, 1971, petitioner and Chesapeake Industries, Inc. entered into an agreement for the sale by petitioner to Chesapeake of the shares of Jessup Door Company, a wholly-owned subsidiary of petitioner. Chesapeake gave petitioner a promissory note for the purchase price. Apparently Chesapeake encountered financial difficulties and in March, 1973, petitioner and Chesapeake allegedly entered into a merger agreement. In May, 1973, A.J. filed an action in the Central District of California for a declaratory judgment that it had properly terminated the merger agreement. The action was dismissed on July 31, 1973.
On May 18, 1973, Johnson et al. v. A. J. Industries, Inc. (hereinafter referred to as “the Delaware action”) was filed in the District of Delaware. That action was brought by Chesapeake and its Chairman of the Board on behalf of Chesapeake and its stockholders. Peti
The action from which this petition arises, A.J. Industries, Inc. v. Chesapeake Industries, Inc. (the “California action”) was filed on September 13, 1973 in the United States District Court for the Central District of California. This action alleges defaults under a note and breach of the merger agreement and sought rescission of the Jessup sale agreement and restitution of the Jessup stock.
On December 3, 1973 the District Court granted Chesapeake’s motion to transfer and on December 13 refused to certify the order for interlocutory appeal. On December 18, 1973 a stay of transfer was refused. Finally, on December 21, 1973 this petition was filed and a stay of transfer was ordered by a judge of this court.
Although Chesapeake does not contest the point, it should be noted that we have previously held that mandamus is appropriate to review the question of whether a transferee district was one where an action “might have been brought”. Shapiro v. Bonanza Hotel Co.,
Petitioner’s first contention is that under the Supreme Court’s construction of 28 U.S.C. § 1404(a) in Hoffman v. Blaski,
In Hoffman v. Blaski, supra, the Supreme Court held that an action must have been capable of having been brought in the transferee district by the plaintiff independently of the wishes of the defendant. The Court further held that the posture of the case at the time of filing in the transferor district is determinative of whether the action was one which “might have been brought” in the proposed transferee district.
The parties are in agreement that petitioner could not have brought the California action in Delaware as Chesapeake was not amenable to process in that jurisdiction. See Shapiro v. Bonanza Hotel Co., supra, and Foster-Milburn Co. v. Knight,
To decide this question it is necessary to examine the statute and Hoffman in light of the policy considerations behind each.
The statute was apparently designed as an attempt to statutorily embody and modify the doctrine of
forum non conveniens. See
Kaufman, Observations on Transfer Under Section 1404(a) of the New Judicial Code,
The utility of the statute was reduced by the holding in Hoffman v. Blaski,
supra,
that the action to be transferred must have been capable of having been brought independently of the wishes of the defendant. One of the major considerations in
Hoffman
was the fear that were the statute to be less rigidly construed, a defendant could take an unwilling plaintiff to a distant forum with which he was unfamiliar. This reasoning was forcefully attacked by Justice Frankfurter in his dissent in Sullivan v. Behimer,
The contention that the right to raise the subject matter of the suit by way of counterclaim in the transferee district meets the statutory requirement is one of first impression in the Courts of Appeals. Several District Courts have considered this problem, but only two have reached a decision on this point. In Foster-Wheeler Corp. v. Aqua-Chem Corp., D.C.,
We believe the better course of action is to hold that the ability to raise the subject matter of a suit in the transferor district by counterclaim in the transferee district will, as a general proposition, satisfy the “where it might have been brought” requirement of 28 U.S.C. § 1404(a). Hoffman v. Blaski, supra, has been subject to well-founded criticism and there appears to be no reason to extend it unnecessarily. A plaintiff is amply protected by the statutory requirements that a transfer be for the convenience of the parties and in the interest of justice. An additional protection is that the determination of transferability must still be made as of the time of filing of the action in the transferor district. Hoffman v. Blaski, supra. This requirement obviates the possibility of a defendant subsequently filing suit in another district and then requesting a transfer to that district. Finally, this result is not inconsistent with many of the policy considerations behind Hoffman. The raising of an issue by counterclaim of course requires that a plaintiff already be present in the transferee district. This minimizes the possibility that a plaintiff will unwillingly be sent to a district with which he is unfamiliar.
Petitioner next contends that Hoffman still requires the granting of the Writ as it could not have raised the subject matter of the California action by counterclaim without leave of the Court. This is alleged to contravene the requirement of Hoffman v. Blaski, supra, that a plaintiff must be able to raise the subject matter independently of the wishes of the defendant.
The basis for petitioner’s argument is that it answered the Delaware action several days before it filed the California action; and the addition of a counterclaim not filed with an Answer is
There is little authority on the question of whether Rule 13(f) exclusively governs the addition of counterclaims or whether Rule 15(a) is also applicable. In Stoner v. Terranella,
There are several potential resolutions of the conflict between Rules 13(f) and 15(a). We could follow the last cited cases and hold that only Rule 13(f) applies. However in those cases the courts were not faced with the question of whether a counterclaim could have been added as a matter of right before a responsive pleading had been filed. In each of those cases the responsive pleading had been filed and the parties were seeking to come under the portion of the rule that requires leave of the court. Where a responsive pleading had not yet been filed we see no reason why Rule 15(a) should not apply with Rule 13(f) coming into force after the filing of the responsive pleading. This result, proposed by Professors Wright & Miller at 159, § 1430 of 6 Federal Practice and Procedure (1971), reconciles the conflict and is consistent with the reasoning of the above cases that Rule 13(f) establishes the standards for discretionary amendment of counterclaims.
Thus, even if Hoffman v. Blaski, supra, required petitioner to have an absolute right to raise the subject matter of the transferred suit by counterclaim to an action in the transferee forum, transfer would be proper in this instance. The best route to this result is the holding that an absolute right to raise the matter by counterclaim is unnecessary. Although we could base our decision on our opinion that petitioner had a right under Rule 15(a) to raise the subject matter by counterclaim, we choose not to do so as it has several undesirable ramifications. Were we to establish such a rule, a court would be required to examine the status of the pleadings, the local rules of the proposed transferee district, and the law of the proposed transferee circuit as to whether Rule 13(f) or 15(a) applies. This result is most undesirable as only the Sixth Circuit has attempted to reconcile the two rules. Thus a District Court would have to guess as to the law of another Circuit and the lawsuit could be unduly delayed if the transferee Circuit disagreed with the construction made by the transferor court. Until the conflicting interpretations were resolved by the Supreme Court the statute could be converted into a vehicle for additionally delaying lawsuits. As this result is neither necessary nor desirable we choose to base our holding on our interpretation that a plaintiff need not have an absolute right to raise the subject matter of a transferred suit by way of counterclaim in an action in the transferee forum before a suit may be transferred.
The ability to raise the subject matter of the transferred suit by counterclaim in a pending action in the transferee forum is significant because it insures that a plaintiff will not be transferred to a forum where it has not already appeared and is not already engaged in litigation with the defendant. Whether or not the subject matter could in fact have been raised by counterclaim is relatively unimportant as it affords no additional protection for a plaintiff and does not reflect the realities of the litigation as there will be two suits pending in the transferee forum unless consolidation is ordered. The statute does not require that a plaintiff have an absolute right to originate an action in the transferee fo
Petitioner further contends that the District Court considered an improper factor in reaching its decision to transfer the action. It is claimed that the possibility of consolidating the transferred action with the Delaware action was a factor in the court’s decision, whereas, in fact, the two actions could not be consolidated.
Under Rule 42(a) of the Federal Rules of Civil Procedure consolidation is discretionary. The feasibility of consolidation is a significant factor in a transfer decision, Van Dusen v. Barrack,
The final contention is that the District Court abused its discretion in granting the transfer motion. Petitioner contends the failure to issue an opinion, written or oral, stating the reasons for transfer, combined with other factors demonstrates an abuse of discretion.
If it appears from a well-reasoned discussion that the District Court considered the appropriate factors under the transfer statute a written opinion is not necessary. Kasey v. Molybdenum Corp. of America,
supra.
Even an oral opinion is unnecessary if the record as a whole demonstrates that the factors were considered. Westinghouse Electric Corp., v. Weigel,
While an opinion stating the reasons for the resolution of such an important motion is highly desirable, we cannot find that the District Court abused its discretion by failing to state its reasons. The briefs and transcript of hearing indicate that all the issues were presented to the District Court and that the Court took ample time to consider them. Thus, there was no abuse of discretion.
It appearing that the Petition for a Writ of Mandamus or Prohibition should be denied, it is ordered that the Petition is dismissed and the stay of Transfer dissolved.