Drеxel Burnham Lambert, Incorporated (Drexel) and Moseley, Haligarten, Esta-brook, & Weeden, Inc. (Moseley), bring an interlocutory apрeal challenging the trial court's denial of their motion to dismiss in a securities claim initiated by Merchants Investment Counseling, Inc. (Merchants Investmеnt) and Merchants National Bank and Trust Company of Indianapolis (Merchants Bank).
We affirm.
Merchants Bank and Merchants Investment filed a complaint seeking to recover $798,875, which they paid for 83,000 shares of stock in Flight Transportation Corporation (FTC) that were purchased from Drex-el and Moseley. Drexel and Moseley acted as lead underwriters in the public offering of the FTC stock. Merchants Bank and Merchants Investmеnt sought this amount pursuant to section 11 of the Securities Act of 19883, 15 U.S.C. § 77k and Ind.Code § 23-2-1-19. Drexel and Moseley moved to dismiss the complaint or in the altеrnative, to stay the Indiana proceedings on the theory of forum non conveniens.
On June 8 and June 4, 1982, the Securities and Exchange Commission (SEC) dеclared effective two Registration Statements filed by FTC for 715,000 shares of common stock and 25,000 units of securities consisting of debentures and wаrrants to purchase FTC common stock. Merchants Bank and Merchants Investment purchased 5000 shares from Moseley and 75,000 from Drexel, as wеll as 3000 shares from Thompson, McKinnon Securities, Inc., which has not been named as a defendant.
The SEC suspended trading in FTC's shares on June 18, 1982, and sought injune-tive relief against FTC, two subsidiaries of *348 FTC, and its chairman in the United States District Court for the District of Minnesota. The SEC alleged that FTC had violated numerous federal securities provisions regarding the offering.
Drexel and Moseley initiated a class action against FTC in United States District Court for thе District of Minnesota. The class consists of purchasers of the offering and Merchants Bank and Merchants Investment are potential members of the class. Approximately thirty actions against FTC, alleging violations of federal and state securities laws, have been filed. On Nоvember 2, 1982, the Judicial Panel for Multistate Litigation granted the motion of Drexel and Moseley to coordinate and consolidate thе pretrial proceedings in the District Court in Minnesota. A documentary depository has been established there to facilitate discоvery.
Merchants Bank and Merchants Investment filed their complaint on January 7, 1983, alleging violations of section 11 of the Securities Act of 1988 аnd 1.C. 28-2-1-19. Drexel and Moseley filed a motion to dismiss, or in the alternative, to stay the proceedings pending the litigation in Minnesota. The motion wаs based upon the theory of forum non conveniens. Their argument is simply that Minnesota is better suited to handle the litigation and the litigation in Indianа would be duplicative. The trial court denied this motion.:
Jurisdiction of claims of section 11 of the Securities Act of 19883 is governed by 15 U.S.C. § 77v. This section provides:
(a) The district courts of the United States, and the United States courts of any Territory, shall have jurisdiction of offenses and violations under this sub-chapter and under the rules and regulations promulgated by the Commission in respect thereto, and concurrent with State and Territorial courts, of all suits in equity and actions at law brought to en-foree any liability or duty created by this subchapter. Any such suit or action may be brought in the district wherein the defendant is found or is an inhabitant or transacts business, or in the district where the offer or sale took place, if the defеndant participated therein, and process in such cases may be served in any other district of which the defendant is an inhabitant or whеrever the defendant may be found. Judgments and decrees so rendered shall be subject to review as provided in sections 1254, 1291, and 1292 of Title 28. No case arising under this subchapter and brought in any State court of competent jurisdiction shall be . removed to any court of the United States. No costs shall be assessed for or against the Commission in any proceeding under this subchapter brought by or against it in the Supreme Court or such other courts. (Emphasis added).
Drexel and Moseley do not contest that Indiana has jurisdiction to entertain this action, however, they do challenge the propriety of entertaining the action. _
The doctrine of forum non conven-iens permits an action to be litigated in another jurisdiction upon a showing that litigation in the initiating forum is so inconvenient to the parties and witnesses that substantial injustice is likely to result. Transfer does not result as a matter of right, but is addressed to the discretion of the trial court. Appellate review is limited to whether the trial court abused its discretion. Duncan v. Rogers, (1983) Ind.App.,
Drexel and Moseley argue the trial court's decision should be reversed becаuse most non-party witnesses reside in Minnesota, the action in Minnesota was filed prior to this action, potential third party defendants rеside in Minnesota, a documentary depository is established in Minnesota, the federal courts have more experience in securities claims, this action will be costly and duplicative of the federal action, dismissal will avoid piecemeal litigation, and that the action is not local in nature. These factors would certainly have justified the trial court's granting of Drexel and Moseley's motion. Howevеr, the trial court denied the motion and review is limited to whether the trial court abused its discretion. An abuse of discretion occurs
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only when the trial court reaches a conclusion against logic and the natural inferences to be drawn therefrom. Kilearn Properties, Inc. v. Lambright, (1978)
With this standard of review bеfore us, we remain unpersuaded that the trial court abused its discretion. The plaintiffs are Indiana corporations and the claim involves LC. 28-2-1-19 as well as the federal claim. Neither Drexel nor Moseley is a Minnesota corporation. Neither Merchants Bank nor Merсhants Investment has consented to the class actions on their behalf. While the District Court has ordered a constructive trust on FTC's accоunts, the trust is insufficient to return to each investor the price of the shares. 1 Furthermore, the discovery concerning Drexel and Moseley will occur in their principal places of business, New York or Boston. Although we may not have reached the trial court's conclusion regarding this motion, we cannot conclude that its decision was without a rational basis.
Review of a motion to stay is also limited to whether thе trial court has abused its discretion. Young v. Herald, (1965)
The judgment is affirmed.
Notes
. The constructive trust has 95% of the amount invested.