Wyndham Associates v. David C. Bintliff, A. G. McNeese Jr., L. B. Tybor, American Stock Exchange, Moroney, Beissner & Co., Inc., A. G. Becker & Co., Inc., and Goodkind, Neufeld & Co., Inc.; Maurice M. Friedman v. David C. Bintliff, the Chase Manhattan Bank, N. A., A. G. McNeese Jr., L. B. Tybor, American Stock Exchange, Moroney, Beissner & Co., Inc., A. G. Becker & Co., Inc., and Goodkind, Neufeld & Co., Inc.

Summary

The Second Circuit affirmed orders severing claims against the American Stock Exchange and Chase Manhattan Bank and transferring the remaining claims in two related securities class actions from the Southern District of New York to the Southern District of Texas. The court held that claims may be severed under Federal Rule of Civil Procedure 21 to facilitate transfer under 28 U.S.C. § 1404(a), including when venue would not otherwise be proper as to the severed defendants. The court also upheld the transfer as to Goodkind, Neufeld & Co. and declined to review its motion to dismiss because no order denying that motion had been entered.

Holdings

1. A district court may sever claims against one or more defendants to permit transfer of the remaining action to a more convenient district, even when the claims were properly joined, where administration of justice would be materially advanced by severance and transfer.
2. The district court did not abuse its discretion in finding that the balance of convenience and the interests of justice favored transfer of the remaining claims to the Southern District of Texas.
3. Venue in Texas was proper as to Goodkind because acts or transactions by other defendants in Texas allegedly furthered a manipulative scheme in which Goodkind knowingly participated; alleged interstate communications could independently support venue.
4. The court could not review Goodkind's motion to dismiss because the district court had entered no order denying that motion.

Questions Presented

1. Whether a district court may sever properly joined claims solely to facilitate transfer of the remaining claims under 28 U.S.C. § 1404(a).
2. Whether the district court abused its discretion in transferring the claims against the remaining defendants to the Southern District of Texas.
3. Whether Goodkind was subject to venue in Texas under § 27 of the Securities Exchange Act.
4. Whether the Second Circuit could review Goodkind's motion to dismiss when the district court had denied the motion in its opinion but had entered no order disposing of it.

Disposition

affirmed