## Facts

- The Colocotronis family owned and managed several companies in the oil-tanker charter business, with each company operating a single tanker.
- European-American Banking Corporation (EAB) arranged loans to the Colocotronis-related tanker companies.
- EAB sold participation interests in those loans to other banks, which advanced funds as participating lenders.
- After the Colocotronis entities defaulted on the loans, six participating banks filed federal actions against EAB in multiple districts.
- Across the suits, the lender-plaintiffs alleged that EAB made materially false and misleading statements and omissions connected to the sale of the loan participations, violating federal and state securities laws.
- The lender-plaintiffs also asserted common-law fraud and alleged that EAB breached common-law fiduciary duties owed to the participating banks in connection with the participations.
- In one Southern District of New York action, the plaintiff also sued Deutsche Bank, which owned about 20% of EAB’s stock, alleging it conspired with or aided and abetted EAB’s wrongdoing and was liable as EAB’s controlling person.
- The six actions were pending in three districts: three in the Southern District of New York, two in the Eastern District of Pennsylvania, and one in the Southern District of Texas.
- EAB moved before the Judicial Panel on Multidistrict Litigation (JPML) under 28 U.S.C. § 1407 to transfer the Pennsylvania and Texas actions to the Southern District of New York for coordinated or consolidated pretrial proceedings with the three actions already pending there.
- Deutsche Bank objected that the allegations against it raised issues distinct from the core EAB participation-sale allegations and argued that transfer could complicate or delay litigation of its defenses, including anticipated jurisdictional challenges.

## Issues

1. Whether the six actions shared common questions of fact sufficient for transfer under 28 U.S.C. § 1407.
2. Whether transferring the Pennsylvania and Texas actions to the Southern District of New York would serve party and witness convenience and advance efficient pretrial management, despite Deutsche Bank’s objections that its issues were case-specific.

## Decision

- The JPML granted EAB’s motion under 28 U.S.C. § 1407.
- The Panel found common questions of fact across the actions arising from EAB’s loan transactions with the Colocotronis tanker companies and EAB’s sale of participations to the plaintiff banks.
- The Panel transferred the two Eastern District of Pennsylvania actions and the Southern District of Texas action to the Southern District of New York for coordinated or consolidated pretrial proceedings with the three related actions already pending there.
- The Panel rejected Deutsche Bank’s arguments against centralization, concluding that the existence of defendant-specific issues did not outweigh the efficiencies of centralizing overlapping factual discovery and pretrial proceedings, and that the transferee court could address any separate matters through case management.

## Legal Principles

- Under 28 U.S.C. § 1407, civil actions pending in different districts may be transferred for coordinated or consolidated pretrial proceedings when they involve one or more common questions of fact and transfer will serve convenience and advance the fair and efficient conduct of the litigation.
- Common factual questions exist when multiple suits arise from the same set of transactions and call for overlapping discovery into the same events, documents, and witnesses (here, EAB’s investigation, credit analysis, disclosures, and conduct in marketing and documenting the loan participations tied to the Colocotronis tanker companies).
- Centralization is appropriate to reduce duplicative discovery, limit inconsistent pretrial rulings, and conserve judicial and party resources.
- The JPML may select as the transferee forum a district that already has a concentration of related actions and practical access to likely sources of proof and witnesses.
- Transfer under § 1407 does not require identical parties, claims, or defenses across all actions; the presence of defendant-specific or case-specific issues generally does not defeat transfer where the transferee judge can structure pretrial proceedings to handle differences (including separate motion practice on jurisdiction or other individualized defenses).

## Conclusion

In *In re Colocotronis Tanker Securities Litigation*, the JPML centralized six lender suits alleging securities and common-law misconduct in connection with EAB’s sale of loan participations tied to Colocotronis-managed tanker companies, ordering transfer of the Pennsylvania and Texas cases to the Southern District of New York because the actions shared significant factual questions and centralized pretrial proceedings would reduce duplication and improve efficiency despite Deutsche Bank’s claim of distinct issues.


In re Colocotronis Tanker Securities Litigation, 420 F. Supp. 998 (1976)