Hodgson v. Gilmartin (Venue/28 U.S.C. §754)

2006 WL 2707397 (E.D.Pa. September 18, 2006)

In the past, there has been little detailed consideration of whether the creation of extra-territorial “ancillary” personal jurisdiction through the interaction of 28 U.S.C. §754 and 28 U.S.C. §1692 extends to a similar creation of ancillary venue in the Receivership Court as well. (Several cases have so held, but with little discussion. See SEC v. Bilzerian, 378 F.3d 1100, 1107 (D.C. Cir. 2004); Scholes v. Lehmann, 56 F.3d 750, 753 (7th Cir. 1995); and Haile v. Henderson Nat. Bank, 657 F.2d 816, 822 n. 6 (6th Cir. 1981), cert. denied 455 U.S. 949.)

In Hodgson v. Gilmartin, 2006 WL 2707397 (E.D.Pa. September 18, 2006), the District Court, after extensive discussion, held that there was such ancillary venue, and that actions could be brought in the Receivership Court, even though venue would normally not have been appropriate in that court under the general venue statutes. **1-7. The Hodgson case also held that increased expense and inconvenience to the Receiver (and thus to the defrauded Investors) would be given strong weight in exercising the Court’s discretion as to whether or not to transfer a case to another district pursuant to 28 U.S.C. §1404(a). **14-16.

– Phil Stenger