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FREISCHLING v. PRIEST OIL AND GAS CORP.

October 21, 1981

LOUIS FRISCHLING, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFF,
v.
PRIEST OIL AND GAS CORPORATION, PRIEST EXPLORATIONS, INC., KENNETH W. PRIEST, VIRGINIA PRIEST, THOMAS A. PFAFF, JOEL MURRAY, MOFFATT, SHREFFLER AND CO., INC., RICHARD M. GLASCOW, JERRY K. RIDLEY, AND FIRST NATIONAL BANK OF BIRMINGHAM, DEFENDANTS.



The opinion of the court was delivered by: Bua, District Judge.

ORDER

This cause comes before this court on defendant First National Bank of Birmingham's (hereinafter FNB) motion to dismiss for improper venue. This decision that defendant, FNB, must be dismissed for lack of venue in this district makes it unnecessary to consider FNB's motion for a protective order.

The venue provisions of the National Banking Act, 12 U.S.C. § 94, provide that a National Bank may only be sued in the district in which it is established. It is unanimously recognized that a bank is "established" only in the federal district that encompasses the place specified in the bank's charter. Citizens & Southern National Bank v. Bougas, 434 U.S. 34, 39, 98 S.Ct. 88, 91, 54 L.Ed.2d 218 (1977) and cases cited therein. FNB is established, as evidenced by its corporate charter, in Alabama.

Both plaintiff and defendant recognize that the venue provisions of § 94 are mandatory and exclusive. The Supreme Court in Radzanower v. Touche, Ross & Co., 426 U.S. 148, 96 S.Ct. 1989, 48 L.Ed.2d 540 (1976) expressly held that the § 94 venue provisions control over the more liberal venue provisions of the Securities Exchange Act, which are relied upon by plaintiff in the instant case.

Plaintiff contends that FNB has waived its venue privilege. Plaintiff has raised no issue of express waiver or failure to interpose a timely objection to venue. Plaintiff, therefore, must necessarily be relying on the concept of implied waiver.

It is well recognized that the § 94 venue privilege may be waived. Radzanower; National Bank of America v. Associates of Obstetrics & Female Surgery, Inc., 425 U.S. 460, 96 S.Ct. 1632, 48 L.Ed.2d 92 (1976). However, facts which will constitute an implied waiver are rarely found. This case is no exception. Plaintiff lengthily expounds upon FNB's conduct in the sale of certain oil well shares, which took place, in part, in Illinois. Plaintiff also makes much of FNB's alleged assistance to defendant Joel Murray in two other securities actions filed in an Illinois district court involving this same sale.*fn1 Plaintiff contends that this sale of shares and "participation" in the lawsuits constitutes a waiver by defendant FNB by its § 94 venue privilege. Case law does not support plaintiff's contention.

The standard for waiver of the § 94 venue provisions was set forth in Buffum v. Chase National Bank of City of New York, 192 F.2d 58 (7th Cir. 1951).

  Waiver is a voluntary and intentional relinquishment or
  abandonment of a known existing right or privilege . . . . [I]t
  may be implied as a necessary consequence of the waiver's
  conduct inconsistent with an assertion of retention of the
  right. . . . [The party's] act or omissions to act should be so
  manifestly consistent with and indicative of an intent to
  relinquish voluntarily a particular right that no other
  reasonable explanation of [its] conduct is possible.

192 F.2d at 61-62.

Defendant has cited numerous cases which failed to find waiver of the § 94 venue privilege, many on facts more conducive to a finding of waiver than those alleged by plaintiff. It has been held that maintaining a branch bank in another district does not constitute a waiver. Helco, Inc. v. First National City Bank, 470 F.2d 883 (3d Cir. 1972); United States National Bank v. Hill, 434 F.2d 1019 (9th Cir. 1970); Tafco, Inc. v. National Bank of Commerce of Dallas, Texas, 490 F. Supp. 132 (W.D.Pa. 1980). Additionally, Buffum held that no waiver could be found where a foreign corporation had registered and appointed an agent for service of process in limited situations. Commission of fraud in another district is not a waiver. Northside Iron & Metal Co., Inc. v. Dobson & Johnson, Inc., 480 F.2d 798 (5th Cir. 1973). Instituting foreclosure proceedings in another district is not a waiver. Bechtel v. Liberty National Bank, 534 F.2d 1335 (9th Cir. 1976). Radzanower failed to find that violation of the Securities Exchange Act in another district would constitute a waiver.

Plaintiff prayed for denial of defendant's motion to dismiss and motion for a protective order and to be allowed limited discovery for the purpose of ascertaining facts that would constitute a waiver. However, none of the facts plaintiff claims he might elicit through this discovery could support a finding of waiver by FNB of its venue privilege.

The only case that has been cited by plaintiff where the court did in fact find a waiver was Stinnett v. 3rd National Bank of Hampden City, 443 F. Supp. 1014 (D.Minn. 1978). In Stinnett, plaintiff sued defendant bank for defamation; the publication allegedly having been part of a complaint filed by defendant bank against the plaintiff in a previous action. The court held that since the action concerned arose from a previous action voluntarily filed by the bank, there was a waiver of § 94 venue for the purpose of the present action.

Plaintiff in the instant case relies heavily on FNB's alleged involvement in previous actions in this district. However, plaintiff has not alleged, nor could he, that FNB was a party to those actions, made an appearance in those actions or in any way put itself before the courts of this district. Thus, even if plaintiff could show that FNB was informally involved in those other causes, that would not constitute a voluntary waiver as required by Buffum. FNB, not being a party, was not in a position to move for a change of venue.

Therefore, since plaintiff has alleged no facts which, if proved, would constitute a waiver by FNB of its ยง 94 venue privilege, this court is bound by Supreme Court precedent ...


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