Investors Funding Corporation of New York, and I.f.c.collateral Corporation, Petitioners, v. Honorable William B. Jones, United States District Judge Forthe District of Columbia, Respondent, 495 F.2d 1000 (D.C. Cir. 1974)

On May 1, 1973, the Securities nad Exchange Commission brought an action in our District Court pursuant to 15 U.S.C. 78u(e) and (f) (1970)¹  for injunctive relief to compel defendants to comply with the filing requirements of sections 13(a)²  and 15(d)³  of the Securities Exchange Act of 1934 and regulations thereunder. The complaint alleged late filings by defendant Investors Funding Corporation ('Investors') of the required annual reports for 1971 and 1972 and of several quarterly reports over the same period. Defendant I.F.C. Collateral Corporation ('I.F.C.') allegedly failed also to make timely filing of its 1972 annual report and of various quarterly reports during 1971. The complaint prayed for an appropriate court order directing the defendants to make filings as required by law.

Defendants moved to dismiss the complaint for lack of venue, or to transfer the case to the Southern District of New York pursuant to Rule 12(b) (3) of the Federal Rules of Civil Procedure, and 28 U.S.C. 1406(a).⁴  Alternatively, the defendants urged the court to transfer the action to the Southern District of New York for the convenience of the parties and witnesses, in the interest of justice, pursuant to 28 U.S.C. 1404(a).⁵  On July 3, 1973, the trial court entered an order denying defendants' motion for dismissal or transfer, it appearing to the court 'that venue lies in the District of Columbia.' Defendants promptly filed the instant petition for writ of mandamus.

The Securities Exchange Act of 1934 contains a specialized provision governing venue, 15 U.S.C. 78aa, which reads in relevant part:

Any criminal proceeding may be brought in the district wherein any act or transaction constituting the violation occurred. Any suit or action to enforce any liability or duty created by this chapter or rules and regulations thereunder, or to enjoin any violation of such chapter or rules and regulations, may be brought in any such district or in the district wherein the defendant is found or is an inhabitant or transacts business . . .

Thus, by the terms of this section a civil suit may be brought not only in any district where the defendant is found, or is an inhabitant or transacts business, none of which apply here,⁶  but also in that district in which a criminal proceeding, based upon the same illegal conduct, could be brought. The allegations of the complaint of tardy filings of reports required by the Act arguably form the basis of venue in this district. The first issue before this court, then, is whether venue for failure timely to file a report is in the district where the report was due, or is in the district where antecedent actions, such as the preparation of the report, occurred.

As a general matter, the Supreme Court has supplied the answer in United States v. Lombardo, 241 U.S. 73, 36 S. Ct. 508, 60 L. Ed. 897 (1916). In that case, dealing with the criminal failure to file with the Commissioner General of Immigration the names of aliens employed as prostitutes, venue and jurisdiction were held to lie in the District of Columbia, where the office of the Commissioner General was located and where the filing was required to be made. In upholding the trial court's decision that there was no jurisdiction over the subject matter in the district where the filing should have been prepared and mailed, the Court quoted with approval the district court's opinion, in part as follows:

'Filing, it must be observed, is not complete until the document is delivered and received. 'Shall file' means to deliver to the office and not send through the United States mails . . .. A paper is filed when it is delivered to the proper official and by him received and filed . . .. Anything short of delivery would leave the filing a disputable fact, and that would not be consistent with the spirit of the act.'

241 U.S. at 76-77, 36 S. Ct. at 509. It follows from this reasoning that late filing, as much as a failure to file, occurs within the district where the report is finally delivered to the designated agency or official.

The Supreme Court has applied the Lombardo principle to reports filed under the Trading with the Enemy Act of 1917,⁷  which required any person in the United States having custody or control of any property or of on behalf of an enemy of the United States to report this fact to the Alien Property Custodian within a prescribed period. Thus, in Rumely v. McCarthy, 250 U.S. 283, 39 S. Ct. 483, 63 L. Ed. 983 (1919), the Court held:

The (United States) commissioner . . . found as a matter of fact that the Custodian's office was in the District of Columbia, and as the finding was supported by competent evidence the District Court properly held that it was not reviewable on writ of habeas corpus. That being so, the duty imposed by the statute to make report to the Alien Property Custodian involved the duty to make such report in the District of Columbia, and failure to make it was an offense against the United States committed in that District.

250 U.S. at 289, 39 S. Ct. at 486.

More recently the Supreme Court followed the reasoning of Lombardo in Travis v. United States, 364 U.S. 631, 81 S. Ct. 358, 5 L. Ed. 2d 340 (1961), where a Colorado labor union official was indicted in Colorado for making and filing false affidavits denying affiliation with the Communist party. Such affidavits were required under a provision of the Taft-Hartley Act which prohibited investigations by the National Labor Relations Board of alleged Communist activity in labor unions 'unless there is on file with the Board' an affidavit of each union officer stating that he was not a member of the Communist party. The forms prescribed by the Board for such affidavits required filing in the District of Columbia. The Government argued that the offense of filing false affidavits 'began' in Colorado, because it was there that the officer had prepared and mailed the allegedly false affidavit. The Court rejected such an interpretation, stating:

Venue should not be made to depend on the chance use of the mails, when Congress has so carefully indicated the locus of the crime. After mailing, the affidavit might have been lost; petitioner himself might have recalled it . . .. When a place is explicitly designated where a paper must be filed, a prosecution for failure to file lies only at that place . . ..

364 U.S. at 636, 81 S. Ct. at 362.

Under section 78aa of the Securities Exchange Act, the civil action for enforcement which relies on violations by tardy filings as the basis for a court injunction against further late filings, may be brought in any district where a criminal prosecution for late filings could be brought. On the basis of the Lombardo line of decisions we think that venue for such prosecution would lie in the District of Columbia, the locus for the act of late filing. We accordingly hold that venue for civil enforcement actions of the Commission, involving reports required to be filed in the District of Columbia, is here.

Petitioners also urge that the writ should issue to transfer the case to the Southern District of New York pursuant to 28 U.S.C. 1404(a),⁸  under which a case may be transferred for the 'convenience of parties and witnesses, in the interest of justice.' We have held that appellate review of an order granting or denying a motion for transfer may be had 'in the light of the criteria customarily associated with mandamus and similar remedies.' Wiren v. Laws, 90 U.S.App.D.C. 105, 194 F.2d 873, 874, (1951). And see Norwood v. Kirkpatrick, 349 U.S. 29, 32, 75 S. Ct. 544, 99 L. Ed. 789 (1955); Altman v. Central of Georgia Ry. Co., 363 F.2d 284 (D.C. Cir.), cert. denied, 385 U.S. 920, 87 S. Ct. 231, 17 L. Ed. 2d 144 (1966); Fine v. McGuire, 139 U.S.App.D.C. 341, 433 F.2d 499, 501 (D.C. Cir. 1970).

Though we have not granted the writ, our denial of the petition therefor is without prejudice to reconsideration by the District Court of the discretion available to it under 28 U.S.C. 1404(a), to which reconsideration petitioner is entitled if feasible in the present posture of the proceedings in the District Court. This we emphasize especially in light of the omission in the court's order of July 3, 1973, to explain its reasons for not transferring the case in the court's discretion, other than to note the existence of venue in this jurisdiction, although the order of the court disposed as well of the alternative motion under section 1404(a).

The petition is denied.