Venue, transfer, forum non conveniens

Proper venue within a court system

Section 1390(a) defines venue as “the geographic specification of the proper court or courts for the litigation of a civil action that is within the subject-matter jurisdiction of the district courts in general, and does not refer to any grant or restriction of subject-matter jurisdiction providing for a civil action to be adjudicated only by the district court for a particular district or districts.”

Whereas PJ typically looks to state boundaries, venue looks to district boundaries. Although there are 50 states in the USA, the federal district court system has 94 districts. See the official district court map from the U.S. Courts website at http://www.uscourts.gov/file/document/us-federal-courts-circuit-map. Thus, Florida has three districts, Texas has five, and Nevada has one.

Section 1391 is the default venue statute and determines proper venue, unless another specialized venue statute applies. Examples of specialized statutes regarding venue would be 28 U.S.C. 1400 (patents and copyrights) and 28 U.S.C. 1441(a) (venue of removed civil action).

Section 1391(b) is the heart of the venue statute. It provides three bases for venue:

  • 1391(b)(1): looks to where defendants reside. What if D1 resides in Los Angeles and D2 resides in Miami? Does 1391(b)(1) apply? Read the statute, find the answer.
  • 1391(b)(2): looks to where substantial events, omissions, or property is located. What if the accident involving D1 (Los Angeles) and D2 (Miami) happened in Las Vegas? Read the statute, find the answer.
  • 1391(b)(3): it’s a fallback that applies only when 1391(b)(1) and (b)(2) create no venue. What if you wanted to sue D1 and D2 for a car accident occurring in Tijuana, Mexico? Read the statute, find the answer.

What are the functions of 1391(c) and (d)? Note that the primary function of these subsections is to determine where a party “resides” for venue purposes. Read them carefully. Is “residence” relevant to 1391(b)(1)? 1391(b)(2)? 1391(b)(3)?

Here’s a follow-up exercise: Prepare answers for study questions on “basic venue.”

Transfer & dismissal

What happens when venue under 1391 is improper? Then the D has the right to seek dismissal for improper venue under 28 U.S.C. 1406 and  FRCP 12(b)(3) based on improper venue. In deciding the motion, the court will consider whether venue is proper (see above re proper venue). If venue is improper, then the court has two choices under section 1406. It can either:

  • Dismiss for improper venue; OR
  • Transfer to another federal district court that has proper venue.

What if venue is proper but another federal district court would be even better? Then a party can seek transfer under 28 U.S.C. 1404. Transfer can be either to:

  • Where the civil action “might have been brought.” That means a federal district court that has both PJ and venue.
  • A district “to which all parties have consented.” In that case, the court can transfer to a district that would lack PJ or venue, so long as the parties consent. That makes sense since defects in PJ and venue are both subject to waiver.

In determining whether to transfer, the court considers the public and private-interest factors discussed in the MacMunn case in the book. Read the case.

Also note that either P or D can seek a 1404 transfer! Why do you think a plaintiff might file in one district and then seek transfer to another?

An exercise: Prepare answers for study questions on “transfer and dismissal.”

Forum non conveniens: dismissal when transfer is not possible

A motion for Forum Non Conveniens (FNC) dismissal is for situations where:

  • PJ and venue are both ok,
  • But there is a much better place to litigate, and
  • Transfer is not possible

How might a FNC scenario occur?

  • A state court has PJ and venue, but the more convenient court is in another state.

Example: suppose a Florida citizen sues another Florida citizen in state “X” for a car accident in state X. If the court in state X concludes that Florida would be a better place for trial, the state X court cannot transfer to Florida. It can, however, dismiss the action to allow refiling in a Florida state court.

  • A state or federal court have PJ and venue, but the more convenient court is in another country.

Example: in Piper Aircraft v. Reyno, American manufacturers were sued in federal court for a plane crash in Scotland involving Scottish citizens. Held: based on the public and private interest factors, a Scottish court would provide a far more convenient place to litigate.

What if the other court has law that is not friendly to the plaintiff? In federal court, FNC dismissal can be proper even if the alternative court system has remedies less favorable to the plaintiff. In Piper Aircraft, representatives of Scottish plane crash victims wanted to litigate in the US because of the far more generous monetary remedies available from American courts. However, the U.S. Supreme Court held that an FNC dismissal would be permissible even if it meant litigating in a court system with less favorable law. The court held:

We do not hold that the possibility of an unfavorable change in law should never be a relevant consideration in a forum non conveniens inquiry. Of course, if the remedy provided by the alternative forum is so clearly inadequate or unsatisfactory that it is no remedy at all, the unfavorable change in law may be given substantial weight; the district court may conclude that dismissal would not be in the interests of justice. In these cases, however, the remedies that would be provided by the Scottish courts do not fall within this category. Although the relatives of the decedents may not be able to rely on a strict liability theory, and although their potential damages award may be smaller, there is no danger that they will be deprived of any remedy or treated unfairly.

Stipulations. When a court orders a FNC dismissal, it will often condition that dismissal on stipulations by the parties, such as the defendant agreeing not to seek a statute-of-limitations dismissal in the refiled litigation.

Here’s a follow-up exercise: Prepare answers for study questions on “forum non conveniens.”

And here’s a final activity: prepare answers to the venue/transfer/FNC problem set.

Table showing the differences

The table below is loosely based on Glannon’s table (2d ed.) page 375, with substantial additions:

Venue improper Venue valid
Motion to transfer 28 U.S.C. § 1406

D moves to transfer to another federal district court due to improper venue.

28 U.S.C. § 1404

The P’s chosen district is valid; nevertheless, P or D move to transfer to another district that is more convenient.

Motion to dismiss 28 U.S.C. § 1406 (and FRCP 12(b)(3))

D moves to dismiss under due to improper venue.

If the court agrees with D that the venue is improper, the court can decline to dismiss and instead transfer to another district where venue and PJ would be proper.

The chosen district is valid; nevertheless, a party (typically D) moves to dismiss so that the case can instead be litigated in another court system. The alternative court system may be a court in another state or another country.

Posted Sept. 16, 2016