M4: Venue

Question 1

Define venue and its purpose in civil procedure

Answer 1

Venue: the particular court within a court system where a plaintiff can file a lawsuit

Purpose: ensure that a case is litigated in a court that is conveniently located and has some connection to the lawsuit (one or both parties)

Question 2

How are PJ and Venue alike? How are they different?

Answer 2

PJ and Venue ⇒ relationship with forum
Venue is NOT constitutionally compelled
Venue is NOT focused exclusively on D’s interest

Question 3

What are the differences between PJ, SMJ and Venue?

Answer 3

1) Constitution does NOT restrict a plaintiff’s choice of venues, but the Constitution DOES limit a federal court’s subject matter jurisdiction and a court’s authority to exercise personal jurisdiction.
2) Reasonable and convenient = venue restrictions help with this (witnesses, evidence, defendant). SMJ = limits a court’s power to hear a particular type of dispute. PJ = ensures litigation is fair to defendant.
3) Venue = whether a particular court within a state is a convenient location. PJ = Whether a state as a whole is a fair location in which to force the defendant to litigate.

Question 4

Powers (citizen of CT) and Doris (citizen of NY) had a car accident in Manhattan (Southern District of NY). Powers suffered serious injuries and sued Dories in federal court in Buffalo, NY (Western District of NY) for damages in excess of $75K.

Doris resides in Albany, NY, located in the Northern District of NY. Powers wants to file a claim in federal court. In which districts would venue be proper?

A) Any federal district court in NY
B) Northern District of NY
C) Southern District of NY only
D) Northern District and Southern District of NY only
E) Northern District of NY and District of CT only
F) Northern District of NY, Southern District of NY, District of CT only

Answer 4

28 U.S.C. §1391(b): General Federal Venue Statute
“A civil action may be brought in…

(1) A judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located; –> Northern District of NY
(2) A judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; –> Southern District of NY
(3) If there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court’s personal jurisdiction with respects to such action. –> n/a because 1 and 2 have sufficient districts

Thus, D is correct. Northern District and Southern District of NY only.

Question 5

Powers (citizen of CT) and Doris (citizen of Albany, NY - Northern District) and Donald (citizen of Buffalo, NY - Western District) had a car accident in Manhattan (Southern District). Powers suffered serious injuries and sued Dories + Donald in federal court.

Where is the proper venue for Powers to sue?

Answer 5

28 U.S.C. §1391(b): General Federal Venue Statute
“A civil action may be brought in…

(1) A judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located; –> Northern District of NY, Western District of NY
(2) A judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; –> Southern District of NY
(3) If there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court’s personal jurisdiction with respects to such action. –> n/a because 1 and 2 have sufficient districts

Question 6

Powers (citizen of CT) and Doris (citizen of Albany, NY - Northern District) and Donald (citizen of Vermont) had a car accident in Manhattan (Southern District). Powers suffered serious injuries and sued Dories + Donald in federal court.

Where is the proper venue for Powers to sue?

Answer 6

28 U.S.C. §1391(b): General Federal Venue Statute
“A civil action may be brought in…

(1) A judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located; –> The D’s are not from the same state, N.A
(2) A judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; –> Southern District of NY
(3) If there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court’s personal jurisdiction with respects to such action. –> n/a because 2 is sufficient.

Question 7

Peggy (SC resident) sues Devo Corp in federal court. Peggy alleges that Devo manufactured a product that injured Peggy at her home in South Carolina. Devo manufactured the product in Sacramento, CA (Eastern District) and mailed it from Sacramento to Peggy’s home after Peggy ordered it from Devo’s website.

In addition to accepting internet orders that are processed in Sacramento, Devo has five stores in LA (Central District of CA). Devo also has its place of incorporation in Delaware and its principal place of business in San Diego, which is in the Southern District of California.

Devo has no contacts with any district mentioned above.

Identify every district in where venue would be proper.

Answer 7

28 U.S.C. §1391(b): General Federal Venue Statute
“A civil action may be brought in…

(1) A judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located;
——-> 28 U.S.C. 1391(c):
Any judicial district in which D is subject to the court’s PJ
——-> 28 U.S.C. 1391(d):
More than one judicial district and in which D is subject to PJ, any district in that state within which its contacts would be sufficient to subject it to PJ
If not such district from rule above, it’s the district within the corporation has most significant contacts

Devo is subject to General Jurisdiction in Delaware (place of incorporation) and Southern District of California (principal place of business)

Devo is subject to Specific Jurisdiction in South Carolina (where they sent the defective product) and Eastern District of California (arising out of manufacturing of product there)

Question 8

There’s a three-car accident in New York involving Pieter (MI resident), Dolly (MN resident), and Dirck (Oregon resident). Pieter sues Dolly and Dirk in federal district of Minnesota based on diversity jurisdiction.

Where is the venue proper? What if the accident was in Toronto, ON?

Answer 8

28 U.S.C. §1391(b): General Federal Venue Statute
“A civil action may be brought in…
(1) A judicial district in which any defendant resides, if all defendants are residents of the State in which the district is located; –> n/a

(2) A judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated; –> If the accident was in New York (in whatever district the accident occurred), If the accident was in Toronto, you couldn’t have appropriate venue under b2 n/a
(3) If there is no district in which an action may otherwise be brought as provided in this section, any judicial district in which any defendant is subject to the court’s personal jurisdiction with respects to such action. –> Toronto accident: Venue is proper in district of Minnesota (Dolly is subject to general personal jurisdiction) and district of Oregon (Dirk is subject to general personal jurisdiction)

BUT since Dirk is an Oregon resident, there is no personal jurisdiction for him in Minnesota. Pieter may have to sue Dirk separately in the district of Oregon unless he can establish PJ over Dirk in another way. Ex: Serve Dirk with process while he’s visiting MN. Dirk may waive PJ or consent to PJ.

Question 9

P files a lawsuit in District of Nevada, but the only proper venue is the District of Utah. Can the federal court in Nevada move or dismiss the case?

Answer 9

§1406: authorizes the judge to transfer a case if doing so is in the interest of justice. Here, transfer will save P the time and expense of having to refile again in another forum. Easier, quicker, and less $.

If dismissed, the SOL may have run out or expire before P can refile in proper venue.

When proper venue exists, courts will encourage transfer v. dismiss.

Question 10

PJ can be waived, but SMJ cannot. Is a motion to dismiss for improper venue more like PJ, which is waivable under Rule 12? Or is it more like SMJ, which is not? Why?

Answer 10

SMJ = limits a court’s power to hear certain cases. Not a right of the parties involved.

PJ = Due process protection belongs to defendant. If D decides to waive that right, they can do so.

Improper venue = case was filed in a court that the legislature has deemed inconvenient or inefficient for the parties or witnesses. It’s protection to the parties.

Thus, §1406 is more similar to PJ

Question 11

Can a federal court grant a venue-related motion to dismiss without first addressing SMJ and PJ?

Answer 11

It depends, but in general they can.

SCOTUS: district court can dispose of a case without first determining whether a court has SMJ IF dismissal does not involve decision on the merits.

SCOTUS: district courts lacking PJ has the authority to transfer the case to a district court that has PJ over defendant.

Question 12

True or false: Defendants are the only parties in a case who can raise an objection to venue.

Answer 12

False. Plaintiffs can move to transfer venue, but it’s usually the defendants who raise an objection.

Question 13

P (an AZ citizen) sues D (New Mexico citizen) after the two are in a car accident in New Mexico. P brings her suit in a federal district court in AZ.

D has never set foot in AZ and has no contacts there. P’s claim exceeds $75K. D immediately moves to dismiss the case, asserting that the court lacks PJ and is an improper venue.

What would a court most likely do?

Answer 13

Transfer the case to the federal district court of New Mexico under 28 U.S.C. §1406(a).

1) Is the District of AZ a proper venue? No, because D did not reside there and none of the events giving rise to the suit occurred there. §1404 does not apply
2) Is there a proper venue under which the District of AZ could transfer? Yes! District of New Mexico is proper under §1391(b)(1): all of the defendants are from the same state (D, New Mexico) and there is only one federal district in New Mexico. §1391(b)(2): Any part of events giving rise to the claim are in New Mexico.

New Mexico is the only proper venue.

3) Would a court transfer or dismiss? For judicial economy, courts prefer to transfer vs. dismiss “in the interest of justice”

Question 14

Two diverse parties enter into an agreement containing a forum selection clause that requires all disputes arising out of the agreement to be litigated in New York.

One party brings a lawsuit under the agreement in Oklahoma federal court because venue is proper (D resides there under §1391).

Does the existence of a forum selection clause, which requires the suit to be heard in NY, mean that OK is an improper venue? Is is venue proper because the district court is the one that satisfies the §1391(b)?

Answer 14

SCOTUS: Even if a forum selection clause requires a suit to be heard elsewhere, a court is a proper venue if it is proper according to §1391(b)

A party seeking to enforce a forum selection clause cannot move to dismiss or transfer the case under §1406

BUT they can move to transfer under §1404
OR move to dismiss under “forum non conveniens”

Question 15

Dynamo Corp is incorporated and has its principal place of business in France. They sell French wine to liquor stores in South Carolina, but the company has no other contacts in the U.S.

Perry, a South Carolina citizen, sues Dynamo in federal district court in South Carolina. He alleges he bought Dynamo wine at a South Carolina liquor store and got sick from it because it had been improperly bottled in France.

Dynamo moves to dismiss the case and asserts that the case should be heard in France. The court would probably…

Answer 15

Deny the motion.

1) §1391(b)(2): South Carolina is a proper venue b/c a substantial part of the events giving rise to this claim happened in South Carolina. Plus, Dynamo resides in South Carolina because there’s PJ (this case arose directly out of the contact), and we’re assuming that the South Carolina long-arm provision provides for PJ.
2) A district court in S. Carolina cannot transfer the case to a court in France under §1406 (because it is a proper venue) and because they can only transfer to a different federal district court (not France).
3) §1404 does not have dismissals
4) Forum Non-Conveniens: not a possibility b/c the weighing of private and public factors indicates that the witnesses and evidence are in South Carolina. South Carolina is a more convenient location. South Carolina has an public interest in hearing this case.

Question 16

Paulie (IL citizen) sues Doron (MN citizen) in state court in Minneapolis, alleging claims arising out of a business dispute that the two had in Minnesota and IL.

The venue would be proper in these courts:
Minneapolis state court (where the case was filed)
State court in Duluth
State court in Chicago
Federal district court in Minnesota

Assuming Minnesota has a statute authorizing each of the options below, which of them would the Minnesota state judge have the power to order?

A) Transfer to the state court in Duluth, MN
B) Dismissal on forum non conveniens grounds
C) Transfer to federal district of Minnesota
D) Transfer to the state court in Chicago, IL
E) None of the Above
F) All of the above
G) A and B only

Answer 16

G) A and B only

A is permissible: a state can authorize its courts to transfer case to another court within the same state

B is permissible: If a case is filed in a proper venue in state court, the court can grant a forum non conveniens dismissal if the judge believes the case should be litigated in another state or in another country.

Question 17

True or false: State trial courts are bound to follow the state supreme court’s previous decisions

Answer 17

True. State trial courts are bound to follow state supreme court decisions, unless the previous decision(s) have been so eviscerated by later decisions as to be “impliedly overruled.” The state trial court has no authority to ignore a precedent directly on point, even if it predicts that the state supreme court would overrule.

Question 18

True or false: Under the “supreme court predictive approach”, law applied to an issue will differ in the state and federal courts at the trial level.

Answer 18

True. State trial courts are not bound by federal trial court “Erie guesses” when it comes to a predictive approach to changing the rule applied. State courts are bound by state case precedent until those decisions are overruled.

Question 19

Marden brings a negligence action in federal court. The federal judge dismisses the case, concluding that her contributory negligence is a complete bar to recovery under East Dakota law (which governs under Erie). Marden appeals to the federal court of appeals, claiming that East Dakota Supreme court would apply comparative negligence today, allowing her to recover part of her damages.

While the appeal is pending, the East Dakota Supreme Court takes a state case on review and adopts comparative negligence, overruling the contributory negligence rule.

What law should the court of appeals apply to Marden’s case?

Answer 19

The appeal should be decided under East Dakota law as it stands at the time of the appeal. Marden is entitled to the federal appeal court’s best judgment about what East Dakota law is at the time rather than affirming the federal trial judge’s ruling because she made her best guess about East Dakota law based on earlier evidence.

Question 20

True or false: certification of state law questions are extremely common

Answer 20

False. Not routine at all. This would take too much time, money, and delay other proceedings in the court.

Since most cases settle, the case can probably be resolved without a definitive ruling on the question.

Question 21

Why can a tort rule be one thing in NY and something different in PA?

Answer 21

States are free to make their own law in areas not delegated to the federal government. As such, they may make different laws on a point than a sister state.

Question 22

True or false: Plaintiffs can request a transfer, not removal

Answer 22

true. P’s cannot remove a case from state to federal court but they can request a transfer under §1404

Question 23

True or False: A federal district court cannot dispose of a case without first determining whether it has SJM at any time.

Answer 23

False. District Courts can dispose of a case without first determining whether it has SMJ only if the dismissal does not involve a decision on the merits

Question 24

True or false: Federal district courts lacking PJ have the authority to transfer a case to a district case that does have PJ over the defendant.

Answer 24

True!

Question 25

What is the difference between transferor and transferee courts?

Answer 25

Transferor: The court transfering
Transferee: The court accepting the transfer

Question 26

True or false: Transferee court must use Transferor’s choice of law rules for §1404 cases and §1406 cases.

Answer 26

False. Choice of law does not always mean forum court’s law.

§1404 transfer: Transferee must use Transferor court’s choice of law rules

§1406 transfer: not so (MacMunn)

Question 27

What are three questions to ask yourself when dealing with transfers and dismissals in state courts?

Answer 27

1) Is the state court similar to §1404? Was this filed in the proper venue? Is the criteria for granting transfer similar?
2) Is the state system similar to §1406 where the case is originally filed in the wrong court? Or is dismissal the only solution?
3) Forum non conveniens: is there a proper alternate venue, even if the original filing was in a proper venue?

Question 28

True or false: Erie applies to all cases in federal court involving diversity state claims

Answer 28

False. Erie applies to cases in federal court involving diversity state claims under §1332 and §1367, but not cases that are questions of federal law

Question 29

What were the “twin aims of Erie”?

Answer 29

1) avoiding forum shopping

2) avoid inequitable administration of the law

Question 30

When in a federal case between state claims, what rules of procedure are used?

Answer 30

Apply procedural law of the forum: FRCP in federal court

Question 31

Dan, a lifelong resident of New York, went to New Orleans for a convention. One night, he tasted a local Cajun whiskey. Liking what he tasted, he bought a case of the whiskey to take back to New York. Upon his return to New York, Dan gave a bottle to his boss, Ben, a citizen of New York. After work that evening, Ben decided to try the whiskey and prepared himself a cocktail consisting of the Cajun whiskey and water. After three or four sips of his cocktail, Ben experienced a severe burning sensation in his throat and stomach. He called his doctor, who advised him to come to the hospital and bring the bottle of the whiskey with him. At the hospital it was determined that the bottle contained a high percentage of acid. Ben was treated accordingly. He survived, but had to have part of his stomach removed and will talk in a low raspy voice for the rest of his life.

Ben comes to you, an attorney in New York, and wants you to represent him in his personal injury action. He wants to sue for $1 million to pay for his medical expenses and be compensated for his pain and suffering and permanent physical impairments. You agree to represent him and immediately begin making certain investigations. You learn that the Cajun whiskey is a product distilled by the De-Lis Whiskey Company, a Louisiana corporation with its principal place of business in Louisiana. It distributes its products in Louisiana, Alabama, and Mississippi. You learn that about 45% of all sales of the Cajun whiskey are made to New York tourists who take the product back to their home state and 50% of its sales are made to New Yorkers who purchase the liquor through De-Lis’s highly interactive web site. Sales to New Yorkers account for in excess of $3 million annually. In addition, you learn that De-Lis Whiskey Company has $500,000 on deposit in a New York bank.

Assume that the legislature in every state in the country has passed the following statute:

The courts of this state shall have personal jurisdiction over an individual, corporation or other entity who, in person or through an agent: transacts business within the state; or commits a tortious act without the state causing injury within the state; or is personally served within the state; or owns property within the state.

If the plaintiff chose to file this action in a federal district court in New York, which long-arm statute would apply?

Answer 31

New York, because it is the forum state.

Federal Rule of Civil Procedure 4(k)(1) provides that in the absence of a governing federal statute, the federal court applies the state long-arm statute of the forum state. Since this is a tort claim governed by state law, there is no applicable federal long-arm provision and so the forum’s long-arm statute applies.

Question 32

*In a tort action filed in a federal district court in Alabama by an Alabama plaintiff against a citizen of California, the defendant refuses to waive service of process. The accident that gave rise to the lawsuit occurred in Mississippi. The plaintiff wants to serve the defendant while the defendant is on vacation in New York City. Which statute governs the sufficiency of service in this case?

Answer 32

New York law, because the defendant is being served there. Under Fed. R. Civ. P. 4(e)(1), in civil actions filed in federal court, service must be made either pursuant to governing federal law, the state statute of the forum state (Alabama) or the state in which service is effected, or the specific provisions of Rule 4(e)(2) of the Federal Rules of Civil Procedure.

Question 33

*Plaintiff files a claim against the defendant, a Delaware corporation with its headquarters located in New York, in federal district court in Los Angeles, California, alleging a violation of the federal antitrust statute. The federal statute contains a provision for nationwide service of process. The defendant is a major retailer with retail shops in all 50 states and a highly interactive web page that generates hundreds of thousands of dollars of business annually from citizens of all 50 states.

Which jurisdictional statute governs whether or not the defendant is subject to PJ?

Answer 33

Under Fed. R. Civ. P. 4(k)(1), a federal court looks to the forum state’s jurisdictional provision unless otherwise provided by federal law. Here, the substantive federal law contains its own jurisdictional provision. Consequently, the federal antitrust statute, rather than state law, applies.

Question 34

An Arkansas citizen brought a $100,000 tort action in Arkansas state court against a restaurant located in Alaska alleging that the plaintiff had developed food poisoning while eating in that restaurant because of the unhygienic conditions present in the kitchen. The defendant removed the case. Thereafter, the restaurant filed a motion with the federal trial judge requesting that the court dismiss the case for lack of personal jurisdiction over it. The plaintiff acknowledges that the applicable long-arm statute does not provide jurisdiction over this defendant.

Should the court grant this motion?

Answer 34

Yes, because the defendant is not subject to personal jurisdiction. The defendant has not waived any defenses by removing the case to federal court and can still challenge the lack of personal jurisdiction under the long-arm statute.

Question 35

*In a breach of contract action filed in federal district court by a Florida plaintiff against a Louisiana defendant, the defendant refuses to waive service. The plaintiff serves the attorney who had represented the defendant in his previous divorce, at her law office.

Is this service proper under the Federal Rules of Civil Procedure?

Answer 35

No, because she was not authorized to receive service.

Under Fed. R. Civ. P. 4(e)(2)(C), service can be made upon an agent authorized by appointment to receive service of process. The issue here is whether the defendant’s attorney meets that test, i.e., whether the attorney was appointed for the purpose of receiving service of process.

Question 36

In an action filed in federal district court, the defendant refuses to waive service. The plaintiff serves the defendant by placing a copy of the summons and complaint in the hands of the defendant’s housekeeper while she is working in the defendant’s home. She forgets to turn it over to the defendant. Is this service proper under the Federal Rules of Civil Procedure?

Answer 36

No, because the housekeeper does not reside in the defendant’s home.

Under Fed. R. Civ. P. 4(e)(2)(B), service is sufficient if it is delivered to the defendant’s dwelling house or usual place of abode with some person of suitable age and discretion who resides therein. Since the housekeeper does not live in the defendant’s home, this latter requirement has not been met. While some courts have said that this defect can be cured by the fact that the defendant actually receives the notice, this defendant did not receive the process.

Question 37

*The defendant/purchaser, a Vermont citizen, bought a television from the plaintiff/retailer, an Illinois corporation. The written sales agreement provides that the purchaser designated the company president’s secretary to receive service of process for the purchaser in any action brought by the retailer under the terms of this agreement. When the purchaser failed to make a payment, the retailer sued him for breach of contract in federal district court and served the company president’s secretary. The secretary, who was unknown to the defendant, mailed a copy of the service to the defendant’s home and the defendant received it.

Is this service proper under the Federal Rules of Civil Procedure?

Answer 37

Yes, because the defendant agreed to it by signing the contract and received the process.

Under Fed. R. Civ. P. 4(e)(2)(C), service can be made upon an agent authorized by appointment to receive service of process. The Supreme Court held that a service provision in a form contract can constitute an effective appointment of an agent for service of process even if the recipient is unknown to the defendant. The only requirement of the job is to transfer service to the defendant and if that job is fulfilled, the Court ruled, the service is effective. That occurred here and so the service is proper under Rule 4(e)(2)(C).

Question 38

The plaintiff and defendant assert ownership to the same home located in California. The plaintiff is a California citizen and the defendant, the plaintiff’s former best friend, is a citizen of West Virginia. The plaintiff files suit in federal court in California and the defendant refuses to waive service. The plaintiff obtains a court order seizing the property and serves the defendant by publication in a Los Angeles publication. The defendant, who stopped corresponding with the plaintiff one week before suit was brought, files a motion to dismiss for insufficient service.

Should the court grant the defense motion?

Answer 38

Yes, because this is an in personam proceeding.

The due process requirements of the Fourteenth Amendment must be applied to determine the constitutional sufficiency of notice regardless of whether the proceeding is deemed to be in personam, in rem, or quasi in rem. Thus, although this is an in rem case, mere seizure plus publication is not constitutionally sufficient under these circumstances. The constitutional requirement for notice is that notice which is reasonably calculated under all the circumstances to apprise interested parties of the pendency of the action. Since the defendant’s whereabouts were known to the plaintiff, the ruling in Mullane would require more than publication—the plaintiff would have to mail service to the defendant’s known home address.

Question 39

Erica, a resident of New York City, was vacationing in California when the taxi she was riding in collided with an automobile owned by Dave, a resident of San Francisco, California, and driven by Chris, a resident of Los Angeles, California. Erica brought a tort action seeking $300,000 in damages against both Dave and Chris in the federal district court for the Central District of California, which is located in Los Angeles. San Francisco is located within the Northern District of California.

Does venue lie in the chosen forum?

Answer 39

Yes, because Chris resides there.

Venue in diversity cases is governed by 28 U.S.C. §1391(a). Under §1391(b)(1) venue will lie in a federal judicial district in which any defendant resides as long as all defendants reside in the same state. Although the two defendants reside in different federal judicial districts (the Northern and Central Districts of California), they both reside in the State of California. Therefore, under § 1391(b)(1), venue would lie in either the Central (Los Angeles) or Northern (San Francisco) District.

Question 40

Jill went on a vacation to Europe with her two best friends, Lenny and Patty. Lenny is a resident of New York City, New York, and Patty is a resident of Chicago, Illinois. Jill had been a lifelong resident of Chicago but moved to Philadelphia, Pennsylvania, just before leaving for vacation. While they were in Paris, Lenny and Patty rented motorcycles and during their ride, they ran over Jill. Jill returned home and filed a civil action in federal court in Philadelphia asserting $200,000 tort claims against both Lenny and Patty. Neither Lenny nor Patty has ever been to Pennsylvania nor have either of them had any contact with the state.

Does venue lie in the chosen forum?

Answer 40

No, because neither defendant resides there and the accident occurred in Paris.

Venue in diversity cases is governed by 28 U.S.C. §1391. Venue is proper under this statute in a district in which any defendant resides if they all reside in the same state, a district in which a substantial part of the events giving rise to the claim occurred, or a district in which any defendant is subject to personal jurisdiction if there is no other district in the United States that would qualify under either of the first two tests. Neither of the defendants (NY, IL) resides in the chosen district (PA) and the events giving rise to the claim did not occur within that district (Paris, France). Can we then rely on the personal jurisdiction-based fall-back position? Only if there is no other federal district in which venue would lie under either of the first two tests. Since there is no district in the United States in which both defendants reside and there is no district in the United States where the events giving rise to the claim occurred, then the fall-back provision comes into play. However, Pennsylvania is not a suitable venue under the fall-back provision for venue as neither have been to Pennsylvania and neither have sufficient contacts in that forum in order to be subject to personal jurisdiction in PA.

Question 41

Jill went on a vacation to Hawaii with her best friend, Patty. Patty is a resident of Chicago, Illinois. Jill had been a lifelong resident of Chicago but moved to Philadelphia, Pennsylvania, just before leaving for vacation. While they were in Hawaii, Jill and Patty rented motorcycles and during their ride, Patty’s motorcycle ran into Jill’s motorcycle while Jill was on it. Jill returned home and filed a civil action in federal court in Philadelphia asserting $200,000 tort claims against Patty and Bikes, Inc., the Hawaii rental company that is incorporated under the laws of Delaware. Patty has never been to Pennsylvania and never had any contact with the state. Although Bikes, Inc. operates a highly interactive web site, no one in Pennsylvania has ever visited that site or purchased any products from the company.

Does venue lie in the chosen forum?

Answer 41

No, neither of the defendants resides there and the accident occurred in Hawaii.

This case involves two defendants—one natural person and one corporation. Since residence is the relevant concept for venue purposes, we need to know the definition of residence for a corporate defendant. Under the terms of §1391(c)(2), a corporate defendant resides in any federal judicial district in which the corporation is subject to personal jurisdiction. And in multi-district states, the corporation is deemed to reside in any district in that state within which its contacts would be sufficient to subject it to personal jurisdiction if that district were considered to be a separate state. Here, defendant Patty is a resident of the Northern District of Illinois (Chicago). The defendant rental company clearly resides in Hawaii and is also subject to personal jurisdiction in the state under whose laws it is incorporated—Delaware. But it does not have any contact with Pennsylvania that would justify determining that it would be subject to personal jurisdiction in any part of Pennsylvania. Consequently, Bikes, Inc. does not reside in the Eastern District of Pennsylvania (Philadelphia). Therefore, we now have two defendants, each of whom resides in different states. Thus, residence of defendants is not useful for venue purposes. The events occurred in Hawaii so that will not support jurisdiction in the Eastern District of Pennsylvania (Philadelphia). And since the events occurred in Hawaii, venue would not lie in Philadelphia under §1391(b)(2). We cannot even consider the fall-back provision of (b)(3) since venue is available elsewhere under subsections (1) or (2), here in Hawaii.

Question 42

*Jill went on a vacation to Paris, France, with her best friend, Sandy. Sandy is a resident of Chicago, Illinois. Jill had been a lifelong resident of Chicago but moved to Philadelphia, Pennsylvania, just before leaving for vacation. While they were in Paris, Jill and Sandy rented motorcycles and during their ride, Sandy’s motorcycle ran into Jill’s motorcycle while Jill was on it. Jill returned home and filed a civil action in federal court in Chicago asserting $200,000 tort claims against Sandy and Moto, the motorcycle rental company in Paris.

Does venue lie in the chosen forum?

Answer 42

Yes, because Sandy resides there and Moto is a French company.

Subject matter jurisdiction is predicated on §1332(a)(1) (as to the claim against Sandy) and §1332(a)(2) (as to the claim against Moto). So the governing venue statute is §1391(b)(1), which provides for venue in the district where the defendant resides. Since Sandy resides in Chicago, venue is clearly appropriate as to the claim against her. Moto is a foreign company. But §1391(c)(3) expressly allows that a defendant not residing in the United States may be sued in any judicial district, and that joinder of such defendant shall be disregarded in determining where the action may be brought with respect to other defendants.

Question 43

Mandy, a resident of New York City, was vacationing in California when the taxi she was riding in collided with an automobile owned by Charles, a resident of San Francisco and driven by Mike, a resident of Los Angeles. Mandy brought a tort action seeking $300,000 in damages against both Charles and Mike in the federal district court for the Southern District of New York, which is located in New York City.

Does venue lie in the chosen forum?

Answer 43

No, because the plaintiff’s residence is irrelevant for venue purposes and because the accident occurred and the defendants reside in California.

Venue in diversity cases is governed by 28 U.S.C. §1391. Proper venue here lies in the district in which any defendant resides if they all reside in the same state under §1391(b)(1), a district in which a substantial part of the events giving rise to the claim occurred under §1391(b)(2), or a district in which any defendant is subject to personal jurisdiction if there is no other district in the United States that would qualify under subsections (1) or (2) under §1391(b)(3). None of the defendants resides in New York so defendant residence under §1391(b)(1) does not provide venue. The events giving rise to the claim occurred in California, not New York, so that does not provide venue in New York under §1391(b)(2). Even if the defendants would be subject to personal jurisdiction in New York, that is not a basis for venue because that fall-back provision is only available if there is no other district in the United States that would meet either of the prior two tests. In other words, since venue options are available in judicial districts in California, Mandy cannot use §1391(b)(3) to obtain venue in New York.

Question 44

Sam is injured in a crash between his car and another car and a truck on a narrow country road in Concord, New Hampshire. Sam is a citizen of New Hampshire. The driver of the other car, Karen, is a citizen of Maine, and the owner of the truck, Mac Truck, is incorporated under the laws of Delaware and has its principal place of business in Connecticut. Sam files an action in the federal court for the District of New Hampshire seeking damages of $250,000 against each of the two named defendants, Karen and Mac Truck. In the same suit, Karen files a claim against Mac Truck seeking over $75,000 in damages for the damage to her car. Mac Truck files a tort claim against Sam seeking over $70,000 in damages for the damages to its truck. Mac Truck also files a claim against Ben, a citizen of Connecticut who was driving its truck at the time of the accident, seeking indemnity from any loss it might suffer in connection with Sam’s claim against it.

Does venue lie over Sam’s claim against Karen?

Answer 44

Yes, because the accident occurred in New Hampshire.

Since original jurisdiction was founded solely on diversity in this civil action, the relevant venue provision is §1391(b). Under §1391(b)(2), venue will lie in the district where a substantial part of the events that gave rise to the claim occurred. Since the accident occurred in the chosen venue, venue lies there.

Question 45

A California plaintiff brought a $250,000 breach of contract action against an Arizona citizen in federal court in Phoenix, Arizona. The complaint alleges that the defendant agreed to purchase $250,000 of merchandise from the plaintiff’s store, shipped the merchandise to his home in Phoenix, and then refused to pay the invoice. The defendant moved to have the case transferred to the federal district court in Santa Fe, New Mexico. In his motion to transfer, the defendant declared that although he had no contacts with the state of New Mexico, he would waive any objections to personal jurisdiction and venue in that state.

Should the court grant the motion to transfer?

Answer 45

Yes, because the defendant has waived his objections to personal jurisdiction and venue.

In this problem, the defendant seeks to transfer the case to a district that would not have personal jurisdiction over him. Pursuant to the recent amendment to the venue statute, a case can be transferred to a district where the action could not have been brought initially, since the defendant is willing to consent to the exercise of jurisdiction for the purposes of effecting a transfer. Since the defendant is willing to consent to personal jurisdiction for purposes of transfer, the presumption is that it would have been willing to consent to the exercise of jurisdiction by that court if the plaintiff had initially chosen that forum. See 28 U.S.C. §1404.

Question 46

A New York-incorporated and -based company brought a tort claim seeking $1 million in damages against a rival company based in Chicago, Illinois, and incorporated under the laws of Delaware. After being advised by its attorney that Texas law would be most hospitable to this claim, the plaintiff filed this action in a federal court in Dallas, Texas. None of the events that gave rise to this action were connected to Texas. Assume the defendant is subject to personal jurisdiction in Texas. The plaintiff subsequently moved to transfer the case to the district court in Chicago.

Should the court grant this motion?

Answer 46

Yes, because the action could have been brought in Chicago.

The only question is whether Chicago, the transferee court, is a district in which the action might have been brought, i.e., was the defendant subject to personal jurisdiction there and does venue lie there. Clearly the answer to that is yes since the defendant resides there. Thus, the motion to transfer should be granted.

Question 47

A Texas citizen was given a two-year contract by a Middle Eastern oil company to work in one of its plants in that country. After six months, the plaintiff was fired. She returned to the United States and filed a claim in federal court in Dallas, Texas, against the company alleging that she was terminated on the basis of her sex in violation of Title VII of the federal Civil Rights Act of 1964. The defendant moved to dismiss the action on the ground that although it admitted that it was subject to personal jurisdiction in Texas because of its past business dealings there (including recruiting the plaintiff from Texas), maintaining the suit there would result in extreme inconvenience to it since all the alleged acts of discrimination occurred in the Middle East, all the witnesses to the events in question were there, and defending in the United States would be extremely inconvenient. The plaintiff opposed the defense motion on the ground that the foreign court would apply foreign law to this dispute and that under that law, she would have to establish malicious conduct beyond a reasonable doubt, whereas under Title VII, she would only have to prove negligent conduct by a preponderance of the evidence.

Should the court dismiss the case?

Answer 47

Yes, under the doctrine of forum non conveniens

In Piper Aircraft v. Reyno, an airplane crashed off the coast of Scotland. The plane was manufactured in Pennsylvania while the propellers were manufactured in Ohio. A suit was filed in California on behalf of the deceased. The California case was removed to federal district court and the case was transferred to the federal district court in Pennsylvania. Upon motion, the Pennsylvania court dismissed the action under the doctrine of forum non conveniens. While the Third Circuit reversed, the Supreme Court dismissed under the doctrine of forum non conveniens. The defendant here is relying on the doctrine of forum non conveniens as the basis for dismissing an action over which the court clearly has subject matter jurisdiction, in which venue lies, and with respect to a defendant over which it clearly has personal jurisdiction. Courts will grant this motion upon a showing not only that the chosen forum is extremely inconvenient but that a distinctly more convenient forum exists in which the court would have subject matter jurisdiction, venue, and personal jurisdiction. Assuming the court finds the chosen forum to be manifestly and significantly inconvenient, it will grant the motion in light of the availability of this alternative, more convenient forum.

Question 48

*A Texas citizen was given a two-year contract by a Middle Eastern oil company to work in one of its plants in that country. After six months, the plaintiff was fired. She returned to the United States and filed a claim in federal court in Dallas alleging that she was terminated on the basis of her sex in violation of Title VII of the federal Civil Rights Act of 1964. The defendant moved to dismiss the action on the ground that although it was subject to personal jurisdiction in Texas because of its past business dealings there (including recruiting the plaintiff from Texas), maintaining the suit there would result in extreme inconvenience to it since all the alleged acts of discrimination occurred in the middle eastern country, all the witnesses to the events in question were there, and defending in the United States would be extremely inconvenient. The plaintiff opposed the defense motion on the ground that a Middle Eastern court would apply foreign law to this dispute and that law does not prohibit discrimination on the basis of sex. Should the court dismiss the case?

Answer 48

Yes, under the doctrine of forum non conveniens

In Piper Aircraft v. Reyno, the Supreme Court indicated that, in determining whether an alternative forum exists, 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 and the district court may conclude that dismissal would not be in the interests of justice. But the Court also stated that this standard is not met merely when the remedy provided by the alternate forum is either more difficult to obtain or not as lavish as that provided by the law that would be applied by the initially chosen forum. On the other hand, in this problem, the plaintiff would be completely divested of a right of action under Middle Eastern law and this would result in no remedy at all. Consequently, the court would deny the motion to dismiss on forum non conveniens ground because even if the chosen Texas forum is manifestly and grossly inconvenient, under these circumstances, dismissal is not in the interests of justice.

Question 49

*A Texas plaintiff files a federal question claim against a Nevada defendant in federal district court in Houston, Texas. The events that gave rise to that action occurred exclusively in Nevada. The defendant has no contacts of any kind with Texas and so he moves to transfer the case under §1404 to the federal district court in Reno, Nevada. Nevada has one federal judicial district.

Should the court grant the motion?

Answer 49

Yes, because the action could have been brought in Reno and transfer there is in the interests of justice.

The crucial factor in this problem is that the transferor court in Houston does not have personal jurisdiction over the defendant. So we must determine whether this defect is fatal to the court’s ability to transfer. In Goldlawr v. Heiman, the Court ruled that a court in which venue was improperly laid could still transfer a case under §1406 even if it also lacked personal jurisdiction over the defendant. The Court also stated that this result would promote the congressional objective of removing obstacles that might “impede an expeditious and orderly adjudication of cases and controversies.” In the instant hypothetical, the transferor court does not have venue since the Nevada defendant does not reside in that Texas district and the facts giving rise to the claim did not occur in Texas, but in Nevada. Additionally, the facts indicate that the Nevada defendant would not be subject to the personal jurisdiction of the Texas court. But under Goldlawr, the Texas court can cure both of these defects by transferring the case under §1406 to a district in which it “could have been brought.” Clearly, as both venue and personal jurisdiction would be available in the transferee court in Nevada, the interests of justice will be served by transferring the case there. The defendant here sought to transfer the case to Nevada under §1404. Nevertheless, to avoid unjust dismissals, the courts extend the rationale of Goldlawr to §1404-based transfers. Thus, since the action could have been brought by the plaintiff in Nevada since venue would lie there and the defendant is subject to personal jurisdiction there, the court should grant the motion.

Question 50

A citizen of Oregon was injured in an accident by a citizen of Wyoming. Before filing suit in state court, the Oregonian assigned his claim to a citizen of Wyoming on the understanding that the Wyoming citizen would transfer all proceeds recovered at trial back to the injured party in exchange for a fee for expenses and services provided. This individual then filed the suit seeking $100,000 in damages in Oregon state court. The defendant sought to remove the case on the basis of diversity jurisdiction.

Answer 50

Yes, because the parties are diverse and the claim is for $100,000.

The trick here is that the assignment, if collusive in intention, was made for the purpose of defeating diversity jurisdiction. Section 1359 expressly applies only to collusive joinder for the purpose of invoking federal jurisdiction. Nevertheless, the federal courts have construed §1359 to apply to collusive joinder to both invoke and defeat jurisdiction. Thus, §1359 would apply here if the assignment was collusive. Since the original claimholder retained all real interest in the claim minus a service fee, the assignment was collusive. Thus, the original claimholder’s citizenship governs and there is diversity jurisdiction since the state law claim is for $100,000.

Question 51

*A citizen of Pennsylvania is injured in a car accident with another citizen of that same state who was not injured in the crash. The injured party was in desperate need of cash and so he assigned his cause of action to a citizen of New York for $50,000. The New Yorker then filed the claim in federal court in New York, seeking damages in the amount of $100,000 against the other driver.

Answer 51

Yes, because the parties are diverse and the claim is for $100,000. 28 U.S.C. §1359 states that a district court will not have subject matter jurisdiction when a party has been collusively joined for the purpose of invoking that court’s subject matter jurisdiction. The question, therefore, is whether the assignment to the New Yorker was made by the original claimholder for the purpose of creating diversity-based jurisdiction. This turns on whether the original claimholder/assignor retained an interest in the claim or where other aspects of the assignment indicate that it was made solely for the purpose of invoking federal jurisdiction. Since, in this case, the original claimholder gave up all interest in the claim for a reasonable amount of money, it is clear that this was not a collusive assignment within the meaning of §1359. Thus, since the defendant and (New York) plaintiff are diverse and the claim is in excess of $75,000, there is jurisdiction under §1332(a)(1).

Question 52

*A citizen of Pennsylvania is injured in a car accident with another citizen of that same state who was not injured in the crash. The injured party assigned his claim to a New York citizen on the understanding that the New Yorker would transfer all proceeds recovered at trial back to the injured party in exchange for a fee for expenses and services provided. The New Yorker then files the claim in federal court in Pennsylvania against the other driver, seeking damages in the amount of $100,000. Does the court have subject matter jurisdiction?

Answer 52

Yes, because all §1332(a)(1) requirements are met.

28 U.S.C. §1359 states that a district court will not have subject matter jurisdiction when a party has been collusively joined for the purpose of invoking that court’s subject matter jurisdiction. The question, therefore, is whether the assignment to the New Yorker was made by the original claimholder for the purpose of creating diversity-based jurisdiction. This turns on whether the original claimholder/assignor retained an interest in the claim or where other aspects of the assignment indicate that it was made solely for the purpose of invoking federal jurisdiction. Since, in this case, the original claimholder retained all of his interest in the claim and only paid the putative plaintiff a service fee, the courts would find this to be a collusive joinder and disregard the citizenship of the assignee.

Question 53

A former employee brought a defamation suit against a company he had worked for, alleging that the company had given a false negative reference to his prospective employer. The former employee sued in federal district court, invoking diversity jurisdiction. In the state where the federal court sits, the state Supreme Court has held that the common law of defamation requires a plaintiff to prove that the defamatory statement was false. Federal district courts within the state have questioned this element in dicta, on the ground that it is better policy for a defendant to have to substantiate the truth of the statement it made. If the federal court hearing the former employee’s case decides to take the next step and requires the employer to prove the statement was true as an affirmative defense, rather than as an element of the former employee’s claim, would it violate the Erie doctrine?

Answer 53

Yes, because the elements of a state common law claim is a state “law” to which a federal court must defer.

The elements of a state-created common law cause of action—here, the state’s defamation law—are “laws” to which federal courts sitting in diversity must defer. Erie Railroad v. Tompkins made this clear when it held that the Rules of Decision Act required federal courts to defer to Pennsylvania’s legal standard for trespasser negligence rather the conflicting federal common law standard. Both Erie and this fact pattern concern the state’s power to craft the requirements of its own substantive law.

Question 54

An out-of-state citizen sued a police department in a federal diversity case, alleging negligent retention of an officer who had used excessive force against him. Even though discovery established this claim with undisputed evidence, the department refused to settle. Ultimately, the court granted the citizen summary judgment, reasoning he had established all elements of his claim as a matter of law. The court then awarded the citizen attorneys’ fees on the ground that the department had defended the claim in bad faith. Under a 1973 U.S. Supreme Court decision, federal courts have inherent equitable power to award attorneys’ fees for “bad faith” litigation conduct even if no fee-shifting statute applies. The rationale is that the policies supporting the American rule, where each party pays its own attorneys’ fees, don’t apply to parties acting in bad faith, who need to be deterred and punished for such conduct. By contrast, courts in the state where the federal court sits never award attorneys’ fees without a fee-shifting statute. If the attorneys’ fees award is challenged on appeal, how should the appellate court rule?

Answer 54

The appellate court should uphold the award, because the federal rule authorizing attorneys’ fees for bad faith litigation conduct is procedural in nature.

Under the Erie doctrine, when state and federal law conflict in a diversity case and there is no Federal Rule of Civil Procedure on point, the court must analyze whether the state practice is substantive (bound up with state-created rights and obligations) or procedural (a matter of forum and mode). If it is substantive, the state practice must prevail. If it is procedural, the analysis of which practice—federal or state—must be observed turns on the degree of outcome determination if both practices were to remain in place. Here, the issue of attorneys’ fees is not substantive. It’s not appended to any cause of action or other state-created right or obligation. As a matter of form and mode, it’s unlikely that maintaining the federal approach alongside the state’s conflicting practice would be outcome determinative in the Erie “twin aims” sense. Few would choose a forum based on anticipating their own or their opponents’ bad faith conduct. Even if this would result in some degree of litigant inequality—out-of-state litigants would be able to recover fees where in-state litigants would not—it is not of the extreme kind.

Question 55

True or false: Fed district court can dispose of a case without first determining whether it has SMJ only if dismissal is not a decision on the merits.

Answer 55

True

Question 56

True or false: district courts lacking PJ have authority to transfer a case to a district court that does have PJ over the D AND they can transfer at any time, no matter if the D brings up or not.

Answer 56

True. Courts can do this and without motion.