Venue

Question 1

Where is venue proper?

Answer 1

Venue is proper in any federal district where (1) any defendant resides, as long as all defendants reside in the same state, (2) a substantial part of the events occurred or a substantial part of the property at issue is located, or (3) any defendant is subject to the court’s personal jurisdiction (if the first two provisions do not apply).

Question 2

How is a “forum selection clause” treated by courts?

Answer 2

The clause is accorded respect. If the clause specifies a federal forum, most circuit courts treat the clause as prima facie valid, to be set aside only upon a strong showing that transfer would be unreasonable and unjust or that the clause was invalid for reasons such as fraud or overreaching.

Furthermore, the Supreme Court held that a forum selection clause should be given “controlling weight in all but the most exceptional cases,” even if the clause is unenforceable under applicable state law.

Question 3

Explain which state laws are applied when venue transfer occurs in the following situations for diversity jx:

1. State A to State B, where State A was proper venue
2. State A to State B, where State A was improper venue

Answer 3

1. State B’s court must apply State A’s laws.
2. State B applies State B laws.

NOTE: when venue is transferred based on a valid forum selection clause, the transferee court must apply the law, including the choice-of-law rules, of the state in which it is located. This is because parties contractually waived right to the previous court’s law application