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Venue in Federal Courts a. Venue is the geographical location where the lawsuit is filed (Statutory not constitutional query) i. Types of Actions when discussing Venue
1. Transitory Actions a. Can be brought anywhere (nature of underlying claim does not lock controversy to any specific venue) -- Tort or breach of contract claim
2. Local Actions a. Proceeding that directly affects the ownership or possession of real property b. Nature of the underlying claim locks it to a specific geographical location ii. Must raise the 12(b)(3) objection to venue in initial pleading/response or lose it forever according to 12(h)(1) b. Venue must be found as to each claim and defendant c. General Venue Statute: 28 U.S.C. SS1391 i. 1391 Specifics
1. Diversity Actions (subsection (a)) a. (1) Can be brought in a judicial district where any defendant resides if all defendants reside in the same state b. (2) Judicial District in which a substantial part of the events or omissions giving rise to the claim occurred i. First of Michigan Corp.
1. Basic teaching of the case is that the substantial events leading to the case can have occurred in several areas and do not need to pick the best one; so potential for multiple proper venues
2. Not the same query as minimum contacts because you can look at both PL and DF actions to determine what actions gave rise to the claim c. (3) Fallback provision -- any judicial district in which any defendant is subject to PJ at the time action is commenced, if there is no other district (typically overseas claims)
2. Non-Diversity Actions (subsection (b)) a. (1) Can be brought in a judicial district where any defendant resides if all defendants reside in the same state i. Residence has been interpreted to mean domicile b. (2) Judicial District in which a substantial part of the events or omissions giving rise to the claim occurred i. First of Michigan Corp. c. (3) Fallback provision -- any judicial district in which any defendant may be found, if there is no other district (typically overseas claims) i. D may be found before, after, or simultaneously with the commencement of the lawsuit.
3. (subsection c) -- Defines corporations in terms of residence (resident of any judicial district in which the corporation is subject to PJ at the commencement of the action) a. Only definitional, not venue statute and works with (a) and (b)
4. (subsection d) -- Can sue an alien in any district a. They must be subject to PJ Page 1 of 29
b. Where an alien is joined with a US Citizen, disregard the alien d. Transfer of Venue i. General Tips
1. Can only transfer to a Fed. D. Ct. that had PJ over the D and is a proper venue
2. Transfer is limited to another federal district where action might have been brought a. Granting transfer is completely w/in the discretion of the court b. Burden is on D to show the action would be better litigated in another district. OVERWHELMINGLY CONVINCING.
3. May transfer based on 4 things: a. 1) Convenience of parties, 2) Convenience of witnesses, 3) Interest of justice, 4) Case could have been brought in the transferee district.
4. If a case arises under federal question, the federal law applied is that of the transferee court ALWAYS. ii. 28 USC SS 1404(a)
1. For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought. a. Only applies when venue in the original court is proper b. DF cannot submit to personal jurisdiction of the new forum if they were not originally under PJ there c. Can only transfer intra-district. Cannot transfer to state court or foreign court. d. Interest of justice is the standard -- we want to hear the case on the merits if possible e. The choice of law rules from the original court follow the case.
2. Factors to consider (from Colonial Penn) a. The availability and convenience of witnesses and parties b. The location of counsel c. The location of books and records d. The cost of obtaining attendance of witnesses and other trial expenses e. The place of the alleged wrong f. The possibility of delay and prejudice if transfer is granted g. The plaintiff's choice of forum (which is generally entitled to great deference)
3. Private and Public Factors a. Private i. Strong preference for plaintiff's choice of forum ii. Ease of access to sources of proof iii. The availability of compulsory process for unwilling witnesses iv. The cost of obtaining attendance of willing witnesses v. Practical problems that make trial of a case easy, expeditious and inexpensive b. Public i. Relative congestion of court dockets ii. Choice of law considerations iii. Relationship of the community in which the courts and jurors are required to serve to the occurrences that gave rise to the litigation
4. Clearly Erroneous Review - discretionary decisions iii. 28 USC SS 1406(a)
1. Used when venue is improper or there is no PJ a. If you have a case filed in the improper venue, the court shall dismiss or if in the interest of justice transfer to a court where it might have been brought
vii. 2. Original court has discretion to transfer or dismiss a. When venue is proper but PJ is lacking, is the only option for the court to dismiss?
i. No, the court has the power to transfer a case to a district where venue and PJ are proper (Goldlawr)
3. Substantive law is the new forum 28 USC SS 1631: Transfer to cure want of jurisdiction
1. 10th Circuit uses this
2. If want of jurisdiction, the court can transfer in the interest of justice.
3. Can transfer to any court where the action could have originally been filed. Governing Law upon transfer
1. Diversity Cases (Van Dusen Rule) a. If the transfer is made under 1404(a), the substantive law follows the original court (transferor court) b. If the transfer is made under 1406(a), the substantive law follows the new court (transferee court) c. NOTE: If PJ is lacking and case is transferred under 1406, 1404 or 1631, the substantive law of the transferee court applies (Van Dusen does not apply)
2. Federal Question claims a. Federal court is loyal to their own laws (Van Dusen does not apply) Judicial Panel on Multidistrict Litigation (28 USC SS 1407)
1. Procedural device used by the federal judicial system to coordinate or consolidate pretrial proceedings in factually related lawsuits that have been filed in different federal judicial districts. a. Purpose -- Streamline the pre-trial proceedings and promote judicial efficiency b. Once pretrial proceedings are done then it transfers back to the original forums Forum Selection Clauses
1. With regards to contracts it would not unusual two types of clauses a. Choice of Forum i. Clauses that are mandatory ("requiring suit...") -- Specific court is named ii. Clauses that are discretionary ("suit may be brought...") -- General area for suit, such as a state, is named b. Choice of law clauses i. As to many transactions/occurrences/events, given the inter-state or international situation of those events, as to merit issues, it is possible for the law of more than one sovereign to be applied to resolve the issues ii. Courts have to have some approach to determine what law would govern iii. Federal courts like to see this provided at the time of contract
1. Will transfer under 1406(a) or dismiss under 12(b)(3)
2. These are a factor in 1404(a) motions
2. Jones v. GNC a. Used Bremen to determine that statute can trump choice of forum clause i. If there is a strong public policy (such as statute) against choice of forum clause then disregard choice of forum clause b. Bremen -- forum selection clause is presumptively valid and should not be set aside unless the party challenging the clause "clearly shows that enforcement would be unreasonable unjust, or that the clause was invalid for such reasons as fraud or overreaching." Page 3 of 29
c. Depends on if the clause is mandatory i. Remember that if mandatory language to state court, then must dismiss since a case cannot be transferred to state court from federal court e. Forum Non Conveniens (dismissal doctrine and no constitutional concerns) i. Defined -- Common law doctrine that permits a court to decline the exercise of jurisdiction in order to permit a suit to be filed in another more convenient forum
1. From Piper a. An unfavorable change in law does not bar a dismissal under forum nonconvieniens. i. Just because foreign law may need to be used, does not necessarily mean that the case should be dismissed for forum non conveniens. ii. Similarly, the mere fact that the law of the alternative forum is less favorable to the P is not by itself grounds for denying the D's forum non conveniens motion.
2. What the moving party must show a. There is an available alternate forum i. Forum must have jurisdiction over the DF
1. DF could submit to PJ in this one
2. Must be amenable to process ii. Action not barred by the statute of limitations b. The balance of private and public concerns implicated by the choice of forum weighs heavily in favor of dismissal i. P's choice of forum must be respected c. Gilbert's Balancing Test i. Private Factors
1. Relative ease of access to sources of proof
2. Availability of compulsory process for attendance of unwilling witnesses
3. Cost of travel for willing witnesses
4. Possibility of view of premises
5. All other practical problems that make trial of a case easy, expeditious, and inexpensive
6. Plaintiff's choice of forum a. Given less deference if the PL is foreign (Koster) ii. Public Factors
1. Administrative duties flowing from court congestion
2. Local interest in having localized controversies decided at home
3. Interest in having the trial of a diversity case ina forum that is at home with the law that must govern the action
4. Avoidance of unnecessary problems in application of foreign laws a. Change of substantive law should not be given conclusive or substantial weight in the fnc query
5. Unfairness of burdening citizens with jury duty ii. Shiley
1. Just because the new location does not have a suitable remedy does not mean the alternative forum is unsuitable.
2. Defined suitable place for trial as a pure question of law a. Must be one where the DF is subject to PJ b. Must not be past the statute of limitations f. Challenging Venue
i. Since venue = Ds privilege, it's up to D to raise objection to venue.
1. FRCP 12(b)(3): Motion to dismiss pursuant to improper venue, or as affirmative defense. a. Must be asserted by motion or responsive pleading it is waived. 12(g), 12(h)(2) ii. P has burden of proof of establishing venue is improper. iii. CANNOT BE ATTACKED COLLATERALLY II.
Erie Doctrine a. Introduction/Basics i. Basic Premise -- A federal court sitting in diversity will generally apply federal procedural law and state substantive law.
1. Substantive Law -- Defines and regulates primary human conduct
2. Procedural Law -- How you get operative facts before the court ii. Article IV Supremacy Clause of US Constitution
1. Constitution, laws of US shall be the supreme law of the land. The judges in every state shall be bound thereby. a. State law must conform to the dictates of the U.S. Constitution, and yield to constitutionally valid federal law whenever a conflict between state and federal law arises. iii. Pre-Erie Landscape
1. Swift v. Tyson a. Common law is not part of the "laws of the several states" (as indicated by RDA) b. Second, he determined that Congress only meant to include positive law AND judicial interpretation of those statutes, and only common law that is established custom that is intra-territorial in nature and immovable iv. Erie Railroad Co. v. Tompkins
1. The Supreme Court overturned Swift (even though that was not at issue in the case) a. Swift's goals were never met
2. Holding/Results a. The RDA is not unconstitutional but its application under Swift is unconstitutional b. No more federal general common law (it was applied on an ad-hoc basis) c. Holding -- The law to be applied in areas where the federal government cannot act, will be determined by state law v. Significant Steps after Erie
1. Klaxon -- A federal district court exercising jurisdiction over a state law claim must apply the same substantive law as would be applied by the courts of the state in which the federal district court sits. a. A federal court sitting in diversity must apply the choice-of-law principles followed by the courts of the forum state
2. Determining the Content of State law a. Federal district court can certify the question, if there is a certification statute within that state b. If no certification statute, then federal court must review opinions and take the best shot (could use other intermediate appellate courts, treatises) c. The court cannot create new law (cannot expand the scope of the state law) b. Track One - Federal Statutes and the Supremacy Clause i. Use this track when we have a federal statute, constitutional provision or non-procedural common law (judicial interpretations of the constitution) that conflicts with state law Page 5 of 29
1. SS34 of Judiciary Act of 1789 -- Rules of Decision Act exception clause (RDA) a. "The laws of the several states, except where the Constitution, treaties or statutes of the United States shall otherwise require or provide, shall be regarded as rules of decision in trials at common law in the courts of the United States, in cases where they apply." ii. We ask the following questions:
1. Is there a potential conflict between federal and state law?
2. Is the law rationally capable of being classified as procedural?
3. Does the federal law apply? Is it controlling/on point?
4. Is the federal law constitutional/valid?
iii. Stewart Organization Inc. v. Ricoh Corp.
1. 1406 and 1404 are the question in a venue motion
2. The Supreme Court stated to apply the federal law because of the answers above iv. Boyle v. United Technologies Corp
1. Uniquely Federal interest trumps state law where applying state law would frustrate the Federal interest; P's son killed in chopper crash, brought diversity claim in D. Ct. claiming tort causes of action a. Identify the unique interest b. Determine if there is a clash between state and federal law OR if state law would frustrate federal objectives v. Erie did not dismiss the doctrine of federal common law
1. Supreme Court can prescribe if the area is one constitutionally driven or where the power to create it has been expressly or implicitly delegated to the courts by Congress. a. Types of federal common law i. Constitutional Common law ii. Statutory federal common law iii. Common law to protect uniquely federal interests iv. Foreign relations and customary international law v. Common law of interstate relations vi. Admiralty and maritime law vii. Federal procedural common law
1. One area of legitimate federal common law that may have to yield to State law c. Track Two - The Federal Rules of Civil Procedure i. Any rule promulgated under 28 USC SS 2072 (The Rules Enabling Act (REA))
1. The REA provides that the Supreme Court can adopt rules of practice and procedure for the federal court system a. And the rules shall not abridge, enlarge, or modify any substantive right ii. Questions to ask
1. Is there a potential conflict between federal and state law?
2. Is the federal rule on point and broad enough to cover the issue before the court?
3. Is the law rationally capable of being classified as procedural?
4. Does the rule abridge, enlarge, or modify any substantive right?
a. Substantive = rights of the person to bring a cause of action. b. If abridge, enlarge, or modify substantive right, use state law. iii. Sibbach v. Wilson & Company
1. Rule 35 versus State Law against this rule a. FRCP 35 does not modify a substantive right
2. Substantive law = Substantive Right a. Court rejected the substantial/important right for defining substantive right iv. Hanna v. Plumer
1. Issue here is dealing with Federal Service of Process v. State Service of Process a. FRCP rules for service not trumped by state law
2. Revisionist Theory a. Questions must be asked in accordance with REA rather than RDA. i. In deciding cases under REA, the consideration of whether fed or state law should apply under RDA are not part of the query under REA.
3. The Erie Rule has never been invoked to void a Federal Rule. In Erie, because there was no Federal Law on point, Erie commanded the enforcement of State law. v. Trilogy of cases -- Might decided differently under Hanna
1. Ragan v. Merchants (Rule 3 v. Statute of Limitations) a. Would be decided differently
2. Woods v. Interstate Realty (Track one under 1332 or Track Two under FRCP 17) a. Would be decided differently
3. Cohen v. Beneficial Industrial Loan Corp (Rule 23 v. the security bond) a. Might take different view, but could be decided the same under Hanna vi. If the federal law is on point, it is unlikely or next to impossible to find the statute modifies, enlarges or abridges a state statute vii. Walker v. Amoco Steel Corp
1. The Supreme Ct. treats SOL as important state policies and does not interrupt them unless it is necessary. a. FRCP 3 does not interrupt the state SOL (rule was not on point)
2. Ragan is good law as said in Hanna and let it live. d. Track Three - Federal Judge Made Procedural law i. Deals with issues relating to judge made procedural laws that conflict with state procedural law.
1. Questions to ask a. Conflict between federal standard and state law?
b. Is the federal procedural standard on point?
c. Federal standard must be consistent with the inherent judicial authority to create procedural law (REA) d. Refined Outcome determinative test (applied to the forum selection point) i. Would the adoption of federal law significantly affect the result or outcome of litigation and lead to forum shopping OR inequitable administration of the laws?
ii. If federal does transgress the state here, then we move to Byrd balancing to determine whether an underlying federal policy will outweigh the state interest at stake:
1. Identify the State interests
2. Identify federal interests
3. Strike a balance between the two to come to a decision. a. It is ok to be unsure. The test is undefined and undefinable. ii. Guaranty Trust Co. v. York -- Doctrine of laches
1. S. Ct. said that the application of the doctrine of laches had a substantive consequence that led to a different result
2. Simple Holding: A federal court sitting in diversity is required to apply the same substantive law of a court of the forum state would apply. (Can't bring it in St. Ct.
= Can't bring it in Fed. Ct!)
3. Complicated Holding: Would adoption of federal law significantly affect result/outcome of litigation?
a. Outcome of the litigation should be substantially the same in federal court as in state court. Page 7 of 29
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