While attorneys understandably want to focus on the substantive merits of an action, the procedural question of what venue to litigate a case in can have substantial impacts on the likelihood of success.[1] And, transferring a case after its been filed can keep an action lacking personal jurisdiction alive, or ensure that a case has a better chance of success than in the original jurisdiction. There are three statutes that empower a party to transfer their action: 28 U.S.C. §§ 1404, 1406, and 1631. Sometimes multiple statutes will apply to a given action, although each has different factors that must be met which can be mutually exclusive of the other statutes. What’s more, courts are split on particular requirements for each statute, specifically regarding personal jurisdiction.
28 U.S.C. § 1404. Change of Venue
28 U.S.C. § 1404 empowers courts, in their discretion, to transfer an action “[f]or the convenience of the parties and witnesses, in the interest of justice.” When exercising this discretion, a court looks at both public and private factors, including:
(1) the convenience of the parties;
(2) the convenience of the witnesses;
(3) the relative ease of access to the sources of proof;
(4) the availability of process to compel attendance of unwilling witnesses;
(5) cost of obtaining willing witnesses; and
(6) any practical problems associated with trying the case most expeditiously and inexpensively.[2]
These factors can cut both ways. Courts may evaluate not just how convenient a new forum may be for one party, but also how inconvenient that same forum may be for other parties.[3] Additionally, the transfer must be to a court of competent jurisdiction, i.e., a court where the case could have originally been brought. Importantly § 1404 presumes that venue in the original forum is proper, but that the case will nevertheless be more conveniently heard before another court.
And yet, the power of § 1404 is limited because of this concession—the argument for transferring venues essentially is an argument, not that anything is improper with the venue, but that the forum is merely inconvenient. Thus, it can be harder to achieve transfer under this statute.
28 U.S.C. § 1406. Cure or Waiver of Defects
28 U.S.C. § 1406 permits courts to transfer any case to any district or division in which it could have been brought if the original venue is improper and the transfer is “in the interest of justice.”[4] However, this statute can be limited by Fed. R. Civ. P. 12(b) if parties fail to oppose venue in their initial pleadings.[5] Courts have also interpreted § 1406 to permit transfer when a court lacks personal jurisdiction over the defendant,[6] provided the transfer would be “in the interest of justice.”[7]
28 U.S.C. § 1631. Transfer to Cure Want of Jurisdiction
28 U.S.C. § 1631 differs from §§ 1404 and 1406 both in application and purpose. First, § 1631 permits a federal court, either appellate or district, to dismiss a case or transfer to an appropriate court when jurisdiction is lacking.[8] This deviates from the previous statutes which focused at least in part on whether venue in the original forum was proper. This is because the statute also differs from the previous two in its purpose.
The statute was enacted as part of the Federal Courts Improvement Act of 1982. According to the legislative history, legislators acknowledged the reality that cases may be filed in the wrong court when another statute might require them to be filed in a different court like the Court of Federal Claims, for example.[9] Thus, § 1631 was not passed due to concerns with convenience or venue but focuses on whether the court hearing the case can do so in the first place.
The Ambiguity on Personal Jurisdiction
The three statutes differ on when they apply, with § 1404 applying despite venue being proper, § 1406 requiring venue to be improper, and § 1631 applying regardless of venue but when the court lacks jurisdiction. However, none of the statutes, on their face, answer the question of whether personal jurisdiction must also be lacking over the defendant.[10] In fact, courts across the country give different answers to this question.
The Third, Fourth, and Fifth Circuits have held previously that personal jurisdiction is not required when relying on § 1404 to seek a new venue.[11] On the other, some courts from the Sixth and Ninth Circuits have held that personal jurisdiction is required to transfer venues under § 1404.[12]
By contrast, the Supreme Court has weighed in on the question of personal jurisdiction under § 1406. In Goldlawr, Inc. v. Heiman, the Court held § 1406(a) is “amply broad enough” such that transfer is permitted when venue is improper regardless of whether the court has personal jurisdiction over the defendant.[13]
However, that is the only one of the three statutes which have been clarified regarding personal jurisdiction. For § 1631, courts are once again split on the kind of jurisdiction which must be missing in order for a venue to be transferred. Ostensibly, § 1631 applies to cases where courts lack subject-matter jurisdiction. After all, the purpose of the statute was to help cure mistakes in navigating the complexity of the federal court system.[14] Some courts take § 1631 even further, though, and find that § 1631 can apply to cases when both personal jurisdiction and subject-matter jurisdiction is lacking.[15]
These distinctions are particularly important in instances where there is an alleged lack of personal jurisdiction, because the transfer statute used can help a party fight against or support motions to dismiss for lack of personal jurisdiction. To wit, § 1631 can only be used (in jurisdictions which expansively interpret it), if there is no personal jurisdiction. Meaning, parties who need to have filed in a court of competent jurisdiction (say, when facing statute of limitations attacks), must strenuously oppose efforts to use § 1631. Conversely, § 1404 requires personal jurisdiction, and thus is an ideal statute for defeating a motion to dismiss for lack of jurisdiction. Alternatively, sometimes competent jurisdiction means subject matter jurisdiction and venue, making § 1406 a potent tool as it requires a finding that there is not proper venue.[16]
Conclusion
Fine lines run between the three transfer statutes, and it is not always clear which statutes apply to particular facts and what are the underlying requirements of each. Ultimately, whether to transfer a case often comes down to the interests of judicial economy in resolving the matter expeditiously and fairly, as seen in the factors courts consider under § 1404(a).[17]
If you find yourself needing to transfer your lawsuit or defend against a motion to dismiss for lack of personal jurisdiction, contact the experienced litigation attorneys at Eckland & Blando.
[1] Research and drafting assistance provided by Kenneth Cooper, law clerk at Eckland & Blando.
[2] E.g., F.A.I. Elecs. Corp. v. Chambers, 944 F.Supp. 77, 81 (D. Mass. 1996) (citing Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947)).
[3] See TargetSmart Holdings, LLC v. GHP Advisors, LLC, 366 F.Supp.3d 195, 218 (D. Mass. 2019) (“While the District of Massachusetts may be marginally more convenient for [Defendant], wholesale transfer of the entire matter would hardly inconvenience it.”).
[4] 28 U.S.C. § 1406(a); Goldlawr, Inc. v. Heiman, 269 U.S. 463, 466 (1962).
[5] Manchester Knitted Fashions, Inc. v. Amalgamated Cotton Garment and Allied Industries Fund, 967 F.2d 688, 691 (1st Cir.1992).
[6] Id.
[7] 28 U.S.C. § 1406(a).
[8] 28 U.S.C. § 1631.
[9] S. Rep. No. 275, 97th Cong. 2d Sess. (“Because of the complexity of the Federal court system and of special jurisdiction provisions, a civil case may on occasion be mistakenly filed in a court . . . that does not have jurisdiction.”).
[10] That being said, the factors courts employ in § 1404, although not in the statute itself, evaluate the contacts that each party has with the original forum. See F.A.I. Elecs. Corp. v. Chambers, 944 F.Supp. at 81.
[11] United States v. Berkowitz, 328 F.2d 358 (3d Cir. 1964); Internatio-Rotterdam, Inc. v. Thomsen, 218 F.2d 514 (4th Cir. 1955); Koehring Co. v. Hyde Constr. Co., 324 F.2d 295 (5th Cir. 1963).
[12] Martin v. Stokes, 623 F.2d 469, 474 (6th Cir. 1980); Shapiro v. Bonanza Hotel Co., 185 F.2d 777 (9th Cir. 1950).
[13] Goldlawr, 369 U.S. at 466.
[14] See supra note 8.
[15] Ross v. Col. Outward Bound School, Inc., 822 F.2d 1524 (10th Cir. 1987); Carty v. Beech Aircraft Co., 679 F.2d 1051 (3d Cir. 1982).
[16] Driscoll v. New Orleans Steamboat Company, 633 F.2d 1158 (5th Cir. 1981).
[17] See TargetSmart Holdings, LLC, 366 F.Supp.3d at 219.