Petitioner husband lost a hand in Pennsylvania when it allegedly
became caught in a harvester manufactured by respondent Deere, a
Delaware corporation. Petitioners, Pennsylvania residents, delayed
taking legal action against Deere until after Pennsylvania's 2-year
tort limitations period expired. In the third year, they filed
proper diversity suits (1) in a Federal District Court in
Pennsylvania, raising contract and warranty claims as to which the
applicable Pennsylvania limitations period had not yet run, and (2)
in a Federal District Court in Mississippi, where Deere did
business, alleging tort causes of action. As to the latter suit,
petitioners knew that the federal court had to apply the
Mississippi state courts' choice-of-law rules,
Klaxon Co. v.
Stentor Electric Mfg. Co., 313 U. S. 487,
313 U. S. 496,
under which Mississippi's 6-year tort statute of limitations would
apply. The Mississippi court then granted petitioners' motion to
transfer the tort action to the Pennsylvania court under 28 U.S.C.
§ 1404(a), which allows such transfers "[f]or the convenience of
parties and witnesses, in the interest of justice." However, the
Pennsylvania court declined to honor the Mississippi tort statute
of limitations, ruling that, since petitioners had moved for
transfer as plaintiffs, the rule in
Van Dusen v. Barrack,
376 U. S. 612 --
that, following a defendant-initiated § 1404(a) transfer, the
transferee court must follow the choice-of-law rules prevailing in
the transferor court -- was inapplicable. The court therefore
dismissed the tort action under Pennsylvania's tort statute of
limitations, and the Court of Appeals affirmed.
Held: The policies underlying
Van Dusen, as
well as other considerations, require a transferee forum to apply
the law of the transferor court, regardless of who initiated the
transfer. Pp.
494 U. S.
521-532.
(a) The
Van Dusen policy that § 1404(a) should not
deprive parties of state law advantages that exist absent diversity
jurisdiction is not violated by applying that case's rule to
transfers initiated by plaintiffs. Applying the transferor law will
not deprive plaintiffs of any state law advantages. Moreover,
although a defendant may lose a nonlegal advantage if the
transferor law controls --
e.g., Deere would lose whatever
advantage inheres in forcing petitioners to litigate in Mississippi
or not at all -- that loss is slight, since a plaintiff always can
sue in the favorable state court or in diversity and not seek a
transfer. Section 1404(a)
Page 494 U. S. 517
exists to eliminate inconvenience without altering permissible
choices under the federal venue statutes, and it is not its purpose
to protect a party's ability to use inconvenience as a shield to
discourage or hinder litigation otherwise proper. Applying the
transferor law in these circumstances is in full accord with the
rule in
Erie R. Co. v. Tompkins, 304 U. S.
64, whereas applying the transferee law would seriously
undermine
Erie, since it would mean that initiating a §
1404(a) transfer changes the state law applicable in a diversity
case, a result disapproved generally by this Court.
See Van
Dusen, supra, at
376 U. S.
636-637. Pp.
494 U. S.
524-527.
(b) Applying the transferor State's law with respect to
plaintiff-initiated § 1404(a) transfers does not contravene
Van
Dusen's policy against forum shopping, since, even without §
1404(a), a plaintiff already has the option of shopping for a forum
with the most favorable law. Applying the transferee law, by
contrast, might create opportunities for forum shopping in an
indirect way, since such application, to the extent that it
discourages plaintiff-initiated transfers, might give States
incentives to enact laws similar to Mississippi's long tort statute
of limitations in order to bring in out-of-state business that
would not be moved at the instance of the plaintiff. Pp.
494 U. S.
527-528.
(c) The
Van Dusen policy mandating that the § 1404(a)
transfer decision turn upon considerations of convenience, rather
than on the possibility of prejudice resulting from a change in the
applicable law, requires application of the transferor law when a
plaintiff initiates the transfer. If a law change were to occur
following such a transfer, a district court would be at least
reluctant, despite convenience considerations, to grant a transfer
that would prejudice the defendant. Hardship might occur because
plaintiffs may find as many opportunities to exploit application of
the transferee law as they would the transferor law. If the
transferee law were to apply, moreover, the plaintiff simply would
not move to transfer unless the benefits of convenience outweighed
the loss of favorable law. The desire to punish the plaintiff who
has chosen an inconvenient forum overlooks the facts that § 1404(a)
exists for the benefit of witnesses and courts, as well as the
moving party, and that litigation in an inconvenient forum harms
the entire judicial system. Pp.
494 U. S.
528-530.
(d) Foresight and judicial economy also favor the simple rule
that the transferor law should apply regardless of who makes the §
1404(a) motion. While applying the transferee law to
plaintiff-initiated transfers would eliminate cases such as this in
the future, that rule would produce undesirable complications, and
would result in litigation and uncertainty in cases presenting
other situations --
e.g., a transfer at the request of
both parties, or by the court on its own motion. Pp.
494 U. S.
530-531.
Page 494 U. S. 518
(e) Although requiring a district court in Pennsylvania to apply
a Mississippi statute of limitations to a Pennsylvania cause of
action might seem to be too generous to petitioners, and even to
reward them for manipulative conduct, that does not affect the
outcome of this case, since Congress gave them the power to seek a
§ 1404(a) transfer, and
Van Dusen already could require
the same result. Moreover, no alternative rule would be more
acceptable. Applying the transferee law would, in effect, tell
petitioners that they should have continued litigating their
separate actions in Pennsylvania and Mississippi, thereby causing
the wastefulness of time, energy, and money that § 1404(a) was
designed to prevent. Allowing them simply to file in the convenient
forum, and then to request application of the law of the
inconvenient forum, would ignore the fact that § 1404(a) does not
provide for an automatic transfer, but requires a showing of
convenience, and that the transfer is "in the interest of justice."
And there is no need to develop more sophisticated federal
choice-of-law rules to cover all diversity actions involving
transfers, since state conflicts rules already ensure generally
that appropriate laws will apply, and, even if more elaborate
federal rules would not run afoul of
Klaxon and
Erie, applying the transferor law effects the appropriate
balance between fairness and simplicity. Pp.
494 U. S.
531-532.
862 F.2d 31, reversed and remanded.
KENNEDY, J., delivered the opinion of the Court, in which
REHNQUIST, C.J., and WHITE, STEVENS, and O'CONNOR, JJ., joined.
SCALIA, J., filed a dissenting opinion, in which BRENNAN, MARSHALL,
and BLACKMUN, JJ., joined,
post, p.
494 U. S.
533.
JUSTICE KENNEDY delivered the opinion of the Court.
Section 1404(a) of Title 28 states:
"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."
28 U.S.C.
Page 494 U. S. 519
§ 1404(a) (1982 ed.). In
Van Dusen v. Barrack,
376 U. S. 612
(1964), we held that, following a transfer under § 1404(a)
initiated by a defendant, the transferee court must follow the
choice-of-law rules that prevailed in the transferor court. We now
decide that, when a plaintiff moves for the transfer, the same rule
applies.
I
Albert Ferens lost his right hand when, the allegation is, it
became caught in his combine harvester, manufactured by Deere &
Company. The accident occurred while Ferens was working with the
combine on his farm in Pennsylvania. For reasons not explained in
the record, Ferens delayed filing a tort suit, and Pennsylvania's
2-year limitations period expired. In the third year, he and his
wife sued Deere in the United States District Court for the Western
District of Pennsylvania, raising contract and warranty claims as
to which the Pennsylvania limitations period had not yet run. The
District Court had diversity jurisdiction, as Ferens and his wife
are Pennsylvania residents and Deere is incorporated in Delaware
with its principal place of business in Illinois.
Not to be deprived of a tort action, the Ferenses in the same
year filed a second diversity suit against Deere in the United
States District Court for the Southern District of Mississippi,
alleging negligence and products liability. Diversity jurisdiction
and venue were proper. The Ferenses sued Deere in the District
Court in Mississippi because they knew that, under
Klaxon Co.
v. Stentor Electric Mfg. Co., 313 U.
S. 487,
313 U. S. 496
(1941), the federal court, in the exercise of diversity
jurisdiction, must apply the same choice-of-law rules that
Mississippi state courts would apply if they were deciding the
case. A Mississippi court would rule that Pennsylvania substantive
law controls the personal injury claim, but that Mississippi's own
law governs the limitation period.
Although Mississippi has a borrowing statute which, on its face,
would seem to enable its courts to apply statutes of
limitations
Page 494 U. S. 520
from other jurisdictions,
see Miss.Code Ann. § 151-65
(1972), the State Supreme Court has said that the borrowing statute
"only applies where a nonresident [defendant] in whose favor the
statute has accrued afterwards moves into this state."
Louisiana & Mississippi R. Transfer Co. v. Long, 159
Miss. 654, 667, 131 So. 84, 88 (1930). The borrowing statute would
not apply to the Ferenses' action because, as the parties agree,
Deere was a corporate resident of Mississippi before the cause of
action accrued. The Mississippi courts, as a result, would apply
Mississippi's 6-year statute of limitations to the tort claim
arising under Pennsylvania law, and the tort action would not be
time-barred under the Mississippi statute.
See Miss.Code
Ann. § 15-1-49 (1972).
The issue now before us arose when the Ferenses took their forum
shopping a step further: having chosen the federal court in
Mississippi to take advantage of the State's limitations period,
they next moved, under § 1404(a), to transfer the action to the
federal court in Pennsylvania on the ground that Pennsylvania was a
more convenient forum. The Ferenses acted on the assumption that,
after the transfer, the choice of law rules in the Mississippi
forum, including a rule requiring application of the Mississippi
statute of limitations, would continue to govern the suit.
Deere put up no opposition, and the District Court in
Mississippi granted the § 1404(a) motion. The Court accepted the
Ferenses' arguments that they resided in Pennsylvania; that the
accident occurred there; that the claim had no connection to
Mississippi; that a substantial number of witnesses resided in the
Western District of Pennsylvania, but none resided in Mississippi;
that most of the documentary evidence was located in the Western
District of Pennsylvania, but none was located in Mississippi; and
that the warranty action pending in the Western District of
Pennsylvania presented common questions of law and fact.
The District Court in Pennsylvania consolidated the transferred
tort action with the Ferenses' pending warranty action,
Page 494 U. S. 521
but declined to honor the Mississippi statute of limitations as
the District Court in Mississippi would have done. It ruled instead
that, because the Ferenses had moved for transfer as plaintiffs,
the rule in
Van Dusen did not apply. Invoking the 2-year
limitations period set by Pennsylvania law, the District Court
dismissed their tort action.
Ferens v. Deere &
Co., 639 F.
Supp. 1484 (WD Pa.1986).
The Court of Appeals for the Third Circuit affirmed, but not, at
first, on grounds that the Ferenses had lost their entitlement to
Mississippi choice-of-law rules by invoking § 1404(a). The Court of
Appeals relied at the outset on the separate theory that applying
Mississippi's statute of limitations would violate due process,
because Mississippi had no legitimate interest in the case.
Ferens v. Deere & Co., 819 F.2d 423 (1987). We vacated
this decision and remanded in light of
Sun Oil Co. v.
Wortman, 486 U. S. 717
(1988), in which we held that a State may choose to apply its own
statute of limitations to claims governed by the substantive laws
of another State without violating either the Full Faith and Credit
Clause or the Due Process Clause.
Ferens v. Deere &
Co., 487 U.S. 1212 (1988). On remand, the Court of Appeals
again affirmed, this time confronting the
Van Dusen
question and ruling that a transferor court's choice-of-law rules
do not apply after a transfer under § 1404(a) on a motion by a
plaintiff. 862 F.2d 31 (1988). We granted certiorari, 490 U.S. 1064
(1989).
II
Section 1404(a) states only that a district court may transfer
venue for the convenience of the parties and witnesses when in the
interest of justice. It says nothing about choice of law, and
nothing about affording plaintiffs different treatment from
defendants. We touched upon these issues in
Van Dusen, but
left open the question presented in this case.
See 376
U.S. at
376 U. S. 640.
In
Van Dusen, an airplane flying from Boston to
Philadelphia crashed into Boston Harbor soon after takeoff. The
personal representatives of the accident
Page 494 U. S. 522
victims brought more than 100 actions in the District Court for
the District of Massachusetts and more than 40 actions in the
District Court for the Eastern District of Pennsylvania. When the
defendants moved to transfer the actions brought in Pennsylvania to
the federal court in Massachusetts, a number of the Pennsylvania
plaintiffs objected because they lacked capacity under
Massachusetts law to sue as representatives of the decedents. The
plaintiffs also averred that the transfer would deprive them of the
benefits of Pennsylvania's choice-of-law rules, because the
transferee forum would apply to their wrongful death claims a
different substantive rule. The plaintiffs obtained from the Court
of Appeals a writ of mandamus ordering the District Court to vacate
the transfer.
See id. at
376 U. S.
613-615.
We reversed. After considering issues not related to the present
dispute, we held that the Court of Appeals erred in its assumption
that Massachusetts law would govern the action following transfer.
The legislative history of § 1404(a) showed that Congress had
enacted the statute because broad venue provisions in federal acts
often resulted in inconvenient forums, and that Congress had
decided to respond to this problem by permitting transfer to a
convenient federal court under § 1404(a). 376 U.S. at
376 U. S.
634-636. We said:
"This legislative background supports the view that § 1404(a)
was not designed to narrow the plaintiff's venue privilege or to
defeat the state law advantages that might accrue from the exercise
of this venue privilege, but rather the provision was simply to
counteract the inconveniences that flowed from the venue statutes
by permitting transfer to a convenient federal court. The
legislative history of § 1404(a) certainly does not justify the
rather startling conclusion that one might 'get a change of a law
as a bonus for a change of venue.' Indeed, an interpretation
accepting such a rule would go far to frustrate the remedial
purposes of § 1404(a). If a change in the law were in the offing,
the parties might
Page 494 U. S. 523
well regard the section primarily as a forum-shopping
instrument. And, more importantly, courts would at least be
reluctant to grant transfers, despite considerations of
convenience, if to do so might conceivably prejudice the claim of a
plaintiff who initially selected a permissible forum. We believe,
therefore, that both the history and purposes of § 1404(a) indicate
that it should be regarded as a federal judicial housekeeping
measure, dealing with the placement of litigation in the federal
courts and generally intended, on the basis of convenience and
fairness, simply to authorize a change of courtrooms."
Id. at
376 U. S.
635-637 (footnotes omitted).
We thus held that the law applicable to a diversity case does
not change upon a transfer initiated by a defendant.
III
The quoted part of
Van Dusen reveals three independent
reasons for our decision. First, § 1404(a) should not deprive
parties of state law advantages that exist absent diversity
jurisdiction. Second, § 1404(a) should not create or multiply
opportunities for forum shopping. Third, the decision to transfer
venue under § 1404(a) should turn on considerations of convenience
and the interest of justice, rather than on the possible prejudice
resulting from a change of law. Although commentators have
questioned whether the scant legislative history of § 1404(a)
compels reliance on these three policies,
see Note, Choice
of Law after Transfer of Venue, 75 Yale L.J. 90, 123 (1965), we
find it prudent to consider them in deciding whether the rule in
Van Dusen applies to transfers initiated by plaintiffs. We
decide that, in addition to other considerations, these policies
require a transferee forum to apply the law of the transferor
court, regardless of who initiates the transfer. A transfer under §
1404(a), in other words, does not change the law applicable to a
diversity case.
Page 494 U. S. 524
A
The policy that § 1404(a) should not deprive parties of state
law advantages, although perhaps discernible in the legislative
history, has its real foundation in
Erie R. Co. v.
Tompkins, 304 U. S. 64
(1938).
See Van Dusen, 376 U.S. at
376 U. S. 637.
The
Erie rule remains a vital expression of the federal
system and the concomitant integrity of the separate States. We
explained
Erie in
Guaranty Trust Co. v. York,
326 U. S. 99,
326 U. S. 109
(1945), as follows:
"In essence, the intent of [the
Erie] decision was to
insure that, in all cases where a federal court is exercising
jurisdiction solely because of the diversity of citizenship of the
parties, the outcome of the litigation in the federal court should
be substantially the same, so far as legal rules determine the
outcome of a litigation, as it would be if tried in a State court.
The nub of the policy that underlies
Erie R. Co. v.
Tompkins is that, for the same transaction, the accident of a
suit by a nonresident litigant in a federal court instead of in a
State court a block away should not lead to a substantially
different result."
In
Hanna v. Plumer, 380 U. S. 460,
380 U. S. 473
(1965), we held that Congress has the power to prescribe procedural
rules that differ from state law rules even at the expense of
altering the outcome of litigation. This case does not involve a
conflict. As in
Van Dusen, our interpretation of § 1404(a)
is in full accord with the
Erie rule.
The
Erie policy had a clear implication for
Van
Dusen. The existence of diversity jurisdiction gave the
defendants the opportunity to make a motion to transfer venue under
§ 1404(a), and if the applicable law were to change after transfer,
the plaintiff's venue privilege and resulting state law advantages
could be defeated at the defendant's option. 376 U.S. at
376 U. S. 638.
To allow the transfer and at the same time preserve the plaintiff's
state law advantages, we held
Page 494 U. S. 525
that the choice-of-law rules should not change following a
transfer initiated by a defendant.
Id. at
376 U. S.
639.
Transfers initiated by a plaintiff involve some different
considerations, but lead to the same result. Applying the
transferor law, of course, will not deprive the plaintiff of any
state law advantages. A defendant, in one sense, also will lose no
legal advantage if the transferor law controls after a transfer
initiated by the plaintiff; the same law, after all, would have
applied if the plaintiff had not made the motion. In another sense,
however, a defendant may lose a nonlegal advantage. Deere, for
example, would lose whatever advantage inheres in not having to
litigate in Pennsylvania, or, put another way, in forcing the
Ferenses to litigate in Mississippi or not at all.
We, nonetheless, find the advantage that the defendant loses
slight. A plaintiff always can sue in the favorable state court or
sue in diversity and not seek a transfer. By asking for application
of the Mississippi statute of limitations following a transfer to
Pennsylvania on grounds of convenience, the Ferenses are seeking to
deprive Deere only of the advantage of using against them the
inconvenience of litigating in Mississippi. The text of § 1404(a)
may not say anything about choice of law, but we think it not the
purpose of the section to protect a party's ability to use
inconvenience as a shield to discourage or hinder litigation
otherwise proper. The section exists to eliminate inconvenience
without altering permissible choices under the venue statutes.
See Van Dusen, supra, at
376 U. S.
634-635. This interpretation should come as little
surprise. As in our previous cases, we think that
"[t]o construe § 1404(a) this way merely carries out its design
to protect litigants, witnesses and the public against unnecessary
inconvenience and expense, not to provide a shelter for . . .
proceedings in costly and inconvenient forums."
Continental Grain Co. v. Barge FBL-585, 364 U. S.
19,
364 U. S. 27
(1960). By creating an opportunity to have venue transferred
between courts in different States on the basis of convenience, an
option
Page 494 U. S. 526
that does not exist absent federal jurisdiction, Congress, with
respect to diversity, retained the
Erie policy while
diminishing the incidents of inconvenience.
Applying the transferee law, by contrast, would undermine the
Erie rule in a serious way. It would mean that initiating
a transfer under § 1404(a) changes the state law applicable to a
diversity case. We have held, in an isolated circumstance, that §
1404(a) may preempt state law.
See Stewart Organization, Inc.
v. Ricoh Corp., 487 U. S. 22 (1988)
(holding that federal law determines the validity of a forum
selection clause). In general, however, we have seen § 1404(a) as a
housekeeping measure that should not alter the state law governing
a case under
Erie. See Van Dusen, supra, at
376 U. S.
636-637;
see also Stewart Organization, supra,
at
487 U. S. 37
(SCALIA, J., dissenting) (finding the language of § 1404(a)
"plainly insufficient" to work a change in the applicable state law
through preemption). The Mississippi statute of limitations, which
everyone agrees would have applied if the Ferenses had not moved
for a transfer, should continue to apply in this case.
In any event, defendants in the position of Deere would not fare
much better if we required application of the transferee law
instead of the transferor law. True, if the transferee law were to
apply, some plaintiffs would not sue these defendants for fear that
they would have no choice but to litigate in an inconvenient forum.
But applying the transferee law would not discourage all plaintiffs
from suing. Some plaintiffs would prefer to litigate in an
inconvenient forum with favorable law than to litigate in a
convenient forum with unfavorable law or not to litigate at all.
The Ferenses, no doubt, would have abided by their initial choice
of the District Court in Mississippi had they known that the
District Court in Pennsylvania would dismiss their action. If we
were to rule for Deere in this case, we would accomplish little
more than discouraging the occasional motions by plaintiffs to
transfer inconvenient cases. Other plaintiffs would sue in an
Page 494 U. S. 527
inconvenient forum with the expectation that the defendants
themselves would seek transfer to a convenient forum, resulting in
application of the transferor law under
Van Dusen.
See Note, Choice of Law in Federal Court After Transfer of
Venue, 63 Cornell L.Rev. 149, 156 (1977). In this case, for
example, Deere might have moved for a transfer if the Ferenses had
not.
Van Dusen also sought to fashion a rule that would not
create opportunities for forum shopping. Some commentators have
seen this policy as the most important rationale of
Van Dusen,
see, e.g., 19 C. Wright, A. Miller, & E. Cooper, Federal
Practice and Procedure § 4506, p. 79 (1982), but few attempt to
explain the harm of forum shopping when the plaintiff initiates a
transfer. An opportunity for forum shopping exists whenever a party
has a choice of forums that will apply different laws. The
Van
Dusen policy against forum shopping simply requires us to
interpret § 1404(a) in a way that does not create an opportunity
for obtaining a more favorable law by selecting a forum through a
transfer of venue. In the
Van Dusen case itself, this
meant that we could not allow defendants to use a transfer to
change the law. 376 U.S. at
376 U. S.
636.
No interpretation of § 1404(a), however, will create comparable
opportunities for forum shopping by a plaintiff, because, even
without § 1404(a), a plaintiff already has the option of shopping
for a forum with the most favorable law. The Ferenses, for example,
had an opportunity for forum shopping in the state courts, because
both the Mississippi and Pennsylvania courts had jurisdiction and
because they each would have applied a different statute of
limitations. Diversity jurisdiction did not eliminate these forum
shopping opportunities; instead, under
Erie, the federal
courts had to replicate them.
See Klaxon Co. v. Stentor
Electric Mfg. Co., 313 U.S. at
313 U. S. 496
("Whatever lack of uniformity [
Erie] may produce between
federal courts in different states is
Page 494 U. S. 528
attributable to our federal system, which leaves to a state,
within the limits permitted by the Constitution, the right to
pursue local policies diverging from those of its neighbors").
Applying the transferor law would not give a plaintiff an
opportunity to use a transfer to obtain a law that he could not
obtain through his initial forum selection. If it does make
selection of the most favorable law more convenient, it does no
more than recognize a forum shopping choice that already exists.
This fact does not require us to apply the transferee law. Section
1404(a), to reiterate, exists to make venue convenient, and should
not allow the defendant to use inconvenience to discourage
plaintiffs from exercising the opportunities that they already
have.
Applying the transferee law, by contrast, might create
opportunities for forum shopping in an indirect way. The advantage
to Mississippi's personal injury lawyers that resulted from the
State's then applicable 6-year statute of limitations has not
escaped us; Mississippi's long limitation period no doubt drew
plaintiffs to the State. Although
Sun Oil held that the
federal courts have little interest in a State's decision to create
a long statute of limitations or to apply its statute of
limitations to claims governed by foreign law, we should recognize
the consequences of our interpretation of § 1404(a). Applying the
transferee law, to the extent that it discourages
plaintiff-initiated transfers, might give States incentives to
enact similar laws to bring in out-of-state business that would not
be moved at the instance of the plaintiff.
C
Van Dusen also made clear that the decision to transfer
venue under § 1404(a) should turn on considerations of convenience,
rather than on the possibility of prejudice resulting from a change
in the applicable law.
See 376 U.S. at
376 U. S. 636;
Piper Aircraft Co. v. Reyno, 454 U.
S. 235,
454 U. S.
253-254, and n. 20 (1981). We reasoned in
Van
Dusen that, if the law changed following a transfer initiated
by the defendant, a district
Page 494 U. S. 529
court
"would at least be reluctant to grant transfers, despite
considerations of convenience, if to do so might conceivably
prejudice the claim of a plaintiff."
376 U.S. at
376 U. S. 636.
The court, to determine the prejudice, might have to make an
elaborate survey of the law, including statutes of limitations,
burdens of proof, presumptions, and the like. This would turn what
is supposed to be a statute for convenience of the courts into one
expending extensive judicial time and resources. Because this
difficult task is contrary to the purpose of the statute, in
Van Dusen we made it unnecessary by ruling that a transfer
of venue by the defendant does not result in a change of law. This
same policy requires application of the transferor law when a
plaintiff initiates a transfer.
If the law were to change following a transfer initiated by a
plaintiff, a district court in a similar fashion would be at least
reluctant to grant a transfer that would prejudice the defendant.
Hardship might occur because plaintiffs may find as many
opportunities to exploit application of the transferee law as they
would find opportunities for exploiting application of the
transferor law.
See Note, 63 Cornell L.Rev. at 156. If the
transferee law were to apply, moreover, the plaintiff simply would
not move to transfer unless the benefits of convenience outweighed
the loss of favorable law.
Some might think that a plaintiff should pay the price for
choosing an inconvenient forum by being put to a choice of law
versus forum. But this assumes that § 1404(a) is for the benefit
only of the moving party. By the statute's own terms, it is not.
Section 1404(a) also exists for the benefit of the witnesses and
the interest of justice, which must include the convenience of the
court. Litigation in an inconvenient forum does not harm the
plaintiff alone. As Justice Jackson said:
"Administrative difficulties follow for courts when litigation
is piled up in congested centers, instead of being handled at its
origin. Jury duty is a burden that ought not to be imposed upon the
people of a community which has
Page 494 U. S. 530
no relation to the litigation. In cases which touch the affairs
of many persons, there is reason for holding the trial in their
view and reach, rather than in remote parts of the country where
they can learn of it by report only. There is a local interest in
having localized controversies decided at home. There is an
appropriateness too, in having the trial of a diversity case in a
forum that is at home with the state law that must govern the case,
rather than having a court in some other forum untangle problems in
conflicts of laws, and in law foreign to itself."
Gulf Oil Corp. v. Gilbert, 330 U.
S. 501,
330 U. S.
508-509 (1947).
The desire to take a punitive view of the plaintiff's actions
should not obscure the systemic costs of litigating in an
inconvenient place.
D
This case involves some considerations to which we perhaps did
not give sufficient attention in
Van Dusen. Foresight and
judicial economy now seem to favor the simple rule that the law
does not change following a transfer of venue under § 1404(a).
Affording transfers initiated by plaintiffs different treatment
from transfers initiated by defendants may seem quite workable in
this case, but the simplicity is an illusion. If we were to hold
that the transferee law applies following a § 1404(a) motion by a
plaintiff, cases such as this would not arise in the future.
Although applying the transferee law, no doubt, would catch the
Ferenses by surprise, in the future, no plaintiffs in their
position would move for a change of venue.
Other cases, however, would produce undesirable complications.
The rule would leave unclear which law should apply when both a
defendant and a plaintiff move for a transfer of venue or when the
court transfers venue on its own motion.
See Note, 63
Cornell L.Rev. at 158. The rule also might require variation in
certain situations, such as when the plaintiff moves for a transfer
following a removal from state court by the defendant, or when only
one of several
Page 494 U. S. 531
plaintiffs requests the transfer, or when circumstances change
through no fault of the plaintiff making a once convenient forum
inconvenient. True, we could reserve any consideration of these
questions for a later day. But we have a duty, in deciding this
case, to consider whether our decision will create litigation and
uncertainty. On the basis of these considerations, we again
conclude that the transferor law should apply regardless of who
makes the § 1404(a) motion.
IV
Some may object that a district court in Pennsylvania should not
have to apply a Mississippi statute of limitations to a
Pennsylvania cause of action. This point, although understandable,
should have little to do with the outcome of this case. Congress
gave the Ferenses the power to seek a transfer in § 1404(a), and
our decision in
Van Dusen already could require a district
court in Pennsylvania to apply the Mississippi statute of
limitations to Pennsylvania claims. Our rule may seem too generous,
because it allows the Ferenses to have both their choice of law and
their choice of forum, or even to reward the Ferenses for conduct
that seems manipulative. We nonetheless see no alternative rule
that would produce a more acceptable result. Deciding that the
transferee law should apply, in effect, would tell the Ferenses
that they should have continued to litigate their warranty action
in Pennsylvania and their tort action in Mississippi. Some might
find this preferable, but we do not. We have made quite clear
that
"[t]o permit a situation in which two cases involving precisely
the same issues are simultaneously pending in different District
Courts leads to the wastefulness of time, energy and money that §
1404(a) was designed to prevent."
Continental Grain, 364 U.S. at
364 U. S.
26.
From a substantive standpoint, two further objections give us
pause but do not persuade us to change our rule. First, one might
ask why we require the Ferenses to file in the District
Page 494 U. S. 532
Court in Mississippi at all. Efficiency might seem to dictate a
rule allowing plaintiffs in the Ferenses' position not to file in
an inconvenient forum and then to return to a convenient forum
though a transfer of venue, but instead simply to file in the
convenient forum and ask for the law of the inconvenient forum to
apply. Although our rule may invoke certain formality, one must
remember that § 1404(a) does not provide for an automatic transfer
of venue. The section, instead, permits a transfer only when
convenient, and "in the interest of justice." Plaintiffs in the
position of the Ferenses must go to the distant forum because they
have no guarantee, until the court there examines the facts, that
they may obtain a transfer. No one has contested the justice of
transferring this particular case, but the option remains open to
defendants in future cases. Although a court cannot ignore the
systemic costs of inconvenience, it may consider the course that
the litigation already has taken in determining the interest of
justice.
Second, one might contend that, because no
per se rule
requiring a court to apply either the transferor law or the
transferee law will seem appropriate in all circumstances, we
should develop more sophisticated federal choice of law rules for
diversity actions involving transfers.
See Note, 75 Yale
L.J. at 130-135. To a large extent, however, state conflicts-of-law
rules already ensure that appropriate laws will apply to diversity
cases. Federal law, as a general matter, does not interfere with
these rules.
See Sun Oil, 486 U.S. at
486 U. S.
727-729. In addition, even if more elaborate federal
choice-of-law rules would not run afoul of
Klaxon and
Erie, we believe that applying the law of the transferor
forum effects the appropriate balance between fairness and
simplicity.
Cf. R. Leflar, American Conflicts Law § 143,
p. 293 (3d ed.1977) (arguing against a federal common law of
conflicts).
For the foregoing reasons, we conclude that Mississippi's
statute of limitations should govern the Ferenses' action.
Page 494 U. S. 533
We reverse and remand for proceedings consistent with this
opinion.
It is so ordered.
JUSTICE SCALIA, with whom JUSTICE BRENNAN, JUSTICE MARSHALL, and
JUSTICE BLACKMUN join, dissenting.
Plaintiffs, having filed this diversity action in Federal
District Court in Mississippi, successfully moved for a transfer of
venue to the District Court in Pennsylvania, where their warranty
action was then pending. The question we must decide is which
State's choice-of-law principles will govern the case now that it
is to be litigated in that court.
The Rules of Decision Act, first placed in the Judicial Code by
the Judiciary Act of 1789, currently provides:
"The laws of the several states, except where the Constitution
or treaties of the United States or Acts of Congress otherwise
require or provide, shall be regarded as rules of decision in civil
actions in the courts of the United States, in cases where they
apply."
28 U.S.C. § 1652 (1982 ed.). In
Erie R. Co. v.
Tompkins, 304 U. S. 64
(1938), we held that the Act requires a federal court to apply, in
diversity cases, the law of the State in which it sits, both
statutory law and common law established by the courts. Three years
later, in
Klaxon Co. v. Stentor Electric Mfg. Co.,
313 U. S. 487,
313 U. S. 494
(1941), we considered "whether, in diversity cases, the federal
courts must follow conflict of laws rules prevailing in the states
in which they sit." We answered the question in the affirmative,
reasoning that, were the rule otherwise,
"the accident of diversity of citizenship would constantly
disturb equal administration of justice in coordinate state and
federal courts sitting side by side,"
a state of affairs that "would do violence to the principle of
uniformity within a state, upon which the
Tompkins
decision is based."
Id. at
313 U. S. 496.
See also Griffin v. McCoach, 313 U.
S. 498,
313 U. S. 503
(1941). Although the venue provision of § 1404(a) was enacted
after
Page 494 U. S. 534
Klaxon, see 62 Stat. 937, we have repeatedly reaffirmed
Klaxon since then.
See Nolan v. Transocean Air
Lines, 365 U. S. 293
(1961);
Day & Zimmermann, Inc. v. Challoner,
423 U. S. 3
(1975).
The question we must answer today is whether 28 U.S.C. § 1404(a)
(1982 ed.) and the policies underlying
Klaxon -- namely,
uniformity within a State and the avoidance of forum shopping --
produce a result different from
Klaxon when the suit in
question was not filed in the federal court initially, but was
transferred there under § 1404(a) on plaintiff's motion. In
Van
Dusen v. Barrack, 376 U. S. 612
(1964), we held that a result different from
Klaxon is
produced when a suit has been transferred under § 1404(a) on
defendant's motion. Our reasons were two. First, we thought it
highly unlikely that Congress, in enacting § 1404(a), meant to
provide defendants with a device by which to manipulate the
substantive rules that would be applied.
Id. at
376 U. S.
633-636. That conclusion rested upon the fact that the
law grants the plaintiff the advantage of choosing the venue in
which his action will be tried, with whatever state law advantages
accompany that choice. A defensive use of § 1404(a) in order to
deprive the plaintiff of this "venue privilege,"
id. at
376 U. S. 634,
would allow the defendant to "
get a change of law as a bonus
for a change of venue,'" id. at 376 U. S. 636
(citation omitted), and would permit the defendant to engage in
forum shopping among States, a privilege that the Klaxon
regime reserved for plaintiffs. Second, we concluded that the
policies of Erie and Klaxon would be undermined
by application of the transferee court's choice-of-law principles
in the case of a defendant-initiated transfer, id. at
376 U. S.
637-640, because then "the `accident' of federal
diversity jurisdiction" would enable the defendant
"to utilize a transfer to achieve a result in federal court
which could not have been achieved in the courts of the State where
the action was filed,"
id. at
376 U. S. 638.
The goal of
Erie and
Klaxon, we reasoned, was to
prevent "forum shopping" as between state and federal systems; the
plaintiff makes a
Page 494 U. S. 535
choice of forum law by filing the complaint, and that choice
must be honored in federal court, just as it would have been
honored in state court, where the defendant would not have been
able to transfer the case to another State.
We left open in
Van Dusen the question presented today,
viz., whether "the same considerations would govern" if a
plaintiff sought a § 1404(a) transfer. 376 U.S. at
376 U. S. 640.
In my view, neither of those considerations is served -- and indeed
both are positively defeated -- by a departure from
Klaxon
in that context. First, just as it is unlikely that Congress, in
enacting § 1404(a), meant to provide the defendant with a vehicle
by which to manipulate in his favor the substantive law to be
applied in a diversity case, so too is it unlikely that Congress
meant to provide the
plaintiff with a vehicle by which to
appropriate the law of a distant and inconvenient forum in which he
does not intend to litigate, and to carry that prize back to the
State in which he wishes to try the case. Second, application of
the transferor court's law in this context would encourage forum
shopping between federal and state courts in the same jurisdiction
on the basis of differential substantive law. It is true, of
course, that the plaintiffs here did not select the
Mississippi federal court in preference to the Mississippi
state courts because of any differential substantive law; the
former, like the latter, would have applied Mississippi
choice-of-law rules, and thus the Mississippi statute of
limitations. But one must be blind to reality to say that it is the
Mississippi federal court in which these plaintiffs have
chosen to sue. That was merely a way station en route to suit in
the
Pennsylvania federal court. The plaintiffs were
seeking to achieve exactly what
Klaxon was designed to
prevent: the use of a Pennsylvania federal court instead of a
Pennsylvania state court in order to obtain application of a
different substantive law. Our decision in
Van Dusen
compromised "the principle of uniformity within a state,"
Klaxon, 313 U.S. at
313 U. S. 496,
only in the abstract, but today's decision compromises it precisely
in the respect that
Page 494 U. S. 536
matters --
i.e., insofar as it bears upon the
plaintiff's choice between a state and a federal forum. The
significant federal judicial policy expressed in
Erie and
Klaxon is reduced to a laughingstock if it can so readily
be evaded through filing and transfer.
The Court is undoubtedly correct that applying the
Klaxon rule after a plaintiff-initiated transfer would
deter a plaintiff in a situation such as exists here from seeking a
transfer, since that would deprive him of the favorable substantive
law. But that proves only that this disposition achieves what
Erie and
Klaxon are designed to achieve:
preventing the plaintiff from using "the accident of diversity of
citizenship,"
Klaxon, 313 U.S. at
313 U. S. 496,
to obtain the application of a different law within the State where
he wishes to litigate. In the context of the present case, he must
either litigate in the State of Mississippi under Mississippi law,
or in the Commonwealth of Pennsylvania under Pennsylvania law.
The Court expresses concern,
ante at
494 U. S.
529-530, that, if normal
Erie-Klaxon principles
were applied, a district judge might be reluctant to order a
transfer, even when faced with the prospect of a trial that would
be manifestly inconvenient to the parties, for fear that, in doing
so, he would be ordering what is tantamount to a dismissal on the
merits. But where the plaintiff himself has moved for a transfer,
surely the principle of
volenti non fit injuria suffices
to allay that concern. The Court asserts that, in some cases, it is
the defendant who will be prejudiced by a transfer-induced change
in the applicable law. That seems likely to be quite rare, since it
assumes that the plaintiff has gone to the trouble of bringing the
suit in a less convenient forum, where the law is
less
favorable to him. But where the defendant is disadvantaged by a
plaintiff-initiated transfer, I do not see how it can reasonably be
said that he has been "prejudiced," since the plaintiff could have
brought the suit in the "plaintiff's-law forum" with the law more
favorable to him (and the more convenient forum) in the first
place. Prejudice to the defendant, it
Page 494 U. S. 537
seems to me, occurs only when the plaintiff is enabled to have
his cake and eat it too -- to litigate in the more convenient forum
that he desires, but with the law of the distant forum that he
desires.
The Court suggests that applying the choice-of-law rules of the
forum court to a transferred case ignores the interest of the
federal courts themselves in avoiding the "systemic costs of
litigating in an inconvenient place," citing Justice Jackson's
eloquent remarks on that subject in
Gulf Oil Corp. v.
Gilbert, 330 U. S. 501,
330 U. S.
508-509 (1947).
Ante at
494 U. S. 530.
The point, apparently, is that these systemic costs will increase
because the change in law attendant to transfer will not only deter
the plaintiff from moving to transfer, but will also deter the
court from ordering
sua sponte a transfer that will harm
the plaintiff's case. Justice Jackson's remarks were addressed,
however, not to the operation of § 1404(a), but to "those rather
rare cases where the doctrine [of
forum non conveniens]
should be applied." 330 U.S. at
330 U. S. 509.
Where the systemic costs are that severe, transfer ordinarily will
occur whether the plaintiff moves for it or not; the district judge
can be expected to order it
sua sponte. I do not think
that the prospect of depriving the plaintiff of favorable law will
any more deter a district judge from transferring [
Footnote 1] than it would have deterred a
district judge, under the prior regime, from ordering a dismissal
sua sponte pursuant to the doctrine of
forum non
conveniens. In fact the deterrence to
sua sponte
transfer will be considerably less, since transfer involves no risk
of statute of limitations bars to refiling.
Page 494 U. S. 538
Thus, it seems to me that a proper calculation of systemic costs
would go as follows: saved by the Court's rule will be the
incremental cost of trying in forums that are inconvenient (but not
so inconvenient as to prompt the court's
sua sponte
transfer) those suits that are now filed in such forums for
choice-of-law purposes. But incurred by the Court's rule will be
the costs of considering and effecting transfer, not only in those
suits but in the indeterminate number of additional suits that will
be filed in inconvenient forums now that filing and transfer is an
approved form of shopping for law; plus the costs attending the
necessity for transferee courts to figure out the choice-of-law
rules (and probably the substantive law) of distant States much
more often than our
Van Dusen decision would require. It
should be noted that the file-and-transfer ploy sanctioned by the
Court today will be available not merely to achieve the relatively
rare (and generally unneeded) benefit of a longer statute of
limitations, but also to bring home to the desired state of
litigation all sorts of favorable choice-of-law rules regarding
substantive liability -- in an era when the diversity among the
States in choice-of-law principles has become kaleidoscopic.
[
Footnote 2]
The Court points out, apparently to deprecate the prospect that
filing-and-transfer will become a regular litigation strategy, that
there is "no guarantee" that a plaintiff will be accorded a
transfer; that while "[n]o one has contested the justice of
transferring this particular case," that option "remains open to
defendants in future cases"; and that,
"[a]lthough a court cannot ignore the systemic costs of
inconvenience, it may consider the course that the litigation
already has taken in determining the interest of justice."
Ante at
494 U. S. 532.
I am
Page 494 U. S. 539
not sure what this means -- except that it plainly does not mean
what it must mean to foreclose the filing-and-transfer option,
namely, that transfer can be denied because the plaintiff was law
shopping. The whole theory of the Court's opinion is that it is not
in accord with the policy of § 1404(a) to deprive the plaintiff of
the "state law advantages" to which his "venue privilege" entitles
him.
Ante at
494 U. S. 524.
The Court explicitly repudiates "[t]he desire to take a punitive
view of the plaintiff's actions, "
ante at
494 U. S. 530,
and to make him "pay the price for choosing an inconvenient forum
by being put to a choice of law versus forum,"
ante at
494 U. S. 529.
Thus, all the Court is saying by its "no guarantee" language is
that the plaintiff must be careful to choose a
really
inconvenient forum if he wants to be sure about getting a
transfer. That will often not be difficult. In sum, it seems to me
quite likely that today's decision will cost the federal courts
more time than it will save them.
Thus, even as an exercise in giving the most extensive possible
scope to the policies of § 1404(a), the Court's opinion seems to me
unsuccessful. But, as I indicated by beginning this opinion with
the Rules of Decision Act, that should not be the object of the
exercise at all. The Court and I reach different results largely
because we approach the question from different directions. For the
Court, this case involves an "interpretation of § 1404(a),"
ante at
494 U. S. 524,
and the central issue is whether
Klaxon stands in the way
of the policies of that statute. For me, the case involves an
interpretation of the Rules of Decision Act, and the central issue
is whether § 1404(a) alters the "principle of uniformity within a
state" which
Klaxon says that Act embodies. I think my
approach preferable, not only because the Rules of Decision Act
does, and § 1404(a) does not, address the specific subject of which
law to apply, but also because, as the Court acknowledges, our
jurisprudence under that statute is "a vital expression of the
federal system and the concomitant integrity of the separate
States,"
ante at
494 U. S. 523.
To ask, as in effect the Court
Page 494 U. S. 540
does, whether
Erie gets in the way of § 1404(a), rather
than whether § 1404(a) requires adjustment of
Erie, seems
to me the expression of a mistaken sense of priorities.
For the foregoing reasons, I respectfully dissent.
[
Footnote 1]
The prospective transferor court would not be deterred at all,
of course, if we simply extended the
Van Dusen rule to
court-initiated transfers. In my view, that would be inappropriate,
however, since court-initiated transfer, like plaintiff-initiated
transfer, does not confer upon the defendant the advantage of forum
shopping for law,
Van Dusen v. Barrack, 376 U.
S. 612,
376 U. S. 636
(1964), and does not enable the defendant
"to utilize a transfer to achieve a result in federal court
which could not have been achieved in the courts of the State where
the action was filed,"
id. at
376 U. S.
638.
[
Footnote 2]
The current edition of Professor Leflar's treatise on American
Conflicts Law lists 10 separate theories of choice of law that are
applied, individually or in various combinations, by the 50 States.
See R. Leflar, L. McDougall III, & R. Felix, American
Conflicts Law §§ 86-91, 93-96 (4th ed.1986).
See also Kay,
Theory into Practice: Choice of Law in the Courts, 34 Mercer L.Rev.
521, 525-584, 591-592 (1983).