Lafferty v. St. Riel ( 2007 )

Opinions of the United
2007 Decisions States Court of Appeals
for the Third Circuit
7-13-2007
Lafferty v. St. Riel
Precedential or Non-Precedential: Precedential
Docket No. 05-5357
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PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 05-5357
DEBRA A. LAFFERTY; RANDOLPH C.
LAFFERTY, HER HUSBAND,
Appellants
v.
GITO ST. RIEL; ACHENBACH’S PASTRIES, INC.;
JOHN DOE; MARY DOE; ABC PARTNERSHIPS; DEF
CORPORATIONS; XYZ CORPORATIONS, JOINTLY,
SEVERALLY AND/OR IN THE ALTERNATIVE
Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil Action No. 05-cv-04094)
Chief District Judge: Honorable Harvey Bartle, III
Submitted Under Third Circuit LAR 34.1(a)
January 9, 2007
Before: McKEE, AMBRO and FISHER, Circuit Judges
(Opinion filed: July 13, 2007)
Daniel J. Cahill, Esquire
Youngblood, Corcoran, Lafferty & Hyberg
1201 New Road
Suite 230, Cornerstone Commerce Center
Linwood, NY 08221
Counsel for Appellants
Lloyd G. Parry, Esquire
Davis, Parry & Tyler
1525 Locust Street, 14th Floor
Philadelphia, PA 19102
Counsel for Appellees
OPINION OF THE COURT
AMBRO, Circuit Judge
We deal with a deceptively simple issue: which filing
date applies for statute of limitations purposes when a federal
district court transfers venue to another district under 28 U.S.C.
§ 1406(a)? Here, a federal district court in New Jersey with
diversity jurisdiction transferred a personal injury claim filed
within the limitations statutes of both New Jersey and
Pennsylvania to another federal district court in Pennsylvania
because the New Jersey district was an improper venue. The
2
United States District Court for the Eastern District of
Pennsylvania held that recovery was barred because the transfer
occurred after the running of Pennsylvania’s statute of
limitations. Lafferty v. St. Riel, 397 F. Supp. 2d 602, 603–04
(E.D. Pa. 2005).
That response in this uncertain area is well-reasoned, but
we disagree. Even though the suit was filed in an improper,
transferor forum in New Jersey, it was timely here because it
was filed within the limitations statute for the transferee forum
in Pennsylvania, as the filing date for a case transferred under
§ 1406(a) is that of the initial filing in the improper forum.
I. Factual Background
On July 17, 2003, Gito St. Riel, who was driving a
delivery truck for Achenbach Pastries (together, “defendants”),
was in an automobile accident in Pennsylvania with Debra
Lafferty. Almost two years later (July 11, 2005), Lafferty filed
a personal injury claim (and her husband filed a loss of
consortium claim as well) in the United States District Court for
the District of New Jersey. As St. Riel and Achenbach Pastries
were citizens of Pennsylvania, and the Laffertys citizens of New
Jersey, federal diversity jurisdiction existed under 28 U.S.C.
§ 1332.1 They asserted venue under 28 U.S.C. § 1391(a).2
1
The statute provides, in relevant part:
3
(a) The district courts shall have original jurisdiction of
all civil actions where the matter in controversy exceeds
the sum or value of $75,000, exclusive of interest and
costs, and is between—
(1) citizens of different States; . . . .
The parties do not discuss whether the amount in controversy
exceeded $75,000, and as the District Court did not reach this
question, we do not address it (though we presume that
threshold was met).
2
Subsection (a) of § 1391 states:
(a) A civil action wherein jurisdiction is founded
only on diversity of citizenship may, except as
otherwise provided by law, be brought only in (1)
a judicial district where any defendant resides, if
all defendants reside in the same State, (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, or (3) a
judicial district in which any defendant is subject
to personal jurisdiction at the time the action is
commenced, if there is no district in which the
action may otherwise be brought.
The Laffertys asserted that venue was proper in the New Jersey
District Court under § 1391(a) because, “although [Achenbach
4
Sixteen days later (July 27, 2005), the New Jersey District Court
transferred the action sua sponte, pursuant to 28 U.S.C.
§ 1406(a),3 to the Eastern District of Pennsylvania, and the case
was docketed there a few days later. Two months later,
Pastries] has a principal place of business in . . . Pennsylvania,
its advertising and marketing activities targeted patrons, such as
the Plaintiff[s], located in the State of New Jersey.” Appellant’s
Br. at 6. “No discovery was undertaken to determine [the
company’s] State of incorporation, nor the extent of its
marketing activities,” id, and no mention was made whether
“there [was] no district in which the action may otherwise be
brought” under the statute.
3
The District Judge in New Jersey determined that venue
was improper because, although the Laffertys are New Jersey
citizens, “both defendants clearly reside in Pennsylvania” and “a
substantial part of the events giving rise to the claim [including
the accident] did not occur in New Jersey.” Order Transferring
Matter to Eastern District of Pennsylvania, No. 05-3474, at *2
(D.N.J. July 27, 2005). On these facts and the wording of
§ 1391(a) set out above, supra note 2, another court may not
have considered the Laffertys’ asserted basis for filing in New
Jersey sufficient to meet any good-faith requirements for filing
in an incorrect forum. However, that the New Jersey District
Court transferred—rather than dismissed—this case under
§ 1406(a) indicates implicitly that it thought the initial filing was
done in good faith, but mistaken. The decision to transfer under
§ 1406(a) thus turns on a question of fact, subject to the District
Court’s discretion. We do not disturb it here.
5
defendants filed a motion for judgment on the pleadings,
asserting that the Laffertys’ action was time-barred by
Pennsylvania’s two-year statute of limitations for personal
injury claims.
The Eastern District of Pennsylvania Court determined
that the doctrine of Erie R.R. Co. v. Tompkins, 304 U.S. 64(1938), requires courts to “apply the substantive law, including
conflicts of laws rules” and “statute[s] of limitations,” “of the
state where the District Court sits . . . , in this case, the law of
Pennsylvania” whenever venue was improper. Lafferty, 397 F.
Supp. 2d at 603–04 (citations omitted). The Court noted that
Pennsylvania’s statute of limitations for personal injury actions
is two years. 42 Pa. Cons. Stat. Ann. § 5524(2).4 It further
noted that this case was barred because it did not fall under
exceptions to the state limitations period, 42 Pa. Cons. Stat.
Ann. §§ 5103(a), (b)(1). It therefore concluded that the
Laffertys’ action was untimely because the case was transferred
ten days after the Pennsylvania statute of limitations had
run—counting the date of the transfer to the Eastern District of
Pennsylvania (July 27, 2005) rather than the date of the initial
filing in the District of New Jersey (July 11, 2005) as the filing
date. Finally, the Court observed that the Laffertys could have
filed a protective action in a Pennsylvania commonwealth court
or one of the federal district courts sitting in Pennsylvania “to
4
The same is true for personal injury claims applying New
Jersey’s statute of limitations. N.J. Stat. Ann. § 2A:14-2.
6
avoid the possibility that the statute of limitations [would] bar an
action in situations not exempted by [Pennsylvania’s limitations
law] . . . .” Lafferty, 397 F. Supp. 2d at 605. Concluding that
the Laffertys had not availed themselves of the means for
bringing a timely claim or otherwise preserving it, the Court
granted defendants’ motion for judgment on the pleadings.
The Laffertys appeal to us, arguing that they complied
with both New Jersey and Pennsylvania statutes of limitations
by filing a complaint within two years of the accident. They
also point out that the New Jersey District Court simply
transferred the matter rather than dismissing it. Thus, they
argue, the statute of limitations—for purposes of determining
timeliness under Pennsylvania law—must run from the time the
case was first filed.5
II. Discussion
As the District Court noted, federal courts must apply the
substantive laws of the forum state in diversity actions, Erie,
304 U.S. at 78, and these include state statutes of limitations,
Guaranty Trust Co. v. York, 326 U.S. 99, 110 (1945); see also
5
As noted, the District Court had diversity jurisdiction under
28 U.S.C. § 1332. We have jurisdiction under 28 U.S.C.
§ 1291. We exercise plenary review over a district court’s grant
of judgment on the pleadings and over questions of statutory
interpretation. E.g., CoreStates Bank, N.A. v. Huls America,
Inc., 176 F.3d 187, 193 (3d Cir. 1999).
7
Dixon Ticonderoga Co. v. Estate of O’Conner, 248 F.3d 151,
160–61 (3d Cir. 2001). Also correct is the observation that
“Erie and its progeny are grounded on the notion that actions in
a state court and a federal court involving the same transaction
or accident ‘should not lead to a substantially different result.’”
Lafferty, 397 F. Supp. 2d at 603 (citing Ferens v. John Deere
Co., 494 U.S. 516, 524 (1990)); see also Guaranty Trust, 326
U.S. at 109 (same). For this case the issue is not so much whose
statute of limitations applies; both are the same (two years). It
is whether the first-filed complaint, which was timely but in an
improper forum, may be heard when the case is transferred—
rather than dismissed—to a proper venue where the action
would have been timely if filed there initially.6
A. Venue Transfers under 28 U.S.C. §§ 1404(a) &
1406(a)
The two provisions governing venue transfers at issue
here read, in relevant part, as follows:
1. 28 U.S.C. § 1404(a):
6
As the limitations periods here are the same, we expressly
do not decide the question whether a § 1406(a) transfer is timely
when the periods are different, particularly in situations where
the transferee court’s statute of limitations is shorter than that of
the transferor court. This colloquially termed “next case” is left
to another panel of our Court.
8
Venue: Change of venue
(a) 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.
2. 28 U.S.C. § 1406(a):
Venue: Cure or waiver of defects
(a) The district court of a district in which
is filed a case laying venue in the wrong
division or district shall dismiss, or if it be
in the interest of justice, transfer such case
to any district or division in which it could
have been brought.
Distinctions between §§ 1404(a) and 1406(a) have to do
with discretion, jurisdiction, and choice of law. Section 1404(a)
transfers are discretionary determinations made for the
convenience of the parties and presuppose that the court has
jurisdiction and that the case has been brought in the correct
forum. Jumara v. State Farm Ins. Co., 55 F.3d 873, 878 (3d Cir.
1995); 17A Moore’s Federal Practice, § 111.02 (Matthew
Bender 3d ed. 2006). Faced with a choice-of-law question,
federal courts in the district to which the case has been
9
transferred under § 1404(a) must apply the law of the transferor
state. See Van Dusen v. Barrack, 376 U.S. 612, 639 (1964) (for
defendant-initiated § 1404(a) transfers); Ferens, 494 U.S. at527–28 (extending the Van Dusen rule to all § 1404(a) transfers,
whether initiated by plaintiff or defendant).
Section 1406(a) comes into play where plaintiffs file suit
in an improper forum. Jumara, 55 F.3d at 878; Moore’s Federal
Practice, supra, § 111.02. In those instances, district courts are
required either to dismiss or transfer to a proper forum.
Goldlawr, Inc. v. Heiman, 369 U.S. 463, 465–66 (1962)
(emphasizing that federal district courts may transfer—rather
than dismiss—cases that plaintiffs initially brought in an
improper forum, regardless whether they otherwise have
personal jurisdiction). When cases have been dismissed for
improper venue, plaintiffs in those cases must file anew in a
proper forum. See Moore’s Fed. Practice, supra, § 111.03. No
doubt the filing date in the new forum governs for limitations
purposes. When cases have been transferred for improper
venue, transferee courts generally apply the substantive law they
would have applied had the action been brought there initially.
See Moore’s Fed. Practice, supra, §§ 111.02[2][c], 111.38
(citing cases); Charles A. Wright, Arthur R. Miller & Edward H.
Cooper, 14D Federal Practice & Procedure: Jurisdiction 3d
§ 3827 at 581 n.22 (West 2007) (same). However, there is a
question whether a transferee court should count the date of
transfer as the date of initial filing under its forum’s statute of
limitations to bar a claim merely because that statute has run by
10
the time of the transfer.
B. The District Court’s Analysis
The District Court’s rejection of the Laffertys’ claims
turns on its analysis of 28 U.S.C. §§ 1404(a) and 1406(a):
We acknowledge that one of the salutary purposes
of § 1406(a) is to permit a transfer to overcome
the bar of the statute of limitations that might
otherwise result if an action is dismissed by a
federal court for improper venue or lack of
personal jurisdiction. Goldlawr, 369 U.S. at 463.
It clearly serves this intended purpose where
federal questions are involved. It also does so in
diversity cases when the statute of limitations of
the state in which the transferee court sits has not
expired or the transferee state has an appropriate
savings provision in its law. Nonetheless, unlike
a transfer under § 1404(a), a transfer under
§ 1406(a) is not merely a change in courtrooms
where the action can be properly filed and tried in
either place. . . . We see no reason why
§ 1406(a) should not be characterized as [“a
housekeeping measure,” as was § 1404(a) by the
Supreme Court], but it does not follow that Erie
requires the application of the law of the
transferor court when it is the wrong, as opposed
11
to an inconvenient, forum. Indeed, in our view,
Erie requires the opposite, that is, that when a
transfer occurs pursuant to § 1406(a) the law of
the transferee forum should be applied.
Lafferty, 397 F. Supp. 2d at 608–09 (emphasis in original).
From this, the Court concluded that the Laffertys’ action was
untimely under Pennsylvania law because (1) they filed an
action in an incorrect forum (New Jersey) and, applying the laws
of the transferee court, the Pennsylvania statute was not tolled
pending the transfer of that action under § 1406(a); and (2) they
failed to complete service of process according to
Pennsylvania’s procedural rules.
The first basis of the Court’s conclusion—regarding the
tolling of the limitations statute for a venue transfer under
§ 1406(a)—is the threshold matter that determines the outcome
of this case. Here, the Court distinguished between the venue
transfer statutes by presuming that the impropriety of filing an
action in an incorrect forum is a prejudicial factor that bars
transferee courts from hearing claims when § 1406(a) transfers
are not completed within the transferee state’s statute of
limitations and according to that state’s filing procedures.
We doubt this focus on impropriety as a prejudicial bar.
Many courts have noted that the only relevant distinction
between the venue-transfer statutes is simply which of “the two
principal transfer statutes—§§ 1404(a) and 1406(a)”—is
12
appropriate for transfers: the former is appropriate “when venue
is proper and [the latter] should be used when venue is
improper.” John D. Currivan, Choice of Law in Federal Court
After Transfer of Venue, 63 Cornell L. Rev. 149, 150 n.10
(1977–78) (citing cases). But many other courts, like the
District Court here, “have blurred this distinction,” id., by
finding that the improper filing prejudices a party when the case
is transferred out-of-time.7 These courts fail to distinguish
between the effects of transfers as opposed to dismissals.
C. Supreme Court and Courts of Appeals
Precedent
The Goldlawr Court distinguished between transfers and
7
Proponents of this view argue that if a suit is filed in the
wrong district, then transferred pursuant to § 1406, the
limitations statute of the transferee forum should apply as if the
suit were initiated there on the date it was transferred in order to
prevent plaintiffs from forum-shopping. However, while forum-
shopping is a concern “where parties purposely file an action in
a district with improper venue simply to take advantage of the
forum’s longer statute of limitations,” Richard Maloy, Forum
Shopping? What’s Wrong with That?, 24 Quinnipiac L. Rev.
25, 48 (2005), here the limitations period in either jurisdiction
is two years. Thus, we need not fear the specter of forum-
shopping that might appear if our holding allowed plaintiffs to
file in any federal forum in bad faith. Moreover, there is no
allegation of bad faith here.
13
dismissals under § 1406(a).
The problem which gave rise to the
enactment of [§ 1406(a)] was that
of avoiding the injustice which had
often resulted to plaintiffs from
dismissal of their actions merely
because they had made an
erroneous guess with regard to the
existence of some elusive fact of
the kind upon which venue
provisions often turn. . . .
[D]ismissal here would have
resulted in plaintiff’s losing a
substantial part of its cause of
action under the statute of
limitations merely because it made
a mistake in thinking that the
respondent corporations could be
“found” or that they “transact . . .
business” in the Eastern District of
Pennsylvania. . . .
The language of § 1406(a) is
amply broad enough to authorize
the transfer of cases, however
wrong the plaintiff may have been
in filing his case as to venue . . . .
14
If by reason of the uncertainties of
proper venue a mistake is made,
Congress, by enactment of
§ 1406(a), recognized that “the
interest of justice” may require that
the complaint not be dismissed but
rather that it be transferred in order
that the plaintiff not be penalized
by . . . “time-consuming and
justice-defeating technicalities.”
369 U.S. at 466–67 (emphasis added) (citations omitted).8
Goldlawr’s discussion of § 1406(a) acknowledges that
dismissals will bar actions that are not refiled in the proper
forum within the forum state’s statute of limitations. By
contrast, transfers, “‘in the interest of justice,’” “remov[e]
whatever obstacles [that] may impede an expeditious and
orderly adjudication of cases and controversies on their merits.”
8
The Supreme Court recently affirmed the principles set
forth in Goldlawr in the context of convenience transfers. It
noted that Congress codified the doctrine of forum non
conveniens in §§ 1404(a) and 1406(a), and “has provided for
transfer, rather than dismissal,” when a transferee venue is the
“more convenient place for trial of the action.” Sinochem Int’l
Co. Ltd. v. Malaysia Int’l Shipping Corp., 549 U.S. __, 127 S.
Ct. 1184, 1190–91 (2007) (citing, inter alia, Goldlawr, 369 U.S.
at 466).
15
Id. at 466–67 (quoting 28 U.S.C. § 1406(a)).9
Goldlawr establishes the following: (1) the provision is
designed to preserve claims that rigid application of dismissal
rules may bar; (2) § 1406(a) transfers do not require that
prejudice should result from filing an action in an improper
forum if the initial filing was made in good faith; and (3) the
filing itself of a lawsuit, even in an improper forum, “shows the
proper diligence on the part of the plaintiff which such statutes
of limitation were intended to insure,” and “toll[s] whatever
statutes of limitation would otherwise apply.” 369 U.S. at466–67.
We affirmed these Goldlawr principles in Carteret Sav.
Bank, F.A. v. Shushan when we noted that “section 1406(a) is
read broadly so that a plaintiff properly laying venue but unable
to proceed in the transferor court because of jurisdictional
problems does not lose its day in court by reason of the running
of the statute of limitations in another forum.” 919 F.2d 225,
228, 231–32 (3d Cir. 1990). But the question presented in
Shushan was different than the one here, for there we considered
whether a district court could transfer under § 1406(a) over a
9
In its comparison of these venue-transfer provisions two
years after the Goldlawr decision, the Supreme Court
maintained the distinction between transfers and dismissals by
reiterating that “both sections were broadly designed to allow
transfer instead of dismissal.” Van Dusen, 376 U.S. at 633–34.
16
plaintiff’s objections an action where venue was proper. We
concluded that it could not because, even though we read
§ 1406(a) broadly, we do not allow courts to force transfers “in
the interest of justice” where venue was otherwise proper. Id.
at 232, 233. Relevant to the question before us today is that
Shushan acknowledged that were the § 1406(a) transfer
permissible, the plaintiff would not have “los[t] its day in court
by reason of the running of the statute of limitations in another
forum.” Id. at 231–32.
Prior to Shushan, in United States v. Berkowitz, 328 F.2d
358 (3d Cir. 1964), we recognized implicitly a distinction
between transfers and dismissals under §§ 1404(a) and 1406(a).
In Berkowitz, the Government filed in the Eastern District of
Pennsylvania (where it alleged the tax liability arose) a civil
action against Morton Berkowitz to recover back taxes. Id. at
359. He filed a motion to dismiss the action on the ground that
the Eastern District of Pennsylvania Court had no personal
jurisdiction, as he had abandoned his Pennsylvania residence
and become a New York citizen by the time the action was filed.
Id. Because the New York limitations period had expired by
this time, the Government requested that the Eastern District of
Pennsylvania Court transfer the action to the Eastern District of
New York rather than dismiss it. Id. Concluding that it was
without power to transfer under § 1404(a) because it had not
acquired personal jurisdiction over Berkowitz, and that it could
not transfer under § 1406(a) because venue was proper (as the
tax liability arose in Pennsylvania), the Eastern District of
17
Pennsylvania Court denied the transfer request and dismissed
the action. Id. We reversed, holding that a § 1404(a) transfer
was available even though there was no personal jurisdiction.
Our decision was an extension of the Goldlawr rule, which
allowed venue transfers under § 1406 in the absence of
jurisdiction, to § 1404(a) transfers. Id. at 360. In doing so, we
acknowledged the difference between transfers and dismissals
noted in Goldlawr.
In Young v. Clantech, Inc., we also recognized an implicit
distinction between dismissals and transfers. 863 F.2d 300 (3d
Cir. 1988). We addressed the timeliness of a wrongful death
action brought against a New Jersey company on behalf of
James Young, who was killed in an industrial accident in
Canada in August 1983. His wife filed suit in a Michigan state
court in August 1985, two weeks shy of the two-year limitations
statute. The Michigan state court dismissed the action for lack
of personal jurisdiction, and the wife re-filed in federal court
(the District of Washington) in August 1986, almost a year after
the Michigan dismissal and far outside the limitations window.
The District of Washington Court transferred the action to the
District of New Jersey immediately because it lacked personal
jurisdiction and also because of forum non conveniens.10
Approximately two years later, in May 1988, the New Jersey
10
Our Court did not, however, specify which statute was
used for the transfer; presumably the District Court used
§ 1406(a).
18
District Court dismissed the case as untimely. We affirmed,
holding that “the [timely] filing of a case against a defendant in
a court which did not have jurisdiction over the action tolled [the
transferee court’s] statute of limitations only if the court in
which the case was originally filed had authority to transfer the
case to the proper court.” Id. at 301. Because the Michigan
state court in which the case initially was filed dismissed, rather
than transferred, the action, there was no equitable tolling. Id.
Moreover, although the federal court in which the case was filed
following the dismissal (the District Court of Washington)
transferred the action to a third court (the District Court of New
Jersey), the action had been refiled almost a year outside of New
Jersey’s two-year statute of limitations,11 and therefore was
untimely. In implying that it would have permitted the use of a
transfer to overcome potential timeliness bars in the transferee
state had the Washington action been timely filed in the
transferor state (which did not occur because the action in the
Michigan state court was dismissed), the Young Court’s
reasoning appears to follow our recognition in Berkowitz of the
difference between transfers and dismissals set out in Goldlawr.
Our sister Courts of Appeals have split on the general
question of how to treat limitations issues in cases transferred
11
The parties in Young did not dispute the District Court’s
conclusions that New Jersey law, under which the statute of
limitations is two years, governed their case. Young, 863 F.2d
at 301.
19
under § 1406(a). The Eighth Circuit Court of Appeals applies
the limitations statute of the transferor court in such a transfer.
Mayo Clinic v. Kaiser, 383 F.2d 653, 656 (8th Cir. 1967)
(“[Under] Goldlawr . . . [,] the purpose for making transfers
would be obliterated in many cases if the statute of limitations
of the transferee forum were applied at the date of transfer, and
that if such were the rule there would be little purpose in
transferring the case instead of dismissing it.”). The Fourth,
Seventh, and Eleventh Circuit Courts apply the limitations
statute of the transferee court, viewing the date of the transfer as
the initial filing date for limitations calculations. See LaVay
Corp. v. Dominion Fed. Sav. & Loan Ass’n, 830 F.2d 522, 526
(4th Cir. 1987) (to avoid forum-shopping); Geehan v. Monahan,
382 F.2d 111, 114 (7th Cir. 1967) (upon agreement of counsel
for both sides); Manley v. Engram, 755 F.2d 1463, 1467 (11th
Cir. 1985) (regardless which party requested transfer).
The other Courts of Appeals that have considered this
issue—the Second, Fifth, and Sixth—seem to have once applied
the laws of the transferor forum, but their latest decisions require
courts to apply the transferee forum’s rules, without specific
reference to the calculation of a limitations statute upon a
transfer. In the Second Circuit, compare Schaeffer v. Village of
Ossining, 58 F.3d 48, 50 (2d Cir. 1995) (“Following a § 1406(a)
transfer, . . . ‘the transferee court should apply whatever law it
would have applied had the action been properly commenced
there.’”) (citations omitted), with Corke v. Sameiet M.S. Song of
Norway, 572 F.2d 77, 79–80 (2d Cir. 1978) (dismissal and
20
refiling would bar the action with great prejudice to the
plaintiffs). In the Fifth Circuit, compare Jackson v. West
Telemarketing Corp. Outbound, 245 F.3d 518, 523 (5th Cir.
2001) (“[F]ollowing a section 1406(a) transfer . . . [,] the
transferee court must apply the choice of law rules of the state
in which it sits.”) (quoting Ellis v. Great Southwestern Corp.,
646 F.2d 1099, 1110 (5th Cir. 1981)), with Dubin v. United
States, 380 F.2d 813, 814, 816 (5th Cir. 1967) (action filed in
improper forum and subsequently transferred to proper venue
under § 1406(a) was timely even though the statute of
limitations in the transferee forum had expired). In the Sixth
Circuit, compare Flynn v. Greg Anthony Constr. Co., 95 Fed.
Appx. 726, 732 n.5 (6th Cir. 2003) (“[A]s a general rule the law
of the transferee court applies after a § 1406 transfer . . . .”),
with Taylor v. Love, 415 F.2d 1118, 1120 (6th Cir. 1969)
(affirming the validity and timeliness of filing suit in the
improper forum and then transferring it to a proper forum, even
if the suit was filed initially “just to stop the running of the
statute of limitations [in the transferee forum]”).
To repeat, the question before us does not necessarily
turn on whether the laws of the transferor or transferee forum
apply, as the ordinary rule is that, following transfers, the
transferee forum’s substantive laws apply. See supra, at 10–11
(citing Moore’s Federal Practice, supra, §§ 111.02, 111.38;
Wright, Miller & Cooper, supra, § 3827 at 581 n.22). Instead,
we address which date should be considered the filing date for
purposes of limitations calculations: the date of initial filing in
21
the transferor forum or the date of transfer to or docketing in the
transferee forum. In our view, the sounder interpretation is that
the transferee forum’s limitations statute applies and the date of
the initial filing in the improper forum counts as the date of the
filing in the transferee forum for limitations purposes when the
case is transferred rather than dismissed under § 1406(a). Thus,
the initial complaint filed here within the transferee forum’s
limitations period is timely. This interpretation accords with the
Supreme Court’s treatment of § 1406(a) transfers in Goldlawr,
as well as its discussions of other transfers in Van Dusen,
Ferens, and Sinochem. It also accords with our Court’s decision
in Shushan, which mentioned the statute of limitations issue, as
well as our decisions in Berkowitz and Young, which touched on
the difference between dismissals and transfers.
This interpretation finds additional support in the
common canon of statutory construction that similar statutes are
to be construed similarly (also known by its Latin label of in
pari materia). See, e.g., Wachovia Bank v. Schmidt, 546 U.S.
303, 126 S. Ct. 941, 943–44 (2006) (“[U]nder the in pari
materia canon, statutes addressing the same subject matter
generally should be read ‘as if they were one law.’”) (citations
omitted); Cook v. Wikler, 320 F.3d 431, 434 (3d Cir. 2003)
(applying the in pari materia canon).12 In this regard, our
12
Although §§ 1404(a) and 1406(a) address different
situations, the doctrine of in pari materia nevertheless applies
because both provisions deal with venue.
22
interpretation today parallels the treatment of transfers pursuant
to 28 U.S.C. § 1631 (“Transfer to cure want of jurisdiction”),
which states as follows:
Whenever a civil action is filed in a
court . . . or an appeal, including a
petition for review of
administrative action, is noticed for
or filed with such a court and that
court finds that there is a want of
jurisdiction, the court shall, if it is
in the interest of justice, transfer
such action or appeal to any other
such court in which the action or
appeal could have been brought at
the time it was filed or noticed, and
the action or appeal shall proceed
as if it had been filed in or noticed
for the court to which it is
transferred on the date upon which
it was actually filed in or noticed
for the court from which it is
transferred.
(emphasis added); see Nelson v. Int’l Paint Co., 716 F.2d 640,
643 n.3 (9th Cir. 1983) (“For cases transferred for lack of
jurisdiction in the transferor court after October 1, 1982, 28
U.S.C. § 1631[] provides that the action ‘shall proceed as if it
had been filed in . . . the court to which it is transferred . . . .’”)
23
(footnote omitted).
Accordingly, we conclude that filing a complaint
(otherwise proper) in a “wrong division or district” does not
make the complaint disappear, only to appear anew when it is
transferred to a proper forum.13 When a judge elects to transfer
13
We note that there is disagreement on the usage of
“wrong” to describe venue or jurisdictional issues that may give
rise to § 1406(a) transfers. Wright & Miller criticize judicial
statements that “venue is ‘wrong’” when referring to an absence
of personal jurisdiction over the defendant, as that “blurs the
very different concepts of venue and personal jurisdiction.”
Wright, Miller, & Cooper, supra, § 3827. In contrast, Moore
says that “the concepts of venue and personal jurisdiction [have
become] essentially coextensive,” and therefore, venue can be
“technically proper” when “it complies with the applicable
venue statute” but “wrong” when there is “some other
procedural obstacle in the original court, such as a lack of
personal jurisdiction over the defendant.” Moore’s Federal
Practice, supra, § 111.02. These differences do not affect our
case, as there is no issue of personal jurisdiction here. Moreover,
Goldlawr clarified that courts may use § 1406(a) to transfer
cases involving defendants over whom they lack personal
jurisdiction.
Here, we use “wrong” district or “improper” venue
simply to refer to any impediment to deciding the case on the
merits, and without pejorative connotations. See, e.g., Dubin,
380 F.2d at 815 (“Looking to the language of § 1406, the statute
is couched in terms of ‘laying venue in the wrong division or
24
rather than dismiss a case filed in an improper forum, he elects
to allow parties to preserve their claim “in the interest of
justice.” Thus, when cases, timely filed in an improper forum
within the limitations periods of the transferor and transferee
forums, are transferred rather than dismissed pursuant to
§ 1406(a), the date of filing is the initial filing date in the
transferor forum, even if the case is not docketed in the new
forum until after the limitations period there has run.
In arriving at a contrary conclusion, the District Court
pointed to our statement in Overfield v. Pennroad Corp. that
“[i]f the action is barred by a Pennsylvania statute of limitations,
no action can be maintained in Pennsylvania even though the
action is not barred elsewhere.” Lafferty, 397 F. Supp. 2d at 605(quoting Overfield, 146 F.2d 889, 898 (3d Cir. 1944)).
Overfield, however, did not involve a § 1406(a) transfer.
Moreover, it was decided before the Supreme Court clarified the
distinction between transfers and dismissals under § 1406(a) in
Goldlawr.
district.’ The statute does not refer to ‘wrong’ venue, but rather
to venue laid in a ‘wrong division or district.’ We conclude that
a district is ‘wrong’ within the meaning of § 1406(a) whenever
there exists an ‘obstacle [to] . . . an expeditious and orderly
adjudication’ on the merits.”); see also Porter v. Groat, 840
F.2d 255, 257 (4th Cir. 1988) (“‘[W]rong division or district’
. . . mean[s] an impediment to a decision on the merits for some
reason other than a mere lack of venue.”).
25
The District Court also relied on our statement in Weaver
v. Marine Bank that “in the context of diversity jurisdiction, . . .
a state statute that bars a person from utilizing a state court
likewise precludes suit in the federal court.” 683 F.2d 744, 747
n.2 (3d Cir.), rev’d on other grounds, 455 U.S. 551 (1982). The
case involved a state enabling statute by which federal courts
transferred claims to state courts. Id. at 747 (“The question
presented . . . is whether the district court, once having acquired
jurisdiction, can transfer the matter to a state court by virtue of
a state enabling statute. We are persuaded that it can.”). Where
parties improperly filed in federal courts, Weaver required those
courts to transfer claims to state courts rather than dismiss them.
683 F.3d at 745. Contrary to the District Court’s conclusion
here, Weaver did not condition the transfer requirement on an
initial filing according to Pennsylvania rules. Id.; cf. Lafferty,
397 F. Supp. 2d at 607 (“[T]he statute of limitations for an
action governed by Pennsylvania law is not tolled until it is
commenced, that is, filed [under those rules].”). Moreover, it is
not controlling because the issue here is not a federal-to-state
transfer via a state enabling statute but a federal-to-federal
transfer via § 1406(a).
Finally, the District Court reasoned that Pennsylvania
law, 42 Pa. Cons. Stat. Ann. §§ 5103(a), b(1), bars this claim
because “this action was not commenced, that is filed, within the
relevant two-year limitations period in a Pennsylvania state
court or in a federal court for a district embracing any part of the
Commonwealth.” 397 F. Supp. 2d at 609. However, § 5103
26
does not apply to this claim because it governs transfers from
state and federal courts sitting within the Commonwealth, not
transfers from courts sitting outside the Commonwealth.
Subsection (a) requires state courts to treat cases transferred
from other state courts “as if originally filed in the transferee
court . . . on the date when first filed in the other tribunal [i.e.,
the transferor state court].” Subsection (b) applies the previous
provision to federal courts within the Commonwealth and lays
out provisions for “transfer[ring]” (read: refiling) cases that the
federal court has dismissed for lack of jurisdiction. Id. These
provisions are not applicable here because the District Court in
New Jersey sits outside the Commonwealth. As § 5103 is silent
about the situation before us, these claims are instead governed
by the ordinary rule that Pennsylvania’s limitations period here
is two years.14
14
The fact that Pennsylvania procedure requires hand
delivery to the defendant and filing with a prothonotary of a
Commonwealth court if the action were filed within the
Commonwealth, Pa. R. Civ. P. Rules 402, 1007, does not
change this outcome. Service of process in a diversity case must
accord with federal rules, even when state rules of a transferee
court require “delivery in hand,” as they do here. Hanna v.
Plumer, 380 U.S. 460, 468 (1965). Rule 3 of the Federal Rules
of Civil Procedure states that “a civil action is commenced by
filing a complaint with the court,” and Rule 4(d)(2), which lays
out the rules for perfecting service, permits mail delivery. These
rules “do[] not affect state statutes of limitations.” Walker v.
Armco Steel Corp., 446 U.S. 740, 751 (1980) (Rule 3); Hanna,
27
380 U.S. at 468 (Rule 4). Thus, so long as the Laffertys
perfected service of process in the New Jersey District Court
according to the Federal Rules—and there is no allegation that
they did not—the action indeed “commenced” (that is, it was
filed) in a timely fashion. Thus, we disagree with the District
Court that “the initial filing in the District of New Jersey . . . did
not constitute a ‘commencement of an action’ under
Pennsylvania law,” as § 5103 does not apply to actions filed in
forums outside the Commonwealth. Because the Laffertys filed
their diversity action in the District of New Jersey within
Pennsylvania’s limitations statute, which neither § 5103 nor
Rule 3 affects for actions initiated in a forum outside of the
Commonwealth, and then transferred that action to a forum
within the Commonwealth, the filing was timely.
The rationale for this holding was explained by Hanna:
To hold that a Federal Rule of Civil
Procedure must cease to function
whenever it alters the mode of
enforcing state-created rights would
be to disembowel either the
Constitution’s grant of power over
federal procedure or Congress’
attempt to exercise that power in
the Enabling Act [28 U.S.C.
§ 2072].
Id. at 473–74. Furthermore, Erie’s “‘outcome-determination’
test . . . cannot be read without reference to the twin aims of the
Erie rule: discouragement of forum shopping and avoidance of
28
Even if § 5103 did apply, the claim we decide would be
preserved. Its provisions would require the Eastern District of
Pennsylvania Court to consider this case as if it were initially
filed there on the date when first filed in the District of New
Jersey Court, particularly where, as here, the case has not been
dismissed and thus is not subject to the refiling requirements.
Perhaps any confusion over whether the transfer in this case
would survive the restrictions imposed in subsection (b) is
because this clause seems to use “transfer” to mean “refile”
when it addresses how litigants may pursue their cases in state
court after a dismissal by a federal court for lack of jurisdiction.
See 42 Pa. Cons. Stat. Ann. § 5103(b) (“Where a matter is filed
in any United States court for a district embracing any part of
this Commonwealth and the matter is dismissed by the United
States court for lack of jurisdiction, any litigant in the matter
filed may transfer the matter to a court or magisterial district of
this Commonwealth by complying with the transfer provisions
set forth . . . [below].”) (emphases added)). Under subsection
(b), such an action would be untimely only if it were dismissed
and subsequently refiled out of time. Here, however, we have
inequitable administration of the laws.” Id. at 458; see also
Ferens v. John Deere Co., 494 U.S. 516, 524 (1990) (explaining
the Erie rule to intend that actions in state and federal courts
involving the same transaction or accident “should not lead to a
substantially different result”).
29
no such a dismissal and refiling. Thus, were § 5103 to apply,
the Pennsylvania Eastern District Court would need to proceed
under subsection (a), in which case it would consider the filing
date in the New Jersey District Court as if it were the initial
filing date in the Pennsylvania Eastern District Court. Because
the case was timely filed in the New Jersey District Court, it
would also be timely under § 5103 after transfer to the
Pennsylvania Eastern District Court.
In short, neither Overview nor Weaver compels a contrary
result because they were not decided with respect to § 1406(a)
transfers. Pennsylvania law is not dispositive because it does
not address issues of transfer from outside the Commonwealth.
To determine the timeliness of cases transferred under § 1406(a)
from a district court in New Jersey to a district court in
Pennsylvania, we look to Goldlawr and cases from our Court
interpreting that provision.
III. Conclusion
The Eastern District of Pennsylvania Court equated
transfer under § 1406(a) with dismissal. On that basis, it applied
Pennsylvania law as if the underlying case began on the date of
the transfer to it from the District of New Jersey Court rather
than the date of filing there. This, we believe, runs counter to
Goldlawr and interpretations of our Court in analogous
situations. When a district court transfers venue to another
district under § 1406(a), for the purpose of calculating the
30
limitations period of the transferee forum the initial filing date
in the transferor forum applies. In this context, the Laffertys’
action was timely because it was filed in the District of New
Jersey within Pennsylvania’s limitations statute and
subsequently transferred to the Eastern District of Pennsylvania
under § 1406(a). We therefore reverse and remand for further
proceedings.
31