Brief Fact Summary.
Plaintiff sued Defendant in federal court in Pennsylvania under contract law for the loss of his hand. Plaintiff also sued Defendant in federal court in Mississippi for negligence. Plaintiff then moved to transfer the case from Mississippi to Pennsylvania under 28 U.S.C. § 1404(a).
Synopsis of Rule of Law.
When a lawsuit is transferred under 28 U.S.C.S. § 1404(a) initiated by a defendant or plaintiff, the transferee court must follow the choice of law rules that prevailed in the transferor court.
Whatever lack of uniformity this may produce between federal courts in different states is 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.View Full Point of Law
Albert Ferens (Plaintiff), a citizen of Pennsylvania, lost his hand when using a combine harvester manufactured by John Deere Co. (Defendant), a Delaware corporation. After Pennsylvania’s statute of limitations had expired for a negligence claim, Plaintiff sued under a contract claim in a federal Pennsylvania court under diversity jurisdiction. Plaintiff also sued for negligence in a federal Mississippi court under diversity jurisdiction because Mississippi statute of limitations had not yet passed for the claim. . Plaintiff then moved to transfer the case from Mississippi to Pennsylvania under 28 U.S.C. § 1404(a).
When a plaintiff transfers a case under 28 U.S.C. § 1404(a), must the transferee court follow the choice of law rules that prevailed in the transferor court?
Yes, the court where the case was transferred to must follow the choice of law rules of the court where the case was originally brought. The case is reversed and remanded.
Justice Scalia argued that the Court’s decision would increase forum shopping and the use of this strategy by litigants would ultimately cost federal courts more time and money.
The Court based its decision on precedent. Under Erie R. Co. v. Tompkins, the Court emphasized the importance of maintaining plaintiffs’ right to state law advantage by allowing them to choose the forum. Under Van Dusen v. Barrack, the Court stated that choice of law rules must come from the transferor court when a defendant initiates a transfer. Taken together, the Court determined that it was proper to allow the choice of law rules of the transferor court to govern. This rule allows plaintiffs to retain power in selecting a forum and its laws when initiating a lawsuit, and it ensures that transfers under 28 U.S.C. § 1404(a) are properly based on consideration of convenience. The Court also made clear that the rule would not impermissibly create opportunities for forum shopping because plaintiffs already had the initial choice in what forum to sue. Thus Pennsylvania must apply Mississippi’s statute of limitations to the Plaintiff’s case.