Opinion
Civil Action NO. 94-1954
July 15, 2001
Before the Court is a Motion to Transfer Pursuant to 28 U.S.C. § 1631 filed by plaintiff Steven Henry Arthur Adams for himself and on behalf of Certain Underwiters at Lloyd's London (doc. 318). Defendants UMS Generali Marine S.p.A. (formerly known as Unione Mediterranea Di Sicurta) ("U.M.S.") and A.K. Steel Corporation ("A.K. Steel") filed oppositions. The motion was set for hearing on May 23, 2001 and was taken on the papers without oral argument. The Court has considered the pleadings, memoranda and relevant law and finds that the motion shall be denied for the reasons that follow.
The task before the Court, as mandated by the Court of Appeals, is to determine whether there exists personal jurisdiction over U.M.S. The factual background in this matter has been set forth in several prior opinions of this Court as well as the United States Court of Appeals for the Fifth Circuit and need not be repeated for purposes of this motion.See Adams et al. v. UMS et al., 220 F.3d 659 (5th Cir. 2001). Without making a determination as to whether this Court does indeed have personal jurisdiction over the defendant at this time, the instant motion can be resolved at this stage because even were the Court to find no personal jurisdiction over U.M.S., the Court holds 28 U.S.C. § 1631 would not apply because that statute operates only in those cases where subject matter jurisdiction, not personal jurisdiction, is deficient.
The motion currently before the Court can be decided as a matter of law. Plaintiff argues that "the evidence seems to indicate that U.M.S. did not conduct business in the Eastern District of Louisiana sufficient to establish minimum contacts." Therefore, plaintiff contends that the Court should transfer this case to the Eastern District of New York, which plaintiff states could exercise personal jurisdiction, pursuant to 28 U.S.C. § 1631. U.M.S. argues that this Court has no personal jurisdiction over it and that 28 U.S.C. § ; 1631 only applies to those cases where a court lacks subject matter jurisdiction and is therefore inapplicable here. A.K. Steel also contends the statute is inapplicable but further states that this Court does have personal jurisdiction over U.M.S., or alternatively that discovery should be granted to make a better informed personal jurisdiction finding. Plaintiff concedes that there is no Fifth Circuit precedent on the issue, but states that the plain language of the statute indicates that both personal and subject matter jurisdiction are contemplated because if Congress intended to distinguish the two it would have used the appropriate language. Plaintiff admits that the only case arising from this district permitting a § 1631 transfer upon a finding of no personal jurisdiction is Britten Leon Parsons Donald v. Alpine Ocean Seismic Survey. Inc., 1999 WL 13935 (E.D. La. 1999) but argues that the case should control here. Assuming its argument is true, plaintiff states that New York does have personal jurisdiction over U.M.S. based upon the acts of its agent, ICA/Bruzzone.
Defendants acknowledge that neither the Supreme Court or the Fifth Circuit have addressed the scope of the term "jurisdiction" found in 28 U.S.C. § 1631. However, defendant asserts that although the Fifth Circuit has not addressed the issue regarding personal jurisdiction that is before this Court, the Fifth Circuit has applied the statute where the court lacked subject matter jurisdiction. See FDIC v. Kahlil Zoom In Markets. Inc. 978 F.2d 183 (5th Cir. 1992). More significantly, defendants argue that the legislative history and jurisprudence dictate that the statute only be applied to matters where subject matter jurisdiction is lacking. See e.g., Serendip LLC v. Franchise Pictures, LLC, 2000 WL 1277370 (S.D.N.Y. 9/7/00); Pedzewick v. Foe. 963 F. Supp. 48 (D. Mass. 1997). Finally, defendants argue that the proper procedural vehicle to address a situation such as this would be 28 U.S.C. § 1406, which in this case was waived. In the event this Court finds 28 U.S.C. § 1631 applicable, U.M.S. argues that there is no transferee court in the United States that could exercise personal jurisdiction over it. With those arguments in mind, the Court turns to the language of the statute.
28 U.S.C. § 1631 provides as follows:
Whenever a civil action is filed in a court as defined in section 610 of this title 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.28 U.S.C. § 1631 (emphasis added).
Most courts confronted with the issue of whether 28 U.S.C. § 1631 allows transfer upon a finding of no personal jurisdiction recognize the nationwide split on the issue and generally take one of two courses from there. Those that find a narrower reading of the statute do so in reliance on the legislative history whereas those finding a more expansive scope to the statute generally rely upon the face of the statute, which clearly contains no limiting language. As this Court finds the term "jurisdiction", without more, to be something less than crystal clear, it is instructive to examine the legislative history. The "Federal Courts Improvement Act of 1982", Public Law 97| 164, recognized a recurring problem with the existing rules for transfers of cases from one court to another. The problem was described as follows:
In recent years much confusion has been engendered by provisions of existing law that leave unclear which of two or more federal courts including both courts at the trial and appellate level — have subject matter jurisdiction over certain categories of civil actions . The problem has been particularly acute in the area of administrative law where misfilings and dual filings have become commonplace. The uncertainty in some statutes regarding which court has review authority creates an unnecessary risk that a litigant may find himself without a remedy because of a lawyer's error or a technicality of procedures. . . Therefore, [the statute] is broadly drafted to permit transfer between any two federal courts.
S. Rep. 97-275, 1St Sess. 1981, 1982 U.S.C.A.A.N. at 11 (emphasis added).
The solution was to add what is now known as 28 U.S.C. § 1631 which "authoriz[es] the court in which a case is improperly filed to transfer it to a court where subject matter jurisdiction is proper. . ." Id. at 30 (emphasis added).
The commentators have relied on this legislative history to come to the conclusion that the statute applies solely to defects in subject matter jurisdiction:
[ 28 U.S.C. § 1631] provides that whenever an action, an appeal, or a petition for review is filed in a court that. lacks jurisdiction of it, that court, if it is in the interest of justice to do so, may transfer the matter to any other court in which it could have been brought at the time it was filed or noticed. That statute is concerned only with subject matter jurisdiction. It has nothing to do with personal jurisdiction or venue.
Wright, Miller Cooper, Federal Practice Procedure: Jurisdiction 2d, § 3842 (emphasis added); See also Jeffrey W. Tayon, The Federal Transfer Statute: 28 U.S.C. § 1631, 29 5. Tex. L.J. 189 (1987) ([b]ecause section 1631 focuses on jurisdictional defects apparent at the time the complaint or notice of appeal was filed, it appears to be directed to correcting subject matter jurisdictional defects); see generally James P. George, Parallel Litigation, 51 Baylor L. Rev. 69 (1999) ( 28 U.S.C. § 1631 is principally a safety net for parties who mistakenly file in a court lacking subject matter jurisdiction).
Although the Alpine decision permitted transfer under § 1631 in an apposite situation, it did so without an express analysis of the legislative history and appears to rely more upon the lack of modifying language in the statute as did the Fifth Circuit in Dornbusch v. C.I.R. 860 F.2d 611 (5th Cir. 1988). In that case, the Court of Appeals stated that, with respect venue,
[I]t is not beyond the realm of possibility that Congress used "jurisdiction" in section 1631 in a broad, general, nontechnical sense rather than in the more constricted, specific sense in which jurisdiction is distinguished from venue. The legislative history of section 1631 is fully consistent with such a broad, nontechnical reading of section 1631. . .Dornbusch v. C.I.R., 860 F.2d 611 (5th Cir. 1988). Without much guidance on the matter from the Circuit courts, this Court chooses to rely more heavily on the history of the statute. The reasoning in Dornbusch is not as persuasive in the personal jurisdiction context. In large part,Dornbusch was based upon the finding that federal courts have an inherent power to transfer when there is an improper venue and that a silent statute should not abrogate that inherent power. Such reasoning does not apply with equal force to cases involving personal jurisdiction.
In the one case where Fifth Circuit had the personal jurisdiction issue before it, the Court of Appeals went to great lengths to stress that the scope of 28 U.S.C. § 1631 was a question that it reserved for an later time. In Bentz v. Recile, 778 F.2d 1026 (5th Cir. 1985) (per curiam), a diversity action, the Federal District Court for the Southern District of Mississippi transferred a case to the Eastern District of Louisiana pursuant to 28 U.S.C. § 1631 after finding that Mississippi could not exercise personal jurisdiction over the defendants. The Louisiana court ultimately granted summary judgment in favor of the plaintiff. On appeal, the defendants argued that section 1631 did not support the transfer. The Court of Appeals held that the transfer was proper because it could have been brought under either 28 U.S.C. § 1406 (a) or 28 U.S.C. § 1404 (a). With respect to the propriety of the § 1631 transfer, the court stated that it need not address that issue because the transfer was proper under section 1404 or 1406. However, the court did recognize that "section 1631 may not allow such a transfer."Id. at 1027. Later in the opinion, again stressing that the issue need not be reached in the case before it, the Court of Appeals cited with approval a district court case standing for the proposition that the legislative history of section 1631 indicates that the statute should be applied solely when a court lacks subject matter jurisdiction. Id. at 1028 (citing Nose v. Rementer. 610 F. Supp. 191 (D.Del. 1985)). Although its observations were purely dictum, it appears that were the issue before it at this time, the Fifth Circuit would rely on the legislative history of the statute and read it in the more restrictive manner.
Other courts have found the legislative history to indicate that 28 U.S.C. § 1631 was designed to remedy defects in subject matter jurisdiction only. See Songbyrd. Inc. v. Estate of Grossman, 206 F.3d 172, 179 FN 9 (2d Cir. 2000) ("legislative history of section 1631 provides some reason to believe that this section authorizes transfers only to cure lack of subject matter jurisdiction"); Serendip LLC v. Franchise Pictures. LLC, 2000 WL 1277370 (S.D.N Y 9/2/2000); Nose v. Rementer, 610 F. Supp. 191 (D.Del. 1985). And although there is a line of cases holding that the statute applies to both personal and subject matter jurisdiction, see e.g., Ross v. Colorado Outward Bound School. Inc. 822 F.2d 1524, 1527 (10th Cir. 1987); Romann v. Geissenberger Mfg. Corp. 865 F. Supp. 255, 263 (E.D.Pa. 1994), this Court agrees with those decisions that have relied on the legislative history to interpret the Congressional intent in enacting the statute.
Aside from the Congressional intent in enacting section 1631, the interplay among the general venue statutes leads to the same conclusion. The general transfer of venue provisions, 28 U.S.C. § 1404 and 1406 each are interpreted broadly in this Circuit to allow transfer when personal jurisdiction is lacking. Bentz v. Recile, 778 F.2d 1026 (5th Cir. 1985) (citing Aguacate Consolidated Mines. Inc. v. Deeprock. Inc. 566 F.2d 523 (5th Cir. 1978)); Ellis v. Great Southwestern Corp., 646 F.2d 1099 (5th Cir. 1981). However, a prerequisite to utilizing either section 1404 or 1406 is that the transferring court have subject matter jurisdiction. See generally. Wright, Miller Cooper, Federal Practice and Procedure: Jurisdiction 2d § 3827 and § 3884. As such, section 1404 may be applied when in those instances where a court has subject matter jurisdiction and is a proper venue but cannot assert personal jurisdiction. On the other hand is section 1406, which permits transfer when the court has subject matter and personal jurisdiction, but is an improper venue or has subject matter jurisdiction and venue but not personal jurisdiction. Section 1631 thus comes into play when the other statutes do not: when a court does not have subject matter jurisdiction. To extend section 1631 any further, to those instances where there is neither subject matter jurisdiction or personal jurisdiction, would necessarily allow a Court to exercise authority, even if only to transfer, when it has absolutely no power, under Article III or Due Process, over the action or the defendant. Instead of allowing section 1631 to complement the general venue statutes, it would swallow them. Moreover, the temporal reach of section 1631 justifies a more narrow application. In accord with the general premise that defects in subject matter jurisdiction can be raised at any time, even on appeal, a section 1631 transfer can occur at any time. To read a personal jurisdiction component into the statute would allow a party to raise a personal jurisdiction defense at any time, in direct contravention of Rule 12 (h)'s requirement that the defense of personal jurisdiction is waived if not asserted through a 12(b) motion.
Moreover, the Court finds that even were section 1631 a proper tool to remedy a lack of personal jurisdiction, the interest of justice requires that the action remain with this Court. This matter has been litigated in this Court and the Court of Appeals for six years, with the locus of the accident nearby. To transfer the entire matter to another court would unnecessarily burden all involved. Accordingly,
IT IS ORDERED that the Motion to Transfer is DENIED.