Opinion
Civ. No. 02-1627 (DRD)
September 12, 2002
John E. Patton, Esq., N.J., Bruce A. Lampert, Esq., Daniel Alan Nelson, Esq., Schaden, Katzman, Lampert McClune, Broomfield, CO, Attorneys for Plaintiffs.
Bob Bobian, et al., K. Roger Plawker, Esq., Walder, Hayden Brogan, P.A. Roseland, N.J., Allan I. Mendelsohn, Esq., Mendelsohn O'Keefe, N.W. Washington, D.C. Marvin L. Szymkowicz, Bowytz Savit Szymkowicz, LLP M.D., Attorneys for Defendant, CSA Czech Airlines.
OPINION
On July 31, 2002, Magistrate Judge Hedges issued an Order which denied a motion to transfer the instant action to the United States District Court for the Southern District of Texas. Plaintiffs now move, pursuant to 28 U.S.C. § 636(b)(1)(A) and Fed.R.Civ.P. 72(a) to reverse Magistrate Judge Hedges's Order. For the reasons set forth below, Judge Hedges's Order, dated July 31, 2002, is affirmed.
Factual Background and Procedural History
Plaintiffs filed the instant action in September 2001 in the United States District Court for the Southern District of Texas against CSA Czech Airlines ("CSA") and Continental Airlines, Inc. ("Continental"). Plaintiffs alleged that on September 16, 1999, they were injured on board CSA Flight 52, which was en route from Prague, Czech Republic to Newark, New Jersey.
As originally, filed, the Complaint pled five counts. By an order entered January 9, 2002, Judge Hoyt dismissed Counts II, III, IV and V of the Amended Complaint. The four dismissed counts pled Texas state common law claims alleging negligence, negligent misrepresentation and breach of warranties against both defendants. By memorandum opinion and order dated March 28, 2002, Judge Hoyt entered summary judgment in favor of co-defendant Continental Airlines, Inc., dismissing it from the suit.
Following these dismissals, the only remaining claim from the Amended Complaint is Count I, which is alleged only against CSA. Count I is a claim for bodily injuries allegedly suffered on Flight 52.
In addition to granting Continental's motion for summary judgment, Judge Hoyt simultaneously granted CSA's motion for a change of venue to the District of New Jersey. Judge Hoyt concluded that the transfer was appropriate because a "substantial part of the events or omissions giving rise to the claim occurred in New Jersey." However, he issued his transfer order before Plaintiffs filed a written response to CSA's motion seeking the transfer. On April 5, 2002, the Clerk of the Court for the United States District Court, Southern District of Texas, transferred the case file for the instant action to the District of New Jersey.
Following the venue transfer, Plaintiffs sought relief from both Judge Hoyt and this Court. In the Southern District of Texas, Plaintiffs moved for reconsideration on the merits of the transfer order; a separate brief on the merits of the venue issue was annexed to their motion for reconsideration. In the District of New Jersey, Plaintiffs moved to "return" the case to the Southern District of Texas pending Judge Hoyt's decision on the motion for reconsideration.
Judge Hoyt agreed to reconsider the change of venue order on the merits on June 13, 2002. On July 23, Judge Hoyt issued an order affirming his previous decision and concluding that the change of venue "was appropriate pursuant to 28 U.S.C. § 1406(a) and 1391(f)(1)."
On July 31, 2002, Magistrate Judge Hedges issued a Letter-Opinion that is the subject of this appeal. Judge Hedges declined to retransfer the case to the Southern District of Texas for three reasons: 1) Judge Hoyt's reconsideration of his April 1, 2002, Order, which allowed both parties to brief the venue issue, rendered Plaintiff's motion to return the case to Texas pending Judge Hoyt's reconsideration of the venue issue moot; 2) Any prejudice that Plaintiffs may have suffered from the violation of Plaintiffs' due process rights had been cured when Judge Hoyt agreed to reconsider the venue issue; and 3) Because the Warsaw Convention is a treaty of the United States, this Court has "arising under" jurisdiction under 28 U.S.C. § 1331.
Standard for Review
A district court reviewing a magistrate judge's order on a non-dispositive motion may modify or vacate the order only if the ruling was "clearly erroneous or contrary to law." 28 U.S.C. § 636(b)(1); Fed.R.Civ.P. 72(a); Loc.R. 72.1(c)(1); see Cipollone v. Liggett Group, Inc., 785 F.2d 1108, 1113 n. 5 (3d Cir. 1986). "A finding is clearly erroneous `when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.'" Dome Petroleum Ltd. v. Employers Mut. Liab. Ins. Co., 131 F.R.D. 63, 65 (D.N.J. 1990) (quotingUnited States v. U.S. Gypsum Co., 333 U.S. 364, 395 (1948)). A ruling is contrary to law if the magistrate judge has misinterpreted or misapplied applicable law. Gunter v. Ridgewood Energy Corp., 32 F. Supp.2d 162, 164 (D.N.J. 1998).
Analysis
As an initial matter, Plaintiffs' generic notice of appeal, to which a copy of its original motion to transfer is annexed, does not meet the requirements of Fed.R.Civ.P. 72(a) and L. Civ. R. 72.1(c)(1)(A), which calls for the notice "to specifically designate the order or part thereof appealed from and the basis for objection thereto." Although the local rules do not specify a remedy for failing to specifically designate the basis for an objection from a non-dispositive order of a Magistrate Judge, CSA argues that Plaintiffs objections should be waived because it failed to properly present its objections. CSA's proposed remedy seems too harsh and is rejected; nevertheless, it is difficult to see how Plaintiffs expect to receive a reversal if they fail to state how Magistrate Judge Hedges was either clearly erroneous or contrary to law.
Generally, when a court denies a party a hearing or an opportunity for hearing on a motion to transfer venue, that party has been denied procedural due process of law guaranteed to it by the Fifth Amendment. See Swindell-Dressler Corp. v. Dumbaule, 308 F.2d 267, 273-74 (3d Cir. 1962). Here, CSA moved in the Southern District of Texas to transfer venue, and Judge Hoyt granted the motion on March 28, 2002, without first giving Plaintiffs an opportunity to file a brief in opposition to the motion. Although Judge Hoyt may have violated Plaintiffs' procedural due process rights, thus making the transfer a nullity, see Swindell-Dressler, 308 F.2d at 275, Judge Hoyt's subsequent Order, dated June 13, 2002, which vacated his earlier Order granting CSA's motion to transfer venue, makes this issue moot. Judge Hoyt's June 13, 2002, Order gave Plaintiffs an opportunity to brief fully the issue of whether transfer of the instant action was appropriate. Consequently, Judge Hoyt's Order, dated July 22, 2002, in which he affirmed his order of March 28, 2002, is effective and his findings of law and fact are the law of the case.
It is black letter law that, "[w]hen a motion for transfer under 28 U.S.C.A. § 1404(a) has been granted, and the papers lodged with the clerk of the transferee court, the transferor court — and the appellate court that has jurisdiction over it — lose all jurisdiction over the cased and may not proceed further with regard to it." 15 C. Wright, A. Miller E. Cooper, Federal Practice and Procedure § 3846 (footnote omitted). Nevertheless, the Third Circuit Court of Appeals has stated that "shifting papers cannot validate an otherwise invalid transfer." White v. ABCO Engineering Corp. , 199 F.3d 140, 143 n. 4 (3d Cir. 1999). Thus, in the instant case, although the case files of the instant action were transferred to the District of New Jersey, the Southern District of Texas retained jurisdiction over the case because its original Order, dated March 28, 2002, transferring venue was invalid. Therefore, Judge Hoyt had the jurisdictional authority to grant Plaintiffs' motion for reconsideration and to issue his subsequent Order, dated July 22, 2002, affirming his decision to transfer this case to the District of New Jersey.
Judge Hoyt based his decision to transfer the case upon 28 U.S.C. § 1406(a) and 1391(f)(1). The rules for whether the venue of a particular case are appropriate is set forth in 28 U.S.C. § 1391. Judge Hoyt specifically relied upon § 1391(f)(1) of the venue statute, which necessarily implies that he found that CSA was a "foreign state" as defined by 28 U.S.C. § 1603(a). Section 1391(f)(1) states that an action against a foreign state may be brought, inter alia, in "any judicial district in which a substantial part of the events or omissions giving rise to the claim occurred." Section 1406(a) gives the transferor court the option of either dismissing the action in its entirety or transferring the action to a district "in which it could have been brought."
Because Judge Hoyt transferred the instant action based upon the conclusion that "a substantial part of the events or omissions giving rise to the claim occurred in New Jersey," his decision is the law of the case and cannot be disturbed. The Third Circuit Court of Appeals has noted that "under the law of the case doctrine, once an issue is decided, it will not be relitigated in the same case, except in unusual circumstances." See Hayman Cash Register Co. v. Sarokin, 699 F.2d 162, 165 (3d Cir. 1982) (holding that once a transferor court decides the issue of venue, a transferee court cannot revisit the issue except in "usual circumstances"). An example of an "unusual circumstance" would be if the decision was "`clearly erroneous and would work a manifest injustice.'" See Christianson v. Colt Industries Operating Corp., 486 U.S. 800, 817 (1988) (quoting Arizona v. California, 460 U.S. 605, 618, n. 8 (1983)).
Plaintiffs have neither alleged any facts nor made any arguments suggesting that Judge Hoyt's decision either was clearly erroneous or would work a manifest injustice. Plaintiffs did, however, argue before Judge Hedges that if the jurisdictional language of the Warsaw Convention were properly applied, the Southern District of Texas would be an appropriate venue for this action. Plaintiffs arguments must, however, be rejected for two reasons: 1) the law of the case doctrine applies and the case cannot be returned to the Southern District of Texas; and 2) the Warsaw Convention does not apply when considering whether venue is appropriate.
Article 28(1) of the Warsaw Convention speaks to the subject-matter jurisdiction of the federal courts. See Gayda v. LOT Polish Airlines, 702 F.2d 424, 425 (2d Cir. 1983). In a Warsaw Convention case, there are two levels of judicial power that must be examined to determine whether suit may be maintained. See Smith v. Canadian Pacific Airways, Ltd., 452 F.2d 798, 801 (2d Cir. 1971). The first level is that of jurisdiction in international or treaty sense under article 28(1), and the second level involves power of a particular United States court, under federal statutes and practice to hear a Warsaw Convention case jurisdiction in the domestic law sense. See id. It is only after jurisdiction in both senses is had that the question of venue is reached and a determination made regarding appropriateness and convenience for parties of a particular domestic court.See id. The Warsaw Convention, however, does not determine the existence of personal jurisdiction or venue; instead these are determined under domestic law. See Romero v. Argentinas, 834 F. Supp. 673, 678 (D.N.J. 1993).
The Warsaw Convention, by virtue of its status as a treaty made under the authority of the United States, is the supreme law of the land, equal in stature and force to the domestic laws of the United States. See U.S. Const. art. VI. It has been said to be "self-executing," needing no Congressional implementation to make it and its provisions creating a rebuttable presumption of liability (Art. 17) and limitations thereon (Art. 25) constitutionally enforceable. See Smith, 452 F.2d at 801-02. Therefore, a federal court has the authority to hear Warsaw Convention cases under 28 U.S.C. § 1331 because interpretation of a treaty falls under a federal court's "arising under" jurisdiction. The parties agree that the Warsaw Convention applies to this case. Thus, subject matter jurisdiction over this action exists if the facts satisfy one of the four jurisdictional fora set forth in Article 28 of the Warsaw convention. Because the United States was the final destination of the Plaintiffs, who are residents of Texas, the United States has jurisdiction under the Warsaw Convention, and this court has "arising under" jurisdiction under 28 U.S.C. § 1331 exists. Once a federal court determines that it has subject matter jurisdiction over an action, it still must have personal jurisdiction over the defendants and be assured that venue is properly laid.
At oral argument, counsel for Plaintiffs appears to have confused subject matter jurisdiction and venue. Counsel for the plaintiffs argued that under the Warsaw Convention, this court lacks subject matter jurisdiction, but that the federal district court in the Southern District of Texas does not. This is a legal impossibility. Once one federal court has determined that it has subject-matter jurisdiction, all federal courts have subject matter jurisdiction because each district court is merely a subdivision of the federal courts.
Here, implicit in Judge Hoyt's Order to transfer the instant case under 28 U.S.C. § 1406(a), was Judge Hoyt's finding that the District of New Jersey has personal jurisdiction over the parties and that venue is proper. This decision is the law of the case and cannot be disturbed except by the Third Circuit Court of Appeals. Therefore, as Magistrate Judge Hedges noted, "under law of the case principles, if the transferee court can find the transfer decision plausible, its jurisdictional inquiry is at an end." (citing Christianson v. Colt Industries Operating Corp., 486 U.S. at 817-19 (1988)).
CONCLUSION
Plaintiffs' motion to reverse Magistrate Judge Hedges's Order, dated July 31, 2002, is denied and the Order will be affirmed.
An order implementing this decision will be entered.