Foreign Forums Versus Transfer

Foreign Forums Versus Transfer

The federal version of forum non conveniens shrank in 1948, when Congress gave district judges a gentler remedy than dismissal. The principle behind the doctrine is old: a court may resist imposition upon its jurisdiction even when a general venue statute authorizes the suit, because such statutes give the plaintiff a choice of courts, and the open door may admit those who seek justice blended with harassment.¹ Gulf Oil put that principle to work in the federal courts in 1947, and under it the remedy for an inconvenient forum was dismissal, never transfer.² The next year Congress enacted § 1404(a), which in some measure superseded the doctrine in the federal courts.³

Section 1404(a) kept the doctrine's purpose and changed its remedy. The Reviser's Note describes the provision as drafted in accordance with forum non conveniens, permitting transfer to a more convenient forum even though venue is proper.⁴ A federal court that finds another federal district more convenient now transfers the action, crossing state lines and even a continent, where most other courts would dismiss.⁵ Transfer also spares the plaintiff a second suit, because the action does not have to be dismissed and then recommenced in the new forum.⁶ The Court observed in Quackenbush v. Allstate Insurance Co. that Gulf Oil expected the parties to refile in federal court in Virginia after dismissal of the New York suit, and that this venue-shifting function has been superseded by statute.⁷

The common-law remedy survives for the cases the statute cannot reach. When the better forum is not a federal court, § 1404(a) has no application, and the residual doctrine of forum non conveniens “has continuing application in federal courts,” chiefly where the alternative forum is abroad and perhaps in rare instances where a state or territorial court serves litigational convenience best.⁸

The reason lies in how court systems are built. Transfer works inside the federal system because all federal courts are branches of one system, and § 1404(a) requires each of them to entertain cases transferred from the others.⁹ A New York state court, by contrast, has no authority to send a case to a Pennsylvania court, because the two are autonomous systems that decide for themselves which cases they will hear.¹⁰ A federal court has no greater power over a foreign tribunal: it cannot transfer a case to another country.¹¹ Because transfers are limited to courts within the same system, a defendant who wants to move from a federal forum to a court abroad, or from one state's courts to another's, must move to dismiss for forum non conveniens.¹² The plaintiff then refiles in the other forum, and the federal court, which has no hold on that forum, must first examine whether the foreign remedy is clearly unsatisfactory.¹³ State courts meet the same wall for the same reason, a point the section on state court practice develops.¹⁴

The factors that guide the two remedies are largely the same: the burden of jury duty on a community with no relation to the suit, the local interest in deciding localized controversies at home, and the appropriateness of a forum that is at home with the state law governing the case.¹⁵ Courts nevertheless require those factors to weigh more heavily in favor of dismissal than of transfer.¹⁶ Transfer often may be obtained on a lesser showing of inconvenience, either party may move for it, and the court may order it on its own motion.¹⁷ Dismissal, which the defendant requests, ends the action and leaves the plaintiff to begin again elsewhere. The lesser intrusion explains the lesser burden.

A bar-exam fact pattern shows how the remedies sort themselves. Suppose Dynamo, a French winery, sold wine in South Carolina, and a South Carolina buyer who became ill from adulterated wine sues Dynamo in the federal court there. Dynamo wants the case tried in France. Venue is proper in South Carolina: a substantial part of the events, the sale of the wine and the buyer's illness, occurred there, and a corporation resides for venue purposes in any district where it is subject to personal jurisdiction, which Dynamo is because the claim arises directly out of its sales there.¹⁸ A motion to dismiss for improper venue therefore fails. A motion to transfer fails too, because the transfer power ends at the edge of the federal system and France has no district or division to receive the case.¹⁹ Only a motion to dismiss for forum non conveniens can give Dynamo what it wants, and that motion must clear the heavier showing. The Michaels problem has the same shape. Mark Michaels sued Lady G for an intentional tort and Rupert Murdon for failing to protect him, seeking $500,000 in state-law tort damages in the Southern District of California.²⁰ An answer choice proposing transfer to a court in another country is wrong for the reason just given.²¹

When both courts are federal, the case moves without dismissal. In MacMunn v. Eli Lilly Co. the plaintiffs lived in Massachusetts, the operative facts arose there, almost all nonparty witnesses and the sources of medical records were there, and the District of Columbia had no meaningful ties to the controversy. The court weighed the private and public factors, acknowledged the presumption favoring the plaintiffs' chosen forum, and concluded that the balance favored transfer to Massachusetts. Neither side refiled anything, and the court did not ask whether a foreign forum was available or adequate. Dynamo's case and MacMunn differ in one respect: the better court in the first sits outside the federal system and the better court in the second sits inside it, and that fact fixes the remedy.

A contract that names the foreign forum changes the inquiry, and the later section on forum-selection clauses takes it up. Courts evaluate a clause pointing to a nonfederal forum the same way they evaluate one pointing to a federal forum, because § 1404(a) and the doctrine from which it derives apply the same balancing-of-interests standard.²² The Court has also marked a limit: an agreement between two Americans to resolve an essentially local dispute in a remote alien forum is a different case, in which serious inconvenience might carry greater weight, though even there the party claiming inconvenience should bear a heavy burden of proof.²³

Abstention Distinguished

Abstention also lets a federal court step aside in favor of another forum, but it answers a different question. Federal courts abstain out of deference to the paramount interests of another sovereign, and the concern is comity and federalism.²⁵ Dismissal for forum non conveniens has historically reflected a far broader range of considerations, most notably the convenience of the parties and the practical difficulties of adjudicating a dispute in a certain locality.²⁶

Burford illustrates the abstention side. Texas had given a state commission exclusive authority over oil-field regulation and had placed review of the commission's orders in one set of state courts, so that review would be uniform and state judges could build expertise; federal courts yielded because their involvement would conflict with that scheme.²⁷ Nothing in that reasoning turns on where the witnesses live. Gulf Oil turned on exactly that sort of consideration: the availability of witnesses, the need to interplead a Virginia corporation, and the location of the evidence.²⁸

The remedies diverge as well. Federal courts may stay damages actions on abstention principles, but the Court has not held that those principles support outright dismissal or remand of a damages action, and it has recognized dismissal of damages actions for forum non conveniens only where the alternative forum is abroad.²⁹ One also sees federal dismissals in deference to state-court jurisdiction, and these may be exercises of abstention rather than convenience.³⁰ On an exam, the justification an argument offers identifies the doctrine. An argument built on a state's regulatory scheme or another sovereign's paramount interest raises abstention. An argument built on witnesses, proof, and the practical burden of trial raises transfer or forum non conveniens, and the location of the other court, inside or outside the federal system, chooses between them.