Ferens v. John Deere Company/Dissent Scalia

by Antonin Scalia

Justice SCALIA, with whom Justice BRENNAN, Justice MARSHALL, and Justice BLACKMUN join, dissenting.

Plaintiffs, having filed this diversity action in Federal District Court in Mississippi, successfully moved for a transfer of venue to the District Court in Pennsylvania where their warranty action was then pending. The question we must decide is which State's choice-of-law principles will govern the case now that it is to be litigated in that court.

The Rules of Decision Act, first placed in the Judicial Code by the Judiciary Act of 1789, currently provides:

"The laws of the several states, except where the Constitution or treaties of the United States or Acts of Congress otherwise require or provide, shall be regarded as rules of decision in civil actions in the courts of the United States, in cases where they apply." 28 U.S.C. § 1652 (1982 ed.).

In Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), we held that the Act requires a federal court to apply, in diversity cases, the law of the State in which it sits, both statutory law and common law established by the courts. Three years later, in Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 494, 61 S.Ct. 1020, 1020, 85 L.Ed. 1477 (1941), we considered "whether in diversity cases the federal courts must follow conflict of laws rules prevailing in the states in which they sit." We answered the question in the affirmative, reasoning that, were the rule otherwise, "the accident of diversity of citizenship would constantly disturb equal administration of justice in coordinate state and federal courts sitting side by side," a state of affairs that "would do violence to the principle of uniformity within a state, upon which the Tompkins decision is based." Id., at 496, 61 S.Ct., at 1021. See also Griffin v. McCoach, 313 U.S. 498, 503, 61 S.Ct. 1023, 1025, 85 L.Ed. 1481 (1941). Although the venue provision of § 1404(a) was enacted after Klaxon, see 62 Stat. 937, we have repeatedly reaffirmed Klaxon since then. See Nolan v. Transocean Air Lines, 365 U.S. 293, 81 S.Ct. 555, 5 L.Ed.2d 571 (1961); Day & Zimmermann, Inc. v. Challoner, 423 U.S. 3, 96 S.Ct. 167, 46 L.Ed.2d 3 (1975).

The question we must answer today is whether 28 U.S.C. § 1404(a) (1982 ed.) and the policies underlying Klaxon-namely, uniformity within a State and the avoidance of forum shopping produce a result different from Klaxon when the suit in question was not filed in the federal court initially, but was transferred there under § 1404(a) on plaintiff's motion. In Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964), we held that a result different from Klaxon is produced when a suit has been transferred under § 1404(a) on defendant's motion. Our reasons were two. First, we thought it highly unlikely that Congress, in enacting § 1404(a), meant to provide defendants with a device by which to manipulate the substantive rules that would be applied. 376 U.S., at 633-636, 84 S.Ct., at 817-19. That conclusion rested upon the fact that the law grants the plaintiff the advantage of choosing the venue in which his action will be tried, with whatever state-law advantages accompany that choice. A defensive use of § 1404(a) in order to deprive the plaintiff of this "venue privilege," id., at 634, 84 S.Ct., at 818, would allow the defendant to " 'get a change of law as a bonus for a change of venue,' " id., at 636, 84 S.Ct., at 819 (citation omitted), and would permit the defendant to engage in forum shopping among States, a privilege that the Klaxon regime reserved for plaintiffs. Second, we concluded that the policies of Erie and Klaxon would be undermined by application of the transferee court's choice-of-law principles in the case of a defendant-initiated transfer, 376 U.S., at 637-640, 84 S.Ct., at 819-21, because then "the 'accident' of federal diversity jurisdiction" would enable the defendant "to utilize a transfer to achieve a result in federal court which could not have been achieved in the courts of the State where the action was filed," id., at 638, 84 S.Ct., at 820. The goal of Erie and Klaxon, we reasoned, was to prevent "forum shopping" as between state and federal systems; the plaintiff makes a choice of forum law by filing the complaint, and that choice must be honored in federal court, just as it would have been honored in state court, where the defendant would not have been able to transfer the case to another State.

We left open in Van Dusen the question presented today, viz., whether "the same considerations would govern" if a plaintiff sought a § 1404(a) transfer. 376 U.S., at 640, 84 S.Ct., at 821. In my view, neither of those considerations is served-and indeed both are positively defeated-by a departure from Klaxon in that context. First, just as it is unlikely that Congress, in enacting § 1404(a), meant to provide the defendant with a vehicle by which to manipulate in his favor the substantive law to be applied in a diversity case, so too is it unlikely that Congress meant to provide the plaintiff with a vehicle by which to appropriate the law of a distant and inconvenient forum in which he does not intend to litigate, and to carry that prize back to the State in which he wishes to try the case. Second, application of the transferor court's law in this context would encourage forum shopping between federal and state courts in the same jurisdiction on the basis of differential substantive law. It is true, of course, that the plaintiffs here did not select the Mississippi federal court in preference to the Mississippi state courts because of any differential substantive law; the former, like the latter, would have applied Mississippi choice-of-law rules and thus the Mississippi statute of limitations. But one must be blind to reality to say that it is the Mississippi federal court in which these plaintiffs have chosen to sue. That was merely a way station en route to suit in the Pennsylvania federal court. The plaintiffs were seeking to achieve exactly what Klaxon was designed to prevent: the use of a Pennsylvania federal court instead of a Pennsylvania state court in order to obtain application of a different substantive law. Our decision in Van Dusen compromised "the principle of uniformity within a state," Klaxon, supra, 313 U.S., at 496, 61 S.Ct., at 1021, only in the abstract, but today's decision compromises it precisely in the respect that matters-i.e., insofar as it bears upon the plaintiff's choice between a state and a federal forum. The significant federal judicial policy expressed in Erie and Klaxon is reduced to a laughingstock if it can so readily be evaded through filing-and-transfer.

The Court is undoubtedly correct that applying the Klaxon rule after a plaintiff-initiated transfer would deter a plaintiff in a situation such as exists here from seeking a transfer, since that would deprive him of the favorable substantive law. But that proves only that this disposition achieves what Erie and Klaxon are designed to achieve: preventing the plaintiff from using "the accident of diversity of citizenship," Klaxon, 313 U.S., at 496, 61 S.Ct., at 1021, to obtain the application of a different law within the State where he wishes to litigate. In the context of the present case, he must either litigate in the State of Mississippi under Mississippi law, or in the Commonwealth of Pennsylvania under Pennsylvania law.

The Court expresses concern, ante, at 529-530, that if normal Erie-Klaxon principles were applied a district judge might be reluctant to order a transfer, even when faced with the prospect of a trial that would be manifestly inconvenient to the parties, for fear that in doing so he would be ordering what is tantamount to a dismissal on the merits. But where the plaintiff himself has moved for a transfer, surely the principle of volenti non fit injuria suffices to allay that concern. The Court asserts that in some cases it is the defendant who will be prejudiced by a transfer-induced change in the applicable law. That seems likely to be quite rare, since it assumes that the plaintiff has gone to the trouble of bringing the suit in a less convenient forum, where the law is less favorable to him. But where the defendant is disadvantaged by a plaintiff-initiated transfer, I do not see how it can reasonably be said that he has been "prejudiced," since the plaintiff could have brought the suit in the "plaintiff's-law forum" with the law more favorable to him (and the more convenient forum) in the first place. Prejudice to the defendant, it seems to me, occurs only when the plaintiff is enabled to have his cake and eat it too-to litigate in the more convenient forum that he desires, but with the law of the distant forum that he desires.

The Court suggests that applying the choice-of-law rules of the forum court to a transferred case ignores the interest of the federal courts themselves in avoiding the "systemic costs of litigating in an inconvenient place," citing Justice Jackson's eloquent remarks on that subject in Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-509, 67 S.Ct. 839, 843, 91 L.Ed. 1055 (1947). Ante, at 530. The point, apparently, is that these systemic costs will increase because the change in law attendant to transfer will not only deter the plaintiff from moving to transfer but will also deter the court from ordering sua sponte a transfer that will harm the plaintiff's case. Justice Jackson's remarks were addressed, however, not to the operation of § 1404(a), but to "those rather rare cases where the doctrine [of forum non conveniens ] should be applied." 330 U.S., at 509, 67 S.Ct., at 843. Where the systemic costs are that severe, transfer ordinarily will occur whether the plaintiff moves for it or not; the district judge can be expected to order it sua sponte. I do not think that the prospect of depriving the plaintiff of favorable law will any more deter a district judge from transferring ^[1] than it would have deterred a district judge, under the prior regime, from ordering a dismissal sua sponte pursuant to the doctrine of forum non conveniens. In fact the deterrence to sua sponte transfer will be considerably less, since transfer involves no risk of statute-of-limitations bars to refiling.

Thus, it seems to me that a proper calculation of systemic costs would go as follows: Saved by the Court's rule will be the incremental cost of trying in forums that are inconvenient (but not so inconvenient as to prompt the court's sua sponte transfer) those suits that are now filed in such forums for choice-of-law purposes. But incurred by the Court's rule will be the costs of considering and effecting transfer, not only in those suits but in the indeterminate number of additional suits that will be filed in inconvenient forums now that filing-and-transfer is an approved form of shopping for law; plus the costs attending the necessity for transferee courts to figure out the choice-of-law rules (and probably the substantive law) of distant States much more often than our Van Dusen decision would require. It should be noted that the file-and-transfer ploy sanctioned by the Court today will be available not merely to achieve the relatively rare (and generally unneeded) benefit of a longer statute of limitations, but also to bring home to the desired state of litigation all sorts of favorable choice-of-law rules regarding substantive liability-in an era when the diversity among the States in choice-of-law principles has become kaleidoscopic. ^[2]

The Court points out, apparently to deprecate the prospect that filing-and-transfer will become a regular litigation strategy, that there is "no guarantee" that a plaintiff will be accorded a transfer; that while "[n]o one has contested the justice of transferring this particular case," that option "remains open to defendants in future cases"; and that "[a]lthough a court cannot ignore the systemic costs of inconvenience, it may consider the course that the litigation already has taken in determining the interest of justice." Ante, at 532. I am not sure what this means-except that it plainly does not mean what it must mean to foreclose the filing-and-transfer option, namely, that transfer can be denied because the plaintiff was law shopping. The whole theory of the Court's opinion is that it is not in accord with the policy of § 1404(a) to deprive the plaintiff of the "state-law advantages" to which his "venue privilege" entitles him. Ante, at 524. The Court explicitly repudiates "[t]he desire to take a punitive view of the plaintiff's actions," ante, at 530, and to make him "pay the price for choosing an inconvenient forum by being put to a choice of law versus forum," ante, at 529. Thus, all the Court is saying by its "no guarantee" language is that the plaintiff must be careful to choose a really inconvenient forum if he wants to be sure about getting a transfer. That will often not be difficult. In sum, it seems to me quite likely that today's decision will cost the federal courts more time than it will save them.

Thus, even as an exercise in giving the most extensive possible scope to the policies of § 1404(a), the Court's opinion seems to me unsuccessful. But as I indicated by beginning this opinion with the Rules of Decision Act, that should not be the object of the exercise at all. The Court and I reach different results largely because we approach the question from different directions. For the Court, this case involves an "interpretation of § 1404(a)," ante, at 524, and the central issue is whether Klaxon stands in the way of the policies of that statute. For me, the case involves an interpretation of the Rules of Decision Act, and the central issue is whether § 1404(a) alters the "principle of uniformity within a state" which Klaxon says that Act embodies. I think my approach preferable, not only because the Rules of Decision Act does, and § 1404(a) does not, address the specific subject of which law to apply, but also because, as the Court acknowledges, our jurisprudence under that statute is "a vital expression of the federal system and the concomitant integrity of the separate States," ante, at 523. To ask, as in effect the Court does, whether Erie gets in the way of § 1404(a), rather than whether § 1404(a) requires adjustment of Erie, seems to me the expression of a mistaken sense of priorities.

For the foregoing reasons, I respectfully dissent.

Notes

1. The prospective transferor court would not be deterred at all, of course, if we simply extended the Van Dusen rule to court-initiated transfers. In my view that would be inappropriate, however, since court-initiated transfer, like plaintiff-initiated transfer, does not confer upon the defendant the advantage of forum shopping for law, Van Dusen v. Barrack, 376 U.S. 612, 636, 84 S.Ct. 805, 819, 11 L.Ed.2d 945 (1964), and does not enable the defendant "to utilize a transfer to achieve a result in federal court which could not have been achieved in the courts of the State where the action was filed," id., at 638, 84 S.Ct., at 820.
2. The current edition of Professor Leflar's treatise on American Conflicts Law lists 10 separate theories of choice of law that are applied, individually or in various combinations, by the 50 States. See R. Leflar, L. McDougall III, & R. Felix, American Conflicts Law §§ 86-91, 93-96 (4th ed. 1986). See also Kay, Theory into Practice: Choice of Law in the Courts, 34 Mercer L.Rev. 521, 525-584, 591-592 (1983).