Ferens v. John Deere Company/Opinion of the Court

by Anthony Kennedy

Section 1404(a) of Title 28 states: "For the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404(a) (1982 ed.). In Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964), we held that, following a transfer under § 1404(a) initiated by a defendant, the transferee court must follow the choice-of-law rules that prevailed in the transferor court. We now decide that, when a plaintiff moves for the transfer, the same rule applies.

* Albert Ferens lost his right hand when, the allegation is, it became caught in his combine harvester, manufactured by Deere & Company. The accident occurred while Ferens was working with the combine on his farm in Pennsylvania. For reasons not explained in the record, Ferens delayed filing a tort suit, and Pennsylvania's 2-year limitations period expired. In the third year, he and his wife sued Deere in the United States District Court for the Western District of Pennsylvania, raising contract and warranty claims as to which the Pennsylvania limitations period had not yet run. The District Court had diversity jurisdiction, as Ferens and his wife are Pennsylvania residents, and Deere is incorporated in Delaware with its principal place of business in Illinois.

Not to be deprived of a tort action, the Ferenses in the same year filed a second diversity suit against Deere in the United States District Court for the Southern District of Mississippi, alleging negligence and products liability. Diversity jurisdiction and venue were proper. The Ferenses sued Deere in the District Court in Mississippi because they knew that, under Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 1021, 85 L.Ed. 1477 (1941), the federal court in the exercise of diversity jurisdiction must apply the same choice-of-law rules that Mississippi state courts would apply if they were deciding the case. A Mississippi court would rule that Pennsylvania substantive law controls the personal injury claim but that Mississippi's own law governs the limitation period.

Although Mississippi has a borrowing statute which, on its face, would seem to enable its courts to apply statutes of limitations from other jurisdictions, see Miss.Code Ann. § 15-1-65 (1972), the State Supreme Court has said that the borrowing statute "only applies where a nonresident [defendant] in whose favor the statute has accrued afterwards moves into this state." Louisiana & Mississippi R. Transfer Co. v. Long, 159 Miss. 654, 667, 131 So. 84, 88 (1930). The borrowing statute would not apply to the Ferenses' action because, as the parties agree, Deere was a corporate resident of Mississippi before the cause of action accrued. The Mississippi courts, as a result, would apply Mississippi's 6-year statute of limitations to the tort claim arising under Pennsylvania law and the tort action would not be time barred under the Mississippi statute. See Miss.Code Ann. § 15-1-49 (1972).

The issue now before us arose when the Ferenses took their forum shopping a step further: having chosen the federal court in Mississippi to take advantage of the State's limitations period, they next moved, under § 1404(a), to transfer the action to the federal court in Pennsylvania on the ground that Pennsylvania was a more convenient forum. The Ferenses acted on the assumption that, after the transfer, the choice-of-law rules in the Mississippi forum, including a rule requiring application of the Mississippi statute of limitations, would continue to govern the suit.

Deere put up no opposition, and the District Court in Mississippi granted the § 1404(a) motion. The court accepted the Ferenses' arguments that they resided in Pennsylvania; that the accident occurred there; that the claim had no connection to Mississippi; that a substantial number of witnesses resided in the Western District of Pennsylvania but none resided in Mississippi; that most of the documentary evidence was located in the Western District of Pennsylvania but none was located in Mississippi; and that the warranty action pending in the Western District of Pennsylvania presented common questions of law and fact.

The District Court in Pennsylvania consolidated the transferred tort action with the Ferenses' pending warranty action but declined to honor the Mississippi statute of limitations as the District Court in Mississippi would have done. It ruled instead that, because the Ferenses had moved for transfer as plaintiffs, the rule in Van Dusen did not apply. Invoking the 2-year limitations period set by Pennsylvania law, the District Court dismissed their tort action. Ferens v. Deere & Co., 639 F.Supp. 1484 (WD Pa.1986).

The Court of Appeals for the Third Circuit affirmed, but not, at first, on grounds that the Ferenses had lost their entitlement to Mississippi choice-of-law rules by invoking § 1404(a). The Court of Appeals relied at the outset on the separate theory that applying Mississippi's statute of limitations would violate due process because Mississippi had no legitimate interest in the case. Ferens v. Deere & Co., 819 F.2d 423 (1987). We vacated this decision and remanded in light of Sun Oil Co. v. Wortman, 486 U.S. 717, 108 S.Ct. 2117, 100 L.Ed.2d 743 (1988), in which we held that a State may choose to apply its own statute of limitations to claims governed by the substantive laws of another State without violating either the Full Faith and Credit Clause or the Due Process Clause. Ferens v. Deere & Co., 487 U.S. 1212, 108 S.Ct. 2862, 101 L.Ed.2d 898 (1988). On remand, the Court of Appeals again affirmed, this time confronting the Van Dusen question and ruling that a transferor court's choice-of-law rules do not apply after a transfer under § 1404(a) on a motion by a plaintiff. 862 F.2d 31 (CA 3 1988). We granted certiorari, 490 U.S. 1064, 109 S.Ct. 2061, 104 L.Ed.2d 627 (1989).

Section 1404(a) states only that a district court may transfer venue for the convenience of the parties and witnesses when in the interest of justice. It says nothing about choice of law and nothing about affording plaintiffs different treatment from defendants. We touched upon these issues in Van Dusen, but left open the question presented in this case. See 376 U.S., at 640, 84 S.Ct., at 821. In Van Dusen, an airplane flying from Boston to Philadelphia crashed into Boston Harbor soon after takeoff. The personal representatives of the accident victims brought more than 100 actions in the District Court for the District of Massachusetts and more than 40 actions in the District Court for the Eastern District of Pennsylvania. When the defendants moved to transfer the actions brought in Pennsylvania to the federal court in Massachusetts, a number of the Pennsylvania plaintiffs objected because they lacked capacity under Massachusetts law to sue as representatives of the decedents. The plaintiffs also averred that the transfer would deprive them of the benefits of Pennsylvania's choice-of-law rules because the transferee forum would apply to their wrongful-death claims a different substantive rule. The plaintiffs obtained from the Court of Appeals a writ of mandamus ordering the District Court to vacate the transfer. See id., at 613-615, 84 S.Ct., at 807-08.

We reversed. After considering issues not related to the present dispute, we held that the Court of Appeals erred in its assumption that Massachusetts law would govern the action following transfer. The legislative history of § 1404(a) showed that Congress had enacted the statute because broad venue provisions in federal Acts often resulted in inconvenient forums and that Congress had decided to respond to this problem by permitting transfer to a convenient federal court under § 1404(a). Id., at 634-636, 84 S.Ct., at 818-19. We said:

"This legislative background supports the view that § 1404(a) was not designed to narrow the plaintiff's venue privilege or to defeat the state-law advantages that might accrue from the exercise of this venue privilege but rather the provision was simply to counteract the inconveniences that flowed from the venue statutes by permitting transfer to a convenient federal court. The legislative history of § 1404(a) certainly does not justify the rather startling conclusion that one might 'get a change of a law as a bonus for a change of venue.' Indeed, an interpretation accepting such a rule would go far to frustrate the remedial purposes of § 1404(a). If a change in the law were in the offing, the parties might well regard the section primarily as a forum-shopping instrument. And, more importantly, courts would at least be reluctant to grant transfers, despite considerations of convenience, if to do so might conceivably prejudice the claim of a plaintiff who initially selected a permissible forum. We believe, therefore, that both the history and purposes of § 1404(a) indicate that it should be regarded as a federal judicial housekeeping measure, dealing with the placement of litigation in the federal courts and generally intended, on the basis of convenience and fairness, simply to authorize a change of courtrooms." Id., at 635-637, 84 S.Ct., at 818-19 (footnotes omitted).

We thus held that the law applicable to a diversity case does not change upon a transfer initiated by a defendant.

The quoted part of Van Dusen reveals three independent reasons for our decision. First, § 1404(a) should not deprive parties of state-law advantages that exist absent diversity jurisdiction. Second, § 1404(a) should not create or multiply opportunities for forum shopping. Third, the decision to transfer venue under § 1404(a) should turn on considerations of convenience and the interest of justice rather than on the possible prejudice resulting from a change of law. Although commentators have questioned whether the scant legislative history of § 1404(a) compels reliance on these three policies, see Note, Choice of Law after Transfer of Venue, 75 Yale L. J. 90, 123 (1965), we find it prudent to consider them in deciding whether the rule in Van Dusen applies to transfers initiated by plaintiffs. We decide that, in addition to other considerations, these policies require a transferee forum to apply the law of the transferor court, regardless of who initiates the transfer. A transfer under § 1404(a), in other words, does not change the law applicable to a diversity case. A

The policy that § 1404(a) should not deprive parties of state-law advantages, although perhaps discernible in the legislative history, has its real foundation in Erie R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). See Van Dusen, 376 U.S., at 637, 84 S.Ct., at 819. The Erie rule remains a vital expression of the federal system and the concomitant integrity of the separate States. We explained Erie in Guaranty Trust Co. v. York, 326 U.S. 99, 109, 65 S.Ct. 1464, 1470, 89 L.Ed. 2079 (1945), as follows:

"In essence, the intent of [the Erie ] decision was to insure that, in all cases where a federal court is exercising jurisdiction solely because of the diversity of citizenship of the parties, the outcome of the litigation in the federal court should be substantially the same, so far as legal rules determine the outcome of a litigation, as it would be if tried in a State court. The nub of the policy that underlies Erie R. Co. v. Tompkins is that for the same transaction the accident of a suit by a non-resident litigant in a federal court instead of in a State court a block away should not lead to a substantially different result."

In Hanna v. Plumer, 380 U.S. 460, 473, 85 S.Ct. 1136, 1145, 14 L.Ed.2d 8 (1965), we held that Congress has the power to prescribe procedural rules that differ from state-law rules even at the expense of altering the outcome of litigation. This case does not involve a conflict. As in Van Dusen, our interpretation of § 1404(a) is in full accord with the Erie rule.

The Erie policy had a clear implication for Van Dusen. The existence of diversity jurisdiction gave the defendants the opportunity to make a motion to transfer venue under § 1404(a), and if the applicable law were to change after transfer, the plaintiff's venue privilege and resulting state-law advantages could be defeated at the defendant's option. 376 U.S., at 638, 84 S.Ct., at 820. To allow the transfer and at the same time preserve the plaintiff's state-law advantages, we held that the choice-of-law rules should not change following a transfer initiated by a defendant. Id., at 639, 84 S.Ct., at 821.

Transfers initiated by a plaintiff involve some different considerations, but lead to the same result. Applying the transferor law, of course, will not deprive the plaintiff of any state-law advantages. A defendant, in one sense, also will lose no legal advantage if the transferor law controls after a transfer initiated by the plaintiff; the same law, after all, would have applied if the plaintiff had not made the motion. In another sense, however, a defendant may lose a nonlegal advantage. Deere, for example, would lose whatever advantage inheres in not having to litigate in Pennsylvania, or, put another way, in forcing the Ferenses to litigate in Mississippi or not at all.

We, nonetheless, find the advantage that the defendant loses slight. A plaintiff always can sue in the favorable state court or sue in diversity and not seek a transfer. By asking for application of the Mississippi statute of limitations following a transfer to Pennsylvania on grounds of convenience, the Ferenses are seeking to deprive Deere only of the advantage of using against them the inconvenience of litigating in Mississippi. The text of § 1404(a) may not say anything about choice of law, but we think it not the purpose of the section to protect a party's ability to use inconvenience as a shield to discourage or hinder litigation otherwise proper. The section exists to eliminate inconvenience without altering permissible choices under the venue statutes. See Van Dusen, supra, at 634-635, 84 S.Ct. at 818-19. This interpretation should come as little surprise. As in our previous cases, we think that "[t]o construe § 1404(a) this way merely carries out its design to protect litigants, witnesses and the public against unnecessary inconvenience and expense, not to provide a shelter for . . . proceedings in costly and inconvenient forums." Continental Grain Co. v. Barge FBL-585, 364 U.S. 19, 27, 80 S.Ct. 1470, 1475, 4 L.Ed.2d 1540 (1960). By creating an opportunity to have venue transferred between courts in different States on the basis of convenience, an option that does not exist absent federal jurisdiction, Congress, with respect to diversity, retained the Erie policy while diminishing the incidents of inconvenience.

Applying the transferee law, by contrast, would undermine the Erie rule in a serious way. It would mean that initiating a transfer under § 1404(a) changes the state law applicable to a diversity case. We have held, in an isolated circumstance, that § 1404(a) may pre-empt state law. See Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988) (holding that federal law determines the validity of a forum selection clause). In general, however, we have seen § 1404(a) as a housekeeping measure that should not alter the state law governing a case under Erie. See Van Dusen, supra, 376 U.S., at 636-637, 84 S.Ct., at 819-20; see also Stewart Organization, supra, 487 U.S., at 37, 108 S.Ct., at 2248 (SCALIA, J., dissenting) (finding the language of § 1404(a) "plainly insufficient" to work a change in the applicable state law through pre-emption). The Mississippi statute of limitations, which everyone agrees would have applied if the Ferenses had not moved for a transfer, should continue to apply in this case.

In any event, defendants in the position of Deere would not fare much better if we required application of the transferee law instead of the transferor law. True, if the transferee law were to apply, some plaintiffs would not sue these defendants for fear that they would have no choice but to litigate in an inconvenient forum. But applying the transferee law would not discourage all plaintiffs from suing. Some plaintiffs would prefer to litigate in an inconvenient forum with favorable law than to litigate in a convenient forum with unfavorable law or not to litigate at all. The Ferenses, no doubt, would have abided by their initial choice of the District Court in Mississippi had they known that the District Court in Pennsylvania would dismiss their action. If we were to rule for Deere in this case, we would accomplish little more than discouraging the occasional motions by plaintiffs to transfer inconvenient cases. Other plaintiffs would sue in an inconvenient forum with the expectation that the defendants themselves would seek transfer to a convenient forum, resulting in application of the transferor law under Van Dusen. See Note, Choice of Law in Federal Court After Transfer of Venue, 63 Cornell L.Rev. 149, 156 (1977). In this case, for example, Deere might have moved for a transfer if the Ferenses had not.

Van Dusen also sought to fashion a rule that would not create opportunities for forum shopping. Some commentators have seen this policy as the most important rationale of Van Dusen, see, e.g., 19 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 4506, p. 79 (1982), but few attempt to explain the harm of forum shopping when the plaintiff initiates a transfer. An opportunity for forum shopping exists whenever a party has a choice of forums that will apply different laws. The Van Dusen policy against forum shopping simply requires us to interpret § 1404(a) in a way that does not create an opportunity for obtaining a more favorable law by selecting a forum through a transfer of venue. In the Van Dusen case itself, this meant that we could not allow defendants to use a transfer to change the law. 376 U.S., at 636, 84 S.Ct., at 819.

No interpretation of § 1404(a), however, will create comparable opportunities for forum shopping by a plaintiff because, even without § 1404(a), a plaintiff already has the option of shopping for a forum with the most favorable law. The Ferenses, for example, had an opportunity for forum shopping in the state courts because both the Mississippi and Pennsylvania courts had jurisdiction and because they each would have applied a different statute of limitations. Diversity jurisdiction did not eliminate these forum shopping opportunities; instead, under Erie, the federal courts had to replicate them. See Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S., at 496, 61 S.Ct., at 1021 ("Whatever lack of uniformity [Erie ] 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"). Applying the transferor law would not give a plaintiff an opportunity to use a transfer to obtain a law that he could not obtain through his initial forum selection. If it does make selection of the most favorable law more convenient, it does no more than recognize a forum shopping choice that already exists. This fact does not require us to apply the transferee law. Section 1404(a), to reiterate, exists to make venue convenient and should not allow the defendant to use inconvenience to discourage plaintiffs from exercising the opportunities that they already have.

Applying the transferee law, by contrast, might create opportunities for forum shopping in an indirect way. The advantage to Mississippi's personal injury lawyers that resulted from the State's then applicable 6-year statute of limitations has not escaped us; Mississippi's long limitation period no doubt drew plaintiffs to the State. Although Sun Oil held that the federal courts have little interest in a State's decision to create a long statute of limitations or to apply its statute of limitations to claims governed by foreign law, we should recognize the consequences of our interpretation of § 1404(a). Applying the transferee law, to the extent that it discourages plaintiff-initiated transfers, might give States incentives to enact similar laws to bring in out-of-state business that would not be moved at the instance of the plaintiff.

Van Dusen also made clear that the decision to transfer venue under § 1404(a) should turn on considerations of convenience rather than on the possibility of prejudice resulting from a change in the applicable law. See 376 U.S., at 636, 84 S.Ct., at 819; Piper Aircraft Co. v. Reyno, 454 U.S. 235, 253-254, and n. 20, 102 S.Ct. 252, 264-65, and n. 20, 70 L.Ed.2d 419 (1981). We reasoned in Van Dusen that, if the law changed following a transfer initiated by the defendant, a district court "would at least be reluctant to grant transfers, despite considerations of convenience, if to do so might conceivably prejudice the claim of a plaintiff." 376 U.S., at 636, 84 S.Ct., at 819. The court, to determine the prejudice, might have to make an elaborate survey of the law, including statutes of limitations, burdens of proof, presumptions, and the like. This would turn what is supposed to be a statute for convenience of the courts into one expending extensive judicial time and resources. Because this difficult task is contrary to the purpose of the statute, in Van Dusen we made it unnecessary by ruling that a transfer of venue by the defendant does not result in a change of law. This same policy requires application of the transferor law when a plaintiff initiates a transfer.

If the law were to change following a transfer initiated by a plaintiff, a district court in a similar fashion would be at least reluctant to grant a transfer that would prejudice the defendant. Hardship might occur because plaintiffs may find as many opportunities to exploit application of the transferee law as they would find opportunities for exploiting application of the transferor law. See Note, 63 Cornell L.Rev., at 156. If the transferee law were to apply, moreover, the plaintiff simply would not move to transfer unless the benefits of convenience outweighed the loss of favorable law.

Some might think that a plaintiff should pay the price for choosing an inconvenient forum by being put to a choice of law versus forum. But this assumes that § 1404(a) is for the benefit only of the moving party. By the statute's own terms, it is not. Section 1404(a) also exists for the benefit of the witnesses and the interest of justice, which must include the convenience of the court. Litigation in an inconvenient forum does not harm the plaintiff alone. As Justice Jackson said:

"Administrative difficulties follow for courts when litigation is piled up in congested centers instead of being handled at its origin. Jury duty is a burden that ought not to be imposed upon the people of a community which has no relation to the litigation. In cases which touch the affairs of many persons, there is reason for holding the trial in their view and reach rather than in remote parts of the country where they can learn of it by report only. There is a local interest in having localized controversies decided at home. There is an appropriateness too, in having the trial of a diversity case in a forum that is at home with the state law that must govern the case, rather than having a court in some other forum untangle problems in conflicts of laws, and in law foreign to itself." Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508-509, 67 S.Ct. 839, 843, 91 L.Ed. 1055 (1947).

The desire to take a punitive view of the plaintiff's actions should not obscure the systemic costs of litigating in an inconvenient place.

This case involves some considerations to which we perhaps did not give sufficient attention in Van Dusen. Foresight and judicial economy now seem to favor the simple rule that the law does not change following a transfer of venue under § 1404(a). Affording transfers initiated by plaintiffs different treatment from transfers initiated by defendants may seem quite workable in this case, but the simplicity is an illusion. If we were to hold that the transferee law applies following a § 1404(a) motion by a plaintiff, cases such as this would not arise in the future. Although applying the transferee law, no doubt, would catch the Ferenses by surprise, in the future no plaintiffs in their position would move for a change of venue.

Other cases, however, would produce undesirable complications. The rule would leave unclear which law should apply when both a defendant and a plaintiff move for a transfer of venue or when the court transfers venue on its own motion. See Note, 63 Cornell L.Rev., at 158. The rule also might require variation in certain situations, such as when the plaintiff moves for a transfer following a removal from state court by the defendant, or when only one of several plaintiffs requests the transfer, or when circumstances change through no fault of the plaintiff making a once convenient forum inconvenient. True, we could reserve any consideration of these questions for a later day. But we have a duty, in deciding this case, to consider whether our decision will create litigation and uncertainty. On the basis of these considerations, we again conclude that the transferor law should apply regardless of who makes the § 1404(a) motion.

Some may object that a district court in Pennsylvania should not have to apply a Mississippi statute of limitations to a Pennsylvania cause of action. This point, although understandable, should have little to do with the outcome of this case. Congress gave the Ferenses the power to seek a transfer in § 1404(a), and our decision in Van Dusen already could require a district court in Pennsylvania to apply the Mississippi statute of limitations to Pennsylvania claims. Our rule may seem too generous because it allows the Ferenses to have both their choice of law and their choice of forum, or even to reward the Ferenses for conduct that seems manipulative. We nonetheless see no alternative rule that would produce a more acceptable result. Deciding that the transferee law should apply, in effect, would tell the Ferenses that they should have continued to litigate their warranty action in Pennsylvania and their tort action in Mississippi. Some might find this preferable, but we do not. We have made quite clear that "[t]o permit a situation in which two cases involving precisely the same issues are simultaneously pending in different District Courts leads to the wastefulness of time, energy and money that § 1404(a) was designed to prevent." Continental Grain, 364 U.S., at 26, 80 S.Ct., at 1474.

From a substantive standpoint, two further objections give us pause but do not persuade us to change our rule. First, one might ask why we require the Ferenses to file in the District Court in Mississippi at all. Efficiency might seem to dictate a rule allowing plaintiffs in the Ferenses' position not to file in an inconvenient forum and then to return to a convenient forum though a transfer of venue, but instead simply to file in the convenient forum and ask for the law of the inconvenient forum to apply. Although our rule may invoke certain formality, one must remember that § 1404(a) does not provide for an automatic transfer of venue. The section, instead, permits a transfer only when convenient and "in the interest of justice." Plaintiffs in the position of the Ferenses must go to the distant forum because they have no guarantee, until the court there examines the facts, that they may obtain a transfer. No one has contested the justice of transferring this particular case, but the option remains open to defendants in future cases. Although 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.

Second, one might contend that, because no per se rule requiring a court to apply either the transferor law or the transferee law will seem appropriate in all circumstances, we should develop more sophisticated federal choice-of-law rules for diversity actions involving transfers. See Note, 75 Yale L.J., at 130-135. To a large extent, however, state conflicts-of-law rules already ensure that appropriate laws will apply to diversity cases. Federal law, as a general matter, does not interfere with these rules. See Sun Oil, 486 U.S., at 727-729, 108 S.Ct., at 2124-2125. In addition, even if more elaborate federal choice-of-law rules would not run afoul of Klaxon and Erie, we believe that applying the law of the transferor forum effects the appropriate balance between fairness and simplicity. Cf. R. Leflar, American Conflicts Law § 143, p. 293 (3d ed. 1977) (arguing against a federal common law of conflicts).

For the foregoing reasons, we conclude that Mississippi's statute of limitations should govern the Ferenses' action. We reverse and remand for proceedings consistent with this opinion.

It is so ordered.

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

Notes