Commercial Litigation and Arbitration

Following § 1404(a) Transfer, Does Transferee Court Apply Its Own Circuit’s Interpretation of Federal Law or That of Transferor Circuit? — Circuit Split

Klatte v. Buckman, Buckman & Reid, Inc., 2014 U.S. Dist. LEXIS 92286 (D.N.J. July 8, 2014):

Because this action was transferred to this Court from a district court in another circuit, an additional  [*13] preliminary layer of analysis is required before the Court may reach the question of who determines arbitrability. The answer to that question may vary by circuit, so which circuit court's law applies is a critical inquiry. The Supreme Court case of Van Dusen v. Barrack established that when a civil action, brought before the court on the basis of its diversity jurisdiction, is transferred from one district court to another pursuant to § 1404(a) on motion of the defendant, the transferee forum must apply the law of the transferor forum. 376 U.S. 612, 639 (1964) ("[W]here the defendants seek transfer [under § 1404(a)], the transferee district court must be obligated to apply the state law that would have been applied if there had been no change of venue."). The Van Dusen Court summarized its holding as the principle that "[a] change of venue under § 1404(a) generally should be with respect to state law, but a change of courtrooms." Id. At 639. Amica Mut. Ins. Co. v. Fogel, 656 F.3d 167, 170-71 (3d Cir. 2011). In other words, while the courtroom in which the parties litigate may change, the state law to which they are subject should not. The circuit courts of appeals are divided on whether the holding of Van Dusen extends to questions of federal law.  See discussion in Hooper v. Lockheed Martin Corp., 688 F.3d 1037 (9th Cir. 2012); Compare In re Ford Motor Co., 591 F.3d 406 (5th Cir. 2009) (where federal "law is 'geographically non-uniform, a transferee court should use the rule of the transferor forum in order to implement the central conclusion of Van Dusen v. Barrack, 376 U.S. 612 (1964), and Ferens v. John Deere Co., 494 U.S. 516 (1990): that a transfer ... accomplishes 'but a change of courtrooms.''") (quoting Eckstein v. Balcor Film Investors, 8 F.3d 1121, 1127 (7th Cir. 1993)) with Desiano v. Warner-Lambert & Co.,467 F.3d 85 (2d Cir. 2006) ("We have previously held that a transferee federal court should apply its interpretations of federal law, not the constructions of federal law of the transferor circuit. . . . [F]ederal courts comprise a single system applying a single body of law, and no litigant has a right to have the interpretation of one federal  [*15] court rather than that of another determine his case. . . .") (quoting Menowitz v. Brown, 991, F.2d 36, 40 (2d Cir. 1993)).

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