Commercial Litigation and Arbitration

Is a Venue Transfer Pursuant to 28 U.S.C. § 1631 Permitted for Lack of Personal Jurisdiction or Only for Lack of Subject Matter Jurisdiction? — Circuit Split — Factors Governing Transfer under § 1631

Companion Prop. & Cas. Ins. Co. v. U.S. Bank N.A., 2016 U.S. Dist. LEXIS 158389 (D.S.C. Nov. 16, 2016):

17   In response to the motion to dismiss his fourth-party complaint, Burns requests, in the event the court concludes that it lacks personal jurisdiction over USBT, that the court transfer the action to the U.S. District Court for the District of Delaware. (ECF No. 219 at 16.) Such a request must be made pursuant to 28 U.S.C. § 1631, which permits transfers when a district court determines that (1) there is a want of jurisdiction in the transferor court; (2) the transferee court is one in which the action could have been brought at the time it was filed in the transferor court; and (3) the transfer would be in the interests of justice. See Dragenice v. Ridge, 389 F.3d 92, 94 (4th Cir. 2004); McCook Metals LLC v. Alcoa, Inc., 249 F.3d 330, 334 (4th Cir. 2001). The court declines to transfer the action. First, although it is not clear whether § 1631 permits a transfer based on a lack of personal rather than subject-matter jurisdiction, see In re Carefirst of Md., 305 F.3d 253, 257 n.2 (4th Cir. 2002) (noting circuit split and declining to resolve [*74]  issue), "the better view is that [§] 1631 is limited to subject matter jurisdiction defects and does not address problems with personal jurisdiction," 15 Charles Alan Wright, et al., Federal Practice and Procedure § 3842 (4th ed. 2013). Because the court concludes that it lacks personal jurisdiction over USBT, § 1631 is inapposite. Second, even assuming that § 1631 were an appropriate vehicle for transfer occasioned by lack of personal jurisdiction, the court would not exercise its discretion to do so. See id. ("Section 1631 . . . gives the court discretion to transfer or to dismiss without prejudice.") The court notes that Burns did not file a separate motion to transfer and, in his response, did not cite § 1631 or provide any reasons that transfer would be appropriate. Moreover, the court notes that, under South Carolina law--upon which Burns' contribution claim is based (see ECF No. 143 at 10)--Burns suffers no more prejudice by filing a new complaint in the District of Delaware than he would suffer by being deemed to have filed the complaint there at the time he brought the action in this court, see S.C. Code Ann. §§ 15-3-530, -38-40(D) (2015).

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