Froelich v. Petrelli, Civ. No. 77-0206.

• Decision Date: 21 June 1979
• Docket Number: Civ. No. 77-0206.
• Parties: Kathryn M. FROELICH, Plaintiff, v. Vito PETRELLI and Glenn McDermott, Defendants.
• Court: U.S. District Court — District of Hawaii

472 F. Supp. 756

Kathryn M. FROELICH, Plaintiff, v. Vito PETRELLI and Glenn McDermott, Defendants.

Civ. No. 77-0206.

United States District Court, D. Hawaii.

June 21, 1979.

Joseph M. McKellar, and M. Alan Rhodey, Honolulu, Hawaii, for plaintiff.

James Kawashima, and J. Douglas Ing., Honolulu, Hawaii, for defendant Petrelli.

Warren Price, III, and Michael A. Cane, Goodsill, Anderson & Quinn, Honolulu, Hawaii, for defendant Glenn McDermott.

ORDER DENYING MOTION TO TRANSFER AND GRANTING MOTION TO DISMISS

SAMUEL P. KING, Chief Judge.

On June 26, 1975, plaintiff Kathryn M. Froelich, a citizen of Hawaii, was a passenger in an automobile operated by defendant Glenn McDermott, a citizen of California, when it was involved in a traffic accident near Long Beach, California, with an automobile driven by defendant Vito Petrelli, a citizen of California. On June 9, 1977, plaintiff filed suit in this Court alleging that she had been severely injured in this accident due to the negligence of both defendants and that she was entitled to $75,000 in damages. Federal jurisdiction was based upon diversity of citizenship pursuant to 28 U.S.C. § 1332(a) and venue was ostensibly premised upon the portion of 28 U.S.C. § 1391(a) which allows diversity suits to "be brought . . . in the judicial district where all plaintiffs . . . reside . . . ." This suit was filed after the California one-year statute of limitations had run and just prior to the running of the Hawaii two-year statute of limitations.

On February 6, 1979, defendant Petrelli filed a motion, in which defendant McDermott joined on February 8, to dismiss the complaint on the ground that this Court lacks personal jurisdiction over the defendants or, in the alternative, to transfer this action to the Central District of California "for the convenience of parties and witnesses, in the interest of justice" pursuant to 28 U.S.C. § 1404(a) if this Court concluded that it had personal jurisdiction over the defendants. A hearing on defendants' alternative motions was held on March 16. At that hearing, plaintiff conceded that this Court lacks personal jurisdiction over the defendants; nevertheless, plaintiff argued that this action should not be dismissed but rather transferred to the Central District of California. Plaintiff, relying upon the authority of Shong Ching Lau v. Change, 415 F.Supp. 627 (E.D.Pa.1976), contended that this Court has the power to transfer venue in the absence of personal jurisdiction over the defendants if such a transfer would be "in the interest of justice." Defendants responded that, in the absence of personal jurisdiction over the defendants, this Court has no such power to transfer venue and nonetheless such a transfer in this case would not be "in the interest of justice." After noting its predilection to follow the rationale of Shong Ching Lau, this Court granted defendants' request for more time to brief and present oral argument on the two points they raised.¹

A second hearing was held on March 22, at which time each party was instructed to submit supplemental memoranda on the issue of whether a transfer of venue would be "in the interest of justice." Having carefully considered the memoranda and oral arguments of the parties, this Court is of the opinion that it has the power to transfer venue under either 28 U.S.C. §§ 1404(a) or § 1406(a) in the absence of personal jurisdiction over the defendants, but that transfer of venue is inappropriate in this case.

The starting point for analyzing the power of a district court to transfer venue in the absence of personal jurisdiction over the defendants is Goldlawr, Inc. v. Heiman, 369 U.S. 463, 82 S.Ct. 913, 8 L.Ed.2d 39 (1962). Goldlawr was a private antitrust action for treble damages under the Sherman and Clayton Acts that was filed in the Eastern District of Pennsylvania. That court concluded that venue was improperly laid as to two corporate defendants because they could not be "found" in, nor were they doing business in, that forum. The court also lacked personal jurisdiction over these defendants. Nevertheless, the court transferred the case to the Southern District of New York, a district where the parties could be served. The court acted pursuant to 28 U.S.C. § 1406(a), which provided that:

the district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.

The New York district court dismissed the action on the ground that the Pennsylvania court had no power to transfer the suit because it lacked personal jurisdiction over the parties. The Supreme Court reversed, holding that 28 U.S.C. § 1406(a) is not limited to cases in which the transferor court has personal jurisdiction over the defendants.

Three lines of cases have evolved from Goldlawr which take different routes to arrive at the ultimate conclusion that a district court which has no personal jurisdiction over the defendants may transfer a suit "in the interest of justice" to another district court even though venue was properly laid in the transferor court. One line of cases extended the rationale of Goldlawr to cover transfers of venue effected pursuant to 28 U.S.C. § 1404(a). This statute provides that:

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.

Thus, it was held that a district court lacking personal jurisdiction over the defendants may transfer a suit pursuant to § 1404(a). United States v. Berkowitz, 328 F.2d 358, 361 (3d Cir.), cert. denied, 379 U.S. 821, 85 S.Ct. 42, 13 L.Ed.2d 32 (1964); Koehring Co. v. Hyde Construction Co., 324 F.2d 295, 297-98 (5th Cir. 1963); accord, Shong Ching Lau v. Change, 415 F.Supp. 627 (E.D.Pa.1976); see 1 Moore's Federal Practice ¶ 0.1454.-5, at 1608-13 (2d ed. 1978); 15 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure § 3827, at 171-72 (1976).

A second line of cases holds that the language of 28 U.S.C. § 1406(a) does not require incorrect venue in the 28 U.S.C. § 1391 sense in order to permit transfer under that section. Dubin v. United States, 380 F.2d 813 (5th Cir. 1967); Mayo Clinic v. Kaiser, 383 F.2d 653 (8th Cir. 1967); Taylor v. Love, 415 F.2d 1118 (6th Cir. 1969), cert. denied, 397 U.S. 1023, 90 S.Ct. 1257, 25 L.Ed.2d 533 (1970); see 1 Moore's Federal Practice ¶ 0.1465 at 1668 n.22 (2d ed. 1970). The language of § 1406(a) suggests that a court's transfer power is conditioned upon improper venue by its reference only to "a district in which is filed a case laying venue in the wrong division or district . . . ." Nevertheless, the Dubin court concluded that:

the statute does not refer to "wrong" venue, but rather to venue laid in a "wrong division or district." We conclude that a district is "wrong" within the meaning of § 1406 whenever there exists an "obstacle to * * * an expeditious and orderly adjudication" on the merits. Inability to perfect service of process on a defendant in an otherwise correct venue is such an obstacle.

380 F.2d at 815 (quoting Goldlawr, Inc. v. Heiman, 369 U.S. at 466-67, 82 S.Ct. at 915-16). It was reasoned that "certainly a party who has been totally wrong in selecting the forum as in Goldlawr would have no greater right of transfer under § 1406(a) than a party who has selected a forum which is wrong only because service of process cannot be obtained." Mayo Clinic v. Kaiser, 383 F.2d at 655-56.²

A third approach which declined to elect between reliance on 28 U.S.C. § 1404(a) or on § 1406(a) was adopted in Volk Corp. v. Art-Pak Clip Art Service, 432 F.Supp. 1179 (S.D.N.Y.1977). In that case, Judge Weinfeld apparently read these two provisions together and placed a judicial gloss on the statutory language, holding that the court "has power to transfer the case even if there is no personal jurisdiction over the defendants, and whether or not venue is proper in the district, if a transfer would be in the interest of justice." 432 F.Supp. at 1181 (footnotes omitted); see Corke v. Sameiet M. S. Song of Norway, 572 F.2d 77, 80 n.9 (2d Cir. 1978). The Second Circuit, after noting that this reasoning both reaffirms "the Goldlawr majority's emphasis on the statutory phraseology `in the interest of justice'" and avoids "the analytic difficulties which inhere in both the Dubin and Berkowitz rationales," adopted Judge Weinfeld's statement of the law. Corke v. Sameiet M. S. Song of Norway, 572 F.2d at 80.³

Therefore, I conclude that this Court has the power to transfer this action in the absence of personal jurisdiction over the defendants under either § 1404(a) or § 1406(a) if such a transfer is "in the interest of justice."⁴

The crucial inquiry in the determination of whether it would be "in the interest of justice" to grant plaintiff's motion to transfer this suit to the Central District of California concerns the application of the California one-year statute of limitations.⁵ If this suit had been filed here before the California statute of limitations had run, I would conclude that a transfer would be proper, whether the motion to transfer had been made prior to⁶ or after⁷ the statute had run.

The major difficulty with the instant case is that this suit was filed after the California statute of limitations had run. It would not be "in the interest of justice" to transfer this case if the suit would be barred in the transferee court by the applicable statute of limitations. Haire v. Miller, 447 F.Supp. 57, 64 (N.D.Miss.1977); Viaggio v. Field, 177 F.Supp. 643 (D.Md.1959); 1 Moore's Federal Practice ¶ 0.1465, at 1666 (2d ed. 1978); cf. Fox v. Warner Bros. Pictures, Inc., 95 F.Supp. 360, 362 (D.Del.1950) (In denying a transfer under § 1406(a), the court pointed out that, if the case were transferred, the transferee court...