Hayman Cash Register Co. v. Sarokin

• Decision Date: 01 February 1982
• Docket Number: No. 81-2760,81-2760
• Citation: 669 F.2d 162
• Parties: 1982-1 Trade Cases 64,508 HAYMAN CASH REGISTER COMPANY, Talco Cash Register Co., Inc., Stanley Hayman and Hiram M. Tallmadge, Jr., Petitioners, v. Honorable H. Lee SAROKIN, United States District Judge for the District of New Jersey, Nominal Respondent, Sharp Electronics Corporation, Respondent.
• Court: U.S. Court of Appeals — Third Circuit

Page 162

669 F.2d 162

1982-1 Trade Cases 64,508

HAYMAN CASH REGISTER COMPANY, Talco Cash Register Co., Inc. Stanley Hayman and Hiram M. Tallmadge, Jr., Petitioners, v. Honorable H. Lee SAROKIN, United States District Judge for the District of New Jersey, Nominal Respondent Sharp Electronics Corporation, Respondent.

No. 81-2760.

United States Court of Appeals Third Circuit.

Argued Dec. 2, 1981.

Decided Feb. 1, 1982.

Stephen L. Dreyfuss (argued), Hellring, Lindeman, Goldstein & Siegal, Newark, N. J., for petitioners; Bernard Hellring, Newark, N.J., of counsel.

Peter A. Dankin (argued), Lance Gotthoffer, Wender, Murase & White, New York City, and Arthur R. Schmauder, Mary E Before ADAMS, VAN DUSEN and SLOVITER, Circuit Judges.

Tracey, Shanley & Fisher, Newark, N.J., for respondent.

OPINION OF THE COURT

VAN DUSEN, Senior Circuit Judge.

This petition for a writ of mandamus or prohibition involves the power of a district court to retransfer a case to its original forum after a transfer pursuant to 28 U.S.C. § 1406(a). Because we conclude that the United States District Court for the District of New Jersey did not adequately consider the law of the case doctrine, we hold that the New Jersey district court should vacate its order retransferring the case to the United States District Court for the District of Columbia.

I. Procedural History

In December 1979, plaintiff-respondent Sharp Electronics Corporation ("Sharp") brought this suit in the United States District Court for the District of Columbia, alleging violations of the Sherman Act. The defendants-petitioners are two corporations, Hayman Cash Register Company ("Hayman Company") and Talco Cash Register Co., Inc. ("Talco"), and their presidents, Stanley Hayman and Hiram M. Tallmadge, Jr., respectively. Hayman Company has its principal place of business in the District of Columbia, and Hayman is a resident of Maryland. Talco is a New Jersey corporation, doing business solely in that state, and Tallmadge is a New Jersey resident. Sharp, the plaintiff, is a New York corporation with its principal place of business in New Jersey.

The defendants moved to dismiss the complaint, alleging improper venue, lack of personal jurisdiction, and failure to state a claim upon which relief can be granted. The Honorable Charles R. Richey, of the United States District Court for the District of Columbia, concluded that venue was improper in the District of Columbia and dismissed the complaint without reaching the issues of personal jurisdiction or the alleged failure to state a claim upon which relief can be granted.

Sharp then appealed to the United States Court of Appeals for the District of Columbia Circuit, arguing that venue did exist under 28 U.S.C. § 1391 (1976). ¹ The court of appeals vacated the judgment of the district court, and remanded to Judge Richey to consider whether transferring the case to New Jersey would be preferable to dismissal. The appellate court "agree(d) with the district court's implicit finding that efficient conduct of Sharp's action would be enhanced by moving it to New Jersey, where most of the parties are located and related lawsuits are in progress," Sharp Electronics Corp. v. Hayman Cash Register Co., 655 F.2d 1228, 1230 (D.C.Cir. 1981). ²

The Court of Appeals for the District of Columbia Circuit instructed the district court to consider transfer under 28 U.S.C. § 1406(a), which provides:

"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."

28 U.S.C. § 1406(a) (1976). The court of appeals specifically indicated the factors that must be considered by the district court before transferring a case:

"We are aware that such a transfer would require the district court to decide as a preliminary matter that venue and jurisdiction would be proper as to all defendants in the district of New Jersey.... We therefore direct the district court to make a determination of these matters."

655 F.2d at 1230 (citations omitted). ³

On remand, the District of Columbia district court transferred the action to the District of New Jersey. Judge Richey's order of July 1, 1981, explicitly stated his conclusion that "personal jurisdiction and proper venue existed in New Jersey at the commencement of this suit." Sharp Electronics Corporation v. Hayman Cash Register Company, No. 79-3268, (D.D.C., filed July 2, 1981).

Upon transfer to the District of New Jersey, the case was assigned to the Honorable H. Lee Sarokin. Sharp then moved the court to retransfer the action to the District of Columbia. Sharp argued that there was no personal jurisdiction in New Jersey over defendants Hayman Company and Hayman when the action was commenced in December 1979. Therefore, Sharp claimed, New Jersey was not a district in which the action "could have been brought," 28 U.S.C. § 1406(a), and the transfer was improper.

In a letter-opinion of October 6, 1981, Judge Sarokin granted Sharp's motion to retransfer. Citing Hoffman v. Blaski, 363 U.S. 335, 340 n.9, 80 S.Ct. 1084, 1088 n.9, 4 L.Ed.2d 1254 (1960), the New Jersey district court stated that a transferee court has the power to determine independently whether jurisdiction and venue would have been proper had the case been brought there originally. Finding that there was no personal jurisdiction over Hayman Company and Hayman in New Jersey as of December 1979, the court concluded that New Jersey was not a district in which the action "could have been brought" as required by § 1406(a). Because the case was improperly transferred, Judge Sarokin held, the "only recourse in this situation reluctantly is to retransfer the case to the transferor court." Sharp Electronics Corporation v. Hayman Cash Register Company, No. 81-2345, Opinion at 4 (D.N.J., filed Oct. 6, 1981). The New Jersey district court made no findings as to whether the District of Columbia was a district "in which (the suit) could have been brought." 28 U.S.C. § 1406(a).

Defendants then petitioned this court for a writ of mandamus or prohibition vacating Judge Sarokin's retransfer order. Judge Sarokin stayed his order pending this court's decision on the petition for the writ.

Defendants raise two issues in their petition. First, they argue that Judge Sarokin exceeded his power in re-examining the issue of personal jurisdiction over the defendants in New Jersey because this issue had been decided by Judge Richey as a prerequisite to the original transfer. Second, defendants argue that, even if Judge Sarokin had the power to re-examine this issue, he was required under § 1406(a) to determine if the case could have been brought in the District of Columbia before retransferring the suit to that district.

II. The Law of the Case

The District of Columbia court of appeals explicitly directed the District of Columbia district court to make a determination of whether "venue and jurisdiction would be proper as to all defendants in the district of New Jersey." 655 F.2d at 1230. It is clear from Judge Richey's order of July 2, 1981, that he made such a determination, as his order states in full:

"Upon consideration of the defendants' motion to transfer the entire action to the United States District Court for the District of New Jersey and the plaintiff's opposition thereto, and it appearing to the Court that personal jurisdiction and proper venue existed in New Jersey at the commencement of this suit, as well as for the convenience of the parties and in the interest of justice, it is, by the Court, this 1st day of July, 1981,

"ORDERED, that this entire action be, and the same hereby is, transferred to the United States District Court for the District of New Jersey pursuant to 28 U.S.C. § 1406(a)."

Sharp Electronics Corporation v. Hayman Cash Register Company, No. 79-3268 (D.N.J., filed July 2, 1981) (emphasis supplied).

Recognizing that the District of Columbia district court "made a preliminary finding that the case could have been brought originally in New Jersey," Judge Sarokin undertook to examine this question anew, relying on language from the Supreme Court. Judge Sarokin stated in his letter-opinion:

"28 U.S.C. § 1406, pursuant to which this transfer was made, requires that a transfer be made to a court in which the action could have been brought originally. The Supreme Court has held that this requirement may be examined independently by the transferee court to determine whether it would have had jurisdiction and venue when the case was originally brought. Hoffman v. Blaski, 363 U.S. 335, 340 n.9, 80 S.Ct. 1084, 1088 n.9, 4 L.Ed.2d 1254 (1960)."

Sharp Electronics Corporation v. Hayman Cash Register Company, No. 81-2345, Opinion at 1 & 2 (D.N.J., filed Oct. 6, 1981).

Judge Sarokin read Hoffman v. Blaski, 363 U.S. 335, 80 S.Ct. 1084, 4 L.Ed.2d 1254 (1960), as permitting the redetermination by the transferee court of whether it had jurisdiction over a transferred action. This reading of Blaski creates an exception to the law of the case doctrine for transfer orders. Under the law of the case doctrine, once an issue is decided, it will not be relitigated in the same case, except in unusual circumstances. See 1B J. Moore, Federal Practice P 0.404(1) (1980). The purpose of this doctrine is to promote the "judicial system's interest in finality and in efficient administration." Todd & Co., Inc. v. S.E.C., 637 F.2d 154, 156 (3d Cir. 1980). If this familiar rule applies to the present suit, then instead of examining the issue of jurisdiction "independently," Judge Sarokin should have deferred to Judge Richey's decision that personal jurisdiction existed in New Jersey over all defendants. The question before us, then, is whether the usual doctrine of law of the case applies to transfer orders under § 1406(a), or whether the Supreme Court's decision in Hoffman v....