Mortensen v. Wheel Horse Products, Inc.

• Decision Date: 25 July 1991
• Docket Number: No. 91-CV-29.,91-CV-29.
• Citation: 772 F. Supp. 85
• Parties: Kenneth J. MORTENSEN and Sandra Mortensen, Plaintiffs, v. WHEEL HORSE PRODUCTS, INC., Defendant.
• Court: U.S. District Court — Northern District of New York

772 F. Supp. 85

Kenneth J. MORTENSEN and Sandra Mortensen, Plaintiffs, v. WHEEL HORSE PRODUCTS, INC., Defendant.

No. 91-CV-29.

United States District Court, N.D. New York.

July 25, 1991.

Finkelstein, Levine, Gittelsohn & Tetenbaum, Newburgh, N.Y., for plaintiffs; John J. Tackach, of counsel.

Carter, Conboy, Bardwell, Case, Blackmore & Napierski, Albany, N.Y., for defendant; Dianne Bresee Mayberger, of counsel.

MEMORANDUM-DECISION AND ORDER

MUNSON, Senior District Judge.

Presently before the court are cross-motions by plaintiffs and defendant. Defendant moves pursuant to 28 U.S.C. § 1631 to transfer the case to the United States District Court, Southern District of New York to cure a defect in this court's subject matter jurisdiction. Alternatively, defendant moves to transfer pursuant to 28 U.S.C. § 1404(a) or 28 U.S.C. § 1406(a) to cure a defect in venue. Plaintiffs oppose a transfer of any sort and cross-move to remand to New York State Supreme Court, Dutchess County, and also request costs and attorney's fees incurred as a result of defendant's improper removal to this court. The court heard oral argument on March 25, 1991 in Albany, New York. For the reasons stated below, the case is transferred to the United States District Court, Southern District of New York.

I. Background

The procedural facts relevant to these motions are not in dispute. On December 10, 1990, plaintiffs commenced a products liability action in New York State Supreme Court, Dutchess County. On January 9, 1991, defendant timely filed a notice of removal pursuant to 28 U.S.C. §§ 1332(a)(1) and 1441(a), based on diversity of citizenship between the parties. However, the notice of removal was filed in the Northern District of New York rather than the Southern District, which is the proper federal court under §§ 1441(a) and 1446(a) because it embraces Dutchess County where the action was pending.¹

Defendant's attorney acknowledges this filing error and seeks, pursuant to § 1631, to have the case transferred to the Southern District where it belongs. Defendant cites a panoply of cases to support its contention that the wording of § 1631 is broad enough to permit a district court to transfer to the appropriate court a case removed to the wrong district.

Plaintiffs argue that § 1631 was intended to cover situations where there is confusion over which court is the proper court for filing, not where only one court is appropriate and the filing party clearly makes a mistake by filing in some other court. Moreover, plaintiffs argue, the plain language of § 1631 indicates that it extends only to cases originally filed or appealed in a federal court, not to removed cases, and therefore a transfer is not available here. The cross-motion to remand is based on § 1447(c), which requires that any case removed to a district court without subject matter jurisdiction "shall be remanded."

After the court questioned counsel during oral argument regarding the difference between subject matter jurisdiction and venue, defendant requested leave to supplement its motion papers. Defendant concedes that this court may have subject matter jurisdiction and, as a result, defendant raises an alternative argument that a venue transfer pursuant to § 1404(a) or § 1406(a) also would be appropriate under these circumstances. In opposition plaintiffs adhere to their original argument that this court lacks subject matter jurisdiction, asserting that 28 U.S.C. § 1441(a) is more than a mere venue provision. Contrary to defendant's suggestion that § 1332 is the substantive provision which authorizes this court's original jurisdiction, plaintiffs argue that § 1441(a) provides the substantive basis for federal court jurisdiction over a case commenced in state court. Because that section confers subject matter jurisdiction on only one federal court, namely, "the district court of the United States for the district and division embracing the place where such action is pending," and there is no dispute that this case was not removed to the district court embracing Dutchess County where the case had been pending, plaintiffs contend that this court lacks subject matter jurisdiction. The only solution, plaintiffs assert, is to remand to New York State Supreme Court, Dutchess County pursuant to the mandate of § 1447(c).

II. Discussion

As part of the Federal Courts Improvement Act of 1982, Congress enacted a broadly worded transfer provision designed to facilitate litigation in federal courts. The provision, codified at 28 U.S.C. § 1631, states in relevant part:

Whenever a civil action is filed in a court ... or an appeal including a petition for review of administrative action, is noticed for or filed with such a court and that court finds that there is a want of jurisdiction, the court shall, if it is in the interest of justice, transfer such action or appeal to any other such court in which the action or appeal could have been brought at the time it was filed or noticed....

Policy considerations leading to the enactment of this provision included confusion in existing law as to which of two or more federal courts has subject matter jurisdiction over particular types of civil actions, and the consequent wasteful and costly practice of filing an action in several courts to ensure that the litigant will not be left "without a remedy because of a lawyer's error or a technicality of procedure." S.Rep. No. 275, 97th Cong., 2d Sess. 11, reprinted in 1982 U.S.Code Cong. & Admin.News 11, 21. This provision was constructed in broad terms to permit a transfer between any two federal courts, so long as the prerequisites outlined in the provision are satisfied. Id.

Neither the Supreme Court nor the Court of Appeals for any circuit has interpreted the transfer authority of § 1631 in the context of a removed case. Some insight can be culled, however, from the various cases interpreting the section in other contexts. An appeal in a patent case transferred from the Federal Circuit to the Seventh Circuit and back to the Federal Circuit put § 1631 before the Supreme Court in Christianson v. Colt Ind. Operating Corp., 486 U.S. 800, 108 S.Ct. 2166, 100 L.Ed.2d 811 (1988). Citing Sheldon v. Sill, 49 U.S. (8 How.) 441, 449, 12 L.Ed. 1147 (1850) for the principle that statutorily created courts have jurisdiction only so far as the statute confers, the Supreme Court held that § 1631 confers upon a court the "authority to make a single decision upon concluding that it lacks jurisdiction — whether to dismiss the case or, `in the interest of justice,' to transfer it to a court ... that has jurisdiction." Christianson, 486 U.S. at 818, 108 S.Ct. at 2178. Applying this standard to the Federal Circuit's holding that, although it lacked subject matter jurisdiction the interest of justice warranted a decision on the merits anyway, the Supreme Court determined that the Federal Circuit exceeded its statutory authorization. Id.

In Miller v. Hambrick, 905 F.2d 259 (9th Cir.1990), the Ninth Circuit recently reversed a district court's dismissal of a habeas corpus petition filed in the wrong district, holding that the district court abused its discretion in failing to transfer the petition to the proper district pursuant to § 1631. Id. at 262. To support its ruling the court stated that "normally transfer will be in the interest of justice because normally dismissal of an action that could be brought elsewhere is `time-consuming and justice-defeating.'" Id. (quoting Goldlawr, Inc. v. Heiman, 369 U.S. 463, 467, 82 S.Ct. 913, 916, 8 L.Ed.2d 39 (1962)); see also In re J.D. McCauley, 814 F.2d 1350, 1351 (9th Cir.1987) (when federal court finds that it lacks subject matter jurisdiction but that another federal court has subject matter jurisdiction, under § 1631 the first federal court "must transfer the case to the proper court, if transfer is in the interest of justice"). It is widely recognized in other circuits that § 1631 gives a district court "power to transfer a case to the proper federal court when it determines that it lacks jurisdiction, provided that the transfer will be in the interest of justice, and that, had the case been originally filed in the proper court, the filing would have been timely and jurisdictionally proper in that court." In re Apex Oil Co., 884 F.2d 343, 346 (8th Cir.1989) (transfer of bankruptcy appeal); see also Dornbusch v. C.I.R., 860 F.2d 611, 615 (5th Cir.1988) (transfer of appeal of Tax Court decision).

Examining the parameters of the authorization contained in § 1631, one circuit court relied on the legislative history to conclude that the enactment of § 1631 in no way infringes on nor supplants the inherent discretionary power of a court of appeals to transfer when it has jurisdiction but lacks venue. Alexander v. C.I.R., 825 F.2d 499, 501-02 (D.C.Cir.1987) (citing Clark & Reid Co. v. United States, 804 F.2d 3, 7 (1st Cir.1986) for proposition that courts of appeal have inherent transfer power). The court stopped short of a ruling on whether § 1631 can be interpreted to authorize a transfer for lack of venue, and instead relied on its inherent power to transfer this appeal of a Tax Court decision to the court with proper venue. Id.

Probing a district court's statutory authority to transfer in the context of a personal injuries action based on diversity jurisdiction where personal jurisdiction is lacking, the Northern District of New York has stated that "the legislative history makes clear that § 1631 was only intended to apply to cases in which the transferor court lacks subject matter jurisdiction." Levy v. Pyramid Co. of Ithaca, 687 F.Supp. 48, 51 (N.D.N.Y.1988) (emphasis in original), aff'd, 871 F.2d 9 (2d Cir.1989); see also Nose v. Rementer, 610 F.Supp. 191, 192 & n. 1 (D.Del.1985). Hence, when the motion to transfer focuses on a defect in venue or personal jurisdiction, the transfer must take place under one of the venue transfer statutes, i.e., § 1404(a) or §...