White v. ABCO Engineering Corp.

• Decision Date: 28 September 1999
• Docket Number: No. 98-,THIRD-PARTY,98-
• Citation: 199 F.3d 140
• Parties: (3rd Cir. 1999) KENNETH WHITE, v. ABCO ENGINEERING CORP., DEFENDANT/PLAINTIFF v. H.H.S. RECYCLING, INC.; HAMM'S SANITATION, INC.; DEFENDANTS KENNETH E. WHITE, APPELLANT IN NO. 98-6206, HAMM'S SANITATION, INC., APPELLANT IN NO. 98-6207 (D.C. Civ.cv-00622) NOS. 98-6206 and 98-6207 Submitted Under Third Circuit LAR 34.1(a)
• Court: U.S. Court of Appeals — Third Circuit

Page 140

199 F.3d 140 (3rd Cir. 1999)

KENNETH WHITE, v. ABCO ENGINEERING CORP., DEFENDANT/THIRD-PARTY PLAINTIFF v. H.H.S. RECYCLING, INC.; HAMM'S SANITATION, INC.; THIRD-PARTY DEFENDANTS

KENNETH E. WHITE, APPELLANT IN NO. 98-6206, HAMM'S SANITATION, INC., APPELLANT IN NO. 98-6207 (D.C. Civ. No. 98-cv-00622)

NOS. 98-6206 and 98-6207

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT

Submitted Under Third Circuit LAR 34.1(a) September 28, 1999

Filed December 02, 1999

On Appeal From the United States District Court For the District of New Jersey District Judge: Honorable Alfred J. Lechner, Jr.

Counsel for Plaintiff-Appellant Kenneth E. White: Bruce L. Safro, Esquire Suite 14 One University Plaza Hackensack, NJ 07601, John S. Selinger, Esquire Levinson, Zeccola, Reineke, Ornstein & Selinger, P.C. 11 Abrams Road P.O. Box 244 Central Valley, NY 10917

Counsel for Third-Party Defendant-Appellant Hamm's Sanitation, Inc.: Thomas R. Newman, Esquire Luce, Forward, Hamilton & Scripps 153 East 53rd Street, 26th Floor New York, NY 10022

Counsel for Defendant-Appellee Abco Engineering Corp.: Phillip A. Tumbarello, Esquire Loretta Menkes, Esquire Wilson, Elser, Moskowitz, Edelman & Dicker 150 East 42nd Street New York, NY 10017, Keith G. Von Glahn, Esquire Wilson, Elser, Moskowitz, Edelman & Dicker Two Gateway Center, 12th Floor Newark, NJ 07102

Before: Becker, Chief Judge, McKEE, and Noonan,^* Circuit Judges

OPINION OF THE COURT

Becker, Chief Judge.

This is an appeal from an order of the United States District Court for the Southern District of New York granting summary judgment for the defendant ABCO Engineering Corporation and against the plaintiff Kenneth E. White in a products liability personal injury case founded on diversity jurisdiction. Our opening sentence, describing an appeal to the United States Court of Appeals for the Third Circuit from the United States District Court for the Southern District of New York (in the Second Circuit) should raise eyebrows, and compels immediate inquiry into how such review could take place. The legitimacy of the review depends on whether White's claims against ABCO were properly transferred to the Third Circuit. Resolution of this question turns on one legal question of first impression and one factual question: (1) whether a § 1404(a) inter-district transfer may validly be made by stipulation (in the absence of a judicial balancing exercise), and (2) whether the transferring Judge in this case made a de facto severance of the White/ABCO claims, purposely attempting to transfer only the White claims against a third party, Hamm's Sanitation.

We conclude that § 1404(a) transfers may not be made simply by stipulation, and insofar as the record reveals, the transferring Judge did not engage in the requisite independent balancing of § 1404(a) factors. Alternatively, even if there had been a valid transfer, the transferring Judge effectively severed the claims against ABCO, leaving them in the Second Circuit. We will therefore transfer the appeal to the United States Court of Appeals for the Second Circuit pursuant to 28 U.S.C. § 1631.

I.

After White was injured working on a conveyor belt, he brought suit in the Southern District of New York against ABCO, the manufacturer of the conveyor belt, alleging defective design and negligence for failure to provide adequate safety guards. He later amended his complaint to state a direct claim against Hamm's Sanitation, the solid waste collector which had fabricated the side barrier guards for the ABCO conveyor at issue, alleging negligence in the installation, alteration, repair, and control of the conveyor.¹ White also filed a separate suit against Hamm's Sanitation in the District Court for the District of New Jersey, making the same claim.

In September 1997, the Southern District of New York case was transferred by United States District Judge Barrington Parker to Magistrate Judge Mark D. Fox for all purposes permitted by 28 U.S.C. § 636(b)(1) of the Federal Magistrates Act.² In November Judge Parker granted ABCO's motion for summary judgment. In December all parties agreed to proceed before Magistrate Judge Fox pursuant to 28 U.S.C. § 636(c)(1), which provides that upon consent of the parties, a magistrate Judge "may conduct any or all proceedings in a jury or non-jury civil matter and order the entry of judgment in the case." 28 U.S.C. § 636(c)(1).

On January 9, 1998, White and Hamm's Sanitation stipulated that White's direct actions against Hamm's Sanitation would be transferred to the District Court for the District of New Jersey where, as noted above, a case was already pending between the parties. The stipulation, which was signed by Magistrate Judge Fox and the lawyers for both White and Hamm's Sanitation, clearly indicated that the parties intended to transfer only the White claims against Hamm's Sanitation.³ Presumably ABCO's counsel received notice of the transfer from the Clerk, but she neither objected to nor signed the stipulation. Magistrate Judge Fox notified Judge Parker that the case against Hamm's Sanitation had been transferred. On January 26, 1998, Judge Parker amended his earlier opinion, but again granted summary judgment for ABCO.

II.

A.

The authority for the transfer to the District of New Jersey is not recited in the order. The most obvious source is 28 U.S.C. § 1404(a) which provides: "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."⁴ This section makes no mention of transfer by stipulation, in contrast to the succeeding section which allows for transfer by "motion, consent or stipulation of all parties," but only for (intra-court) inter-division, not inter-district transfer. See 28 U.S.C. § 1404(b). The implication of the juxtaposition of these rules is that inter-district transfer by stipulation is inappropriate. See In re Orthopedic Bone Screw Prods. Liab. Litig., 1995 U.S. Dist. LEXIS 10138 n.6 (E.D. Pa. 1995) ("It should be recalled that the parties, with court approval, can only stipulate to transfer a civil action to another division within a district, but not to another district."). This Conclusion is supported by the history and policies undergirding § 1404(a).

By its terms, § 1404(a) requires that a court make a case specific determination that such a transfer is proper. See Stewart Organization, Inc. v. Ricoh Corp., 487 U.S. 22 (1988). "The idea behind § 1404(a) is that where a `civil action' to vindicate a wrong--however brought in a court--presents issues and requires witnesses that make one District Court more convenient than another, the trial Judge can, after findings, transfer the whole action to the more convenient court." Continental Grain Co. v. Barge FBL-585, 364 U.S. 19 (1960) (emphasis added). In Stewart Organization, the Court concluded that a forum selection clause in a contract was relevant, but not binding, in a § 1404(a) determination. "The district court also must weigh in the balance the convenience of the witnesses and those public-interest factors of systemic integrity and fairness that, in addition to private concerns, come under the heading of `the interest of Justice.' " Id. at 29. The Court stated that "[a] motion to transfer under § 1404(a) thus calls on the district court to weigh in the balance a number of case-specific factors." Id.

No such requirement attends a § 1404(b) transfer, which is much less cumbersome than its inter-district counterpart. A case that is the subject of an intra-district (§ 1404(b)) transfer can be handled by the same lawyer(s) and will be governed by the same rules and procedures. A case that is the subject of a § 1404(a) transfer is unloaded onto an entirely new system. The former is like moving a card table within a house from the living room to the kitchen; the latter is like collecting all the chips and going to the neighbor's house to play. The house rules, as any gamesperson knows, are usually different. For these reasons, the stipulated transfer of any of White's claims is highly problematic. There is no indication in the record that Magistrate Judge Fox engaged in the "flexible and multifaceted analysis that Congress intended to govern motions to transfer within the federal system." Stewart Organization, 487 U.S. at 31.⁵

We acknowledge that we have, in dicta, stated that written findings of fact and law need not always accompany a transfer order. See Plum Tree, Inc. v. Stockment, 488 F.2d 754 (3d Cir. 1973). While scolding the district court for failing to do so in a difficult case, the Plum Tree panel noted that "we have not imposed a requirement that district courts make findings of fact and Conclusions of law with respect to the three factors stated in 28 U.S.C. § 1404(a) on each transfer motion." Id. at 756. The Supreme Court's Stewart Organization decision focused on the requirement of considering multiple factors, not the requirement of stating them, so Plum Tree's dicta is undisturbed.

We do not need to decide whether a court must always state the reasons for every § 1404(a) transfer. We do note, however, that in the absence of anything but a scrawled "so ordered" under a stipulation to transfer, there is every indication that the court relied on the stipulation alone in its decision to transfer and failed to engage in the requisite balancing. Accordingly, we conclude that the transfer was invalid, and none of White's claims against ABCO, or anyone else, were transferred out of the Second Circuit.

B.

Even had Magistrate Judge Fox engaged in the requisite balancing before transferring the case, however, we would still not have jurisdiction to hear this appeal for several reasons. First, even appropriate stipulated transfers require the consent of all affected parties. See § 1404(b); 15 Wright, Miller & Cooper, Federal Practice and Procedure: Jurisdiction 2d § 3844 (2d Ed....