# Petition for Writ of Certiorari — Koontz v. International Harvester Co.

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Petition for Writ of Certiorari
- **Published:** January 1, 1988
- **Citation:** 487 U.S. 1213

## Text

; Supreme Sourt, US.
87-1529 FiLleED

ZAR Z
Or MAR 14 1988
JOS=PHF. SPANIOL, JR,
TLERK
In The

Supreme Court of the United States

October Term, 1987

Oo

RICHARD KOONTZ AND
BARBARA ANN KOONTZ, ADMINISTRATORS
OF THE ESTATE OF
STEVEN KOONTZ, DECEASED,

Petitioners,

INTERNATIONAL HARVESTER COMPANY,

Respondent. —

Oo

PETITION FOR A WRIT OF CERTIORARI TO
THE UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

—_————-0

Tuomas P. Preston
(Counsel of Record)
Wayne A. Mack, Jr.

Duane, Morris & HeckscHer

1500 One Franklin Plaza

Philadelphia, PA 19102

(215) 854-6237

Attorneys for Petitioners
Mareh 11, 1988

COCKLE LAW BRIEF PRINTING CO., (800) 225-6964
or cail collect (402) 342-2831

QUESTIONS PRESENTED

1. Does the due process clause of the United States
Constitution preclude a forum court from applying its
own procedural law to a lawsuit properly instituted
against a defendant conducting business in the state,
where the cause of action arose outside the forum state,
as to which the court of appeals are in conflict?

2. Whether a federal district court, following trans-
fer of venue under 28 U.S.C. § 1404(a) for the convenience
of parties and witnesses, is free to reject the choice of
law rules of the transferor state and dismiss a timely
instituted action based upon the procedural law of the
transferee state, as to which the court of appeals are in
conflict?

LIST OF PARTIES

This petition is being filed on behalf of Richard
Koontz and Barbara Ann Koontz, Administrators of the
Estate of Steven Koontz, deceased.

The respondent before this Court is Internationa!
Harvester Company, now known as Navistar Internation-

al Transportation Corporation.

ill

TABLE OF CONTENTS

Page
Sif ee B00) ED ig 4 i bY | i
LIST OF PARTIES ........... ii
TABLE OF AUTHORITIES Vv
| Eee ee 2
JURISDICTION EET ee a 2
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED 3
STATEMENT OF THE CASE ..... 2 4
REASONS FOR GRANTING THE WRIT i)

I.

If.

THE THIRD CIRCUIT’S RULING CON-
CERNING THE CONSTITUTIONALITY OF
A FORUM COURT’S APPLICATION OF ITS
OWN PROCEDURAL LAW UNNECESSAR-
ILY CONFLICTS WITH THE DECISIONS
OF OTHER CIRCUIT COURTS Soca
THE THIRD CIRCUIT’S RULING CON-
CERNING THE CONSTITUTIONALITY OF
A FORUM COURT’S APPLICATION OF ITS
OWN PROCEDURAL LAW IMPROPERLY
CONFLICTS WITH THE DECISIONS OF
0 SS )

A. The Third Circuit’s Ruling Conflicts With
This Court’s Decisions Upholding The Rule
ec

B. The Third Cireuit’s Ruling Conflicts With
This Court’s Decisions Under The Full Faith
And Clause And The Due Process Clause ~

C. The Third Cireuit’s Ruling Conflicts With
This Court’s Decisions Regarding The Pur-
pose And Effect Of A Transfer Under 28
U.S.C. § 1404(a)

9

17

20

TABLE OF CONTENTS—Continued
Page

D. The Third Cireuit’s Ruling Conflicts With
This Court’s Decisions Requiring Uniformity
Between Federal Courts And State Courts

Sitting In The Same State . Piers acai RS
CONCLUSION | 25

APPENDIX Sicha a

TABLE OF AUTHORITIES

Page

CAsEs:
Allstate Insurance Co. v. Haque, 449 U.S. 302

DIE Dt - sscchchcnnetcunscdioanacagceaaoecmdameaeenes Rae Ar Prt 16, 18, 20
Chase Securities Corp. v. Donaldson, 325 U.S. 304

CRUD © lncins cstacnaieihaneatlabic a coniaseemabneeesaadereena eae 15
Clay v. Sun Insurance Office Ltd., 363 U.S. 207

FOIE:

Based upon these extraordinary circumstances, peti-
tioners filed a motion under Fed. R. Civ. P. 60 with the
district court to have their original, timely Complaint
against International Harvester revived so that it eould
be decided on its merits. Followine the hearine on the
motion, and while this case was awaiting decision by the
district court, the Third Cireuit entered its opinion in
Ferens v. Deere & Co., 819 F.2d 423 (3d Cir. May 28, 1987
pet. for cert. filed, 56 U.S.L.W. 3249 (U.S. Sept. 21, 1987)
(No. 87-477).

Ferens is a ease strikingly similar to this case. As

here, Perens originated in Mississippi and was transferred
to Pennsylvania. Although the action was timely insti-
tuted under Mississippi law, the Pennsylvania district
court dismissed the action on the ground that it was un-

timely under Pennsyivania law.

On appeal, the Third Circuit in Ferens acknowledged
that this Court’s prior holdings established that a trans-
fer under 28 U.S.C. § 1404(a) does not result in a change

of law. Ferens, 819 F.2d at 425 (citing Van Dusen v. Bar-
>

' In the new opinion, the court indicated that the action in
White was barred because the Louisiana Worker’s Com-
pensation Act contained an exclusiveness of liability clause,
and not because the Louisiana statute of limitations was
applicable.

rack, 376 U.S. 612 (1964)).6 The court also admitted that
following transfer from one federal court to another, the
transferee court must sit as a court of the transferor state
and apply its choice of law rule. Jd.’

Notwithstanding the clear language of Van Dusen,
however, the Third Cireuit in Ferens held that the law of
the transferee state, Pennsylvania, controlled. The basis
of this holding was the court’s conclusion that a Missis-
sippi court could not constitutionally apply the Mississippi
six year statute of limitations in a lawsuit involving a
cause of action arising out of state. 819 F.2d at 427.

The Honorable Collin J. Seitz vigorously dissented in
Ferens. Judge Seitz argued that the majority ignored the
traditional distinction between the constitutional limita-
tions on a forum’s choice of substantive law and a forum’s
application of its procedural law. /d. at 428. Therefore,

The Third Circuit rejected the contention, also advanced
by International Harvester in this case, that the application
of the law of the transferor or transferee state should de-
pend on whether the defendant or plaintiff moved for
transfer. 819 F.2d at 426 n.4. Accord Mayo Clinic v. Kaiser,
383 F.2d 653, 656 (8th Cir. 1961); Martin v. Stokes, 623 F.2d
469, 492 (6th Cir. 1980); Roofing & Sheet Metal Services,
Inc. v. LaQuinta Motor Inns, Inc., 689 F.2d 982, 991 n.14
(11th Cir. 1982); Gonzalez v. Volvo of America Corp., 734
F.2d 1221, 1223-24 (7th Cir. 1984), amended on other
grounds, 752 F.2d 295 (7th Cir. 1985). Cf. Ellis v. Great
Southwestern Corp., 646 F.2d 1099, 1108-11 (5th Cir.
1981); Nelson v. International Paint Co., 716 F.2d 640, 643
(9th Cir. 1983). This was a question arguably left open by
the Supreme Court in Van Dusen. See id. at 639-40.

Under Klaxon Co. v. Stentor Electric Manufacturing Co.,
318 U.S. 487 (1941), a federal district court sitting in di-
versity must apply the choice of law rule of the state in
which it sits.

the Third Cireuit had usurped the legislative process and

judicially imposed ‘‘a federal choice of law rule.”’? Jd.

at 429.

On June 4, 1987, the district court denied petitioners’
motion for relief solely on the basis of Ferens. On appeal,
und after denying petitioners’ motion to hear the appeal
in bane, the Third Cireuit summarily affirmed the district
court’s order denying petitioners’ motion for relief. Again,

the court’s order cited only the Ferens opinion.

o

REASONS FOR GRANTING THE WRIT

I.

THE THIRD CIRCUIT’S RULING CONCERNING
THE CONSTITUTIONALITY OF A FORUM
COURT’S APPLICATION OF ITS OWN
PROCEDURAL LAW UNNECESSARILY CONFLICTS
WITH THE DECISIONS OF
OTHER CIRCUIT COURTS.

This petition directly calls into question the validity
of a holding by the Third Circuit on a constitutional issue
of exceptional significance. ‘That issue substantively im-
pacts the rights of countless litigants, including the peti-
tioners in this case. ‘The question, previously addressed
by this Court, is whether the United States Constitution
precludes a forum court from applying its own procedural
law to a lawsuit brought against a defendant conducting

business in the state where the cause of action arose out-

side the state. The Third Cireuit stands alone in its con-

10

clusion that such an application of procedural law is pro-
hibited.

In addition to creating a rule of law conflicting with
the decisions of this Court, the Third Cireuit has created
a rule which is in conflict with the decisions of four other ‘
federal appellate courts. This conflict raises significant
problems within the federal court system.

The issue which the Third Cireuit ruled on in Ferens,
and of necessity in this case, was whether a Mississippi
court could constitutionally apply the Mississippi six year
statute of limitations. Remarkably, despite the fact the
Third Cirenit was analyzing what it believed a Mississippi
court could do, it conducted its analysis without even men-
tioning the binding Fifth Cireuit precedent on the issue.

In Cowan v. Ford Motor Co., 694 F.2d 104 (Sth Cir.
1982) (‘Cowan 1’’), and Cowan v. Ford Motor Co., 713
F.2d 100 (5th Cir. 1983) (‘Cowan IT’’), the Fifth Circuit
addressed the constitutionality of a Mississippi court’s
application of the Mississippi statute, in a case brought
by a non-resident plaintiff, based on a cause of action aris-
ing out of state. The defendant in Cowan, like respondent,
conducted business in Mississippi and appointed an agent
for service of process in Mississippi. The Fifth Circuit
concluded that the application of the Mississippi statute
of limitations to the action was constitutional on the fol-
lowing grounds:

First, the court relied on Perkins v. Benquet Consoli-
dated Mining Co., 342 U.S. 437 (1952), where the
Court held that due process was not violated by appli-
cation of the forum’s law to a cause of action arising
out of state. Cowan I, 694 F.2d at 106-7.

11 :

Second, the court stated that the sovereign state of
Mississippi had a ‘‘recognizable interest’? in’ such
eases. 694 F.2d at 107.

Third, the court noted the well-established distinction
between the constitutional limitations on the choice of
substantive law, as opposed to procedural rules, such
as statutes of limitations. /d.

Finally, the Fifth Cireuit concluded that this Court’s
‘‘onthusiastie endorsement’’ and explicit approval of
a case involving the identical issue, Headrick v. Atchi-
son, T. € S.F.R. Co., 182 F.2d 305 (10th Cir. 1950), in
Van Dusen, supra, indicated that the Supreme Court
‘‘saw no constitutional due process problem’? in such
eases. Cowan 11,713 F.2d at 104.

Likewise, the Tenth Cireuit has also ruled on this
issue. In Schreiber v. Allis-Chalmers Corp., 611 F.2d 790
(10th Cir. 1979), a Kansas plaintiff sued in the federal
district court in Mississippi on a products lability cause
of action which arose in Kansas. The suit was brought
after the Kansas statute of limitations had expired, but be-
fore the expiration of the Mississippi statute. The Mis-
sissippi court transferred the action under 28 U.S. C.
§ 1404(a) to a Kansas federal court. The Kansas court
refused to apply the Mississippi statute of limitations and

dismissed.

On appeal, the Tenth Cireuit reversed holding that a
Mississippi court would follow its long-adhered to rule
that in a proceeding in a Mississippi court, Mississippi
procedural law, including the six year statute of limita-
tions, governs. 611 F.2d at 794. The court admitted that

perhaps, there was a ‘‘degree of incongruity’’ to the result,

but cautioned as follows:

12

[Ijt is axiomatie that hard cases make bad law. We
think it preferable to adhere to accepted legal prin-
ciples rather than to strive to achieve, at the expense
of those principles, a result which might appear to
some as being more fair and just than the alternative.

ld.

A similar result was reached by the United States
Court of Appeals for the Eleventh Cireuit in WeViear v.
Standard Insulations, Inc., 824 F.2d 920 (11th Cir. 1987).
There the court held, contrary to the Third Cireuit, that
the longer Mississippi statute would apply following trans-
fer under 28 U.S.C. § 1404(a) to a federal court in Florida.

The Fourth Cireuit also recently adopted this posi-
tion in a carefully reasoned opinion, Goud v. Celotex Corp.,
831 F.2d 508 (4th Cir. 1987). In Goad, the Fourth Circuit
rejected a constitutional due process challenge to the lex
fori rule. As in this case, the only contact the litigation
in Goad had with the initial forum was that the defendant
conducted business in the state. The court held that this
‘‘contact’’ satisfied due provess, noting the well-estab-
lished distinction between the constitutionality of the ap-
plication of substantive and procedural law. Jd. at 510-11.
In addition, the Fourth Cireuit held that ‘‘the heart of
due process’’ was not violated since there was no unfair
surprise to the defendant which conducted business in the
state and had every reason to expect the longer statute of
limitations could be applied to it. Jd. at 513.

Thus, the Third Cireuit’s ruling stands in conflict
with the decisions of the Fourth, Fifth, Tenth and Elev-
enth Circuits. A conflict of this magnitude creates dra-
matic problems within the federal court system. These

problems are not confined to cases initially filed in Mis-

13

sippi, but involve cases filed in any state where plaintiffs
enjoy the benefit of an extended statute of limitations.

lor example, if a case identical to the instant case is
filed in a Mississippi federal court or other federal court
of a state with a longer statute of limitations and remains
there, the longer statute of limitations will be applied and
the action will proceed. Sce, e.g., Cowan 1, 694 F.2d at
107. Similarly, if a motion to transfer pursuant to 28
U.S.C. § 1404(a) is granted, and the action is transferred
to the Fourth, Fifth, Tenth or Eleventh Circuits, the
longer statute will apply and the action will proceed. See,
e.g., Goad, 831 F.2d. at 513. However, if the case is trans-
ferred to the Third Circuit, the longer statute will not

apply and the case will be dismissed.

Accordingly, the conflict among the circuits creates
the possibility of completely different results in the iden-
tical cases instituted in the identical court. For this reason

alone, certiorari should be granted.

II.

THE THIRD CIRCUIT’S RULING CONCERNING
THE CONSTITUTIONALITY OF A FORUM
COURT’S APPLICATION OF ITS OWN
PROCEDURAL LAW IMPROPERLY CONFLICTS
WITH THE DECISIONS OF THIS COURT.

A.

The Third Circuit’s Ruling Conflicts
With This Court’s Decisions
Upholding The Rule Of Lex Fori.
It is not surprising that four of the five circuit courts
to rule on this issue have reached the result they did.

For hundreds of years, dating back to medieval times,

seeieeiiise aa

14

courts have traditionally relied upon forum law to deal
with the procedural aspeets of the litigation. This appli-
‘ation of forum procedural law by a forum state court
has been held to be constitutional regardless of where the

cause of action arose.

As early as 1839, this Court stated that it was ‘‘ well
settled’? that statutes of limitation were a matter of rem-
edy ‘‘and consequently that the lex fori must prevail.”’
M’Elmoyle v. Cohen, 38 U.S. (13 Pet.) 312, 327 (1839).
The Court reasoned that a statute of limitations:

is a thing of policy, growing out of the experience of
its necessity; and the time after which suits or actions
shall be barred, has been, from a remote antiquity,
fixed by every nation, in virtue of that sovereignty by
which it exercises its legislation for all persons and
property within its jurisdiction.

Id.

Although the due process clause of the fourteenth
amendment, unlike article [V’s full faith and credit clause,
Was not a part of the Constitution at the time of M’El-
moyle, the rule has been consistently followed since the
adoption of the amendment. For example, in Great West-
ern Telephone Co. v. Purdy, 162 U.S. 329 (1896), the Court,
citing W’Elmoyle, stated:

The limitation of actions is governed by the lex fori,
and is controlled by the legislation of the state in
which the action is brought, as construed by the high-
est court of that state, even if the legislative act or
the judicial construction differs from that prevailing
in other jurisdictions.

Id. at 339.

15

In Home Insurance Co. v. Dick, 281 U.S. 397 (1930),
this Court again noted that ‘‘in the absence of a contrac-
tual provision, the local statute of limitations may be ap-
plied to a right created in the other jurisdiction even
where the remedy in the latter is barred.’? Jd. at 409.
Likewise, in Order of United Commercial Travelers of
America v. Wolfe, 331 U.S. 586 (1947), the Court recoe-
nized that the rule was ‘‘well established and constitu-
tional.’’ 7d. at 607-09. The Court reiterated this point
in Wells v. Simonds Abrasive Co., 364 U.S. 514 (1953),
where it noted its approval of the ‘‘well-established rule
that the forum state is permitted to apply its own period
of limitations.’’ Jd. at 516-17.

The basis for the Court’s reeognition of the eonstitu-
tionality of the fraditional lex fori rule was expressed in
Chase Securtties Corp. v. Donaldson, 325 U.S. 304 (1945).
There the Court held that statutes of limitation are tradi-
tionally matters of forum state policy established by the
legislature after weighing the state’s interest in eliminat-
ing stale claims:

Statutes of Limitation find their justification in
necessity and convenience rather than logic. They
represent expedients, rather than principles. They
are practical and pragmatic devices to spare the courts
from litigation of stale claims, and the citizen from
being put to his defense after memories have faded,
witnesses have died or disappeared, and evidence has
been lost. They are by definition arbitrary, and their
operation does not discriminate between the just and
the unjust claim, or the voidable and unavoidable de-
lay. They have come into the law not throneh the
judicial process but through legislation. They repre-
sent a public policy about a privilege to litigate. Their

16

shelter has never been regarded as what now is ealled

a ‘‘fundamental’’ right or what used to be ealled a

‘natural’? right of the individual.

Id. at 314 (citation and footnote omitted).

The Third Cirenit’s position on this issue, expressed
in Ferens and this case, stands counter to this lone line
of decisions. Indeed, the Third Cirenit in its haste to sub-
jeet a court’s application of a forum’s statute of limita-
tions to constitutional analysis, failed to even discuss the
well established distinetion between procedural and sub-
stantive law. Instead, the court erroneously relied on two
eases, Allstate Insurance Co. v. Haque, 449 U.S. 302
(1981), and Tome Insurance Co. v. Dick, 281 U.S. 397
(1930), for the proposition that a particular state’s stat-
ute of limitations may not be applied constitutionally to a
defendant conducting business in the state where the cause

of action arose outside the state.

In taking this aberrational position, however, the
Third Cireuit failed to note that Mague and Dick do not
overrule or set aside this Court’s prior holdings regarding
the traditional lex fori rule. In fact, the eases explicitly
address only the constitutionality of the application of
substantive law, as distinguished from procedural law.’

. For example in Hague, the Court stated:

(Flor a state’s substantive law to be selected in a con-
stitutionally permissible manner, that state must have
a significant contact or a significant aggregation of
contacts, creating state interest, such that choice of its
laws in neither arbitrary nor fundamentally unfair.

449 U.S. at 313 (emphasis added). Moreover, in Dick, the
Court distinguished the case before it which involved an

(Continued on following page)

17

Therefore, the Third Circuit’s rejection of the traditional
rule is directly contrary to the position of this Court.

The Third Circuit’s Ruling Conflicts With This
Court’s Decisions Under The Full Faith And Clause
And The Due Process Clause.

The Third Cireuit’s ruling not only runs contrary to
this Court’s prior decisions on the rule of lex fori, but also
to the Court’s numerous decisions regarding the limita-
tions imposed by the full faith and credit clause and the
due process clause of the fourteenth amendment.

There is simply no authority to support the theory
that the full faith and eredit clause limits the ability of a
forum state to apply its own statute of limitations to a
‘ause of action arising in another state. To the contrary,
this Court has explicitly decided that ‘‘the Full Faith
and Credit Clause does not compel the forum state to use
the period of limitations of a foreign state.’’ Wells, supra,
345 U.S. at 517.

Similarly, the due process clause and its minimum
contacts analysis do not limit a forum’s application of
its own procedural law. The Court has explained that
the minimum contacts analysis embodies a concern for

(Continued from previous page)

attempt to apply Texas substantive law to a contractual
limitation on the period in which the parties could sue,
from a case in which the forum simply applied its pro-
cedural statute of limitations. 281 U.S. at 409-10. The court
stated that ‘‘in the absence of a contractual provision, the
local statute of limitations may be applied to a right created
in the other jurisdiction even where the remedy in the lat-
ter is barred.” Id. at 409.

1s

reasonableness and fairness to defendants. World-Wide
Volkswagen Corp. v. Woodson, 444 U.S. 286, 292-93 (1980).
A corporation purposefully availing itself of the privilege
to conduct business within a state has clear notice that it
is subject to suit in that state and to the application of
that state’s laws. Jd. at 298.

Indeed, this precise issue was addressed by the Court
in Perkins v. Benquet Consolidated Mining Co., 342 U.S.
437 (1952). In that case, a non-resident plaintiff sued a
foreign corporation in Ohio on a cause of action arising
from activities entirely distinct from the corporation’s
activities in Ohio. Having found that the authorized rep-
resentative of the corporation was physically present in
the state and permitted to accept service or receive notice
on the corporation’s behalf, the Court stated that ‘‘there
is no unfairness in subjecting that corporation to the
jurisdiction of the courts of that state ...’? ZTd. at 444.
The Court reasoned that if the corporation carries on,
in that state, ‘‘continuous and systematic corporate ac-
tivities ... those activities are enough to make it fair and
reasonable to subject that corporation to proceedings in
personam in that state ...’? 7d. at 445. With regard to
causes of action not arising out of a corporation’s activ-
ities in the forum state, the Court found ‘‘no requirement
of federal due process’? that prohibited the Ohio court
from exercising jurisdiction and applying its law. Jd. at
446.

Likewise in Haque, supra, this Court attached sig-
nificance to the fact that the corporation was ‘‘at all times
present and doing business’’ in the forum state. 449 U.S.
at 317. In that ease as well, the cause of action arose out-

19

side the forum state. Notwithstanding this fact, the Court
found that the application of the forum’s substantive law
was constitutional, infer alia, on the ground that the cor-
poration could ‘hardly claim unfamiliarity with the laws
of the host jurisdiction and surprise that the state’s courts
might apply forum law to litigation in which the company
is involved.’’ Jd. at 317-18. The Court reasoned that ap-
plication of the forum law was not arbitrary or unfair,
‘*particularly since the company was licensed to do busi-
ness in [the forum!, it must have known it might be sued
there, and that [the forum] courts would feel bound by
[forum] law.’’ Id. at 317-18 (quoting Clay v. Sun Insur-
ance Office Ltd., 363 U.S. 207, 221 (1960) (Black, J., dis-
senting) ).

Limitation statutes are designed to close the doors
of a state’s courts to untimely claims. This purpose is
not subverted by a forum state’s application of its own
limitation period to an action originated in its courts.
Mississippi has chosen to extend this period to six years
and make it applicable to all who conduct business in the
state? Whether the Third Cireuit approves or disapproves
vt the Mississippi poliey is irrelevant. The wisdom of

9 Mississippi's exercise of jurisdiction and its application of
its law is consistent with, and necessary to, its avowed
policy of treating authorized foreign corporations and do-
mestic corporations equivalently. See Miss. Code Ann.
§ 29-1-27. As stated in Poole v. Mississippi Publishers
Corp., 208 Miss. 364, 44 So. 2d 467 (1950): ‘All foreign
corporations doing business in Mississippi shall be subject
to suit here to the extent that corporations of the state
are, whether the cause of action accrued here or not, and
this statute indicates a general policy of equality and sim-
ilarity of treatment as between foreign and domestic cor-
porations’”’. 44 So. 2d at 473.

20

that policy is properly and necessarily reserved for the
Mississippi legislature. The point here is that, as repeat-
edly recognized by this Court, the Mississippi policy does
not violate the United States Constitution and therefore
is not subject to amendment or rejection by the Third
Circuit.

C.

The Third Circuit’s Ruling Conflicts
With This Court’s Decisions Regarding
The Purpose And Effect Of A Transfer

Under 28 U.S.C. § 1404(a).

While the Third Cireuit’s ruling purports to depend
upon a constitutional analysis outside the scope of Van
Dusen v. Barrack, supra, the import of the decision is
squarely contrary to the policy expressed in Van Dusen."

In Van Dusen, this Court laid out the principles gov-
erning the effect of a transfer under 28 U.S.C. § 1404(a)
on the choice of law. There the Court held that following
a transfer, the transferee court is ‘‘obligated to apply the
state law that would have been applied if there had been
no change of venue.’’ 376 U.S. at 639. In other words, the
transferee federal court is to sit as a federal court of the
transferor state and apply its law, imcluding its choice of
law rule. Jd. at 633, 642. The Court explained that ‘‘both
the history and purposes of § 1404(a) indicate that it

10 = =The Third Circut admitted that the application of Van
Dusen was “Straight-forward’” but erroneously concluded
that Hague controlled. ferens, 819 F.2d at 425. As dis-
cussed above, the court failed to recognize that Hague ad-
dressed the choice of substantive law only. Moreover, the
court failed to acknowledge the due process contacts pre-
sent in the case.

21

should be regarded as a federal judicial housekeeping
measure ... [designed] simply to authorize a change of
eourtrooms.’’? Id. at 636-637.

The Court’s ruling in Van Dusen concerning the ef-
fect of a transfer on the choice of law was based upon
an analysis of the purposes of § 1404(a) and the imper-
missible consequences which would result from a contrary
rule. 376 U.S. at 633-36. The Court recognized that
§ 1404(a) was enacted to promote convenience and justice.
376 U.S. at 616. If a change of law were to result from
-a transfer, these ends would be sacrificed and a motion to
transfer could be utilized as a motion to dismiss. More-
over, the judge exercising his diseretion upon a motion
to transfer might well decline to grant the transfer, de-
spite considerations of convenience, if the transfer would
prejudice the plaintiffs’ claim. Zd. at 636. Such a result
would impermissibly turn a remedial, judicial housekeep-
ing statute into a method ‘‘to defeat the advantages ac-
cruing to plaintiffs who have chosen a forum which al-
though it was inconvenient, was a proper venue.’’ 7d. at
634,

The Third Cireuit’s ruling at issue directly contra-
venes this analysis of the purpose and function of § 1404
(a). Under the Third Circuit’s decision, substantive law,
not convenience will be the determining factor in another
court’s decision whether to transfer a case to a federal
court within the Third Cireuit. Defendants will attempt
to utilize the rule to gain an advantageous change in law
and thereby defeat the benefits the plaintiffs were en-
titled to by their selection of the initial forum. Conveni-
ence and judicial eeonomy—the purposes of § 1404(a) ac-

22

eording to Van Dusen—will give way to consideration of
legal tactics.

In avoiding this ‘‘straight-forward’’ analysis laid out
in Van Dusen, the Third Circuit failed to recognize that
the primary case relied on by the Supreme Court as the
basis for the holding in Van Dusen was Headrick v. Atchi-
son T. & SFR. Co., 182 F.2d 305 (10th Cir. 1950). Van
Dusen, 876 U.S. at 631-33. The Supreme Court stated that
Headrick had ‘‘adopted and applied a general interpretive
principle which we belive faithfully reflects the purposes
underlying § 1404(a).’’ 376 U.S. at 631.

Headrick is factually almost identical to this case.
There the plaintiff, a Missouri citizen, filed suit in New
Mexico against a Kansas corporation doing business in
New Mexico for injuries received in California. The plain-
tiff frankly stated that he had chosen New Mexico because
only there would he ‘‘not be confronted with the defense of
the statute of limitations.’’ Headrick, 182 F.2d at 311. The
defendant moved to have the case dismissed, or in the al-
ternative, transferred to the federal district court in Cali-
fornia pursuant to 28 U.S.C. § 1404(a). The judge dis-
missed, reasoning that transfer would be futile because
the suit would be barred by the California statute of lim-
itations.

On appeal, the Tenth Ciremt in Headrick reversed.
It held that the district court erred in assuming the Cali-
fornia statute of limitations was applicable on transfer,
since the case would properly remain ‘‘a New Mexico case
still controlled by the law and policy of that state.’? Head-
rick, 182 F.2d at 310. The court further observed, in a

passage quoted with approval in Van Dusen, that the

23

plaintiff ‘‘had a legal right to select any forum where the
defendant was amenable to process ... [H]lad the case
been tried in the New Mexico state court, the procedural
laws of New Mexico including the statute of limitations
would be applicable ... [I]n removal cases, the federal
court must apply the state law and the state poliecy.”’
Van Dusen, 576 U.S. at 632 (quoting Headrick, 182 F.2d
at 309). :

The Court explicitly approved Headrick’s holding eon-
cerning the applicability of the transferor state’s statute
of limitations in the transferee court and saw no consti-
tutional due process problem in the state’s choice of law.
Yet the Third Cireuit’s ruling to the contrary does not
even cite Headrick, much less distinguish it or otherwise
suggest why the Court’s endorsement of it should not be

controlling.

Such a gap in the analysis is strong evidence of the
errors in the Third Cireuit’s ruling. That decision must
be overturned in light of its failure to follow the decisions
of this Court and its inability to withstand scrutiny in
light of the purposes of 28 U.S.C. § 1404(a).

D.

The Third Circuit’s Ruling Conflicts
With This Court’s Decisions Requiring
Uniformity Between Federal Courts And State
Courts Sitting In The Same State.

Because the Third Cireuit’s holding transforms 28
U.S.C. 6 1404(a) into a vehicle for affecting a change in

state law, rather than a change in courtrooms, the decision

eonflicts with the policies expressed in Erie R. Co. v.
Tompkins, 304 U.S. 64 (1938).

The Supreme Court has often summarized the Frie
policy as ‘‘the principle of uniformity within a state.’’
Klaxon Co. v. Stentor Electric Manufacturing Co., 313
U.S. 487, 496 (1941). The uniformity which Frie requires
is between federal courts and state courts sitting in the
same state. As explained in Guaranty Trust Co. v. York,
526 U.S. 99, 100 (1945), the ‘‘nub of the poliey that under-
lies Erie... is that for the same transaction the accident
of a suit by a non-resident litigant in a federal court
instead of in a state court a block away should not lead to

substantially different results.”’ Jd.

The Third Cireuit’s ruling jeopardizes this uniform-
ity. For example, if a case identical to the instant case
is filed in a Mississippi state court and remains there, the
Mississippi state court will apply the Mississippi statute
of limitations and allow the action to proceed. See Louisi-
ana and Mississipp! R. Transfer Co., supra, 159 Miss. at
667. If, however, as actually happened in this case, a non-
resident plaintiff brought the action in a Mississippi fed-
eral court and venue was transferred to a federal court
within the Third Cireuit, Mississippi law no longer applies

and the action will be dismissed.

This incongruous result is manifestly violative of the
Erie principle of uniformity between-a Mississippi state
court and a Mississippi federal court. The *‘accident of
diversity’? leads to a different result than that which would
have been attained if the action were brought in a state

court.

a, ee

29

Indeed, the Court recognized the implications of Erie
in reaching its decision in Van Dusen. There the court
concluded that ‘‘the accident of federal diversity juris-
diction [should] not enable a party to utilize a transfer to
achieve a result in federal court which could not have been
achieved in the courts of the State where the action was
filed.”? 376 U.S. at 688. Accordingly, the Court held that
a transfer under 28 U.S.C. § 1404(a) should be simply a
change in courtrooms and no more. The Third Cireuit’s
ruling ignores and contravenes this principle without ex-
planation or analysis. This Court should grant certiorari
-to prevent the Third Cireuit’s ruling from jeopardizing

the continued viability of 28 U.S.C. § 1404(a).

co)

CONCLUSION

For the foregoing reasons, petitioners respectfully
pray that the Court issue a writ of certiorari to review the
judgment of the Court of Appeals for the Third Cireuit.

Respectfully submitted,

Tuomas P. Preston

(Counsel of Reeord)

Wayne A. Mack, Jr.

Duane, Morris & HeckscHER
1500 One Franklin Plaza
Philadelphia, PA 19102
(215) 854-6237

Attorneys for Petitioners
March 11, 1988

la

APPENDIX

UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT

No. 87-1571

RICHARD KOONTZ and BARBARA ANN KOONTZ,
ADMINISTRATOR OF THE ESTATE OF
STEVEN KOONTZ, Deceased

Appellants

INTERNATIONAL HARVESTER COMPANY
Appellee

Appeal from the United States District Court
tor the Fastern District of Pennsylvania
(D.C. Civil Action No. 86-1542)

(Hon. Edward N, Cahn)

Submitted Under Third Cireuit Rule 12(6)
December 8, 1987

Before: GREENBERG, SCIRICA and HUNTER,

Circuit Judges

JUDGMENT ORDER

After consideration of all contentions raised by appel-
lants, it is

ADJUDGED AND ORDERED that the judgment of
the district court be and is hereby AFFIRMED. See

Ferens v. Deere & Co., 819 F.2d 423 (3d Cir, 1987).

2a

Costs taxed against appellants.

BY THE COURT,
Anthony J. Scirica
Cireuit Judge
Attest:
/s/ Sally Mrvos
Sally Mrvos, Clerk

Dee. 15, 1987

3a

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANTA

RICHARD KOONTZ, et al.

CIVIL ACTION
NO. 86-1542

Vv.

NAVISTAR INTERNATIONAL
TRANSPORTATION
CORPORATION

SS Se OO ee

ORDER
(Filed June 4, 1987)

AND NOW, this 3rd day of June, 1987, upon consid-
eration of the opinion of our Court of Appeals in Ferens

ww OF

28, 1987), IT IS ORDERED that plaintiffs’ motion for
relief from order of dismissal is DENIED.
BY THE COURT:

/s/ Edward N. Cahn,
Edward N. Cahn, J.

Entered: 6-4-87.

4u

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

RICHARD KOONTZ, et al.

CIVIL ACTION

)
)
v. )
) NO, 86-1342
)
)

INTERNATIONAL
HARVESTER COMPANY
ORDER
(Filed Apr. 50, 1986)

AND NOW, this 29th day of April, 1986, following a
telephone conference with the attorneys, IT IS ORDERED
that the within case is DISMISSED without prejudice.'

BY THE COURT:
/s/ Edward N. Cahn
Edward N. Cahn, J.

‘In a telephone conference held April 29, 1986, involving
the court and both counsel, the case of White v. Malone Prop-
erties, Inc., et al. No. 55,195 (Supreme Court of Mississippi)
was discussed. In that case the Supreme Court of Mississippi
decided that where a “claim arose factually wholly in another
state,” the statute of limitations of the other state would apply
even though the six year statute of limitations for tort actions in
Mississippi would allow the action if it arose in Mississippi.
Counsel agree that the White case controls the outcome of this
case which has been removed from the Northern District of
Mississippi to the Eastern District of Pennsylvania. Consequent-
ly, a dismissal without prejudice is in order.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385017_0733%3A1. Public record. Not legal advice.