Events and Property Venue

Events and Property Venue

Section 1391(b)(2) offers a second route to a proper venue: “a judicial district in which a substantial part of the events or omissions giving rise to the claim occurred, or a substantial part of property that is the subject of the action is situated.”¹ Residence venue asks who the defendants are and where each one lives. This alternative asks where the dispute took place, and it does not require any defendant to live in the district it identifies.² A plaintiff who cannot use the residence alternative may therefore still file where the story happened. An individual domiciled in Florida, for example, does not reside in Alabama for purposes of subsection (b)(1), so a plaintiff who sues that defendant in Alabama needs another basis for venue, such as events in the district.³ Personal jurisdiction over the defendant remains a separate requirement, as the opening section of this chapter showed.

Two questions organize what follows. The first asks which events and omissions count and where they occurred. The second asks how large a part of those events a district must hold before its part is “substantial.” The first question concerns location and the second concerns degree, so the second produces the closer calls.

Events and Omissions

The phrase “events or omissions” replaced a formula that gave every claim a single home. Before 1990 the statute authorized venue in “the judicial district . . . in which the claim arose,” and courts devised a plethora of tests to decide which one district that was. Congress rewrote the provision because the old language “led to wasteful litigation whenever several different forums were involved in the transaction leading up to the dispute.”⁴

The rewritten text can be satisfied by several districts at once, and courts read it that way. Almost all courts hold that venue may be proper in more than one district, and in trademark cases they have found venue in each district where infringement is properly alleged to have occurred.⁵ The purpose of the provision explains the result. It is to assure a relation between the events being litigated and the place where the case is tried, and that relation exists in every district where significant events took place.⁶ Evidence and witnesses tend to be located where those events occurred, so each such district is a sensible forum.⁷ A products liability suit would likely support venue where the product was made and where it caused injury, and a trademark suit would presumably support venue where the decision to market the infringing product was made and where the product was sold (see, e.g., Pilates, Inc. v. Pilates Institute, Inc.).⁸

Many cases are simple because everything the defendant did happened in one place. When all of a defendant's activity in the case occurred in California, the claim against that defendant is properly venued in a district in California.⁹ An accident works the same way. If a plaintiff injured in Manhattan sues a defendant who lives in New Jersey, the Southern District of New York is proper under subsection (2) because the accident occurred there, and the District of New Jersey is proper under subsection (1). The Western District of New York satisfies neither subsection and is not a proper venue.¹⁰ Move the defendant's home to the Northern District of New York, and that district qualifies under subsection (1) while the Southern District still qualifies under subsection (2).¹¹ Sometimes no one contests where the events occurred. In Black Lives Matter, D.C. v. Trump, no party disputed that the events giving rise to the plaintiffs' claims took place in or around Lafayette Square, so the District of Columbia qualified.¹²

Uffner v. La Reunion Francaise shows the sequence approach at work. A Virgin Islands resident insured his yacht, La Mer, and the yacht caught fire and sank in Puerto Rican waters. He then demanded payment through his insurance broker, and the insurers denied the claim as not covered by the policy.¹³ The sinking was the only event in the sequence that occurred in Puerto Rico, yet the First Circuit held venue proper there. The court looked “not to a single ‘triggering event’ prompting the action, but to the entire sequence of events underlying the claim.”¹⁴

That left the question whether the one Puerto Rico event was substantial. Nobody disputed the sinking, but an event need not be a point of dispute to be a substantial event giving rise to the claim. The owner alleged that the loss was covered and that payment was wrongfully denied, and the damages he sought included recovery for the loss. The court therefore held that, in a suit against an insurer to recover for losses from a vessel casualty, the place where the loss occurred is substantial for venue purposes.¹⁵ Substantiality is the limiting principle that keeps this reading from reaching every district where some minor step occurred, and the next subsection takes up how courts apply it.

Conduct that starts in one district may also take place in another. In Verizon Online Services, Inc. v. Ralsky, the defendants sent millions of spam messages to and through Verizon's e-mail servers in Virginia. Their conduct may have originated in Michigan, but under Virginia's long-arm statute the transmissions were a “use” of the Virginia servers and so an act within the Commonwealth. A substantial part of the defendants' actions, and a substantial part of the property harmed, therefore lay in Virginia, and venue was proper there under subsection (b)(2).¹⁶

Omissions belong in the statute because many claims rest on what a defendant failed to do. An omission takes place where the defendant was to have acted, and the contract dispute below turns on that point. It also shows residence venue and events venue meeting in a single district.

The Eastern District of Virginia is proper twice over: Lee resides there, and Lee's omission to design the building took place there. The Western District of Virginia fails both tests, because Lee does not reside there and none of the relevant events happened there.¹⁷

The Middle District of Tennessee turns on what the contract required. If Lee was to render services at the building site during construction, Lee omitted to render them there, and venue in that district may be proper. If Lee was solely to provide design services in Virginia, the building's location does not make Tennessee a place where anything was left undone.¹⁸ The result therefore depends on one fact, where Lee was supposed to perform, which is the inquiry into the sequence of events that Uffner requires.

The Ohio negotiations raise a harder question: whether a step in forming a contract is among the events giving rise to a claim for breaching it. Arguably the claim arose from Lee's failure to perform and not from the formation of the agreement, which would point to Virginia alone. Yet venue provisions exist to site the litigation in a place with a substantial connection to the case, so a court may take the more flexible view of the statutory phrase and place venue where the parties negotiated.¹⁹ Under the pre-1990 formula a court would have had to choose between those readings, because only one district could be where the claim arose; the current text lets it credit both.²⁰

The statute's second clause applies the same logic to a dispute about a thing. The statute joins the two clauses with “or,” so a district in which a substantial part of the property that is the subject of the action is situated qualifies on that ground alone, with no showing about events.²¹ The court in Verizon counted, alongside the defendants' conduct, the property harmed in Virginia, which was Verizon's servers.²²

The ranch is what the dispute is about, so the District of Wyoming qualifies on the property clause alone. The residence alternative points elsewhere, to Castellano's home district in Texas. Property that merely belongs to a party does not qualify, because the clause reaches only property that is the subject of the action. A bank account Castellano keeps in another district is not what a title dispute concerns, so its location adds nothing.

Residence venue and events venue stand side by side, and the plaintiff may file in any district that satisfies either one.²³ Even a single qualifying district under subsection (b)(1) or (b)(2) shuts off the fallback in subsection (b)(3), which applies only if there is no district in which the action may otherwise be brought under the section.²⁴ Venue in any of these districts still leaves personal jurisdiction as a separate requirement, so a plaintiff who finds a good events district must still ask whether the defendant has the necessary contacts with that district's state.

Substantial Connection

The word “substantial” in § 1391(b)(2) decides how much connection a chosen district must have, because the provision reaches only a district in which “a substantial part of the events or omissions giving rise to the claim occurred.”²⁶ The sequence approach makes the adjective necessary. Almost every claim has a long chain of links behind it: where the plaintiff lives, where the goods were made, where a contract was signed, where a traveler changed buses. If any one link sufficed, a plaintiff could find a link in nearly any district, and venue would stop protecting defendants from being “haled into a remote district having no real relationship to the dispute.”²⁷ The justification for events venue also shrinks as the connection thins. A district that holds a substantial part of the events is a sensible forum because the evidence and witnesses are likely to be there, and an incidental link carries no such expectation.²⁸ The substantiality requirement is therefore the limiting principle of the provision.²⁹

A test set too tightly fails in the other direction. A standard that demands too much revives the hunt for the one district where the claim arose, which Congress ended in 1990 after the old language produced wasteful litigation.³⁰ Even the Eighth Circuit, whose approach is the narrower of the two described below, acknowledged that the present statute was intended to expand the number of venues available to a plaintiff.³¹ Courts reconcile these pressures in two ways. One line of decisions looks only at what the defendant did, and the other takes a more holistic view of the acts underlying the claim.³²

The narrower approach comes from Woodke v. Dahm. Woodke, who lived in Iowa, sold semi-trailers under a registered trademark and sued under the Lanham Act for reverse passing off. The defendants had run an advertisement in a southeastern trade paper that was not circulated in Iowa, showing one of his trailers with his mark obscured and identifying it as a different product. Woodke had no evidence of advertising or sales in Iowa, and he argued that venue lay there because the passing off had its ultimate effect where he lived.³³ The Eighth Circuit rejected the argument. It reasoned that a central purpose of venue is to protect the defendant from a remote district, and its approach looks only at the defendant's acts.³⁴ Woodke's other Iowa links fared no better. He asserted that a defendant manufactured the trailers in the forum and that a dealership agreement was executed in Iowa. The court found those connections insubstantial: manufacturing was a necessary event in a causal sense, but it was not itself wrongful, so it was not an event giving rise to the claim.³⁵

The broader approach appears in Uffner, the yacht case from the previous subsection. The First Circuit declined to adopt the Eighth Circuit's approach, which looks only at the defendant's acts, and joined the courts that take a more holistic view.³⁶ Under that view the sinking, a lawful event that nobody disputed, was substantial because it belonged to the sequence behind the claim and the owner sought damages for it.³⁷ The court also considered fairness to the insurers. They had not alleged that suit in Puerto Rico would give the owner a tactical advantage or prejudice their own case, the policy contained no forum-selection clause, and the insurers conceded that they would not object to litigating in the Virgin Islands.³⁸

The two decisions treat a lawful, undisputed event in the forum in opposite ways, and the difference lies in the question each court asks. Woodke asks whether the event was a wrongful act of the defendant, so the manufacturing, though a causal necessity, dropped out. Uffner asks whether the event belongs to the historical sequence behind the claim and connects to the relief sought, so the sinking stayed in. A student who does not know which approach a circuit follows should run both and report whether they agree, because the facts of a given problem will often produce the same answer under each.

A narrow standard bites hardest when the only in-district event is incidental. In Thompson v. Greyhound Lines, Inc., a passenger bought a ticket to Tunica, Mississippi, changed buses in the Southern District of Alabama, and slept through his connection in Jackson, Mississippi. He sued in Alabama. The court held that only events directly giving rise to a claim are relevant under subsection (b)(2), and the bus change was not one of them: the complaint did not allege that the transfer breached any duty, so merely passing through the district was not part of the events giving rise to the claim, much less a substantial part.³⁹ Because the Southern District of Mississippi, where the connection was missed, was a proper venue, the fallback in subsection (b)(3) was unavailable, and the court transferred the case there rather than dismissing it.⁴⁰

Fteja v. Facebook, Inc. shows what a missing connection looks like. The plaintiff asserted that “[a]ll of the facts occurred here in New York State,” but he had not alleged that any harm occurred in the district where he sued as opposed to Staten Island, and he had not pointed to any operative fact of any kind there. The court said that left the district possibly improper, since it could hardly be called a district in which a substantial part of the events or omissions giving rise to the claim occurred, and that the dearth of any connection strongly favored transferring the action.⁴¹

Harm that lands in the forum can count, as Verizon shows. There the defendants' messages went to and through servers in Virginia, so a substantial part of the conduct and of the property harmed lay in that state.⁴² The harmed property sat in the forum and the conduct was directed into it. In Woodke, by contrast, the only forum effect the plaintiff identified was his own loss at home.

Steps three and four carry the weight, because they are where the two lines of authority part company. A plaintiff whose chosen district fails the test often has another proper district to move to, as the Mississippi transfer in Thompson shows. Only when no district satisfies subsection (b)(1) or (b)(2) does the fallback apply, and the next section turns to it.⁴³