Improper Venue Defined

Improper Venue and Cure

Improper Venue Defined

Rule 12(b)(3) gives a defendant a way to attack the plaintiff’s choice of courthouse: the defense of “improper venue.”¹ The defense belongs to Rule 12(b), which requires every defense to a claim for relief to be asserted in the responsive pleading if one is required, but lets a party assert the listed defenses by motion instead.² A defense available by motion before the defendant answers is also a defense the defendant can lose by mishandling that motion, and later parts of this chapter show how.

Venue is a statutory question about where a case may be heard, and it arises only after the court’s power over the dispute is settled. Subject-matter jurisdiction asks whether the federal courts may decide this kind of dispute at all; venue assumes the answer is yes and asks which federal district is the proper place. In most cases the purpose of venue is to protect the defendant against the risk that the plaintiff will select an unfair or inconvenient place of trial.³ “Improper venue” is therefore a technical label: it means that the district where the plaintiff filed fails the governing venue statute. A district the defendant would merely prefer to avoid does not qualify, a boundary that matters most for forum-selection clauses and convenience, both treated below.

Treating venue as a statutory requirement raises two questions that organize the chapter. The first is preservation. A defendant can lose the objection through silence: in one appeal, the court declined to decide whether a district judge may ever raise improper venue on his own motion, because the defendants had waived the objection.⁴ The second is cure. When the defect is genuine, the court must choose between dismissing the case and sending it to a proper district, and in practice it usually sends it. Both questions depend on a prior one, when a district is the wrong one, and this unit answers it twice: first for cases filed originally in federal court, then for cases removed from state court.

What Makes Venue Improper

Rule 12(b)(3) lets a defendant move to dismiss for “improper venue,”⁵ and 28 U.S.C. § 1406(a) directs a court in which a case is filed “laying venue in the wrong division or district” to dismiss it or, “if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.”⁶ Both provisions share one trigger. As Atlantic Marine Construction Co. v. United States District Court for the Western District of Texas explains, they authorize dismissal only when venue is “wrong” or “improper” in the forum where the plaintiff filed, and that question is generally governed by 28 U.S.C. § 1391.⁷ The defendant’s objection therefore succeeds only when the filing district fails the statute that defines the proper districts.

Section 1391(b) defines those districts in three categories, which this chapter treats as shorthand because the full analysis is taught separately. A civil action may be brought in:

1. a judicial district where any defendant resides, if all defendants reside in the state where that district sits;
2. a judicial district where a substantial part of the events or omissions giving rise to the claim occurred, or where a substantial part of the property that is the subject of the action is situated; or
3. if no district qualifies under the first two, any judicial district in which any defendant is subject to the court’s personal jurisdiction for the action.⁸

The statute applies “except as otherwise provided by law,” so a special venue provision can displace it. Patent infringement is the standard example: 28 U.S.C. § 1400(b) restricts those suits to the district where the defendant resides or where she committed acts of infringement and has a regular and established place of business. Copyright suits, interpleader actions, and actions against federal officials have special provisions of their own.⁹ The complete test asks whether the filing district satisfies § 1391(b) or, where one exists, the special provision that governs the claim.

When venue is challenged, the court asks only whether the case falls within one of the categories. If it does, venue is proper; if it does not, venue is improper and the case must be dismissed or transferred under § 1406(a).¹⁰ The third category supplies a guarantee that does real work below, when a contract names a state court. Because it reaches any district with personal jurisdiction over a defendant when no other district fits, venue will always lie in some federal court whenever a federal court has personal jurisdiction over the defendant.¹¹

The categories decide real motions. In Thompson v. Greyhound Lines, Inc., a passenger bought a one-way ticket in Pensacola to Tunica, Mississippi. A Greyhound bus took him to Mobile, Alabama, where Greyhound personnel directed him onto a Colonial Trailways bus whose driver announced that it was going only to Jackson, Mississippi, and would then return to Mobile.¹² The passenger sued Greyhound, Colonial Trailways, and the driver in the Southern District of Alabama. The driver was domiciled in Florida, so the defendants were not all residents of Alabama and the first category failed. The only event in Alabama was the change of buses, and the claims rested on the failure to carry the passenger to Tunica, so the second category failed too: passing through a district is not a substantial part of the events giving rise to a claim. The fallback was closed because a substantial part of the events occurred in the Southern District of Mississippi, where Greyhound conceded that venue was proper, and the third category applies only when no other district qualifies. The court held venue improper in Alabama and transferred the case to Mississippi instead of dismissing it, a choice taken up later in this chapter.

Venue is also a different question from personal jurisdiction, and answers go wrong when the two blur. Personal jurisdiction concerns the court’s power to adjudicate a claim against this defendant; venue concerns the litigant’s convenience in the place where that power is exercised. The Supreme Court has described that difference between the court’s power and the litigant’s convenience as historic in the federal courts.¹³ The Ninth Circuit applied the distinction in Action Embroidery Corp. v. Atlantic Embroidery, Inc., reversing a dismissal for lack of personal jurisdiction that the district court had rested on the ground that venue was improper. The court explained that a defendant who is subject to personal jurisdiction but faces improper venue may move to dismiss or transfer under § 1406(a), while a defendant for whom venue is proper but inconvenient may move to change venue under § 1404(a).¹⁴

The two objections can coexist and still remain distinct. Suppose an Arizona plaintiff sues a New Mexico defendant in the District of Arizona over an accident in New Mexico. One argument says that the Arizona court lacks power over a defendant who has never been there. A second says that venue is improper, because no defendant resides in Arizona and no event occurred there, so the District of New Mexico is the only proper federal venue.¹⁵ Each argument faces its own test, and whether a court that lacks personal jurisdiction may still transfer the case is a separate question taken up later.

A contract can also point to a forum without making venue improper. Atlantic Marine Construction Co., a Virginia corporation, subcontracted work on a construction project to J-Crew Management, Inc., a Texas corporation, under a subcontract providing that all disputes would be litigated in Virginia. J-Crew sued in the Western District of Texas. Atlantic Marine moved to dismiss, arguing that the clause made venue “wrong” under § 1406(a) and “improper” under Rule 12(b)(3), and alternatively moved to transfer the case to the Eastern District of Virginia under § 1404(a). The district court denied both motions.¹⁶ The Supreme Court rejected the dismissal theory. Section 1406(a) and Rule 12(b)(3) allow dismissal only when venue is “wrong” or “improper,” and whether it is depends exclusively on whether the court where the case was brought satisfies the federal venue laws, which say nothing about a forum-selection clause.¹⁷ A case filed in a district that falls within § 1391 therefore may not be dismissed under § 1406(a) or Rule 12(b)(3), whatever the contract says.¹⁸

Two structural points support that result. First, if a clause could make a district wrong, a clause naming a state or foreign court would make every federal district wrong, and some plaintiffs would have no federal venue even though a federal court has personal jurisdiction over the defendant. That outcome would not comport with a statute designed so that venue will always exist in some federal court.¹⁹ Second, if a clause rendered every other federal district “wrong,” a defendant could always obtain automatic dismissal or transfer under § 1406(a) and would have no reason to resort to § 1404(a).²⁰ The proper way to enforce a clause within the federal system is therefore a motion to transfer, not a motion to dismiss for improper venue.²¹

The same line separates improper venue from inconvenient venue. A district that satisfies § 1391(b) remains a proper place for the case even when the witnesses, documents, or parties sit nearer another district. Section 1404(a) addresses that complaint: “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.” The motion calls on the court to weigh case-specific factors, and a forum-selection clause is a significant factor in that weighing.²² Which motion a defendant brings depends on whether the filing district is proper:

	Venue improper (wrong district)	Venue proper (right district)
Transfer	28 U.S.C. § 1406	28 U.S.C. § 1404
Dismissal	28 U.S.C. § 1406 and Rule 12(b)(3)	Forum non conveniens (common-law doctrine)

A defendant who argues only convenience or a contractual preference therefore gets no relief from Rule 12(b)(3) or § 1406(a).²³

The first step already points ahead: § 1391 does not govern an action removed from state court, the subject of the next subsection.²⁴

Removed Actions

Every venue analysis begins with a fork: either the plaintiff filed the case originally in federal court, or the plaintiff filed in state court and the defendant removed it, moving the pending case into federal court. Section 1391 governs only the first branch. For a removed action, the proper venue is “the district and division embracing the place where such action is pending” in state court, a rule that comes from 28 U.S.C. § 1441(a).²⁶ The venue chapter now says the same thing about itself: 28 U.S.C. § 1390(c) provides that the chapter “shall not determine the district court to which a civil action pending in a State court may be removed.”²⁷ A § 1391 analysis of a removed case therefore uses the wrong tool. Section 1441(a) names one district, the one covering the state courthouse where the case sat, and it gives neither side a choice among others.

The Supreme Court reached the same result in Polizzi v. Cowles Magazines. Section 1391 restricts where an action may be “brought” and where a corporation may be “sued,” but a removed action was brought, and the defendant sued, in state court; the federal court receives the case by removal, not by the plaintiff’s choice of a federal forum.²⁸ Structure explains the rule. The venue statute for original filings checks the plaintiff’s selection of a district. On removal no one selects a district: the plaintiff chose a state court, and § 1441(a) assigns the federal district that embraces it. Applying § 1391 on top of that assignment would ask the court to evaluate a choice no litigant made, and it could contradict the statute that already placed the case.

On a motion, the consequence is mechanical. In M.P. Paul v. International Precious Metals Corp., the court held that venue in a removed action was governed by § 1441(a) rather than § 1391, found venue proper, and turned to the pending motion to transfer under § 1404(a).²⁹ Expect that sequence on an exam. A removed defendant’s argument that venue is improper ends under § 1441(a), and what remains is an argument about convenience, which § 1404(a) permits a court to weigh when it may transfer a case “for the convenience of parties and witnesses.”³⁰

The two outcomes differ only in how the case reached federal court, which is why the first question in any venue problem is which route the case took.

The same absence of choice answers a second question: whether removing a case gives up a venue objection. In Lambert v. Kysar, the defendants removed to the federal district court in Massachusetts and said in the removal petition that venue there was proper under § 1391. The district court later dismissed because the contract required suit in a Washington state court, and the plaintiff argued that the removal, and that statement, had waived the objection.³⁵ The First Circuit rejected both arguments. The defendants had raised venue in the state court action and renewed the objection in their first pleading after removal, and filing a removal petition in a diversity action, without more, does not waive a venue objection, because removal must go to the district where the state suit is pending and no choice is possible.³⁶ Waiver requires a voluntary choice, and a removing defendant makes none as to the district: it accepts federal court in general but picks no particular district. The statement about § 1391 changed nothing either, since the venue of a removed action is governed by § 1441(a) and not by § 1391.³⁷

Lambert needs two qualifications. First, courts have frequently treated removal to a proper forum under § 1441(a) as curing any defect in the original venue of the removed action under § 1391, which is one more reason a removed defendant’s improper-venue motion built on § 1391 goes nowhere.³⁸ Second, Lambert involved a dismissal resting on a forum-selection clause, a ground the discussion of Atlantic Marine above shows is unavailable under § 1406(a) and Rule 12(b)(3), because a clause is enforced through a § 1404(a) transfer motion and does not make venue improper. The lasting point from Lambert is the waiver holding, and even that holding assumes the defendant raised the objection at the earliest opportunity, the timing question taken up in the next part of this chapter.