Concept
Improper Versus Inconvenient
Improper venue: objection and cure
Improper Versus Inconvenient
Rule 12(b)(3) lets a defendant move to dismiss for “improper venue,”1 but the phrase is a term of art: it means that the district where the plaintiff sued fails the federal venue statutes. Defendants and exam writers regularly attach it to two other grievances. A contract may name another court as the place for disputes, or the witnesses and documents may sit far from the filing district. Federal law treats neither grievance as improper venue, and a student who merges them will reach for the wrong motion and the wrong statute.
Two statutes divide the field by asking whether the filing district is a correct one. Section 1406 governs a case filed in the wrong division or district. It authorizes the court to dismiss the case or, if the interest of justice favors that course, to transfer it, and Rule 12(b)(3) supplies the motion for dismissal. Section 1404(a) governs a case filed in a proper venue. It allows transfer to another district for the convenience of parties and witnesses and in the interest of justice. A court may also dismiss a properly venued case in favor of a more suitable forum under the common law doctrine of forum non conveniens.2
One question sorts every problem of this kind: is venue wrong under § 1391, or proper but less suitable? A court tests the filing district against § 1391(b) or any special venue statute governing the claim, and, when the case arrived by removal from state court, against § 1441(a), which fixes the district in place of § 1391. If the district fails the test, venue is improper, and the dismiss-or-transfer analysis of the preceding sections applies. If it passes, venue is proper however strongly a contract or a convenience argument favors another courthouse, and the defendant’s route runs through § 1404(a) or forum non conveniens. The classification also controls what follows a transfer. As the previous section showed, a § 1406(a) transfer brings the transferee court’s law, while a § 1404(a) convenience transfer carries the transferor’s law along.
Two look-alikes account for most of the mistakes. The first is the forum-selection clause, a contract term that names a different court and so appears to declare the filing district wrong. The second is the ordinary convenience transfer from a district that satisfies the venue statute. Each has its own subsection below.
Forum-Selection Clauses
A contract that names another court seems at first to supply the ground for a Rule 12(b)(3) motion to dismiss for “improper venue,”3 since the plaintiff promised to sue elsewhere and so appears to have chosen the wrong courthouse. Atlantic Marine Construction Co. v. United States District Court for the Western District of Texas rejected that reasoning. The subcontract there required that disputes be litigated in the Circuit Court for the City of Norfolk, Virginia, or the United States District Court for the Eastern District of Virginia, Norfolk Division. The Texas subcontractor nevertheless sued in the Western District of Texas, and the Virginia contractor moved to dismiss under § 1406(a) and Rule 12(b)(3).4 The Court held that a clause of this kind is enforced by a motion to transfer under § 1404(a), and that a motion to dismiss under § 1406(a) or Rule 12(b)(3) is the wrong vehicle.5 The holding changes the vehicle, the weights, and the governing law, but it leaves untouched the diagnosis of what makes venue improper.
Venue is “wrong” or “improper” only when the district where the case was brought fails the federal venue statutes, and those statutes say nothing about forum-selection clauses. Whether the parties signed a contract containing such a clause has no bearing on whether the case falls into one of the § 1391(b) categories, so a case filed in a district that satisfies § 1391 may not be dismissed under § 1406(a) or Rule 12(b)(3).6 The structure of the venue provisions points the same way. Congress intended venue to lie in some federal court whenever a federal court has personal jurisdiction over the defendant, so a private contract cannot strip every federal district of venue.7
The neighboring statute supplies a second reason. If a clause made every other federal district wrong, a defendant could always demand dismissal or transfer under § 1406(a), and the holding of Stewart Organization, Inc. v. Ricoh Corp. would shrink to the rare case in which a defendant inexplicably neglects to make that motion.8 Stewart involved a contract naming Manhattan, and the Court held that § 1404(a), not state law, governs whether to honor the clause; the clause is a significant factor that figures centrally in the district court’s calculus.9 A footnote in Stewart recorded that the parties did not dispute the denial of the motion to dismiss for improper venue, because the defendant apparently did business in the Northern District of Alabama and § 1391 made venue proper there.10
Section 1404(a) fits a clause that names a federal district because its text asks the question the clause answers. It authorizes transfer for the convenience of parties and witnesses and in the interest of justice. It does not require the original forum to be wrong. And it permits transfer to any district where the case might have been brought or to any district to which the parties have agreed by contract or stipulation.11 Atlantic Marine goes beyond Stewart’s description of the clause as one significant factor. It treats the clause as the parties’ agreement about the most proper forum and gives it controlling weight in all but the most exceptional cases.12
An exam problem shows how the two motions sort. Mead sues Dixie Corporation over a defamatory statement made by a Dixie officer, and he files in the Eastern District of Pennsylvania, where the statement was made, so venue rests on § 1391(b)(2). His employment contract, however, required all suits arising from the employment to be filed in the District of Maryland.13 A dismissal for improper venue would be an awkward ruling, because the claim arose from events in the district Mead chose. Atlantic Marine resolves the puzzle: the court honors the clause by transferring the case to Maryland under § 1404(a).14 Dixie’s Rule 12(b)(3) motion fails and its § 1404(a) motion succeeds, and both results follow from one fact. The clause leaves the Pennsylvania district’s status under § 1391 exactly where it was.
A clause that names only a state or foreign court presents a problem that § 1404(a) cannot solve, because that statute moves cases only within the federal system.15 Section 1404(a) codifies the doctrine of forum non conveniens, under which a court declines a case because another forum is the better place for it, for the subset of cases in which the transferee forum is another federal court. In those cases Congress replaced the traditional remedy of outright dismissal with transfer.16 For cases that call for a nonfederal forum, the residual doctrine of forum non conveniens applies, and it is the way to enforce the clause.17 Rule 12(b)(3) cannot do this work, because if venue is proper under the federal venue rules, “it does not matter for the purpose of Rule 12(b)(3) whether the forum-selection clause points to a federal or a nonfederal forum.”18 The two kinds of clause are evaluated the same way on the merits, because § 1404(a) and the doctrine it derives from use the same balancing-of-interests standard.19 Since the clause in Atlantic Marine named both a Virginia state court and a Virginia federal court, the defendant had both routes open: transfer to the federal court, or a forum non conveniens dismissal if it wanted the state court to hear the case.20 A federal court cannot transfer a case to a foreign court, so a clause naming one ends in dismissal, and that dismissal rests on forum non conveniens while the clause leaves the venue label untouched.
Mead’s case and the distributor’s case meet at one principle. The clause is irrelevant to whether venue is improper, so it cannot turn a proper district into a wrong one or rescue a wrong one. The usual exam error is to announce that venue is improper because the contract points elsewhere. A correct answer begins with § 1391 or the special venue statute that governs the claim, and it turns to the clause only after the filing district passes that test.
When a valid clause supports the transfer motion, the court applies § 1404(a) differently than it would in an ordinary convenience transfer. The clause “represents the parties’ agreement as to the most proper forum,” so the court adjusts its usual analysis in three ways:21
- The plaintiff’s choice of forum merits no weight, and the plaintiff, as the party defying the clause, bears the burden of showing that transfer to the bargained-for forum is unwarranted.22
- The court may not consider arguments about the parties’ private interests and must treat those factors as favoring the preselected forum, so that only public-interest factors remain.23
- A transfer to the contractual forum does not carry the original venue’s choice-of-law rules along with the case.24
Each adjustment answers its own question. Ordinarily a plaintiff may select the forum that looks most advantageous within the limits of jurisdiction and venue, a choice the Court calls the plaintiff’s venue privilege, and that privilege is why courts defer to it. A plaintiff who agreed by contract to sue only in a specified forum, presumably in exchange for other binding promises by the defendant, exercised the privilege before any dispute arose, so only that initial choice deserves deference.25 The second adjustment follows from the same bargain. By agreeing to the clause, the parties gave up the right to call the chosen forum inconvenient, because whatever burden they would bear there was foreseeable when they contracted.26 With private interests deemed to favor the contractual forum, only public-interest factors can resist transfer, and those rarely succeed, so clauses control except in unusual cases.27
The third adjustment keeps the plaintiff from profiting from the breach. Choice-of-law rules ordinarily travel with a case transferred from a proper venue, so a defendant cannot use a convenience transfer to strip away state-law advantages the plaintiff gained by a legitimate choice.28 A plaintiff who flouts the clause held no venue privilege to begin with and so has no such advantages to protect, which is the reasoning the previous section applied to transfers for improper venue.29 Together the adjustments produce the standard the Court announced: the district court should transfer the case unless extraordinary circumstances unrelated to the convenience of the parties clearly disfavor transfer.30 That standard assumes a valid clause, and the full § 1404(a) balancing, including the public-interest factors, belongs to the neighboring reading.
Atlantic Marine settled a question that lower courts had answered in several inconsistent ways, so the pre-2013 decisions in casebooks and practice materials show the old confusion rather than current law. The Second Circuit had observed that no consensus existed on the proper procedural mechanism for dismissing a suit based on a valid clause, and a district court facing defendants who invoked Rules 12(b)(1), 12(b)(3), and 12(b)(6) in an abundance of caution quoted that observation.31 GITA Sports Ltd. v. SG Sensortechnik GmbH & Co. KG followed the Fourth Circuit’s rule that a motion to dismiss based on a clause is properly treated under Rule 12(b)(3), and it granted the motion as to the contract and related claims because the clause named a German court.32 A Northern District of California court reasoned in Brooks v. Sotheby’s that when the proper forum is a foreign country, federal courts lack authority to transfer and must dismiss for improper venue, and it dismissed under a clause naming the courts of England.33 The result in such a case survives, since forum non conveniens still calls for dismissal, but the label “improper venue” does not.
The courts that chose § 1406 reached the wrong statute. In Smith v. Commodore Cruise Line, Ltd., a passenger sued for injuries she allegedly sustained in Montego Bay, Jamaica, aboard the defendant’s cruise vessel. After removing the suit from Louisiana state court on diversity grounds, Commodore moved under Rule 12(b)(3) to dismiss for improper venue or, alternatively, to transfer under § 1406, relying on a ticket clause naming New York.34 The court found venue improper and transferred the case to the Southern District of New York.35 Commodore had first sought transfer under § 1404 and then, in a supplemental brief, corrected its basis to § 1406, a change that runs the wrong way after Atlantic Marine.36 The First Circuit took a third path in the Lambert v. Kysar decision discussed with removed actions. It had held that dismissals under a clause rest on Rule 12(b)(6), and it treated the defendants’ invocation of Rule 12(b)(3) as a label that did not bind the court.37 Some courts already pointed the right way. In Feldman v. Google, Inc., where the clause named Santa Clara County, California, venue in the court’s own district was proper without regard to the clause, so the court analyzed transfer under § 1404(a) and set § 1406 aside as a statute for improper original venues.38
Atlantic Marine itself left one question open. It declined to decide whether a defendant could use Rule 12(b)(6) to enforce a clause, because no such motion was filed or briefed. It added, however, that even if Rule 12(b)(6) were available, § 1406(a) and Rule 12(b)(3) would still be improper vehicles and § 1404(a) and forum non conveniens would still be the proper ones.39 An exam answer should therefore enforce a clause through § 1404(a) or forum non conveniens.
Convenience Transfers
A defendant who complains that another courthouse would suit the case better has raised nothing Rule 12(b)(3) recognizes, because “improper venue” means that the district where the plaintiff filed fails the federal venue statutes.41 The complaint belongs to § 1404(a), which governs a case filed in a proper venue and allows a court, “[f]or the convenience of parties and witnesses, in the interest of justice,” to transfer the action to another district or division where it might have been brought, or to a district to which all parties have consented.42 Section 1406(a), by contrast, governs the case filed in the wrong district. A court asked to move a case must therefore first decide which question it faces.
The sorting step turns on one fact: whether venue in the filing district is wrong. A standard exam problem shows it. Prinha, an Arizona citizen, sues Dirk, a New Mexico citizen, in federal court in Arizona over a car accident in New Mexico. Dirk has no Arizona contacts and moves at once to dismiss for lack of personal jurisdiction and improper venue. Each state has a single federal district. Dirk does not reside in Arizona, and nothing giving rise to the suit happened there, so venue in Arizona is improper and the motion falls under § 1406. Section 1404(a) would be the wrong statute twice over: it presupposes a proper venue, and it authorizes transfer but not dismissal.43 Since the District of New Mexico is the one proper federal venue, the court will probably transfer the case there under § 1406(a). As the earlier discussion of transfer without personal jurisdiction showed, the court’s lack of personal jurisdiction over Dirk does not defeat its power to transfer. Transfer usually serves the interest of justice because it spares the time and expense of refiling, even when the moving party asks only for dismissal.44
The split follows from what each motion says about the plaintiff’s choice of courthouse. Van Dusen v. Barrack explained that § 1406(a) provides for transfer from forums in which venue is wrongly or improperly laid, whereas § 1404(a) operates on the premise that the plaintiff has properly exercised the venue privilege.45 A § 1406 motion therefore points to a legal defect in the plaintiff’s choice, and the court’s task is to cure it. A § 1404(a) motion accepts the choice as legitimate and asks whether another district would serve the parties, the witnesses, and the public better. Because the second motion identifies no defect that the defendant had to call out at the start, three practical differences follow, and the first concerns waiver.
Bailey v. B. Braun Med., Inc. sits on the proper-venue side of the line. The plaintiffs sued in the Northern District of Georgia, and nearly ten months later, after taking part in discovery, they moved to transfer to the Southern District of Georgia, where most of the events occurred and where nearly all of the eleven treating physicians the defendants meant to depose lived.46 The defendants called the request waived. The court disagreed. Rule 12(h)(1) waives any defense listed in Rule 12(b)(2)-(5) that a party fails to raise in an earlier motion or responsive pleading, but the plaintiffs sought no dismissal for improper venue under Rule 12(b)(3). They sought a transfer under § 1404(a).47 A defendant who answers without mentioning a venue defect has lost the objection, yet these plaintiffs, who waited far longer, lost nothing under Rule 12(h)(1). That rule punishes silence about a defect in the plaintiff’s choice, because a party who stays quiet is treated as accepting the forum. A § 1404(a) motion asserts no defect and can become worthwhile at any stage, including after discovery shows where the witnesses are, so a transfer motion may be made at any time after the action begins.48 Delay does not forfeit the request under Rule 12(h)(1), though a court weighing the factors may take into account how long the movant waited.
The second difference concerns who may ask. The right to attack venue is personal to the parties and waivable at will, so a judge should not, absent extraordinary circumstances, dismiss for improper venue on his own motion.49 A § 1404(a) transfer carries no such limit. Either party may seek it, as Bailey itself shows, since the movants there were plaintiffs, and a court may even transfer on its own motion.50 A plaintiff may discover after filing that crucial evidence and witnesses are more closely connected to a different forum, and § 1404(a) lets that plaintiff correct the choice.51 The difference tracks what each motion protects. The venue objection protects a privilege that belongs to the parties, while a convenience transfer rests on the court’s own discretionary judgment about convenience and fairness.
The third difference lies in how the court decides. After a successful venue objection, the § 1406(a) question is one of remedy, and transfer usually follows because it spares the plaintiff from refiling. A § 1404(a) motion begins with no defect and asks for a balance. The statute places discretion in the district court to rule on transfer according to an “individualized, case-by-case consideration of convenience and fairness,” so the court weighs a number of case-specific factors, and the party seeking transfer must show that those interests favor moving the case.52 The arguments come in sequence: a defendant who loses the venue objection may argue in the alternative for a convenience transfer, and the court takes the venue ruling first. The factors themselves belong to the neighboring discussion of convenience transfer. The point here is that a convenience transfer is a discretionary weighing and follows from no defect in the plaintiff’s choice.
One last limit completes the boundary. Section 1404(a) permits transfer only. No statute authorizes a federal court to dismiss a case filed in a proper venue, although the federal courts have kept their common-law power to do so under the doctrine of forum non conveniens.53 The doctrine survives because transfer works only within one court system. A defendant who wants to move from a federal forum to a court in another country, or from one state’s courts to another state’s, must therefore seek a forum non conveniens dismissal. Within one system, transfer often may be obtained on a lesser showing of inconvenience than dismissal requires.54 The same structure explains the previous subsection: a forum-selection clause naming a federal district is enforced by a transfer motion, not by a motion to dismiss for improper venue.55 The recurring exam error runs in both directions. A student who meets a witness-convenience argument and reaches for Rule 12(b)(3) has confused an inconvenient district with an improper one. A student who meets a genuine venue defect and reaches for § 1404(a) has chosen a statute that fits the wrong situation and cannot dismiss.