Also known as:jurisdictional arbitrages · forum shopping
Written by attorneys · grounded in primary & secondary sources — see below
A strategic practice by which parties select or manipulate forums or jurisdictions to exploit differences in substantive or procedural law. The practice is deterred by rules that freeze the applicable law at the time of a proper filing and by choice-of-law principles that promote uniformity and discourage manipulation of outcomes through transfers or forum selection.
Sources & Authorities
How it applies
Common Examples
2
Diversity Filing and Convenience Transfer
Jefferson Trust filed a diversity contract action in federal court in State O against Jones Petroleum after a dispute over performance standards. Venue and jurisdiction were proper there. After learning that State N offered more favorable damages rules, Jefferson Trust moved to transfer the case for convenience to federal court in State N. The transferee court must apply the same state law and choice-of-law rules that governed in State O, preventing the plaintiff from obtaining a different substantive outcome simply by changing courthouses.
Choice-of-Law Manipulation Attempt
Juarez Holdings negotiated a supply contract with Jensen Farms that referenced State A performance standards. After a breach, Juarez Holdings filed suit in State B federal court hoping its choice-of-law rules would select more lenient remedies. The court applied State B choice-of-law rules to determine the governing law, ensuring that the parties could not obtain a more favorable regime merely by selecting a forum whose conflicts principles produced a different result.
Put it into practice
Test Yourself
10
Practice Questions5
· 1 primary source
Select any source to read its text and confirm it supports the definition.
Cases
Restatements
Study Supplements
Common questions
Frequently Asked
3
How do federal courts prevent jurisdictional arbitrage through convenience transfers?+
When venue is proper in the original federal district, a convenience transfer treats the move as a change of courtroom only. The transferee court must apply the same state substantive law and choice-of-law rules that the transferor court would have applied, so a party cannot obtain a different outcome by moving the case.
Supporting sources
What role does the forum-shopping deterrence test play when no federal rule directly addresses an issue?+
State law is followed if disregarding it would encourage parties to choose one forum over another solely to obtain a more favorable substantive rule. This principle preserves uniformity and prevents manipulation of outcomes through strategic filing.
Supporting sources
How does supply-chain contracting reduce opportunities for jurisdictional arbitrage in environmental regulation?+
Private supply-chain requirements impose emissions limits and performance standards that travel with the business regardless of where it locates. Companies therefore gain less competitive advantage by moving operations to jurisdictions with weaker government standards.
Supporting sources
Civil ProcedureJurisdiction and venue · Venue, forum non conveniens, and transferUBEFoundational