Source: https://law.justia.com/cases/federal/appellate-courts/F2/435/527/95699/
Timestamp: 2019-08-17 22:47:25
Document Index: 690074819

Matched Legal Cases: ['§ 5826', '§ 8', '§ 1406', '§ 1406', '§ 1404', '§ 1406', '§ 8', '§ 8', '§ 17', '§ 17', '§ 17', '§ 17', '§ 17', '§ 17', '§ 17', '§ 17', '§ 17', '§ 17', '§ 17', '§ 332', '§ 137', '§ 1404', '§ 1407', '§ 1404', '§ 1406', '§ 1406', '§ 1406', '§ 8', '§ 1406', '§ 56', '§ 1404', '§ 1404']

Donald L. Atkins, Appellant, v. Schmutz Manufacturing Company, Incorporated, Appellee, 435 F.2d 527 (4th Cir. 1970) :: Justia
Justia › US Law › Case Law › Federal Courts › Courts of Appeals › Fourth Circuit › 1970 › Donald L. Atkins, Appellant, v. Schmutz Manufacturing Company, Incorporated, Appellee
Donald L. Atkins, Appellant, v. Schmutz Manufacturing Company, Incorporated, Appellee, 435 F.2d 527 (4th Cir. 1970)
US Court of Appeals for the Fourth Circuit - 435 F.2d 527 (4th Cir. 1970)
At the time of the accident, Virginia had no long-arm statute, and Atkins' counsel reasonably concluded that personal jurisdiction of Schmutz could not be obtained in Virginia. Consequently, he filed a personal injury action in the United States District Court for the Western District of Kentucky, where Schmutz had its principal place of business. That action was commenced within Virginia's two-year period of limitation for tort actions, but not within Kentucky's one year period of limitation. Extensive discovery and other pre-trial proceedings followed, for everyone reasonably assumed that the applicable limitation period was that of Virginia (the state where the cause of action arose) and not that of Kentucky (the forum state).3 That assumption was sharply upset, however, when the Kentucky Court of Appeals held that Kentucky's limitation period was applicable in actions brought in the courts of that state if the limitation period of the state where the cause of action arose was longer.4
In this diversity case, Guaranty Trust Co. v. York, 326 U.S. 99, 65 S. Ct. 1464, compels adoption of the requirement, applicable in the state courts of Virginia, that actions for personal injuries "be brought within two years next after the right to bring the same shall have accrued."12 Atkins' action against Schmutz accrued when he was injured, Caudill v. Wise Rambler, Inc., 210 Va. 11, 168 S.E.2d 257, and he brought an action within two years of that date. But that action was terminated without any decision on the merits, and Schmutz, relying on its interpretation of Virginia law, asserts that its pendency had no tolling effect.
The plaintiff in Jones had filed an action against the defendant in the Circuit Court of the City of Suffolk to recover damages for alleged malicious abuse of civil process. Fourteen months later, it was dismissed "for lack of proper venue duly pleaded."13 Later, Jones asserted the same cause of action against the same defendant in the Circuit Court of the City of Portsmouth. By then, the two year period of limitation had run, unless its running was interrupted by the pendency of the action in the Circuit Court of the City of Suffolk. Construing § 5826 of the Virginia Code (now § 8-34), the Virginia Supreme Court of Appeals found no basis for granting relief to a plaintiff whose prior suit was brought in the wrong forum or was dismissed otherwise than upon the merits.14
Nothing Atkins has done or failed to do has prejudiced in any way Schmutz's ability to defend this suit on the merits. This is not a case where a time lapse between the end of one suit and the commencement of another might cause the defendant to think that the litigation has come to an end. From the initial filing of the complaint in the District Court in Kentucky, these parties have been continual adversaries before one federal tribunal or another pressing their respective claims. More importantly, Atkins asserted his claim in a court of competent jurisdiction within the period prescribed by Virginia and both parties prepared for litigation on the merits.15 Allowing Atkins to litigate the merits of his claim would not frustrate the oft-stated purpose of statutes of limitation to compel the assertion of a right of action promptly while the evidence is available and still relatively fresh.16 Allowing Atkins to litigate the merits of his claim at this time would be consistent with the basic purpose reflected in the tolling rule — saving the right of action for plaintiffs who, without fault, have been unable to obtain an adjudication on the merits.
Virginia's is a highly decentralized, relatively autonomous, system of independent trial courts of sometimes overlapping and duplicating jurisdiction with few administrative or procedural provisions for coordination of their effort or the performance of cooperative or complementary functions. In stark contrast, the federal system is "one great system for the administration of justice"17 with a singularity and a unity which encourages and requires conformity in the functioning of each of the parts to the purposes and objectives of a highly cohesive whole.
Below the circuit and corporation or hustings courts exist numerous inferior courts with limited, specialized jurisdiction, including county courts, municipal courts, courts of limited jurisdiction ("police courts"), and juvenile and domestic relations courts.24
The capacity of the federal courts to function cooperatively led Judge Parker, speaking for this court, to describe the system as "unified" and to approve the transfer of an action, timely filed in the Southern District of New York in the Second Circuit, but where the respondent ship had not been found, to the District of Maryland, where the ship could be attached, though the statute of limitations had run before the transfer.35 In somewhat similar circumstances, the Supreme Court approved the transfer of a case from the Eastern District of Pennsylvania, where it had been filed but where the defendants could not be "found," to the Southern District of New York where the defendants could be "found."36 That transfer was made pursuant to 28 U.S.C. § 1406(a),37 one of several procedural provisions affording federal court litigants protection against "justice-defeating technicalities."38
The problem which confronted the Virginia Supreme Court of Appeals in Jones v. Morris Plan Bank of Portsmouth, supra, never should have arisen in the federal system. If Virginia's trial courts had been organized as the federal district courts are, if Virginia, as an essential part of that organization, had a statute comparable to 28 U.S.C. § 1406(a), the Circuit Court of the City of Suffolk would never have dismissed the action "for lack of proper venue duly pleaded," unless the action was patently frivolous or harassing and provided the filing of the action had served the basic purpose of the statute of limitation. In a more unitary system, it would have been transferred by the Circuit Court of the City of Suffolk to the Circuit Court of the City of Portsmouth, and there would not have been a plea of the statute's bar. If the circuit courts of the two cities had been as closely related as are district courts, with all of the mechanical means of promoting the closeness of that relationship, Mr. Jones would not have been remembered in procedural defeat.39
In the institutional context in which it arises, this case appears more like Weinstein than Jones. The institutional considerations emanating from a system of autonomous trial courts which dictated the result in Jones were absent in Wein- stein, where both actions were brought in the same court. It was unnecessary in Weinstein that a second action between the same parties dealing with the same subject matter be treated as entirely independent of the first. It is noteworthy, too, that Weinstein does not rely on Virginia's tolling statute for its holding. The tolling statute was just as inapplicable there as in Jones. The principal difference between the two cases appears to be that in Jones, unlike Weinstein, the second action was filed in a different and independent court, which was not required to notice the pendency of proceedings in the first court. In a system of integrally related, cooperating trial courts the result in Weinstein and its rationale appear naturally to encompass the Jones situation, at least when the second action is filed during the pendency of the first.
In deciding that the question of the recognition to be given by one federal court to proceedings in another federal court should be resolved as a matter of federal law, we do no violence to the doctrine of Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188, which requires that federal courts in the diversity jurisdiction decide cases in accordance with state law, whether decisional or statutory. The contours of that requirement have been delineated with increasing clarity by subsequent cases which have made it plain that not every issue arising in a diversity case is governed by state law. See, e. g., Guaranty Trust Co. v. York, 326 U.S. 99, 65 S. Ct. 1464; Byrd v. Blue Ridge Cooperative, 356 U.S. 525, 78 S. Ct. 893, 2 L. Ed. 2d 953; Hanna v. Plumer, 380 U.S. 460, 85 S. Ct. 1136, 14 L. Ed. 2d 8; Szantay v. Beech Aircraft Corp., 4 Cir., 349 F.2d 60.
The problem facing the federal courts since Erie has been to determine which questions arising in diversity litigation are matters of state concern which should be answered by reference to state law and which questions are matters of federal concern which can be answered by reference to federal law. Erie and its progeny may be seen as an attempt to formulate a workable doctrine governing choice of law in diversity actions which would prevent impermissible federal court interference with state rules reflecting policy considerations lying within the realm of state law-making competence. Guaranty Trust Co. v. York, 326 U.S. 99, 109, 65 S. Ct. 1464, 89 L. Ed. 2079; Hanna v. Plumer, 380 U.S. 460, 474, 85 S. Ct. 1136 (concurring opinion of Mr. Justice Harlan).
3. If the state procedural provision is not intimately bound up with the right being enforced but its application would substantially affect the outcome of the litigation, the federal diversity court must still apply it unless there are affirmative countervailing federal considerations. This is not deemed a constitutional requirement but one dictated by comity."43
That there is a significant federal concern for the application of rules of litigation in federal courts which are consistent with the fundamental nature of that court system is well established. See, e. g., Byrd v. Blue Ridge Cooperative, supra; Herron v. Southern Pacific Co., 283 U.S. 91, 94, 51 S. Ct. 383, 75 L. Ed. 857.
Whether the Kentucky action could have been transferred to the Western District of Virginia under 28 U.S.C. § 1404 is a matter of federal law.45 If this action had initially laid venue in the wrong district, its transferability under 28 U.S.C. § 1406(a), after the running of any applicable statute of limitation, would be determined as a matter of federal law.46 Implicit in a decision that there should be a transfer after the lapse of two years following the injury is a determination that the basic purpose of the applicable statute of limitation has been satisfied and that the interests of justice dictate against dismissal.47
To me, Weinstein is dispositive of this appeal. Plaintiff's suit was instituted in Kentucky before the expiration of two years prescribed by the applicable Virginia statute. The Kentucky court, bound by Kentucky's ex post facto determination that Kentucky public policy prohibited giving effect to foreign statutes of limitations more liberal than that of Kentucky, was not competent to consider the merits of the suit. Plaintiff's suit in Virginia was instituted before the Kentucky action was terminated. Indeed, suit was filed in the Western District of Virginia before the mandate of the United States Court of Appeals for the Sixth Circuit issued and more than six months before the Supreme Court denied certiorari. See Burnett v. New York Cent. R. Co., 380 U.S. 424, 435, 85 S. Ct. 1050, 13 L. Ed. 2d 941 (1965). I have no difficulty in concluding that the Virginia suit was "but a continuation" of the previously filed Kentucky action, timely under Virginia law, and, therefore, the Virginia statute of limitations interposed no bar.
We ought not to decide more than that the present suit is not barred by limitations under Virginia law. The parties have agreed that, under Guaranty Trust Co. v. York, 326 U.S. 99, 65 S. Ct. 1464, 89 L. Ed. 2079 (1945), we must look to the law of Virginia to decide this case. Guaranty Trust held that, in a diversity action like that at bar, we must look to the state law to determine the period of limitations. The court purportedly accepts this proposition, but seeks to avoid its logical consequences by finding that the tolling of limitations is a matter of federal law. While Guaranty Trust did not concern the tolling of limitations, tolling is so clearly the obverse of the same coin that I think we are bound to Virginia law and are foreclosed from fashioning a federal rule.
Certainly, Guaranty Trust has not been sufficiently eroded in whole or in part that we should refuse to follow it; nor, in my estimation, has a satisfactory way been devised by the court to avoid it. The decisions of the Supreme Court in Byrd v. Blue Ridge Cooperative, 356 U.S. 525, 78 S. Ct. 893, 2 L. Ed. 2d 953 (1958), and Hanna v. Plumer, 380 U.S. 460, 85 S. Ct. 1136, 14 L. Ed. 2d 8 (1965), do provide a basis for applying a federal rule of law in a diversity case under certain circumstances, but the rationale of those two cases does not support a further departure from the principles of Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938), under the facts presented here. Byrd (factual issue must be decided by a jury in a federal court) and Hanna (service of process in federal actions must meet the standards of the Federal Rules of Civil Procedure) were dictated by strong expressions of federal policy: the Seventh Amendment and the Federal Rules of Civil Procedure, respectively. In contrast to these Constitutional and Congressional mandates, here we have only a notion of an "institutional interest" in the uniform management of the federal court system. If this interest is sufficient to support a federal rule of tolling, I suggest that it favors the application of a federal statute of limitations just as strongly, so that by implication Guaranty Trust is being overruled. I note, also, that there is lacking in this case any discriminatory state policy of the type intended to be prevented by the creation of federal diversity jurisdiction so that there would be justification for noncompliance with state law. Szantay v. Beech Aircraft Corp., 349 F.2d 60 (4 Cir. 1965).
Klaxon Co. v. Stentor Electric Manufacturing Co., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477
Guaranty Trust Company v. York, 326 U.S. 99, 65 S. Ct. 1464, 89 L. Ed. 2079
389 U.S. 829, 88 S. Ct. 92, 19 L. Ed. 2d 86
Va.Code Ann. §§ 8-81.1 through 8-81.5. These provisions were enacted in 1964
268 F. Supp. 406
Va.Code Ann. § 8-24
"Statutes of limitation are statutes of repose, the object of which is to compel the exercise of a right of action within a reasonable time. They are designed to suppress fraudulent and stale claims from being asserted after a great lapse of time, to the surprise of the parties, when the evidence may be lost, the facts may have become obscure because of defective memory, or the witnesses have died or disappeared." Street v. Consumers Mining Corp., 185 Va. 561, 575, 39 S.E.2d 271, 277
"Statutes of limitation are primarily designed to assure fairness to defendants. Such statutes `promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared. The theory is that even if one has a just claim it is unjust not to put the adversary on notice to defend within the period of limitation and that the right to be free of stale claims in time comes to prevail over the right to prosecute them.' Order of Railroad Telegraphers v. Railway Express Agency, Inc., 321 U.S. 342, 348-349, 64 S. Ct. 582, 586, 88 L. Ed. 788. Moreover, the courts ought to be relieved of the burden of trying stale claims when a plaintiff has slept on his rights." Burnett v. New York Central R. Co., 380 U.S. 424, 428, 85 S. Ct. 1050, 1054, 13 L. Ed. 2d 941.
Va.Code Ann. § 17-118
Va.Code Ann. § 17-117
Va.Code Ann. § 17-123. The jurisdiction of the circuit courts of the larger cities is fixed by separate statutes. See, for example, the references below to the trial courts sitting in Richmond whose circuit court is one of very specialized jurisdiction
The cities with corporation or hustings courts are set forth in § 17-135, Va.Code Ann. Most, but not all of these cities also have a separate circuit court. Corporation courts and hustings courts appear to differ in name only
Va.Code Ann. § 17-139
Va.Code Ann. § 17-140
Va.Code Ann. § 17-164. Prior to 1954 there was also a Law and Equity Court, Part II
Va.Code Ann. § 17-161
Va.Code Ann. § 17-163
Va.Code Ann. § 17-153
Va.Code Ann. § 17-154
28 U.S.C. § 332, 28 U.S.C. § 137. See the discussion by Mr. Justice Harlan, concurring in Chandler v. Judicial Council, 398 U.S. 74, 89, 90 S. Ct. 1648, 26 L. Ed. 2d 100, of the important role played by the Circuit Judicial Councils in the management of judicial work in the Federal Court System
Rule 42(a) of the Federal Rules of Civil Procedure allows consolidation and joint trial of actions involving a common question of law or fact. Transfer of cases from one district to another for purposes of consolidation is possible under 28 U.S.C. § 1404(a) which permits transfer of any civil action for the convenience of the parties and witnesses, in the interest of justice. Cf. Van Dusen v. Barrack, 376 U.S. 612, 84 S. Ct. 805, 11 L. Ed. 2d 945
28 U.S.C. § 1407. See Peterson and McDermott, Multidistrict Litigation: New Forms of Judicial Administration, 56 A.B.A.J. 737
Internatio-Rotterdam, Inc. v. Thomsen, 4 Cir., 218 F.2d 514. The transfer was held to be permitted under either 28 U.S.C. § 1404(a) or 28 U.S.C. § 1406 (a)
Goldlawr v. Heiman, 369 U.S. 463, 82 S. Ct. 913, 8 L. Ed. 2d 39
28 U.S.C. § 1406(a): The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought
Internatio-Rotterdam, Inc. v. Thomsen, 4 Cir., 218 F.2d 514, 517. See also, for example, 28 U.S.C. § 1406(c) authorizing the transfer from the District Court to the Court of Claims of cases filed in the former but within the exclusive jurisdiction of the latter
Although Virginia has a removal statute, Va.Code Ann. § 8-157, which permits some transfers of cases from one court to another, a plaintiff who lays venue in the wrong court will have his case dismissed and not transferred. Woodhouse v. Burke & Herbert Bank, 166 Va. 706, 185 S.E. 876; see also Jones v. Morris Plan Bank of Portsmouth, 170 Va. 88, 195 S.E. 525. Similarly, a case filed in a court which lacks subject matter jurisdiction over the controversy cannot be transferred to the proper court. Valley Turnpike Co. v. Moore, 100 Va. 702, 42 S.E. 675. Compare 28 U.S.C. § 1406(c), cited in note 38,supra.
304 U.S. 64, 78-80, 58 S. Ct. 817; Bernhardt v. Polygraphic Co. of America, Inc., 350 U.S. 198, 202, 76 S. Ct. 273, 100 L. Ed. 199. See also, Hanna v. Plumer, 380 U.S. 460, 471-472, 85 S. Ct. 1136, 1144:
The extent to which the Erie doctrine is constitutionally compelled has been a subject of considerable debate, see the discussion and citations in Wright, Federal Courts, 2nd ed. § 56. Since we are dealing with an issue relating to the operation of the federal courts which the Constitution gives the federal government authority to resolve, see Hanna v. Plumer, 380 U.S. 460, 472, 85 S. Ct. 1136, that debate is academic for purposes of our decision in this case.
Guaranty Trust Co. v. York, 326 U.S. 99, 108-109, 65 S. Ct. 1464; Cohen v. Beneficial Loan Corp., 337 U.S. 541, 555-556, 69 S. Ct. 1221, 93 L. Ed. 1528
Byrd v. Blue Ridge Cooperative, 356 U.S. 525, 78 S. Ct. 893; Hanna v. Plumer, 380 U.S. 460, 85 S. Ct. 1136
See Adams v. Collier, 122 U.S. 382, 7 S. Ct. 1208, 30 L. Ed. 1207, holding that a suit instituted in the Circuit Court [under the pre-1911 judicial system] after withdrawal of a prior suit on the same cause of action in the District Court was, for statute of limitation purposes, "in effect, a continuation of the former" suit. That the second action is a continuation of the first is precisely the rationale on which the Supreme Court of Appeals of Virginia relied in holding the reformation suit timely in Weinstein.
Compare Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 509, 67 S. Ct. 839, 91 L. Ed. 1055, a diversity case in which the Supreme Court declined to decide whether a pre-§ 1404 forum non conveniens transfer was governed by state or federal law, with Sullivan v. Behimer, 363 U.S. 335, 80 S. Ct. 1084, 4 L. Ed. 2d 1254, a diversity case in which the Supreme Court treated a transfer pursuant to § 1404 entirely as a matter of federal statutory interpretation. See also, Van Dusen v. Barrack, 376 U.S. 612, 84 S. Ct. 805, 11 L. Ed. 2d 945; Internatio-Rotterdam, Inc. v. Thomsen, 4 Cir., 218 F.2d 514.
Cf. Goldlawr v. Heiman, 369 U.S. 463, 82 S. Ct. 913, 8 L. Ed. 2d 39
"When a lawsuit is filed, that filing shows a desire on the part of the plaintiff to begin his case and thereby toll whatever statutes of limitation would otherwise apply. The filing itself shows the proper diligence on the part of the plaintiff which such statutes of limitation were intended to insure." Goldlawr v. Heiman, 369 U.S. 463, 467, 82 S. Ct. 913, 916