Court Opinion

ID: 9482590
Source: CourtListenerOpinion
Date Created: 2023-08-05 08:55:16.59692+00
Date Added: 2024-06-11T17:49:05.684229
License: Public Domain

WALKER, Circuit Judge,
dissenting.
The panel decision in this case needlessly punishes the plaintiffs for their lawyer’s mistake,1 despite the fact that 28 U.S.C. § 1406 is designed to prevent technical obstacles from standing in the way of adjudications on the merits, despite the fact that a contrary ruling would raise no forum *396shopping concerns, and despite the fact that the purpose of statutes of limitations would not be undermined by allowing a transfer in this case. I dissent.
Spar sued IRI alleging that IRI had tor-tiously interfered with Spar’s contract with Dailey, a top Spar employee who went to work for IRI in apparent violation of a non-competition clause in his employment contract with Spar. Spar filed its claim in state court in New York. IRI removed the action to federal court. After removal to the District Court for the Southern District of New York, IRI moved to dismiss on the ground that New York’s three year statute of limitations had run. Spar then cross moved under § 1406(a) for transfer to the Northern District of Illinois (where IRI’s corporate headquarters was located) on the ground that Illinois’ statute of limitations (5 years) had not yet run. The district court ruled that § 1406 transfer is only available where venue is improper or personal jurisdiction is lacking, and thus denied the motion. The majority would affirm on the ground that Spar has not satisfied the requisites for transfer under § 1406.
28 U.S.C. § 1406(a) provides that:
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.
Thus, there are two questions that must be asked in evaluating this transfer motion. (1) was venue laid in the “wrong division or district”? and (2) is transfer in the interests of justice?
The majority apparently concedes that the district court erred when it held that “§ 1406(a) does not apply” and agrees that where venue and personal jurisdiction are proper in the district court, but the statute of limitations has run, then venue has been laid in the “wrong division or district.” See Porter v. Groat, 840 F.2d 255, 258 (4th Cir.1988). Accordingly, the remaining question is whether transfer is in the interest of justice.
The panel suggests that the district court’s determination in this respect is entitled to deference. Supra at 894. While I agree with this as a general proposition, it has no relevance to this case. The district court denied the transfer motion because the court concluded, incorrectly, that the case had not been brought in the wrong division or district. The district court never considered whether the interests of justice favored a transfer. Thus, there is nothing to defer to. After reviewing the facts, I believe that transfer is in the interests of justice.
First, the substantive goals that are served by statutes of limitations, notice of claim and litigation repose, are not at stake. As the Supreme Court stated in Goldlawr v. Heiman, 369 U.S. 463, 82 S.Ct. 913, 8 L.Ed.2d 39 (1962), “[w]hen 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.” Id. at 466-67, 82 S.Ct. at 916. Thus, the majority’s contention that the plaintiffs have not been diligent is untenable. On plaintiffs’ facts, the case was filed as diligently as Illinois’ five year statute of limitations requires.
The majority’s view of Spar’s transfer motion is anchored in the fact that Spar’s lawyer was not diligent in analyzing New York’s statute of limitations. But “justice” does not require us to punish the plaintiffs for their lawyer’s lack of diligence unless the defendant is prejudiced thereby or there is reason to believe that the lawyer’s mistake was not a lack of diligence but rather an attempt to gain an advantage. Here, neither of those concerns apply.
IRI would not be prejudiced by allowing the transfer under § 1406. On the facts alleged by Spar, IRI has been put on notice of the lawsuit as promptly as Illinois law would require. That New York would require even more promptness is not relevant to whether IRI would be prejudiced — IRI’s repose interest can not vest until the statutes of limitation have run in every state *397where IRI might be sued. Moreover, since Spar has shown diligence, and since IRI is not prejudiced, the purposes of statutes of limitation are not at stake in this case.
Nor is there any reason to think that the lawyer’s apparent mistake was actually a clever attempt to achieve an advantage. Spar filed in state court. Had IRI not removed the case to federal court, Spar would never have had the opportunity to seek a § 1406(a) transfer, and thus the case would have been dismissed. Thus, Spar could not have had some Machiavellian plan to file in New York with the intent to later transfer to Illinois.
Further, the majority’s concern that a contrary decision would promote forum shopping is misplaced. No plaintiff would ever have an incentive to proceed as Spar did here, since nothing is gained by filing in the wrong forum and then moving to transfer. Under § 1406, transferee law applies, just as it would had plaintiff originally filed his case in the transferee forum.
In sum, the panel’s rule unnecessarily punishes careless lawyering at the expense of what we must assume to be a meritorious claim, even though this case raises no forum shopping concerns, the policies of the transfer statute would be served by transfer, the defendant is not prejudiced by the transfer, and the plaintiffs have shown diligence. I think we should reverse the district court and order this case transferred to Illinois. At the very least, since we all seem to agree, contrary to the district court’s decision, that § 1406(a) applies in this case, we should remand to the district court to allow that court to consider whether the interests of justice favor transfer.
I dissent.

. Counsel of record for Spar on the appeal did not represent it in the court below.