P and D had a problem with a contractual dealership agreement. The agreement contained a forum selection clause providing that any dispute arising out of the contract could be brought only in a court located in Manhattan.
P brought a complaint in the district court of NDAL.
Relying on the forum selection clause, D moved the district court to either transfer the case to SDNY under 1404(a) or dismiss under 1406.
Procedural History:
District court denied D's motion for change in venue, said that AL law controlled the transfer motion.
11th Cir COA reversed and remanded, D's motion for change in venue should be granted, questions of venue in diversity actions should be governed by federal law.
SCOTUS affirmed, D's motion for change in venue should be granted, questions of venue in diversity actions should be governed by federal law.
Issues:
What analysis should a district court use in deciding whether to apply a federal statute over a state law in a diversity case?
Holding/Rule:
When a federal law to be applied in a diversity action is a congressional statute, there are two questions the court must answer…
The chief question for the district court's determination is whether the statute is sufficiently broad to control the issue before the court.
If so, the court then must inquire whether the statute represents a valid exercise of Congress' authority under the Constitution.
Reasoning:
If Congress intended to reach the issue before the court, and if it enacted its intention into law in a manner that abides with the Constitution, that is the end of the matter; federal courts are bound to apply laws enacted by Congress with respect to matters over which it has legislative power.
Section 1404 is sufficiently broad to cover the issue.
Dissent:
Section 1404 should not be interpreted so broadly as to conflict with state law.
Construing this statute so broadly will encourage forum shopping.
