Stewart Organization Inc. v. Ricoh Corp.
SCOTUS - 1988
- 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.
- 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.
- What analysis should a district court use in deciding whether to apply a federal statute over a state law in a diversity case?
- 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.
- 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.
- Section 1404 should not be interpreted so broadly as to conflict with state law.
- Construing this statute so broadly will encourage forum shopping.
- Is 1404 constitutional?
- If so, does 1404 cover forum-selection clauses?
- If so, is there a procedural element here?