Simms, John M.

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Courts -- Venue -- Inconvenient Forum Considerations and Special Venue Provisions Under the New Judicial Code

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NORTH CAROLINA LAW REVIEWVolume 28 | Number 1 Article 1512-1-1949Courts -- Venue -- Inconvenient ForumConsiderations and Special Venue ProvisionsUnder the New Judicial CodeJohn M. SimmsFollow this and additional works at: http://scholarship.law.unc.edu/nclrPart of the Law CommonsThis Note is brought to you for free and open access by Carolina Law Scholarship Repository. It has been accepted for inclusion in North Carolina LawReview by an authorized editor of Carolina Law Scholarship Repository. For more information, please contact law_repository@unc.edu.Recommended CitationJohn M. Simms, Courts -- Venue -- Inconvenient Forum Considerations and Special Venue Provisions Under the New Judicial Code, 28 N.C.L. Rev. 100 (1949).Available at: http://scholarship.law.unc.edu/nclr/vol28/iss1/15NORTH CAROLINA LAW REVIEWof stock with a view to imposing all the legal consequences generallyassociated with the particular label given the security. This approachmay cause a decision to rest on considerations not necessarily relevantto the question before the court. E.g., in the principal case the factorsof intention and circumstances surrounding the issuance of the certif-icates do not seem to be necessarily relevant in determining whether ornot the periodic payments are a definite and fixed obligation on the partof the corporation regardless of earnings.It would appear to be a sounder approach to limit the inquiry to thecharacteristics of the security material to the particular question beforethe court and cause the judgment to depend not on the entire complexof attributes but on those aspects determined to be pertinent to the par-ticular issue under consideration.Under this analysis the court, in cases involving the taxability ofperiodic payments made by a corporation to its security holders andguaranteed by a third party, could narrow the issue to: Are these pay-ments a definite obligation of the corporation regardless of earnings?The guaranty by the third party should be disregarded in that the cor-poration and the third party are taxed individually and only the taxliability of the corporation is involved.RODDEY M. LiGON, JR.Courts-Venue-Inconvenient Forum Considerations and SpecialVenue Provisions Under the New Judicial Code*The new Judicial Code," effective September 1, 1948, gave the fed-eral courts in §1404(a) 2 the power to transfer a civil action to any otherdistrict or division where it might have been brought if necessary forthe convenience of witnesses and in the interest of justice. Prior tothis revised code, there was no provision in the federal statutes for thetransfer of venue from one district to another district; but where morethan one venue was available to a plaintiff, the federal courts could exer-cise the equitable right to dismiss a case without prejudice and thusforce the plaintiff to sue over again somewhere else.3 Both before andafter final approval of §1404(a), there was speculation by writers asto the effect of this new power on actions arising under special venue* For some interesting discussions of other problems presented by §1404 (a), seeMangan, Federal Legislation, 37 GEo. L. J. 394, 400 (1949) ; Marcus, The SupremeCourt and the Antitrust Laws, 37 GEo. L. J. 341, 356 (1949) ; Notes, 60 HAV. L.REv. 424 (1947), 23 IND. L. J. 82 (1947) ; and materials listed in footnote 4 infra.Title 28 U. S. C. C. S."For the convenience of parties and witnesses, in the interest of justice, adistrict court may transfer any civil action to any other district or division whereit might have been brought."'Gulf Oil Corp. v. Gilbert, 330 U. S. 501 (1947) ; Koster v. Lumbermen'sMutual Casualty Co., 330 U. S. 518 (1947); Rogers v. Guaranty Trust Co., 288U. S. 123, 130-131 (1932).[Vol. 7.8NOTES AND COMMENTSprovisions4 where the rule enunciated had been that special venue stat-utes created an absolute right not subject to interference either by in-junction or in any other manner except legislation. 5Taking advantage of the new provisions of §1404(a) the federaldistrict courts, presented with motions subsequent to September 1, 1948,to transfer the causes in several Federal Employer's Liability Act casesand an antitrust action, almost without exception 6 held that §1404(a)applied to the special venue provisions of the FELA and the antitrustlaw.7In the early summer of 1949, the United States Supreme Court con-strued §1404(a) in three cases, two involving FELA actions8 and oneinvolving an antitrust action.9 In all three the result was an expressdeclaration by the majority of the court 10 that the phrase "any civilaction" as used in §1404(a) is not limited as embracing only thoseactions for which venue requirements are prescribed in 28 U. S. C.§§1391-1406, but means just what it says-any civil action.In arriving at this conclusion, the court said that "the reach of 'anycivil action' is unmistakable. The phrase is used without qualification,' Barnard and Zlinkoff, Patents, Procedure and the Sherman Act-The SupremeCourt and a Competitive Economy, 1947 Term, 17 GEo. WASH. L. REv. 1, 10-18(1949) (thought §1404(a) should not apply to antitrust suits in absence of clearerand more specific evidence of congressional intent to accomplish such a result);Braucher, The Inconvenient Federal Forum, 60 HARv. L. REv. 908 (1947) (ifenacted and sympathetically interpreted, §1404(a) should go far to relieve thefederal judiciary of self-imposed obstacles to the efficient administration of thelaw governing place of trial) ; Note, 28 N. C. L. REv. 248 (1949) (hope expressedthat §1404(a) would be held applicable in cases arising under general and specialvenue provisions); Comment, 44 ILL. L. REv. 75 (1949) (feels that §1404(a)should apply to FELA suits) ; Comment, 56 YALE L. J. 1234, 1249 n. 115 (1947)(thought §1404(a), if enacted, would be a legislative overruling of the court'sinterpretation of special venue provisions of the FELA); Note, 56 YALE L. J.482 (1949) (thinks §1404(a) should apply to antitrust suits) ; 62 HARV. L. Rev.707 (1949) (§1404(a) should apply to antitrust suits); 47 MicH. L. REv. 438(1949) (application of §1404(a) to FELA suits is proper) ; 33 MINN. L. REv.536 (1949) (§1404(a) should apply to FELA special venue provisions).United States v. National City Lines, 334 U. S. 573 (1948); Baltimore &Ohio R. R. v. Kepner, 314 U. S. 44 (1941).' Pascarella v. New York Cent. R. R., 81 F. Supp. 95 (E. D. N. Y. 1948) (heldthat §1404(a) was applicable only to actions brought under §§1391-1406 of Title28 and not to actions under special venue statutes).'United States v. E. I. Du Pont De Nemours & Co., 83 F. Supp. 233 (D. D. C.1949) (antitrust suit); Brainard v. Atchison T. & S. F. Ry., 81 F. Supp. 211(N. D. Ill. 1948) (court accepted application of §1404(a) to a FELA suit, butexercised its discretion to decide that the case should not be delayed by transferto another forum) ; Scott v. New York Cent. R. R., 81 F. Supp. 815 (N. D. Ill.1948) (FELA suit); Nunn v. Chicago, M., St. P. & P. Ry., 80 F. Supp. 745(S. D. N. Y. 1948) (FELA suit); United States v. National City Lines, 80 F.Supp. 734 (S. D. Cal. 1948) (antitrust suit); White v. Thompson, 80 F. Supp.411 (N. D. Ill. 1948) (FELA suit); Hayes v. Chicago, R. I. & P. Ry., 79 F.Supp. 821 (D. Minn. 1948) (FELA suit).Ex parte Collett, 69 Sup. Ct. 944 (1949) ; Kilpatrick v. Texas & P. Ry., 69Sup. Ct. 953 (1949).'United States v. National City Lines, 69 Sup. Ct. 955 (1949)."0 7 to 2 decisions, Justices Black and Douglas dissenting in all three cases.19491102 NORTH CAROLINA LAW REVIEW [Vol. 28without hint that some should be excluded."'1 The majority also usedthe legislative history of §1404(a) and the Reviser's Notes to show thatFELA actions were within the scope of the new power. 12 As to whythere was no reference in the Reviser's Notes to the court's decisionthat the antitrust law special venue provisions created an absolute right,the court pointed out that the Reviser's Notes were printed in 1947 andthe first ruling by the court on the absolute right of the antitrust venueprovisions was handed down on June 7, 1948.13 Further, it was heldthat §1404(a) did not repeal the special venue provisions of the FELA14as those provisions defined the proper forum and §1404(a) deals withthe right to transfer an action properly brought.15 Said the court, "Anaction may still be brought in any court, state or federal, in which itmight have been brought previously."'1The dissenting justices felt that to follow the holding of the major-ity would work too drastic a change in too many statutes to be theproduct of a mere revision of the code. E.g., the special venue pro-visions of the Sherman Act, FELA, Suits in Admiralty Act, Jones Act,Merchant Marine Act of 1936, Securities Act, Securities Exchange Act,Public Utility Holding Company Act, Investment Company Act, andperhaps other statutes too. Therefore, the dissent would make §1404(a)applicable only to any civil action as to which venue provisions are codi-fied in revised Title 28.'7Three cases dealing with only two special venue situations may notbe grounds for a final answer to the problem, but from the rationale ofthese decisions it would seem that the new transfer provisions wouldapply to all special venue statutes. Thus, while an action can still bebrought as it might have been brought previously, the power given in§1404(a) may be used to transfer the action to another district ordivision whether the venue is prescribed by general or special venueprovisions.JOHN M. Simms."Ex parte Collett, 69 Sup. Ct. 944, 946 (1949).121d. at 947-952. In the Reviser's Notes to §1404(a), the.Kepner case, vipranote 5, was cited as an example of the need for such a provision." United States v. National City Lines, 334 U. S. 573 (1948).The concurring opinion of the late Justice Rutledge, 69 Sup. Ct. 959 (1949),expressed his doubts as to congressional knowledge of the effect of §1404(a) onantitrust suits, but notwithstanding his doubts that Congress intended to go sofar as the majority held, he acquiesced in the court's decision." 36 STAT. 291 §6 (1910), 45 U. S. C. §56 (1946)."" "Section 1404(a) does not limit or otherwise modify any right granted in§6 of the Liability Act or elsewhere to bring suit in a particular district." E.parte Collett, 69 Sup. Ct. 944, 947 (1949).8 Ex parte Collett. 69 Sup. Ct. 944, 947 (1949)." United States v. National City Lines, 69 Sup. Ct. 955, 958 (1949) (dissentingopinion).

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Courts -- Venue -- Inconvenient Forum Considerations and Special Venue Provisions Under the New Judicial Code

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