Tom J. Hollis v. Florida State University , 259 F.3d 1295 ( 2001 )

[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
_________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
JULY 30, 2001
No. 00-11627
THOMAS K. KAHN
_________________ CLERK
D.C. Docket No. 99-00625-CV-J-21B
TOM J. HOLLIS,
Plaintiff-Appellant,
versus
FLORIDA STATE UNIVERSITY, by and
through The Board of Regents of
the State of Florida,
Defendant-Appellee.
_________________
Appeal from the United States District Court
for the Middle District of Florida
_________________
(July 30, 2001)
Before EDMONDSON and RONEY, Circuit Judges, and JORDAN*, District Judge.
JORDAN, District Judge:
____________________
* Honorable Adalberto Jordan, U.S. District Judge for the Southern District of Florida, sitting
by designation.
When an action is removed from state court to federal court, it is removed to the
district court “embracing the place where such action is pending.” 28 U.S.C.
§ 1441(a). The question presented by this appeal is whether a defendant can obtain
dismissal of a removed action on the ground that, when originally filed in state court,
the action lacked proper venue under state law. We conclude that state-law venue
deficiencies cannot be the basis for dismissal of a removed action because 28 U.S.C.
§ 1441(e), which was enacted in 1986, abrogated the theory of derivative jurisdiction.
Upon removal the question of venue is governed by federal law, not state law, and
under § 1441(a) a properly removed action necessarily fixes venue in the district
where the state court action was pending. A defendant dissatisfied with venue after
removal may, however, seek a transfer to another division or district under federal
law. See, e.g., 28 U.S.C. § 1404(a).
I
In May of 1999, Tom Hollis sued Florida State University in the Circuit Court
in and for Duval County, Florida, which comprises the state’s Fourth Judicial Circuit.
Mr. Hollis alleged in his complaint that he suffered from chronic fatigue syndrome,
that he had been unable to complete his qualifying examination in the Ph.D. program
in communications due to this disability, and that FSU had improperly dismissed him
from the program in March of 1998. Mr. Hollis asserted claims under the Americans
with Disabilities Act, 42 U.S.C. §12101 et seq., the Rehabilitation Act, 29 U.S.C. §
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701 et seq., and the Florida Civil Rights Act, Fla. Stat. § 760.01 et seq.
FSU removed the case to the U.S. District Court for the Middle District of
Florida, and simultaneously moved under 28 U.S.C. § 1404(a)1 to transfer venue to
the U.S. District Court for the Northern District of Florida. FSU argued that Mr.
Hollis’ claims were based on his graduate studies at FSU’s campus in Tallahassee,
Florida, which is located in the Northern District. FSU also asserted that the relevant
documents, as well as Mr. Hollis’ professors, were in Tallahassee. Mr. Hollis opposed
the § 1404(a) motion. FSU, he argued, had not demonstrated that a trial in
Tallahassee would be substantially more convenient than a trial in Jacksonville. In
reply, FSU cited the Second Circuit’s decision in PT United Can Co., Ltd. v. Crown
Cork & Seal Co., 138 F.3d 65, 72 (2d Cir. 1998), for the proposition that removal did
not constitute a waiver of its right to seek a change of venue. FSU also maintained
that the district court’s removal jurisdiction was merely derivative. The district court,
said FSU, merely inherited what the state court had – an improperly filed case that had
to be dismissed under Fla. Stat. § 47.011,2 the state venue statute, or transferred
1
“For the convenience of parties and witnesses, in the interests of justice, a district
court may transfer any civil action to any other district or division where it might have been
brought.” 28 U.S.C. § 1404(a).
2
“Actions shall be brought only in the county where the defendant resides, where the
cause of action accrued, or where the property in litigation is located[.]” Fla. Stat. § 47.011.
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pursuant to 28 U.S.C. § 1406(a).3
The district court denied FSU’s § 1404(a) motion, explaining that Mr. Hollis
and his witnesses lived in or near Jacksonville and that there was no specific need to
try the case in Tallahassee. The district court then followed PT United and held that,
following removal, a federal court can consider the propriety of venue under state law
and dismiss the action if such venue was improper when the action was initially filed.
Turning to Fla. Stat. § 47.011, the district court ruled that venue for Mr. Hollis’ action
was improper in the Circuit Court in and for Duval County, and that FSU could be
sued only in the Circuit Court in and for Leon County (where Tallahassee is located).
Finally, the district court addressed the possibility of a transfer to the U.S.
District Court for the Northern District of Florida under § 1406(a). The district court
found this provision inapplicable, reasoning that a removed action is not an action
“laying venue in the wrong division or district.” Finding no basis to transfer the case,
the district court dismissed it without prejudice due to “improper venue in the [state]
circuit court.”
Mr. Hollis moved for reconsideration. He informed the district court that his
FCRA claims would be time-barred if a new action had to be filed. He also argued
3
“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.” 28 U.S.C. § 1406(a).
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that, under what he termed the majority rule, a district court had the authority under
§ 1406(a) to transfer a removed case whose venue had been improper under state law.
FSU opposed Mr. Hollis’ motion. It pointed out that the federal courts were evenly
divided on the § 1406(a) issue, and maintained that the district court had no
jurisdiction to do anything but dismiss Mr. Hollis’ action upon concluding that venue
had been improper under state law. The district court denied the motion for
reconsideration, and this appeal followed.
II
Mr. Hollis argues that the district court erred in dismissing the action due to
improper venue under state law. Our review of the district court’s decision is plenary.
See, e.g., Peterson v. BMI Refractories, 124 F.3d 1386, 1390 (11th Cir. 1997).
Because FSU decided not to cross-appeal the district court’s denial of its requests for
transfer under §§ 1404(a) and 1406(a), those rulings are not before us.
A
The district court, relying on PT United, dismissed Mr. Hollis’ complaint
because the action, when originally filed, lacked proper venue under Florida law. In
PT United, the Second Circuit, although not addressing venue challenges made by
certain defendants in an action removed to federal court, explained in dicta that a
defendant who removes a case to federal court does not, by so doing, waive any state-
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law venue challenges. Citing to cases like Freeman v. Bee Machine Co., 319 U.S.
448, 449 (1943), and Greenberg v. Giannini, 140 F.2d 550, 553 (2d Cir. 1944) (L.
Hand, J.), the Second Circuit reasoned that there is no waiver because “[w]here a state
court lacks jurisdiction of the subject matter or of the parties,” the federal district court
“acquires none on a removal of the case.” PT United, 138 F.3d at 72-73. “Because
the ‘jurisdiction of the federal court on removal is, in a limited sense, a derivative
jurisdiction,’ any defect in jurisdiction or process present in the state suit may be
asserted in the district court.” Id. at 73. As explained below, we do not find the dicta
in PT United persuasive.
The judicially-created theory of derivative jurisdiction, which provided the
basis for the Second Circuit’s venue discussion in PT United, has been around for a
long time, and was cited with approval by the Supreme Court as late as 1981. See
Arizona v. Manypenny, 451 U.S. 232, 242 n.17 (1981). A good summary of the
theory can be found in Lambert Run Coal Co. v. Baltimore & O.R. Co., 258 U.S. 377,
382 (1922): “The jurisdiction of the federal court on removal is, in a limited sense, a
derivative jurisdiction. If the state court lacks jurisdiction of the subject-matter or of
the parties, the federal court acquires none, although it might in a like suit originally
brought there have had jurisdiction.”
It would be hard to criticize PT United if the theory of derivative jurisdiction
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retained its vitality today, but the theory has been superseded by statute and no longer
has any force. In 1986 Congress amended §1441, the general removal provision, by
adding subsection (e). That subsection provides that a district court to which a civil
action is removed is “not precluded from hearing and determining any claim” simply
because the state court from which the action was removed “did not have jurisdiction
over that claim.” As many of our sister circuits have recognized, § 1441(e) has
abrogated the theory of derivative jurisdiction. “While it was once settled law that a
federal court’s removal jurisdiction was derived from the state court’s jurisdiction, this
rule has been abolished by [§ 1441(e)].” Lloyd v. FDIC, 22 F.3d 335, 336 n.2 (1st Cir.
1994). Accord Rosciszewski v. Arete Assoc., Inc., 1 F.3d 225, 232 n.6 (4th Cir. 1993);
Baris v. Sulpicio Lines, Inc., 932 F.2d 1540, 1548 & n.12 (5th Cir. 1991); North
Dakota v. Fredericks, 940 F.2d 333, 335-36 (8th Cir. 1991); Nishimoto v. Federman-
Bachrach & Assoc., 903 F.2d 709, 714 n.11 (9th Cir. 1990); Morda v. Klein, 865 F.2d
782, 783 (6th Cir. 1989).
Although PT United was decided in 1998, the Second Circuit did not discuss
§ 1441(e) and relied on derivative jurisdiction cases decided prior to 1986. The dicta
in PT United therefore seems to us to be inaccurate, and cannot support the district
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court’s dismissal of Mr. Hollis’ action.4 We recognize, of course, that PT United does
not stand alone, and that other authorities contain language in accord with the Second
Circuit’s discussion. But these cases and treatises suffer from the same problems as
PT United – the failure to acknowledge § 1441(e) and/or the reliance on derivative
jurisdiction cases. See, e.g., Lambert v. Kysar, 983 F.2d 1110, 1113 n.2 (1st Cir.
1993); Transure, Inc. v. Marsh and McLennan, Inc., 766 F.2d 1297, 1300 (9th Cir.
1985); Crumrine v. NEG Micon USA, Inc., 104 F. Supp. 2d 1123, 1127-28 (N.D. Iowa
2000); Brown v. Texarkana Nat’l Bank, 889 F. Supp. 351, 352 (E.D. Ark. 1995). See
also J. MOORE, 17 MOORE’S FEDERAL PRACTICE § 110.08 (3d ed. 2001) (citing PT
United favorably without accounting for § 1441(e)’s abrogation of the theory of
derivative jurisdiction).
B
In removed actions the general venue provision, 28 U.S.C. § 1391, does not
apply. Instead, § 1441(a), by requiring removal to the district court for the district in
which the state action is pending, properly fixes the federal venue in that district.
Thus, once a case is properly removed to federal court, a defendant cannot move to
dismiss on § 1391 venue grounds. See Polizzi v. Cowles Magazines, Inc., 345 U.S.
4As far as we can tell, § 1441(e) was not brought to the district court’s attention, and
has not been mentioned in the briefs filed here.
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663, 665 (1953) (holding that action removed pursuant to § 1441(a) could not be
dismissed by district court on ground that venue under § 1391 would have been
improper if action had originally been brought in federal court: “[E]ven on the
question of venue, § 1391 has no application to this case because this is a removed
action. The venue of removed actions is governed by . . . § 1441(a), and under that
section venue was properly laid in the Southern District of Florida [the district in
which the state action had been pending].”). See also Moss v. Atlantic Coast Line R.
Co., 157 F.2d 1005, 1006 (2d Cir. 1946) (“The reason [the defendant] cannot prevail
in its present attempt to dismiss the suit for improper venue is simply because the
venue is proper by virtue of the provisions of [the removal statute.]”). The geographic
component of § 1441(a) “is a venue provision,” Peterson, 124 F.3d at 1392, and we
see no reason – aside from the now-abrogated theory of derivative jurisdiction – to
treat state-law venue challenges differently than § 1391 venue challenges. After all,
“removed actions become subject to federal rather than state rules of procedure.”
Aguacate Cons. Mines, Inc. v. Deeprock, Inc., 566 F.2d 523, 525 (5th Cir. 1978). See
also Stewart Org., Inc. v. Ricoh Corp., 810 F.2d 1066, 1068 (11th Cir. 1987) (en
banc) (“Venue is a matter of federal procedure. . . . ”), aff’d on other grounds, 487
U.S. 22 (1988).
Given how cases like Polizzi and Peterson have construed § 1441(a), it is
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unnecessary (and, we think, confusing) to say, as have some courts and commentators,
that a defendant who removes a case to federal court “waives” any venue challenges.
See, e.g., C. WRIGHT, A. MILLER, & E. COOPER, 14C FEDERAL PRACTICE &
PROCEDURE § 3726 (3d ed. 1998). Because § 1441(a) does not give a removing
defendant a choice of districts to remove to, it may not be entirely accurate to
characterize removal as the voluntary relinquishment of a legal right. For our
purposes it sufficient to recognize that, as a matter of law, § 1441(a) establishes
federal venue in the district where the state action was pending, and it is immaterial
that venue was improper under state law when the action was originally filed. See
Serrano v. United States Fire Ins. Co., No. EP-00-CA-255-DB, 2000 WL 33348220,
*1-*2 (W.D. Tex. Nov. 7, 2000); Bacik v. Peek, 888 F. Supp. 1405, 1413 (N.D. Ohio
1993); R. GIVENS, 1 MANUAL OF FEDERAL PRACTICE § 2.28 (5th ed. 1998).
This does not mean that a defendant in a removed action is left without options
if it believes that the case can be better litigated and tried in another division or
district. As did FSU, a defendant can seek a transfer under § 1404(a). See Serrano,
2000 WL 33348220, at *2 (“[T]he only proper way [for a removing defendant] to
assert a challenge to venue, without flouting the venue provisions of 28 U.S.C. §
1441, is to do so pursuant to 28 U.S.C. § 1404(a). . . . ”); Hartford Fire Ins. Co. v.
Westinghouse Elec. Corp., 725 F. Supp. 317, 320 (S.D. Miss. 1989) (“[T]hough their
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removal precludes a challenge to venue as improper, defendants may still attack this
venue as inconvenient.”). There may even be a basis for requesting a transfer
pursuant to § 1406(a). Cf. Aguacate Cons. Mines, 566 F.2d at 524-25 (holding that
removed action can be transferred pursuant to § 1406(a) if personal jurisdiction over
defendant cannot be exercised in the district to which action is removed). We have
no occasion to address the district court’s §§ 1404(a) and 1406(a) rulings, however,
as FSU chose not to cross-appeal on those matters.5
III
The district court’s dismissal of Mr. Hollis’ action is REVERSED, and the case
is REMANDED for proceedings consistent with this opinion.
5
We also have no reason to discuss the First Circuit’s conclusion in Lambert, 983 F.2d
at 1112-13, that a district court can dismiss an action that has been properly removed on diversity
grounds if the parties’ contract contains a valid forum selection clause requiring litigation to be
instituted in a particular state court. Cf. Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 32 (1988)
(“[F]ederal law, specifically 28 U.S.C. § 1404(a), governs the district court’s decision whether to
give effect to the parties’ forum selection clause and transfer this case to a court in Manhattan.”);
Lipcon v. Underwriters at Lloyd’s, London, 148 F.3d 1285, 1290 (11th Cir. 1998) (“[M]otions to
dismiss upon the basis of choice-of-forum and choice-of-law clauses [that purportedly require
litigation in another country] are properly brought pursuant to Fed. R. Civ. P. 12(b)(3) as motions
to dismiss for improper venue.”).
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