While conflict-of-laws principles can be perplexing, one thing is certain: A complaint is not dismissed or transferred simply because choice-of-law rules require application of the law of a state other than the forum state. However, some attorneys argue for dismissal by conflating choice-of-law questions with standing and venue. Here is a refresher on these separate concepts.
Choice of Law
Courts routinely give effect to parties’ contractual choice-of-law provisions. Here, we discuss choice-of-law considerations where no contractual choice governs.
Why: You believe the law of a state other than the forum state should apply to the claims.
Type of Motion: Include a choice-of-law argument as a preliminary issue in other motions, such as a motion to dismiss or for summary judgment, or raise it in a stand-alone motion.
Basis: Choice of law is not a merits determination, but “a determination that, based on policy reasons, non-forum law should apply.” In re iPhone 4S Consumer Litig., No. C 12-1127, 2013 WL 3829653, at *7 (N.D. Cal. July 23, 2013). A federal court sitting in diversity applies the choice-of-law rules of the forum state. Klaxon Co. v. Stentor Co., 313 U.S. 487 (1941). Those rules generally focus on (a) the place of the wrong, (b) differences between the forum and foreign states’ laws and interests in having their law applied to the case, and/or (c) which state has the most significant relationship to the case.
Relief Available: A ruling as to which state’s law applies to the claims. The court will continue presiding over the case and apply the non-forum state’s law. Willis v. Green Bay & W.R. Co., 326 U.S. 549 (1946). The court also may grant a plaintiff leave to amend to reassert her claims under the non-forum state’s laws. See, e.g., Cicero v. Liberty Mut. Ins. Co., No. 15-CV-076, 2016 WL 6571235, at *2 (M.D. Fla. Jan. 7, 2016).
Article III Standing
Why: You want to challenge the federal court’s authority to preside over the plaintiff’s case.
Type of Motion: Rule 12(b)(1) motion to dismiss for lack of subject-matter jurisdiction.
Basis: Standing to sue under Article III ensures that federal courts only exercise powers granted to them in the Constitution—the power to decide cases or controversies. Doe v. Chao, 540 U.S. 614, 625 (2004). Standing exists if a plaintiff sufficiently alleges an “injury in fact” that (i) can fairly be traced to the defendant’s challenged action and (ii) is likely to be redressed by a favorable decision. Summers v. Earth Island Institute, 555 U.S. 488, 492-93 (2009); DaimlerChrysler Corporation v. Cuno, 547 U.S. 332, 340–41 (2006).
Relief Available: Because standing is a matter of subject-matter jurisdiction, and not a merits decision, dismissal should be ordered “without prejudice.” Sinckler v. F.C.C., No. 09-CIV-1313, 2009 WL 2151345, at *2 (D.D.C. July 16, 2009).
Note: The separate concept of “statutory standing” does not implicate a court’s jurisdiction. Statutory standing looks to whether the plaintiff has a cause of action under the relevant statute. A challenge based on statutory standing should be brought under Rule 12(b)(6). See generally Lexmark Int'l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 128 n.4 (2014).
Transfer of Venue
Why: You want the case heard before a federal court in another venue.
Type of Motion: Motion to transfer venue under 28 U.S.C. § 1404(a).
Basis: A federal court may transfer a case to another venue when it is more convenient for the parties and witnesses and in the interest of justice. Two key factors are: “the familiarity of the forum with the law that will govern the case; and [] the avoidance of unnecessary problems of conflict of laws or application of foreign law.” Volkswagen of Am., Inc., 545 F.3d 304, 315 (5th Cir. 2008).
Relief Available: An order transferring the case to the more convenient venue. Dismissal without prejudice may be ordered if that more convenient venue is a foreign country, as opposed to a venue in another state.
Note: The federal transfer statute essentially codifies the doctrine of forum non conveniens with respect to a transfer between different federal district courts. Where the alternative and more convenient forum is in a foreign country, the doctrine of forum non conveniens still applies. See Am. Dredging Co. v. Miller, 510 U.S. 443, 449 n.2 (1994).
Kathryn Honecker is the chair of the Class Action Department at Rose Law Group pc in Scottsdale, Arizona, and cochairs the Section of Litigation’s Consumer Litigation Committee. Mark E. Rooney is the principal and founder of The Rooney Firm PLLC in Washington, D.C., and cochairs the Consumer Litigation Committee’s Subcommittee on TCPA and FDCPA Litigation.