The Marshall Division of the U.S. District Court for the Eastern District of Texas is famous for its speed and efficiency and infamous as a plaintiff-friendly "judicial hellhole."
Whatever your perspective, there is no doubt that Marshall is a litigation magnet and that plenty of corporate defendants would love to "get out of Dodge," if only they could find an escape route.
That's why all eyes are on In Re Volkswagen of America Inc. et al., now under consideration by the full 5th Circuit.
Defense attorneys say the appeals court could use the car accident case to apply the brakes to the forum shopping that has made Marshall the U.S. capital for patent case filings and a national hotspot for product liability suits.
Seventeen judges participated in the 5th Circuit's en banc review of a federal judge's decision to deny Volkswagen's request to move a product defect suit from Marshall to Dallas, 150 miles away.
Lawyers present at the recent hearing say the judges' questions revealed deep division over an appeal that experts say could rewrite the rules for venue transfer motions to make it easier for companies to move cases out of districts viewed to be inhospitable to defendants.
"Many lawyers and many corporations think that, a lot of times, venue can be one of the most important factors in a case," says David George, a partner with Connelly Baker Wotring in Houston.
"The argument in this case is that ... if a case has absolutely no relationship [to the venue] even though the company does business there, you shouldn't be able to file suit there," says George, who represents two railroads that supported Volkswagen as amici curiae.
The crux of the appeal is how much discretion a U.S. district judge has to decide venue transfer motions. Plaintiffs are entitled to file suit in any district where a defendant resides, but 28 U.S.C. Section 1404(a) allows parties to ask a judge to move the case out of a district if it would be more convenient for parties and witnesses and in the interests of justice.
The case arose from a fatal Volkswagen Golf crash in 2005. The plaintiffs allege that improper seat design caused their injuries. The district court denied Volkswagen's bid to change the venue to the Dallas Division of the Northern District of Texas, even though the case had no apparent links to Marshall. The car was purchased in Dallas. The accident occurred on a Dallas freeway. Dallas residents witnessed the crash. Dallas police and paramedics responded. A Dallas doctor performed the autopsy. The third-party defendant driver lives in Dallas County and none of the parties or significant witnesses resides in the Marshall division.
Volkswagen contends the district judge abused his broad discretion by paying too much attention to the plaintiffs' wishes in a case with no relevant links to Marshall. The Product Liability Advisory Council, which represents 120 U.S. and international product manufacturers, argues in an amicus brief in support of Volkswagen that a plaintiff's choice of a forum with which he or she has no connections deserves "minimal deference."
The plaintiffs, however, argue that there is a long history of supporting the plaintiff's right to choose the venue.
"Really all we are arguing for is a continuation of the law as it existed, in our view, in the 5th Circuit since the early 1960s, if not before," says Barry Siegel, a solo practitioner in Houston who represents the plaintiffs.
In October, a 5th Circuit panel that heard Volkswagen's petition for a change of venue was unpersuaded by that precedent and ordered the case moved to Dallas.
"The plaintiffs exercised their privilege to choose the Marshall Division as the forum for their case, but Marshall has no connection to the parties or the facts of this case," explained Circuit Judge E. Grady Jolly. "When the transferee forum is no more convenient than the chosen forum, the plaintiff's choice should not be disturbed. When the transferee forum is clearly more convenient, a transfer should be ordered."
The panel's admonition that transfer is compulsory if another venue is "clearly more convenient" departs from settled case law and Congress' intent that trial judges enjoy wide discretion in fact-bound determinations, argues University of Houston Law Center Professor Lonny Hoffman.
"When you get appellate courts playing Monday-morning quarterback, all that does is slow down the judicial process," says Hoffman, author of an amici curiae brief in support of the plaintiffs on behalf of 14 civil procedure professors. He sees "a decent prospect" that the en banc court will overrule the panel.
Yet there was sympathy at the en banc hearing for Volkswagen's pitch that a district court judge's discretion "is not unlimited." Nor should a plaintiff's forum preference be determinative if a case has no other connections to the forum. "It needs to be based on a reasonable preference," commented one judge.
Whoever wins, George anticipates the 5th Circuit's judgment will reverberate across the country. "Any time a federal appeals court goes en banc to speak to an issue like that, other courts pay attention," he explains. "So if the judgment is contrary to the way other courts are doing it, that could set up an opportunity now, or in the near future, for the U.S. Supreme Court to come in and give clear guidance so everyone is working off the same page."