Monday, July 16, 2007
On Friday, the Third Circuit decided Lafferty v. St. Riel and held that when a case is transferred for improper venue under 28 U.S.C. § 1406(a), the date of filing of the case in the original court—not the date of transfer—is the date of filing for statute of limitations purposes. The court reasoned that a transfer (as opposed to a dismissal) for improper venue does not make the complaint disappear. Instead, a transfer (as opposed to a dismissal) keeps the complaint intact and simply moves the existing lawsuit. Thus, although the statute of limitations of the transferee court generally applies, the filing date is that filed in the transferor court.
The decision puts the Third Circuit in some conflict with Eighth Circuit (which applies the statute of limitations of the transferor court) and in direct conflict with the Fourth, Seventh, and Eleventh Circuits (which all apply the transferee court's statute of limitations but use the date of transfer as the filing date for compliance with that statute of limitations).
Interestingly, the claims at issue were based on state law and therefore were subject to state statutes of limitations, and the transfer was out-of-state. This raises questions of venue, Erie, and conflict of laws. Yummy! I do note that the court expressly acknowledged that because the two states' statutes of limitations were identical, it did not reach any issues that might arise if the statutes of limitations applied by the two courts were different.
UPDATE: I have corrected the date the opinion was filed.
UPDATE #2: In reporting on the case, I took the Third Circuit’s word when it characterized the Fourth, Seventh, Eighth, and Eleventh Circuits as reaching different results. Fortunately, there are those who actually read the underlying cases. Hat tip to Kevin Clermont, who concludes that Lafferty misread those Circuits’ precedents and that the rule is fairly straightforward and uniform: The § 1406(a) transferee court applies transferee law, except that the transferee’s SOL will be tolled by the initial filing if within both the transferor’s and transferee’s limitations period. Thanks, Kevin!