Fifth Circuit Panel Holds That 28 U.S.C. § 1631 Transfer Can Cure a Lack of Personal Jurisdiction

In Franco v. Mabe Trucking Co., No. 19-30316 (5th Cir. July 8, 2021), the Fifth Circuit joins other circuits that have held that 28 U.S.C. § 1631 can cure defective personal as well as subject-matter jurisdiction. But the panel split on the interaction between § 1631 and Louisiana’s “prescription” (limitations) law.

A vehicular accident on near the Louisiana-Texas border led to the filing of a diversity-jurisdiction action in the U.S. District Court for the Eastern District of Texas “on November 22, 2016, two days before the one-year anniversary of the accident.” That court dismissed for want of personal jurisdiction over the defendant Mabe and “transferred the case to the Western District of Louisiana, which would likely have possessed specific jurisdiction under the Louisiana long-arm statute to try claims against Mabe related to the accident because the court sat within the district in which the accident occurred.” The Texas judge cited 28 U.S.C. § 1406(a) in support of the transfer in the “interests of justice.”

Upon transfer, the defendant moved for summary judgment on limitations grounds, holding that Louisiana’s prescription law, not 28 U.S.C. § 1631, governed filing date of the action. That statute, LA. CIV. CODE Arts. 3462, states in full: “Prescription is interrupted when the owner commences action against the possessor, or when the obligee commences action against the obligor, in a court of competent jurisdiction and venue.  If action is commenced in an incompetent court, or in an improper venue, prescription is interrupted only as to a defendant served by process within the prescriptive period.” The district court granted the motion, holding that because the case was filed in an “incompetent court,” then under governing state law, prescription was only arrested on service of the lawsuit rather than filing … and here, process was served beyond the applicable one-year prescription period.

The Fifth Circuit reverses and remands. “We begin by addressing whether § 1631 is relevant when a district court determines that there is a lack of personal, as opposed to subject-matter, jurisdiction and the interests of justice demand transfer.” While the Fifth Circuit had not yet ruled on the matter, the panel notes that the plaint text of § 1631 “does not confine itself to personal or subject-matter jurisdiction, but instead ‘a want of jurisdiction’ generally.” The panel also notes the historical context of the section, which was enacted in 1982 to clear-up confusion in the federal courts about whether 28 U.S.C. § 1404(a) or § 1406(a) transfers were lawful when the transferor district court lacked personal jurisdiction. Finally, the panel notes that other circuits ruling on this issue had uniformly held that § 1631 applies to personal as well as subject-matter jurisdiction.

Next, the panel notes that while the Texas district court cited 28 U.S.C. § 1406(a) in support of the transfer, the Louisiana transferee court concluded that the Texas court “ordered a Section 1631 transfer in all but name.” “Ultimately, we agree with the Louisiana district court that § 1631’s provisions apply to the transferred case because the statute establishes a mandatory duty when it is triggered that is not ‘contradictory or mutually exclusive’ of the duty triggered by § 1406(a) . . . . In light of § 1631’s mandatory language, our sister circuits have applied the statute to transfers even when the parties did not move under § 1631 and where, as here, the transferring court did not mention § 1631 in its transfer orders.”

The panel majority (Judge Edith Jones dissenting) finally holds that § 1631, not state law, governs when the case was filed for purposes of stopping limitations/prescription from running. After § 1631 requires a court to “transfer [an] action . . . to [a] court . . . in which the action . . . could have been brought at the time it was filed or noticed[,]” the statute states that “the action . . . shall proceed as if it had been filed in . . . the court to which it is transferred on the date upon which it was actually filed in . . . the court from which it is transferred.”  If this provision controls, the complaint would be treated as filed on the day it was originally filed in Texas. The defendant argued that the Louisiana statute conflicted with this section and must control as substantive state law under the Erie doctrine. But the majority holds that Erie applies only “to the kind of judge-made federal practices that might arguably be characterized as common law—practices that have no source in a federal rule or statute . . . . The Erie doctrine is not implicated when a valid federal rule or statute directly governs the matter at issue.” And “the plain language of the statute governs when and where Franco’s claim must be considered to have been filed.”

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