In Defense of Forum Shopping: a Realistic Look at Selecting a Venue

• Publication year: 2021
• Citation: Vol. 78

78 Nebraska L. Rev. 79. In Defense of Forum Shopping: A Realistic Look at Selecting a Venue

79

Mary Garvey Algero*

In Defense of Forum Shopping: A Realistic Look at Selecting a Venue

TABLE OF CONTENTS

I. Introduction ............................................. 79
II. Forum Shopping's Place in the American Judicial
System ................................................... 82
III. What Congress and the Courts Have Said About Forum
Shopping ................................................. 87
A. Forum Shopping to Select the Applicable Law............ 88
1. Forum Shopping to Dictate Recoverable
Damages ............................................ 88
2. Forum Shopping to Ensure Capacity to Sue ........... 93
3. Forum Shopping to Determine Applicable
Statutes of Limitations ............................ 95
4. Forum Shopping for Favorable Custody and
Divorce Laws ....................................... 98
B. Forum Shopping in Search of Favorable
Interpretation and Application of the Law ............. 99
C. Forum Shopping by the "Potential Defendant"
Before the "Potential Plaintiff" has Filed Suit ...... 102
IV. The Ethics of Forum Shopping and the Possibility of
Being Sanctioned ........................................ 105
A. The Ethics of Forum Shopping ......................... 105
B. Sanctions for Forum Shopping ......................... 108
V. Conclusion .............................................. 110

I. INTRODUCTION

"Forum shopping" typically refers to the act of seeking the most advantageous venue in which to try a case.(fn1) Forum shopping can take

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place "horizontally" when a party is shopping for the best venue from among courts within the same court system, such as when a party is shopping for the best state court in which to litigate his case. Forum shopping can also take place "vertically" when a party is trying to move from state court to federal court or vice versa. Regardless of which type of forum shopping is taking place, attorneys filing lawsuits or defending against lawsuits usually have the same objective when it comes to evaluating or seeking a venue - they seek a venue in which their clients can not only get a fair trial, but in which their clients might gain some advantage or begin with the odds in their favor.(fn2)

Many practicing attorneys and judges were led to believe in law school that forum shopping was a terrible thing, practiced by only the most manipulative and devious attorneys.(fn3) This teaching may have confused some who may have wondered why venue and jurisdictional

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provisions existed that allowed some discretion in selecting a forum, yet "shopping" for a forum was taboo. Thus, "selecting" a forum was a necessary practice for those filing a lawsuit; "shopping" for one, on the other hand, was forbidden. Likewise, "evaluating" the plaintiff's chosen forum was certainly necessary to adequately represent a defendant, but "shopping" for a better forum was forbidden.

The confusion may have been compounded when these graduates began to practice law and were asked by their respected colleagues to evaluate jurisdiction and venue for the cases to which they were assigned. Were they being asked to compromise their legal ethics already and join the ranks of the manipulative and devious, or were they just being asked to apply the procedural rules and analyze their cases thoroughly? The most likely answer to the question raised above is that these attorneys were being asked to zealously represent their clients and thoroughly analyze their cases in light of the governing procedural rules. After all, most attorneys believe that where an action will be litigated is a significant factor in evaluating the merits of a case.(fn4)

So then, what is or should be forbidden or discouraged under the term "forum shopping"? Perhaps it refers only to those egregious circumstances in which attorneys file suits in forums allowed by law, but inconvenient because of their lack of connection to the issues involved in the lawsuits. Often these "egregious" circumstances occur when the client's only chance of proceeding with a lawsuit is in a remote forum, which may occur when the client has waited too long to seek the assistance of an attorney. The attorney may file in the remote forum, hoping to have the court apply a statute of limitations that would make the client's filing timely.(fn5) Certainly, the attorney is not at fault for trying to provide his client with his day in court.

Other times, the attorney is simply seeking a forum in which awards are traditionally high or the juries are liberal or conservative, depending on the client's position. Do his actions amount to forum shopping? Of course. Should they be forbidden either on an ethical or procedural level? Should the attorney use restraint and not seek the more advantageous venue for his client? If so, the attorney could face a malpractice claim from his client.(fn6)

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This article discusses forum shopping and its place in the American judicial system. It defends forum shopping and those accused of forum shopping to the extent that such shopping is done within the procedural and ethical rules, and it considers some of the rules and decisions that have addressed or discussed forum shopping. Further, it calls on lawmakers-legislators and judges-to accept forum shopping as simply a procedural part of litigation, when that forum shopping takes place within the rules, and to eliminate what is deemed unacceptable forum shopping by legislatively limiting alternative forums and judicially exercising the power to transfer cases to more con-venient forums.

II. FORUM SHOPPING'S PLACE IN THE AMERICAN

JUDICIAL SYSTEM

Attempts to extinguish the "danger of forum-shopping"(fn7) have been only partially successful because forum shopping is an intrinsic part of the American judicial system. Not only do venue options provided by procedural rules allow forum shopping, but the structure of the judicial system provides incentives to shop for a forum.(fn8)

The American judicial system comprises the federal court system and the state court systems. These court systems were designed to function independently of each other. Commenting on this independence, the Court explained that the United States Constitution

recognizes and preserves the autonomy and independence of the States,

independence in their legislative and independence in their judicial

departments. Supervision over either the legislative or the judicial

action of the States is in no case permissible except as to matters

by the Constitution specifically authorized or delegated to the

United States. Any interference with either, except as thus

permitted, is an invasion of the authority of the State and, to that

extent, a denial of its independence.(fn9)

Co-existing with this independence, however, are the instances in which jurisdiction of the court systems overlaps, most notably brought about by choices granted to litigants in diversity of citizenship cases.(fn10)

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Originally, diversity jurisdiction was created "to prevent apprehended discrimination in state courts against those not citizens of the State."(fn11) Thus, forum shopping or venue selection was sanctioned in those cases in which a litigant might have felt that he would not be given a fair trial in a state forum.

Overlapping jurisdiction between the federal court system and a state court system is not the only sanctioned means by which a litigant can select a venue or forum shop. State venue provisions typically provide two or more alternative venues within a state in which a suit may be filed.(fn12) Additionally, specialty courts, like the federal bankruptcy court, give litigants alternative forums in which to litigate their disputes.(fn13)

In light of the potential venue choices provided to litigants under the American judicial system and the governing laws, we should not be surprised or dismayed at the fact that forum shopping has thrived.(fn14) On the other hand, lawmakers have the responsibility to limit choices when those choices "render[] impossible equal protection of the law."(fn15)

Several cases illustrate the extent to which forum shopping is part of the American judicial system. In these cases, the courts attempted to prevent forum shopping, but in each case the court prevented some forum shopping while creating other opportunities for forum shopping. One of the first cases to raise awareness about forum shopping

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is Swift v. Tyson.(fn16) In Swift v. Tyson, the Court, interpreting section 34 of the Federal Judiciary Act of 1789, (fn17) held that federal courts need not follow state case law in diversity cases when the state cases are based on general principles of commercial law and not on local statute or "local usages of a fixed and permanent operation."(fn18) The Court explained that state court decisions could be considered, but they were not conclusive of state law because they were not the law themselves, but were only evidence of what the laws were at a particular time.(fn19)

Following this decision, problems with uniformity arose between state and federal court interpretations of state law and "general law."(fn20) These discrepancies in interpretation, as well as trouble determining the difference between general law and local law, caused uncertainty among courts and litigants.(fn21) The state courts and federal courts each insisted on applying their own interpretations of common law, which prevented uniformity of decisions between those of state courts and those of federal courts purporting to apply the same common law.(fn22) Thus, despite the Court's attempt to preserve state autonomy, the result of Swift was that it preserved federal court autonomy to some extent and "prevented uniformity in the...