United States District Court, E.D. Pennsylvania
HEALTHCARE SERVICES GROUP, INC.
NEW ORLEANS HOME FOR THE INCURABLES, INC.
cannot agree to a venue for their disputes which violates
Congress' long-established definition of proper venue.
Unlike private arbitration clauses, they cannot agree to
create venue where it does not exist. While they can agree to
a particular venue if permitted under federal law and then
argue as to the effect of their forum selection agreement for
purposes of transfer to a certain district for convenience
reasons, they cannot contract around Congress' mandate.
When, as today, we review venue in a case where a
Pennsylvanian seeks to collect for its services provided
entirely in Louisiana and the Louisiana citizen then decides
not to pay for the services provided there, we lack proper
venue in this District over this breach claim regardless of
their agreement to litigate in this District.
Plead facts relating to venue
citizen Healthcare Services Group, Inc. provides
"necessary personnel and supervision to perform
housekeeping services." On October 5, 2015, Healthcare
Services agreed to provide housekeeping and laundry services
to Louisiana citizen New Orleans Home for the Incurables,
Inc. d/b/a John J. Hainkel Jr. Home and Rehabilitation
Center. New Orleans Home would pay $34, 650 per
month for the services. The parties agreed to
"exclusive" venue in the Pennsylvania Court of
Common Pleas of Bucks County or the United States District
Court for the Eastern District of Pennsylvania.
Orleans Home refused to pay Healthcare Services for
"all" housekeeping services it provided under their
agreement. Healthcare Services alleges New Orleans
Home breached their contract, or in the alternative was
unjustly enriched, when it failed to pay Healthcare Services
for the housekeeping services provided under their agreement.
Services sued New Orleans Home invoking our diversity
jurisdiction because the parties are citizens of different
states and the amount in controversy exceeds $75, 000. After
service on New Orleans Home, we issued a rule to show cause
for both parties to explain the propriety of venue in this
district for services provided in the District of
Services argues venue is proper here because the parties
selected our district as their forum in their agreement and
we must enforce their forum selection clause. New Orleans
Home seeks dismissal under 28 U.S.C. § 1406(a) arguing
venue is not proper under 28 U.S.C. § 1391 because a
substantial part of the action or events giving rise to
Healthcare Services claims did not arise in Pennsylvania.
While New Orleans Home seeks dismissal, it concedes venue is
proper in Louisiana.
Venue must be proper under 28 U.S.C. § 1391 regardless
of the forum selection clause.
requires proper venue under § 1391 which supersedes an
agreement among private litigants as to their preferred
forum. Congress alone governs what is proper venue for a
civil action brought in federal district courts. Congress
made this clear in stating § 1391(a) "shall govern
the venue of all civil actions brought in the district courts
of the United States." The Supreme Court instructed this
"structure of the federal venue provisions confirms that
they alone define whether venue exists in given
Supreme Court directly addressed the primacy of proper venue
under§ 1391 over litigants' forum selection in
Atlantic Marine.The court notes some confusion exists
because of the sometimes interchangeable use of the
"special statutory term 'venue'" and
"the word 'forum'" and sometimes they can
correctly be used "synonymously." The Supreme
Court cuts through this confusion to clarify venue is a
"special statutory" term created by Congress and we
must determine venue only in accordance with the criteria in
§ 1391. We cannot look outside Congress's
criteria because § 1391 "cannot reasonably be read
to allow judicial consideration of other, extrastatutory
limitations on the forum in which a case may be
Venue is not proper in the Eastern District of
of Atlantic Marine, we turn to New Orleans
Home's argument venue is improper in this District. While
New Orleans Home seeks dismissal, they concede venue is
proper in the District of Louisiana so we analyze whether to
transfer for improper venue under 28 U.S.C. §
1406. When deciding whether to transfer for
improper venue, we "must generally accept as true the
allegations in the complaint, although the parties may submit
affidavits in support of their positions." We construe
all factual disputes and make all reasonable inferences in
favor of Healthcare Services, the non-moving
party. New Orleans Home, the moving party,
"bears the burden of proving that venue in [this
District] is improper."
provides, except as provided by another federal law, "a
civil action may be brought in (1) a judicial district in
which any defendant resides ...; (2) a judicial district in
which a substantial part of the events or omissions giving
rise to the claim occurred ...; or (3) if there is not
district in which an action may otherwise be brought as
provided in this section, any judicial district in ...