Under 28 U.S.C. § 1404, a federal court weighing a motion to transfer venue should consider factors including the presence of a forum-selection clause designated in the contract. A diversity action filed in State A involves a clause designating State C. State A law says forum selection clauses are unenforceable. How should the court rule on the transfer motion?

Under 28 U.S.C. § 1404, a federal court weighing a motion to transfer venue should consider factors including the presence of a forum-selection clause designated in the contract. A diversity action filed in State A involves a clause designating State C. State A law says forum selection clauses are unenforceable. How should the court rule on the transfer motion?

• A. Deny the motion because forum selection clauses are unenforceable under State A law in a diversity action
• B. Grant the motion because federal law makes forum selection clauses enforceable
• C. Grant the motion because State A law is inapplicable where there is a choice-of-law provision, not a forum clause
• D. Consider the motion and weigh all factors, including the forum selection clause

Answer: (D)

The key idea is that a transfer under § 1404(a) is a balancing test. The court must weigh multiple factors—convenience to the parties and witnesses, the ease of gathering proof, docket congestion, local interests, and so on. A forum-selection clause is one of those factors, and federal law governs whether such a clause is enforceable in federal court, even if a state law in the forum state says otherwise. Under controlling federal authority, a valid forum-selection clause should be given significant weight in the transfer analysis, but it is not an automatic mandate to transfer; public-interest factors can temper or override it. Here, the contract designates a forum in State C, and the action is filed in State A. State A’s law saying forum-selection clauses are unenforceable does not control in a federal transfer decision because federal law governs enforcement of forum clauses in federal court. Thus the clause is a proper factor to consider, and it would weigh in favor of transferring or at least re-docketing in the forum designated by the clause, unless countervailing public-interest factors strongly outweigh it. But the essential point is that the court should not dismiss or grant transfer solely on the basis of State A law; instead, it should “consider the motion and weigh all factors, including the forum selection clause.”

The key idea is that a transfer under § 1404(a) is a balancing test. The court must weigh multiple factors—convenience to the parties and witnesses, the ease of gathering proof, docket congestion, local interests, and so on. A forum-selection clause is one of those factors, and federal law governs whether such a clause is enforceable in federal court, even if a state law in the forum state says otherwise. Under controlling federal authority, a valid forum-selection clause should be given significant weight in the transfer analysis, but it is not an automatic mandate to transfer; public-interest factors can temper or override it.

Here, the contract designates a forum in State C, and the action is filed in State A. State A’s law saying forum-selection clauses are unenforceable does not control in a federal transfer decision because federal law governs enforcement of forum clauses in federal court. Thus the clause is a proper factor to consider, and it would weigh in favor of transferring or at least re-docketing in the forum designated by the clause, unless countervailing public-interest factors strongly outweigh it. But the essential point is that the court should not dismiss or grant transfer solely on the basis of State A law; instead, it should “consider the motion and weigh all factors, including the forum selection clause.”