David R. Smith, Savannah, Ga., for defendant-appellant.

Randell C. Roberts, Tyler, Tex., Joseph B. Bergen, Savannah, Ga., for plaintiff-appellee.

Appeal from the United States District Court for the Southern District of Georgia.

Before JOHNSON and HATCHETT, Circuit Judges, and LYNNE*, District Judge.

This is an appeal from an interlocutory order transferring the action from the United States District Court for the Southern District of Georgia, where it was originally filed, to the United States District Court for the Middle District of Florida. The transfer was ordered pursuant to 28 U.S.C. Sec. 1406(a). Because we believe that the peculiar facts of this case justified a Sec. 1406(a) transfer, we affirm.

This appeal presents novel questions arising under the federal transfer-for-improper-venue statute, 28 U.S.C. Sec. 1406(a). The questions arise out of the following facts. Shirley Hall, the daughter of plaintiff-appellee Eddie Manley, was killed on May 3, 1981, when a car driven by defendant-appellant Engram collided with her vehicle in West Germany. Both Hall and Engram were, at the time of the accident, members of the United States Military serving in West Germany.

Both plaintiff Manley and her daughter Shirley Hall maintained permanent residence in Smith County, Texas. For nearly two years after the accident, Ms. Manley tried in vain to determine the permanent residence of defendant Engram so that she could file this wrongful death action in the proper forum. Just a few days before the two-year anniversary of the wreck, however, Ms. Manley received information that Engram and his family were then residing near Ft. Stewart, Georgia. With Georgia's two-year statute of limitations for wrongful death actions1 about to expire, plaintiff Manley, individually and as executrix of the decedent's estate, filed suit in the United States District Court for the Southern District of Georgia, believing that venue was proper there because defendant maintained his home and family in the district, and appeared to reside there.

Following service of process, defendant Engram filed a motion to dismiss or quash alleging insufficiency of service of process, lack of personal jurisdiction, a bar under the two-year statute of limitations, and improper venue. However, defendant failed and thereafter refused through his counsel2 to disclose his true permanent residence for venue purposes. Finally, some eight months into the litigation and four months after he had assented to venue in his answer, defendant Engram responded to discovery efforts by stating that, although he was stationed at Ft. Stewart at the time of the filing and maintained his home and family there, he had at all relevant times "considered" his permanent residence and domicile to be Duval County, Florida.

At this point, plaintiff Manley immediately amended her complaint to reflect defendant's true residence and the fact that venue and jurisdiction were both proper only in the Middle District of Florida.3 Contemporaneously, Manley moved to transfer venue to the Middle District of Florida. This motion was granted by the district court pursuant to 28 U.S.C. Sec. 1406(a), which provides for transfer of venue of any case "laying venue in the wrong division or district."4

It appears to be conceded that plaintiff objected to venue as soon as she discovered her error of venue, and that she could not in the exercise of due diligence have discovered the defendant's true residence at any earlier time.5 However, defendant Engram contends that merely by filing suit in the Southern District of Georgia, plaintiff automatically waived her right to object to the improper venue there, notwithstanding the fact that no one but the defendant could reasonably have known at the time the suit was filed that he "considered" his true residence to be in Florida.

The reason the defendant has objected to the transfer of venue, of course, is that when a case is transferred under Sec. 1406(a), the transferee court must apply the choice of law rules of the state in which it sits6--in this case, Florida. Florida courts, applying the "most significant relationships" test as embodied in the Restatement (Second) of Conflict of Laws (1971), see Bishop v. Florida Specialty Paint Co., 389 So. 2d 999 (Fla.1980), would probably recognize plaintiff's cause of action for wrongful death under either Texas or Florida law. Georgia courts, following the old "lex loci delicti" choice-of-law rule for tort actions, see Wallace v. Harrison, 166 Ga.App. 461, 304 S.E.2d 487 (1983), would probably apply German substantive law, which apparently would not recognize plaintiff's right of action. Compare Tex.Rev.Civ.Stat.Ann. art. 4671, et seq., and Fla.Rev.Stat. Sec. 768.16, et seq., with West German Civil Code Sec. 844.7DISCUSSION

Where a suit is filed in federal court in a district in which venue or personal jurisdiction is improper, and a timely and sufficient objection to the defect is raised, there is a federal statute of general application under which a change of venue ordinarily may be made. That statute provides as follows:

The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.

28 U.S.C. Sec. 1406(a).8 When a transfer for improper venue is granted pursuant to Sec. 1406(a), then "regardless of which party requested the transfer or the purpose behind the transfer, the transferee court must apply the choice of law rules of the state in which it sits." Ellis v. Great Southwestern Corp., 646 F.2d 1099, 1110 (5th Cir.1981).9 The rationale for this rule in the typical case is quite simple:

A transfer under Sec. 1406(a) is based not on the inconvenience of the transferor forum but on the impropriety of that forum. If the state law of the forum in which the action was originally commenced is applied following a Sec. 1406(a) transfer, the plaintiff could benefit from having brought the action in an impermissible forum.

Ellis, 646 F.2d at 1109, quoting Martin v. Stokes, 623 F.2d 469, 472-73 (6th Cir.1980).10 In other words, where venue or jurisdiction is improper in the original forum, there is no sound reason for the choice-of-law rules of that forum to govern the controversy and its adjudication by the transferee court.

There are limits upon the availability of a Sec. 1406(a) transfer and its attendant choice of law consequences. One such limit is that a transfer is proper only to a district in which the suit might have been brought by the plaintiff. See Ellis, 646 F.2d at 1104, n. 5.11 This limitation is contained in the statute itself. Another limit is also contained in the statute:

Nothing in this chapter shall impair the jurisdiction of a district court of any matter involving a party who does not interpose a timely and sufficient objection to venue.

28 U.S.C. Sec. 1406(b).

It is this second limitation upon the availability of a Sec. 1406(a) transfer that forms the crux of the controversy in the case at hand. If the plaintiff's objection to venue was "timely and sufficient," then venue in the original forum was improper and the Sec. 1406(a) transfer was entirely warranted. However, if plaintiff's objection to venue was not timely and sufficient, or if the plaintiff waived her right to object to venue in the Southern District of Georgia by filing suit there, then the Sec. 1406(a) transfer was improper and unwarranted. This is so because venue, despite its very significant choice of law implications, is merely a privilege of the parties, and defects of venue may be waived by the parties. See Olberding v. Illinois Central Ry. Co., 346 U.S. 338, 340, 74 S. Ct. 83, 85, 98 L. Ed. 39 (1953); Hoffman v. Blaski, 363 U.S. 335, 343, 80 S. Ct. 1084, 1089, 4 L. Ed. 2d 1254 (1960). See also Brown v. Pyle, 310 F.2d 95, 96-97 (5th Cir.1962). Indeed, the right to object to improper venue may be waived in any of several ways: by express waiver, by conduct amounting to waiver as a matter of law, or by failure to interpose a timely and sufficient objection. Goldberg v. Wharf Constructers, 209 F. Supp. 499, 501-502 (N.D.Ala.1962). Accord, Libby, McNeill & Libby v. City Nat. Bank, 592 F.2d 504, 510 (9th Cir.1978). Once objections to venue are waived by the parties, any defect in venue is cured, and the benefits of a Sec. 1406(a) transfer for lack of venue are no longer available. See Dubin v. United States, 380 F.2d 813, 815 (5th Cir.1967); Concession Consultants, Inc. v. Mirisch, 355 F.2d 369 (2d Cir.1966).

In the case sub judice, the defendant expressly assented to venue in his answer. Thus, if the plaintiff waived her right to object to venue as well, there was no defect of venue upon which a Sec. 1406(a) transfer could be predicated.

The general rule, as stated in dicta in Olberding v. Illinois Central Ry. Co., is that the "plaintiff, by bringing the suit in a district other than that authorized by [28 U.S.C. Sec. 1391], [has] relinquished his right to object to venue." 346 U.S. at 340, 74 S.Ct. at 85. However, the Olberding dicta does not clearly extend to the present facts. Indeed, the facts of the case sub judice present compelling grounds for departing from the general rule. Where, as here, the propriety of venue is obscured because the individual defendant lives in one state but subjectively considers another state his permanent residence, and where, as here, the plaintiff who brought suit in the state of defendant's apparent residence could not in the exercise of due diligence have known the defendant's true residence at the time the suit was filed, a waiver of the plaintiff's right to object to the impropriety of venue once it is discovered should not lightly be implied. This is particularly true in light of the very real choice-of-law implications of modern venue doctrines. See Klaxon Co. v. Stentor Electrical Mfg. Co., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477 (1941); Ellis v. Great Southwestern Corp., 646 F.2d 1099 (5th Cir.1981).

If all of the facts had been known or available at the outset, plaintiff obviously would have filed suit in Florida, the only forum with jurisdiction over the defendant in which venue would also be proper. But all of the facts were not available. For all objective appearances, defendant was a resident of Liberty County, Georgia. That was where he maintained his home and family. Subjectively, however, defendant considered Duval County, Florida, to be his permanent home. It is this clash between objective appearances and the critical factor of subjective intent, a matter peculiarly within the knowledge and control of the defendant, that separates this case from the normal situation envisioned by the Olberding dicta.

Only in Wonderland could it be said that a plaintiff in this situation "knowingly" waives her objections to venue merely by filing suit where the defendant appears to reside. Apparently, no federal court has addressed the issue of whether a plaintiff can waive a defect in venue of which she has no actual or constructive knowledge.12

In the peculiar circumstances of the case at hand, however, we are convinced that a plaintiff who attempts to file in the state of defendant's residence should not be held to have waived her right to select among proper forums in the absence of actual or constructive knowledge of the defendant's true residence. The fairness of such a rule is readily apparent. As the plaintiff points out, defendants may preserve their objections to venue pending discovery of the true facts merely by raising a timely objection to venue under Fed.R.Civ.P. 12(b), thus "buying time" to determine the propriety of venue through the various discovery mechanisms. If even diligent plaintiffs are held to automatically waive all objections to venue upon filing suit, notwithstanding the fact that the propriety of venue may turn on the unascertainable subjective mindset of the defendant, then the plaintiff is left to play a "guessing game," with no means of preserving the venue issue pending discovery.13 To hold, on the other hand, that the diligent plaintiff who in good faith files suit in the district where defendant apparently resides has not automatically waived his right to object to venue if discovery reveals that defendant in fact considers another state to be his permanent residence, would provide plaintiffs with a measure of protection very similar to that presently enjoyed by defendants. Allowing a plaintiff to invoke Sec. 1406(a) in these circumstances would be in keeping with the general notion that the provision was intended to correct the injustices that would otherwise result merely because the plaintiff "made an erroneous guess with regard to the existence of some elusive fact of the kind upon which venue provisions often turn." See Goldlawr, Inc. v. Heiman, 369 U.S. 463, 466, 82 S. Ct. 913, 915, 8 L. Ed. 2d 39 (1962).14

The defendant does raise counterarguments. He points out that in Dubin v. U.S., 380 F.2d 813, 815 (5th Cir.1967), the old Fifth Circuit stated generally that "Sec. 1406 operates in cases where the first forum chosen is improper in the sense that litigation may not proceed there" due to some defect in venue or personal jurisdiction. Where the defendant has waived his objections to venue, the argument goes, there is no longer an obstacle to adjudication on the merits, and therefore Sec. 1406(a) may not be invoked.

This argument, of course, begs the question. Only if the plaintiff has effectively waived her right to object to venue can it be said that there is no longer an obstacle to adjudication on the merits. Moreover, the argument overlooks the fact that Dubin and cases following it, see, e.g., Ellis v. Great Southwestern Corp., 646 F.2d 1099 (5th Cir.1981), and Roofing & Sheet Metal Services, Inc. v. La Quinta Motor Inns, Inc., 689 F.2d 982 (11th Cir.1982), are primarily concerned with ensuring that the proper state's choice of law rules apply when a transfer is granted. Where the plaintiff brings suit in an improper forum and the defendant raises a timely objection resulting in transfer under Sec. 1406(a) or Sec. 1404(a), the transferee court's choice of law rules must be applied in order to prevent a plaintiff from suing in a forum lacking personal jurisdiction or venue "for the purpose of capturing the law of that jurisdiction for transportation to the jurisdiction in which service can be obtained." La Quinta, 689 F.2d at 992, quoting Ellis, 646 F.2d at 1108. Since the original forum was not a proper one to begin with, no sound reason exists to apply that forum's choice of law rules. Conversely, where a diligent plaintiff in good faith files suit in the district where the individual defendant appears to reside but actually does not, and objects to venue as soon as the defendant's true residence is revealed, again no sound policy compels application of the original forum's choice of law rules. In these circumstances, the filing of the suit in the original forum was accidental and fortuitous at best. The forum state has little or no interest in the application of its choice of law principles to such a controversy. It seems clear that at least where the defendant's apparent residence and his actual residence differ, a defendant should not be permitted to "capture" the choice of law rules of a state that is the residence of neither party and has nothing to do with the controversy merely by remaining silent as to his true residence until after suit is filed.15 Surely neither Dubin nor Olberding mandated (or even contemplated) such an unconscionable result.

The defendant makes one further argument, however. He argues that if the plaintiff can be granted a transfer over defendant's objection, then the federal diversity plaintiff will enjoy an unfair advantage over those tort plaintiffs who file their actions in state court. In federal court the plaintiff can secure a transfer upon learning the defendant's true residence, while in state court, a transfer is not available. This, he argues, is an improper encouragement of forum-shopping and a violation of the constitutional guarantee of equal protection.

This argument suffers many flaws. First, the plaintiff in the situation at hand is not asking to be allowed to be given carte blanche to "forum shop" as she pleases. She is only asking to be allowed to make the knowing but limited choice among proper forums that the federal venue provisions and personal jurisdiction principles say she is entitled to. Moreover, it is hard to see a violation of equal protection in the fact that, in many cases, federal plaintiffs can secure a transfer whereas state plaintiffs could not. In fact, if there is no statute of limitations problem, the state court plaintiff can always secure the practical benefits of a Sec. 1406(a) transfer simply by voluntarily dismissing the suit and refiling in the forum of defendant's true residence. Even if there is a statute of limitations problem that bars this maneuver, allowing the federal case to be transferred still would not present equal protection problems. If neither the state court plaintiff nor the federal court defendant is deprived of equal protection when the federal defendant raises a valid objection to jurisdiction or venue and a transfer is granted over the defendant's objection (even though a state court in similar circumstances could only dismiss),16 then clearly there is no violation of equal protection when the federal plaintiff objects to venue and a transfer is ordered over the defendant's objection. In either case, there are differences in result. If the suit was filed in federal court, a transfer under Sec. 1406(a) is possible. If the suit was filed in state court, the plaintiff has no similar option. But these differences in result are functions of the inherent differences in the federal and state systems. Unlike state systems, the federal system is composed of districts in different states with different substantive laws. Obviously, the policy of treating diversity litigants and state court litigants equally can never be fully effectuated in the venue context because of the separate and unique procedural and quasi-procedural rules attendant to litigation in each system. However, that in itself has never been thought to establish a violation of equal protection.17

The one fundamental point that should be kept in mind in analyzing the issues presented here is that although venue is largely a principle of litigational convenience, it is inextricably intertwined with choice of law problems and often with the outcome of the case on the merits. See Klaxon Co. v. Stentor Electrical Mfg. Co., 313 U.S. 487, 61 S. Ct. 1020, 85 L. Ed. 1477 (1941); Ellis v. Great Southwestern Corp., 646 F.2d 1099 (5th Cir.1981). Given this critical fact, it seems clear that, at least where a defendant's apparent residence and his actual residence differ, a defendant should not be permitted to "capture" the choice of law rules of a state that is the residence of neither party and has nothing to do with the controversy merely by remaining silent as to his true residence until after suit is filed. For these reasons, we hold that where a diligent plaintiff files suit in good faith in the district of the individual defendant's apparent residence, but later discovers that defendant subjectively considers another state his permanent residence, the plaintiff will not be deemed to have automatically waived his right to object to venue in the original forum or to seek a transfer under Sec. 1406(a).

It is important to emphasize that this holding is confined to the narrow and peculiar facts of this case.18 It applies only in cases where the propriety of venue is obscured because the defendant appears to reside in the original forum but subjectively considers another state his true permanent residence. Moreover, the rule we announce today is not intended to protect the non-diligent plaintiff who could have discovered the defendant's true residence prior to filing suit, but did not make a reasonable effort to do so. Nor is it intended to sanction open and blatant forum-shopping by plaintiffs who knowingly file suit in their preferred forum without a good faith belief that venue is proper there. Cf. Dubin v. United States, 380 F.2d 813, 816 n. 5 (5th Cir.1967).19 In either of these situations, any objection to venue by the plaintiff subsequent to the filing of the complaint would not be "timely and sufficient," and therefore a transfer under Sec. 1406 would not be "in the interest of justice." See 28 U.S.C. Sec. 1406(b).

Similarly, our holding today has no application where the defendant is a corporation rather than an individual. With due diligence, a plaintiff can almost always determine the propriety of venue in a preferred forum when the suit contemplated is one against a corporation. This is particularly true in light of the more lenient venue provisions governing suits against corporations, under which a corporation is deemed to be a resident of "any judicial district in which it is incorporated" as well as of any judicial district in which it is "licensed to do business or is doing business." 28 U.S.C. Sec. 1391(c). These provisions generally offer a plaintiff a number of potential districts in which venue may be properly laid, and much more objective standards by which the propriety of venue in any given district may be determined. Thus, where the defendant is a corporation and has waived its objections to venue and jurisdiction in the original forum, it is extremely unlikely that an objection to venue raised by the plaintiff subsequent to filing could ever be timely and sufficient so as to warrant a Sec. 1406 transfer.20

In short, today's decision makes but one small incision into the general rule enunciated in Olberding: where a plaintiff files suit in good faith in the district of the individual defendant's apparent residence, but later discovers that the individual defendant subjectively considers another state or district to be his permanent residence, then so long as the plaintiff could not in the exercise of due diligence have discovered the defendant's true residence prior to filing suit, the plaintiff will not be deemed to have automatically waived her right to object to venue in the original forum or to seek a transfer under Sec. 1406(a). Outside this narrow factual setting, which obviously is a very rare one, the rule of Olberding will prevail, and a plaintiff will be barred from seeking a Sec. 1406 transfer based upon objections to venue raised by the plaintiff after the suit is filed. So restricted, we believe that this rule best accommodates the federal policy against forum-shopping with the inescapable choice-of-law consequences of our modern venue doctrines.

The order of transfer issued by the court below is hereby AFFIRMED.