Donald L. Atkins v. Schmutz Manufacturing Company, Incorporated

CRAVEN, Circuit Judge

(dissenting):

I regret that I am unable to persuade the court that we may faithfully follow the Erie-Guaranty-Byrd-Hanna1 doctrine without necessarily denying this plaintiff a trial on the merits. If we were deciding this case after Erie and Guaranty but before Byrd and Hanna, I would agree, albeit reluctantly, that the result is compelled. It would be difficult, indeed, to distinguish Guaranty, involving as it did a state statute of limitations, without the light shed by Byrd and Hanna. The simplistic test of Erie (substance-procedure) and the mechanistic test of Guaranty (outcome) have undoubtedly survived Byrd and Hanna, but have been so altered that Mr. Justice Harlan, concurring in Hanna, concludes that the Supreme Court has “not succeeded in articulating a workable doctrine governing choice of law in diversity actions.” More specifically with respect to the problem before us — the application of a state statute of limitations— Professor Charles Alan Wright concluded, even before Hanna, that under the Constitution (1) only the state can say what local tort duties are to be imposed within the state; (2) that only the federal government can say how the federal courts are to administer their proceedings; and (3) that it is a difficult and doubtful question whether state or federal law should control how promptly a suit must be brought in a federal court to vindicate a state-created right.2 What *735seemed so clear after Guaranty3 — that a federal court must mechanistically apply a state statute of limitations— is now, as Professor Wright suggests, in the shadow zone. If there is room for doubt that the federal court must apply the Virginia state statute of limitations, it would seem to me an a fortiori proposition that there ought to be considerable doubt about the very narrow issue before us: whether, assuming the application of the two-year Virginia statute of limitations, it may have been tolled by the commencement of the Kentucky diversity action. Finally, if I am wrong on both counts, and it be assumed that we must not only apply the two-year Virginia statute but also apply the law of Virginia with respect to the tolling of it, I am strongly of the opinion that we need not assume the rule of ventriloquist’s dummy4 but are, instead, free to function as Virginia state judges would when faced with a fact situation not previously considered by Virginia’s highest court.

Although I think the question is not free of doubt, I am willing to assume for purposes of this decision that Guaranty Trust forecloses consideration by an inferior federal court of the possibility that a statute of limitations not bound up with the creation of the cause-of action is “procedural” rather than “substantive” and thus clearly outside the Erie rule as originally promulgated in Erie itself.5

To go so far, and no further, will, in my opinion, serve federalism better than will a mechanistic resort to Virginia tolling statutes and imprecise Virginia state court decisions interpreting them. “The purpose of the Erie doctrine, even as extended by York and Ragan, was never to bottle up federal courts with ‘outcome-determinative’ and ‘integral-relations’ stoppers — when there are affirmative countervailing [federal] considerations * * Hanna v. Plumer, 380 U.S. 460, 473, 85 S.Ct. 1136, 1145, 14 L.Ed.2d 8 (1965) (brackets in original).

It is important to remember how this particular plaintiff became enmeshed in this particular procedural booby trap. He is a Virginia resident who reasonably thought he could not bring his suit in Virginia because it lacked a long-arm statute and was thus driven out of his own state to litigate. Even so, he brought it within the two-year period allowed by his state of residence and the place of the tort, i. e., Virginia. He reasonably relied on Kentucky decisions as interpreted in United States courts that Kentucky would permit the maintenance of the suit if brought within the period of limitation of the place of the tort. Pendente lite the decisional law of Kentucky is changed retrospectively so as to make applicable to his ease the shorter one-year statute of limitation of Kentucky.6

*736The majority decision rests heavily upon the premise that the “outcome” must be the same in the federal court as it would have been in the state court, citing Guaranty. For reasons developed later, I am not sure what the outcome would have been in a Virginia state court. But presently assuming that Atkins would have been barred in the state court, I think it fairly demonstrable that the opposite result — trial on the merits — could have been obtained in a federal court unhampered by either Erie or Guaranty. If this is so, then the problem becomes a purely procedural one involving the method of operation of the federal courts. In at least two ways Atkins might have avoided the Erie problem.

When the Kentucky Supreme Court switched its interpretation of the period of limitation, Atkins could then have sought a transfer of the proceedings to Virginia under § 1406(a) of the Judicial Code. Section 1406(a) provides:

“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.”

A district is “wrong” within the meaning of § 1406 whenever there exists an obstacle to an expeditious and orderly adjudication on the merits.7 Thus where the obstacles to reaching the merits in the original district were both improper venue and a lack of personal jurisdiction over the defendant, the Supreme Court of the United States has approved a transfer of the proceedings to another district, rather than permit a dismissal to result in having the statute of limitations bar a new proceeding in another district. Goldlawr, Inc. v. Heiman, 369 U.S. 463, 82 S.Ct. 913, 8 L.Ed.2d 39 (1962).

But obstacles other than improper venue or lack of personal jurisdiction have been held to warrant a transfer under § 1406. Thus a libellant who filed a libel in the Southern District of New York, thinking he could find a vessel there, was permitted to transfer the proceeding to the Maryland district where the vessel was, thereby avoiding a dismissal in New York and the bar of the statute of limitations that would have confronted a new proceeding in Maryland. Internatio-Rotterdam, Inc. v. Thomsen, 218 F.2d 514 (4th Cir. 1955). In ordering the Maryland district court to accept the transfer from the New York district, the late Judge John Parker of this court added:

“Certainly such transfer is in accord with the modern standards of procedure, the purpose of which is to get away from time-consuming and justice-defeating technicalities and secure an adjudication of the rights of the parties by as direct and expeditious a route as possible. The courts of the United States comprise one great system for the administration of justice * * * [There is no reason why the proceedings should not have been transferred instead of being dismissed, with the necessity of starting all over again,] where, as here, the new proceeding would be barred by the statute of limitations.” Interna-tio-Rotterdam, Inc. v. Thomsen, 218 F.2d 514, 517 (4th Cir. 1955).

Had the Atkins’ Kentucky proceeding been transferred to the Western District of Virginia while the present action was awaiting trial there, the two proceedings could have been consolidated and tried there as one case. See Abbott Laboratories v. Gardner, 387 U.S. 136 at 154-*737155, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967).

The obstacle to an orderly and expeditious adjudication on the merits of Atkins’ claim in Kentucky was the novel and unanticipated application of that state’s one-year statute of limitation. When Atkins commenced the Kentucky action the existing decisions caused him justifiably to believe he could rely on the longer Virginia provision.8 What made the Kentucky district “wrong” as a place to reach the merits of Atkins’ claim was the unexpected obstacle created by the changed rulings of the Kentucky state courts after his action was commenced.

After the Supreme Court of the United States denied certiorari to the Court of Appeals for the Sixth Circuit, Atkins v. Schmutz Mfg. Co., Inc., 389 U.S. 829, 88 S.Ct. 92, 19 L.Ed.2d 86 (1967), it was finally settled that the one-year Kentucky statute of limitation was an insurmountable obstacle to reaching the merits of Atkins’ claim in the Kentucky district.9 Atkins was then in a “wrong” district within the meaning of § 1406 and a transfer of the action to the Western District of Virginia would have preserved the tolling effect on the Virginia statute that began with the commencement of the federal court action in Kentucky. By commencing this action within two years of his injury, Atkins had shown that diligence required by the Virginia statute and the delays that resulted thereafter came out of moves by the defendant to avoid trial of Atkins’ claim on the merits.

That Atkins’ situation at this point came within the protection of § 1406 seems transparently clear from what the Supreme Court of the United States has said of that section:

“The problem which gave rise to the enactment of the section was that of avoiding the injustice which had often resulted to plaintiffs from dismissal of their actions merely because they had made an erroneous guess with regard to the existence of some elusive fact of the kind upon which venue provisions often turn. Indeed, this case is itself a typical example of the problem sought to be avoided, for dismissal here would have resulted in plaintiff’s losing a substantial part of its cause of action under the statute of limitations merely because it made a mistake in thinking that the respondent corporations could be ‘found’ or that they ‘transact * * * business’ in the Eastern District of Pennsylvania. The language and history of § 1406(a), both as originally enacted and as amended in 1949, show a congressional purpose to provide as effective a remedy as possible to avoid precisely this sort of injustice.
“The language of § 1406(a) is amply broad enough to authorize the transfer of cases, however wrong the plaintiff may have been in filing his case as to venue, whether the court in which it was filed had personal jurisdiction over the defendant or not. The section is thus in accord with the general purpose which has prompted many of the procedural changes of the past few years — that of removing whatever obstacles may impede an expeditious and orderly adjudication of oases and controversies on their merits. When a lawsuit is filed, that filing shows a desire on the part of the plaintiff to begin his case and thereby toll whatever statutes would otherwise apply. The filing itself shows the proper diligence on the part of the plaintiff which such statutes of limitation were intended to insure. If by reason of the uncertainties of proper venue a mistake is made, Congress, by the en*738actment of § 1406(a), recognized that the ‘interest of justice’ may require that the complaint not be dismissed but rather that it be transferred in order that the plaintiff not be penalized by what the late Judge Parker aptly characterized as ‘time-consuming and justice-defeating technicalities.’ It would at least partially frustrate this enlightened congressional objective to import ambiguities into § 1406(a) which do not exist in the language Congress used to achieve the procedural reform it desired.” Goldlawr v. Heiman, 369 U.S. 463, 466-467, 82 S.Ct. 913, 915 (1962). (Emphasis added.)

The Goldlawr language just quoted also strongly suggests that the commencement of the Kentucky proceedings tolled “whatever statutes of limitation would otherwise apply.” In Atkins’ case this could only refer to the two-year Virginia statute of limitations since the one-year Kentucky statute had already run when the Kentucky proceeding commenced. Indeed it was the application of the Kentucky statute which deprived Atkins of a remedy in that state and brought his claim within the protective policy of § 1406. It has been held, where lack of personal jurisdiction

in the transferor district provided the basis for a venue transfer under § 1406, that the statute of limitation of the transferor state transferred with the action. Mayo Clinic v. Kaiser, 383 F.2d 653 (8th Cir. 1967). Whatever may be the applicable rule where the obstacle to reaching the merits is either defective venue or personal jurisdiction,10 it would both defeat the general protective policy of § 1406 and the particular justification for a venue transfer if the statute of limitations of Kentucky were to follow a transfer of Atkins’ action to Virginia.

Thus, as I see the matter, the commencement of Atkins’ action in Kentucky tolled the running of the Virginia statute of limitations. When it became clear he was barred from a remedy in Kentucky, he could have transferred the action to the Virginia district court under § 1406 and have proceeded to the merits of his claims without having the Virginia statute of limitations bar his claim. Moreover, the Virginia district by this time was one in which the case “could have been brought” within the meaning of § 1406 since the Virginia long-arm statute had been enacted in 1964, long before the Supreme Court of the United States denied certiorari to *739the Court of Appeals for the Sixth Circuit.

I concede, of course, that the path to a trial on the merits envisioned above is not a broad, inviting one. I suggest only that it may have been negotiable. But there is another and easier way that Atkins might have obtained a trial on the merits.

Despite the lack of a Virginia long-arm statute at the time, Atkins could have originally filed suit in the district court in Virginia. When the defendant predictably moved to dismiss for lack of jurisdiction, Atkins could have sought a transfer of venue under 28 U.S.C. § 1406 and would have brought himself squarely within Goldlawr v. Heiman, supra. Pursuant to Goldlawr, presumably the district judge in Virginia would have transferred the case to the District Court of Kentucky and under the doctrine of Mayo Clinic v. Kaiser, 383 F.2d 653 (8th Cir. 1967), the Virginia statute of limitations would have “followed” the case to the District Court of Kentucky and the shorter Kentucky statute of limitations would have had no effect.11

Thus it seems that there are at least two ways by which specialists in federal jurisdiction, if there are any outside of the faculties of law schools, might have been able to obtain for the plaintiff a trial on the merits in a federal court. If this be so, the outcome-determinative test of Guaranty is not invoked, or if invoked, is simply avoided by the method of operation of the federal courts which is surely not a matter of state regulation. Summarizing, it is apparent that the Erie decision alone does not require the court’s result. “In view of Brandéis’ careful limitation of his statement of unconstitutionality to ‘substantive rules of common law,’ it is strange that Erie has sometimes been claimed to have handcuffed federal procedure to that of the state where the court sits — although in this instance most critics have had the grace to admit that their fears sprang not from Erie itself but from some overly enthusiastic expressions in Guaranty Trust Co. of New York v. York * * 12 Whether the conduct of the plaintiff in instituting suit in Kentucky amounts to a tolling of the statute certainly relates as much to “procedure” as it does to “substance.” For conflicts of law purposes, questions of application of statutes of limitations have traditionally been classified with procedure. The conflicts of laws rule in most jurisdictions is that lex fori controls Michigan Insurance Bank v. Eldred, 130 U.S. 693, 9 S.Ct. 690, 32 L.Ed. 1080 (1889); Me Elmoyle for Use of Bailey v. Cohen, 38 U.S. 311, 10 L.Ed. 177 (1839); Goodrich, Conflict of Laws § 85 (4th ed. 1964). In Guaranty Trust, supra, the Supreme Court declined to categorize statutes of limitations as either “substantive” or “procedural” for Erie purposes.

Similarly, the “outcome-determinative test” of Guaranty is not violated for the result of trial on the merits would have occurred in the state court of Virginia had it been possible at the time for Virginia process to run outside the state.13 “Forum shopping” within the State of Virginia is not involved for presumably the plaintiff would have been well content in a Virginia state court if its process could have reached to Kentucky.14 Finally, since Byrd, it is not at all clear that the substantive right in tort is in this case “bound up” either with the statute of limitations or with the question of the tolling of that statute, for this statute of limitations is simply a general one and not a *740condition precedent to the exercise of a special right created by statute, e. g., wrongful death. The statute in this case is not prescriptive and the running of the period does not destroy the underlying right. See Comment, Developments — Statute of Limitations, 63 Harv. L.Rev. 1177, 1186 (1950); Page v. Cameron Iron Works, 155 F.Supp. 283, 286 (S.D.Texas 1957).

Mr. Justice Harlan, concurring in Hanna, gave us good advice when he said, “To my mind the proper line of approach in determining whether to apply a state or federal rule, whether ‘substantive’ or ‘procedural’ is to stay close to basic principles by inquiring if the choice of rule would substantially affect those primary decisions respecting human conduct which our constitutional system leaves to state regulation.” The primary decision here was whether to sue the defendant. That decision remains governed by state regulation creating a tort action against the defendant. Application of Mr. Justice Harlan’s test plainly leaves us free to permit this plaintiff a trial on the merits. Doing so will divert no stream of cases into the federal courts in Virginia or elsewhere. Doing so does not dishonor the Virginia statute of limitations for the reason that the action was commenced in Kentucky within the Virginia two-year period. To now permit this plaintiff a trial on the merits is not in derogation of Virginia policy but is plainly in accord with it. The enactment of the Virginia long-arm statute is a plain enunciation of a policy that its citizens be accorded the right of a trial on the merits against out-of-state tortfeasors.

The court recognizes that the state policy embodied in § 8-24 (the two-year statute of limitations) was effectuated by the filing of the Kentucky diversity action. The docket entries (reproduced in appellant’s Appendix) in the Kentucky district court indicate that extensive discovery was taken. For some months the plaintiff was a patient in an institution maintained by the defendant’s insurer for hospitalization and treatment. Thus it is clear that the policy embodied in § 8-24, as interpreted by the Virginia Supreme Court of Appeals, has been served. See Hawks v. Dehart, 206 Va. 810, 813, 146 S.E.2d 187 (1966). There is no danger here of the assertion of a fraudulent and stale claim to the surprise of the defendant after evidence may have been lost and the facts may have become obscure or after witnesses have died or disappeared.

Despite the warning in Hanna,15 the majority feels duty bound by Guaranty ritualistically to apply Jones v. Morris Plan Bank of Portsmouth, 170 Va. 88, 195 S.E. 525 (1938). And they read it as foreclosing a federal district court sitting in Virginia from holding that the filing of the diversity action in Kentucky tolled the running of the Virginia statute of limitations. All that Jones holds, as I read it, is that the statute of limitations of Virginia was not tolled by the commencing of an action in the wrong state forum. Atkins did not file his suit in the wrong forum. It was the right forum and, indeed, the only forum, for the reason that he could obtain service of process nowhere else. Nor do I read the Jones decision as a statement or an analysis of state policy. It is simply an interpretation of the statute on the familiar premise of statutory construction that the enumeration of some things implies the exclusion of others. Unlike the majority, I am not at all certain that the Supreme Court of Appeals of Virginia would now hold, on the peculiar facts of our case, that Atkins has not successfully tolled the statute of limitations. Whether I am right about that or not, I am quite certain that neither the Jones case nor §§ 8-24 and 8-34 enunciates a state policy that a Virginia resident who is injured in Virginia shall not be entitled to a *741trial on the merits against a non-resident tortfeasor. There is no such Virginia interest and Virginia has, in my opinion, expressed no such policy either by statute or by decision of its highest court. Byrd teaches that when there is no strong state interest in one result but there is a strong federal interest in the opposite result, the federal interest prevails. It seems to me, a fortiori, that where there is a strong state policy (as indicated by the state created tort action and the recent Virginia long-arm statute) and a strong federal policy both of which favor trial on the merits, it does not serve federalism mechanically to apply a readily distinguishable state decision that may be read, but does not have to be read, to require the opposite result.

Jones is distinguishable on yet another ground. In Jones, the plaintiff began a second action after the dismissal of a prior, timely proceeding and sought to exclude from the statutory period the time during which the earlier action was pending. The Supreme Court of Appeals of Virginia held that this period could not be excluded and barred the later-commenced action.- It is clear, however, that a timely commenced action tolls the running of the Virginia statute of limitations. Jones, supra. Atkins, in fact, commenced the present Virginia action while the Kentucky proceedings were still pending and during the period in which those proceedings continued to toll the running of the Virginia statute. For this reason alone the Virginia proceeding may be regarded as timely commenced, and I do not think it unreasonable to suppose that the Supreme Court of Appeals of Virginia would reach this conclusion.

I concede that if the position I hold had been known in advance as the rule of the Fourth Circuit, Atkins would undoubtedly have been influenced to choose a federal forum. But it did not happen that way. Atkins chose the federal forum certainly without knowing what the federal court would do,16 and I suggest, without knowing how the state courts would view his problem. And it is not impossible he was influenced by other factors — including the possibility that if he began in the state court the defendant would remove to the federal court.17 Plainly one of the twin aims of Erie18 — to discourage forum shopping — is simply not involved here. Moreover, the precise problem confronting us will not likely arise again because of the new Virginia long-arm statute. Thus, even if we forecast badly how Virginia’s highest court might view this tolling problem, no great injury will have been done to federalism.

What of the other twin aim of Erie: “avoidance of inequitable administration of the laws ?” In Szantay v. Beech Aircraft Corp., 349 F.2d 60 (4 Cir. 1965), Judge Sobeloff clearly perceived the impact of Byrd and Hanna on Guaranty. In a helpful analysis of the modern Erie rule, he concluded:

“If the state procedural provision is not intimately bound up with the right being enforced but its application would substantially affect the outcome of the litigation, the federal diversity court must still apply unless there are affirmative countervailing federal considerations. This is not deemed a constitutional requirement but one dictated by comity
-x- -x -x- * *
“At the heart of Erie was the intention to prevent different legal treatment of parties merely because of a variation in the residence of their opponent.” 349 F.2d at 64.

*742The perceived evil of Swift v. Tyson was discrimination against residents in favor of non-residents. The same evil is present in the majority result. The non-resident citizen of Kentucky committing a tort within Virginia is afforded the benefit of a shorter statute of limitations than permitted a citizen of Virginia. Thus the spirit of Erie and the cause of federalism would be advanced by ignoring the Kentucky short statute of limitations which becomes operative by the pure accident of defendant’s residence in Kentucky and the lack of a long-arm statute in Virginia. The second of the twin aims of Erie, “avoidance of inequitable administration of the laws,” would be served by permitting this plaintiff a trial on the merits.

If we remember that we are applying the Virginia statute of limitations and that the question confronting us is simply whether, on the facts of this case, it has been tolled by the commencement of an action within its two-year period, the problem will yield, in my opinion, to the application of well recognized federal equitable principles. There is ample authority that the equitable remedies doctrine survived Erie.19 Indeed, even in Guaranty Trust Co. of New York v. York, it was said by Mr. Justice Frankfurter that: “[the decision] does not mean * * * that a federal court may not afford an equitable remedy not available in a State court.” 326 U.S. at 105, 65 S.Ct. at 1468. “State law cannot define the remedies which a federal court must give simply because a federal court in diversity jurisdiction is available as an alternative tribunal to the State’s courts. Contrawise, a federal court may afford an equitable remedy for a substantive right recognized by a State even though a State court cannot give it.” Id. at 106, 65 S.Ct. at 1468.

It is clear that in the federal courts the equitable doctrine of tolling is favored. Honda v. Clark, 386 U.S. 484, 87 S.Ct. 1188, 18 L.Ed.2d 244 (1967). And it is equally clear, I think, that there is emerging a clearly expressed federal interest in the disposition of litigation on the merits. As Mr. Justice Black said in Surowitz v. Hilton Hotels Corp., 383 U.S. 363, 373, 86 S.Ct. 845, 851, 15 L.Ed. 2d 807 (1966), “If rules of procedure work as they should in an honest and fair judicial system, they not only permit, but should as nearly as possible guarantee that bona fide complaints be carried to an adjudication on the merits.”

In Burnett v. New York Central R.R. Co., 380 U.S. 424, 426-427, 85 S.Ct. 1050, 13 L.Ed.2d 941 (1965), it was said that classification of a statute of limitations as “substantive” rather than “procedural” doe's not determine whether or under what circumstances the limitation period may be extended.

The Court went on to say (with reference to a federal statute of limitations) that “the basic inquiry is whether congressional purpose is effectuated by tolling the statute of limitations in given circumstances.” Id. at 427, 85 S.Ct. at 1054.

For the reasons indicated by Mr. Justice Black for the Supreme Court in Goldlawr, I believe that Atkins, by commencing his Kentucky proceedings within the time period allowed under the Virginia statute of limitations, has shown that “proper diligence on the part of plaintiff which such statutes of limitation were intended to insure.” 369 U.S. at 467, 82 S.Ct. at 916.

*743Atkins’ alleged injuries are severe, his claimed damages great. Five years have elapsed since commencement of the Kentucky proceedings, and trial on the merits still eludes him. I believe this court is not straitjacketed by Guaranty but is, instead, left free by the Erie-Guaranty-Byrd-Hanna doctrine to accord this plaintiff what all agree he ought to have in an honest and fair judicial system: adjudication on the merits.

I would reverse.

. Erie v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 U.Ed. 1188 (1938); Guaranty Trust Co. of N. Y. v. York, 326 U.S. 99, 65 S.Ct. 1464, 89 L.Ed. 2079 (1945); Byrd v. Blue Ridge Elec. Cooperative, 356 U.S. 525, 78 S.Ct. 893, 2 L.Ed.2d 953 (1958); Hanna v. Plumer, 380 U.S. 460, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965). Hereafter, these state-Iaw-in-the-federalcourts cases will be referred to simply as Erie, except as indicated.

. Wright, Federal Courts § 56 at 198. Professor Wright assumes that Erie rests on its avowed constitutional basis despite much commentary to the contrary. See id. § 56.

. The mechanical test of Guaranty (from which the Court sharply retreated in Hanna) may be partially explained by the author’s aversion to diversity jurisdiction. See Mr. Justice Frankfurter’s dissent in Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943), where he said, “I speak as one who has long favored the entire abolition of diversity jurisdiction.” Id. at 337, 63 S.Ct. at 1109.

. Fidelity Union Trust Co. v. Field, 311 U.S. 169, 61 S.Ct. 176, 85 L.Ed. 109 (1940), is the high water mark of ritualistic application of state law in a federal court. Before the water began to noticeably recede, Judge Jerome Frank expressed his dismay in this colorful phrase. Richardson v. CIR, 126 F.2d 562, 567 (2d Cir. 1942). Annot., 140 A.L.R. 705 (1942).

. It has often been suggested that Congress possess the power to enact a general statute of limitations governing diversity cases. E. g., Friendly, In Praise of Erie — And of the New Federal Common Law, 39 N.Y.U.L.Rev. 383, 402 n. 90 (1964).

. The issue on this appeal is completely different from the issue before the Sixth Circuit in the original Schmutz action. The original action was controlled entirely by Klaxon Co. v. Stentor Electric Mfg. Co., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941), which holds foursquare that a federal court in a diversity action must apply the forum state's conflict of laws rule.

. “The statute does not refer to ‘wrong’ venue, but rather to venue laid in a ‘wrong division or district.’ We conclude that a district is ‘wrong’ within the meaning of § 1406 whenever there exists an ‘obstacle [to] * * * an expeditious and orderly adjudication’ on the merits.” Dubin v. United States, 380 F.2d 813, 815 (5th Cir. 1967). Accord, Mayo Clinic v. Kaiser, 383 F.2d 653 (8th Cir. 1967).

. For a discussion of Kentucky law as it was understood in the federal courts when Atkins commenced his action in Kentucky, see Atkins v. Schmutz Mfg. Co., Inc., 372 F.2d 762, 763 (6th Cir. 1967).

. There is no suggestion that the judgment of the Kentucky district court adjudicates the merits of Atkins’ complaint.

. In Van Dusen v. Barrack, 376 U.S. 612, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964), it was held that the law of the trans-feror district followed a case transferred on motion of the defendant under § 1404(a). The Court reserved the question whether a § 1404(a) transfer sought by the plaintiff would be governed by the same rule, id., at 639-640, and there seem to be good reasons for not taking along the law of the transferor district where the plaintiff seeks a transfer from a district “wrong” under § 1406.

In Les Schwimley Motors, Inc. v. Chrysler Motors Corp., 270 F.Supp. 418, Judge Halbert expressed the viewpoint that transferring a diversity ease to a district in another state, on motion of the plaintiff, does not necessarily carry with it the statute of limitations of the state in which the suit was commenced, citing the proposal of the American Law Institute in its Study of the Division of Jurisdiction Between State and Federal Courts. Judge Halbert finds himself in accord with the viewpoint of the late Professor Brainerd Currie as indicated in the following quotation from the opinion of the district court:

“Viewing the federal courts as independent forums for the invocation of legal rights created by state law, the essence of the decision in Erie R. Co. v. Tompkins, supra, militates against the unthinking adoption of one forum’s statute of limitations in a case which no longer has any substantial connection with that forum. If such a course does not violate the due process clause (See: Home Insurance Co. v. Dick, 281 U.S. 397, 50 S.Ct. 338, 74 L.Ed. 926) it certainly violates the sense of ‘juster justice’ that hopefully prevails in the federal system (See: Hart and Wechsler, The Federal Courts and the Federal System (1953) at pp. 652, 892-900; Hart, The Relations between State and Federal Law, 54 Colum.L.Rev. 489).” Id. at 420-421.

. See note 10 supra; accord, Headrick v. Atchison Topeka and Santa Fe Ry. Co., 182 F.2d 305 (10th Cir. 1950).

. H. Friendly, Benchmarks 175 (1967). (Footnotes omitted.)

. Whether “outcome” would have been different if the "present action had been begun in the Virginia state court is discussed below.

. Whether forum shopping was involved in starting the present action in a federal court in Virginia is also discussed below.

. “‘Outcome determination’ analysis was never intended to serve as a talisman.” 380 U.S. at 466, 85 S.Ct. at 1141.

. His fears, not liis hopes, are now realized.

. See Hanna v. Plumer, 380 U.S. 460, 475, 85 S.Ct. 1136, 14 L.Ed.2d 8 (1965) (Harlan, J. concurring).

. In Hanna, tlie Supreme Court said: “The ‘outcome-determination’ test (of Guaranty Trust) therefore cannot be read without reference to the twin aims of the Erie rule: discouragement of forum shopping and avoidance of inequitable administration of the laws.” 380 U.S. at 468, 85 S.Ct. at 1142.

. Sprague v. Ticonic Bank, 307 U.S. 161, 164, 59 S.Ct. 777, 83 L.Ed. 1184 (1939); General Electric Co v. American Wholesale Co., 235 F.2d 606, 608 (7th Cir. 1956); Anheuserbusch, Inc. v. Du Bois Brewing Co., 175 F.2d 370, 373 (3rd Cir. 1949); Purcell v. Summers, 145 F.2d 979, 990 (4th Cir. 1944); Martin v. Reynolds Metals Co., 224 F.Supp. 978, 982 (D.Ore.1963), aff’d 337 F.2d 780 (9th Cir. 1964); Hertzbergs, Inc. v. Ocean Acc. & Guar. Corp., 42 F.Supp. 52 (D.Neb.1941), aff’d 132 F.2d 438 (8th Cir. 1943); Wall & Beaver Street Corp. v. Munson Line, 58 F.Supp. 101 (D.Md.1943). See Black & Yates Mahogany Ass’n, 129 F.2d 227, 233 (3rd Cir. 1942), cert. denied, 317 U.S. 672, 63 S.Ct. 76, 87 L.Ed. 539 (1942), and cases there cited.