Atlantic Marine and Choice-of-Law Federalism

The headline holding of the Supreme Court’s opinion in Atlantic Marine is its conclusion that a forum-selection clause is usually enforceable under the federal transfer statute, 28 U.S.C. § 1404(a). Also lurking within the opinion, however, is a significant shift in the Court’s approach to choice of law in federal courts. In Atlantic Marine, the Court held that after a transfer to enforce a forum-selection clause, the transferee district court must apply the choice-of-law rules of the state in which it sits. The Court’s rationale is straightforward—the plaintiff should not be allowed to flout the forum-selection clause and obtain the benefits of more favorable choice-of-law rules of another state. But the Court’s new rule is a departure from its prior treatment of choice of law in transfer cases, which provided that after a § 1404(a) transfer the transferee court must apply the choice-of-law rules of the transferor court, which, in diversity cases, means the choice-of-law rules of the state in which the transferor court sits. This rule was based on several longstanding principles of what I call choice-of-law federalism, which itself is premised on respect for the substantive policies underlying states’ choice-of-law rules and the refusal to sanction different applicable law in federal and state courts within the same state—even in the face of evident interstate forum shopping by plaintiffs. This Article examines how the Court’s abandonment of these principles creates numerous complications in its jurisprudence under the Erie doctrine and in choice of law