## Facts

- First of Michigan Corporation, a securities brokerage firm, employed Michael Sobol as an investment broker in Michigan.
- Carlton and Dolores Bramlet, Florida residents, invested about $62,000 in an IRA through First of Michigan between 1989 and 1991 based on Sobol’s advice.
- The Bramlets alleged they did not receive periodic account statements and that losses were concealed until they were unable to mitigate them; a 1996 statement showed substantial losses.
- The Bramlets filed an NASD arbitration in Florida against First of Michigan and Sobol; the submission agreement incorporated NASD arbitration rules.
- First of Michigan and Sobol filed a federal diversity action in the Eastern District of Michigan seeking declaratory and injunctive relief to enjoin and dismiss the arbitration as time-barred under NASD eligibility rules.
- The Bramlets moved to dismiss for improper venue; the district court dismissed under § 1406(a), reasoning the “most substantial event” was the arbitration filing in Florida.
- The plaintiffs appealed solely on whether venue in the Eastern District of Michigan was proper under § 1391(a)(2).

## Issues

1. Whether, under 28 U.S.C. § 1391(a)(2), venue was proper in the Eastern District of Michigan because a substantial part of the events or omissions giving rise to the claim occurred there.
2. Whether the district court erred by applying a “most substantial event” test that treated the Florida arbitration filing as dispositive for venue.

## Decision

- The Sixth Circuit reversed the dismissal and remanded for further proceedings.
- The court held the district court applied an incorrect legal standard by requiring identification of the single “most substantial” event.
- The court concluded that substantial events connected to the dispute occurred in Michigan, making venue proper there under § 1391(a)(2).
- The court did not decide whether the NASD arbitration was time-barred, limiting its ruling to venue.

## Legal Principles

- Under 28 U.S.C. § 1391(a)(2) (as amended), venue is proper in any district where “a substantial part of the events or omissions giving rise to the claim occurred.”
- The statute does not require selection of the single best venue; more than one district can satisfy the “substantial part” standard.
- In assessing venue, courts must identify events materially connected to the claim asserted (here, the action seeking to enjoin arbitration), not merely the location of a later procedural step such as the arbitration filing.
- Dismissal under 28 U.S.C. § 1406(a) is improper when the chosen district satisfies § 1391(a)(2).

## Conclusion

The Sixth Circuit held that the amended federal venue statute permits venue in any district with a substantial connection to the events underlying the claim, so the Eastern District of Michigan was a proper venue despite the arbitration having been initiated in Florida.


First of Mich. Corp. v. Bramlet, 141 F.3d 260 (6th Cir. 1998)