WEIS, Circuit Judge.
This is a remand proceeding to consider the proper disposition of pendent state claims following a determination that federal securities law jurisdiction is lacking. A Pennsylvania statute provides that a federal court within the state may transfer erroneously filed cases to the state courts. We invoke that statute and direct that the pendent claims arising under Pennsylvania law be transferred to the state courts rather than be dismissed.
This action began when Samuel and Alice Weaver sued Marine Bank in federal court, alleging that the Bank violated § 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and the Pennsylvania Securities Act, Pa.Stat.Ann. tit. 70, § 1-501. In addition, charges of common law fraud were included.
The district court originally entered summary judgment for the defendant, finding no cause of action under the federal securities laws. Since that basis for federal jurisdiction was absent and there was no diversity, the district judge dismissed the pendent state law claims. A divided panel of this court reversed the grant of summary judgment, 637 F.2d 157 (3d Cir. 1981). The Supreme Court in turn reversed this court's judgment, finding that the case did not involve a "security" within the scope of the federal statutes. ___ U.S. ___, 102 S.Ct. 1220, 71 L.Ed.2d 409 (1982). Because it has been determined that plaintiffs did not have a federal cause of action, it now becomes necessary to address the state law claims that were initially dismissed by the district court.
The plaintiffs allege generally that they were defrauded by Marine Bank when it persuaded them to post their certificate of deposit as collateral for the obligations of a third party. The Weavers contend that the bank's activities contravened the state's Securities Act, which is governed by a one-year statute of limitations, Pa.Stat.Ann. tit. 70, § 1-101-704 (Purdon). In addition, they asserted claims under common law fraud theories to which either a two-year, 42 Pa.Cons.Stat.Ann. § 5524 (Purdon), or a six-year, id. at § 5527, statute of limitations period applies.
The suit in federal court was filed on May 4, 1979, and on July 20, 1979, three separate writs of summons were filed in the Court of Common Pleas of Erie County, Pennsylvania. These summonses, however, were not served on the defendant until March 1982, after the statute had expired — at least as to the state Securities Act count. We need not recite the details of the state litigation insofar as the limitations issue is concerned. It is enough to say that the bank has asserted that it will vigorously press its defense there that the claims are barred by the statute of limitations. Since the issue in that litigation is purely one of Pennsylvania law to be decided by that state's tribunals, we have no authority to pass on the question.
The relevant factor from our standpoint is that there is a possibility that the plaintiffs' cause of action presently in the state court may be barred by the statute of limitations. If so, then the only opportunity for the plaintiffs to litigate the merits of their claims lies in the pendent state law counts in the federal litigation.
A federal court may entertain state law counts arising out of a "common nucleus of operative fact" on which a federal cause of action is based, even though jurisdiction would not otherwise be present. United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966). In the case at hand, however, it has now been determined that there is no federal cause of action.
In Tully v. Mott Supermarkets, Inc., 540 F.2d 187 (3d Cir. 1976), we said that if the federal count is subject to dismissal on a motion for summary judgment, then the district court should "ordinarily refrain from exercising jurisdiction [over the state law claims] in the absence of extraordinary circumstances." Id. at 196 (citation omitted). This is because the primary justification for exercising pendent jurisdiction is missing if the substantial federal claim to which the state counts could be appended is no longer viable. In its absence then, the state claims should be dismissed. In Tully, we observed that the time already invested in litigating the state cause of action is an insufficient reason to sustain the exercise of pendent jurisdiction.
Under the circumstances of the case at hand, Tully would not support the federal court's retention of the remaining state claims. Yet, the prospect of the plaintiffs losing the opportunity to pursue their state cause of action because they erred in their interpretation of the Federal Securities Act is not a satisfying one. This is particularly true when the federal question — obviously one of substance — was not finally decided until it reached the Supreme Court.
It is fortunate for the plaintiffs, however, that Pennsylvania's Judicial Code has provided for just such a situation as exists here. When a matter is brought in a court which does not have jurisdiction, the Code permits the case to be transferred to the proper court of the Commonwealth. That provision is specifically made applicable to "any matter transferred or remanded by any United States court for a district embracing any part" of the Commonwealth. 42 Pa.Cons.Stat. § 5103(b) (Purdon). The transfer is effected by filing a certified transcript of the final judgment of the United States court and the related pleadings in the appropriate state forum. Then the matter "shall be treated as if originally filed in the transferee court . . . on the date first filed in a [federal] court. . . ." Id. at § 5103(a). This provision clearly obviates the limitations problem that might otherwise confront the plaintiffs.
Section 5103 provides:
(a) General rule. — If an appeal or other matter is taken to or brought in a court . . . which does not have jurisdiction of the . . . matter, the court . . . shall not . . . dismiss the matter, but shall transfer the record thereof to the proper court . . . of this Commonwealth, where the . . . matter shall be treated as if originally filed in the transferee court . . . on the date first filed in a court. . . ."
(b) Federal cases. — Subsection (a) shall also apply to any matter transferred . . . by any United States court for a district embracing any part of this Commonwealth. Except as otherwise prescribed by general rules, or by order of the United States court, such transfer may be effected by filing a certified transcript of the final judgment of the United States court and the related pleadings in a court . . . of this Commonwealth. The pleadings shall have the same effect as under the practice in the United States court, but the transferee court . . . may require that they be amended to conform to the practice in this Commonwealth. . . ."
42 Pa.Cons.Stat.Ann. § 5103 (Purdon).
We recognize that such a transfer by a district court is an exercise of a power granted not by federal, but state, law. Jurisdiction of a federal court is dependent upon federal statutory authority, but that principle does not control the issue here. Unquestionably, at the time the suit was filed in the district court, there was a colorable federal claim and pendent jurisdiction could properly be assumed. The question presented then is, whether the district court, once having acquired jurisdiction, can transfer the matter to the state court by virtue of a state enabling statute. We are persuaded that it can.
However, the Supreme Court has held, in the context of diversity jurisdiction, that a state statute that bars a person from utilizing a state court likewise precludes suit in the federal court. Woods v. Interstate Realty Co., 337 U.S. 535, 538, 69 S.Ct. 1235, 1237, 93 L.Ed. 1524 (1949); Angel v. Bullington, 330 U.S. 183, 191-92, 67 S.Ct. 657, 661-62, 91 L.Ed. 832 (1947). This result is commanded by Erie Railroad Co. v. Thompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), and has been given effect in the context of pendent, Hamilton v. Roth, 624 F.2d 1204 (3d Cir. 1980), as well as diversity, jurisdiction, Edelson v. Soricelli, 610 F.2d 131 (3d Cir. 1979). Thus, state law can effectively "limit" the federal court's jurisdiction in the diversity setting.
In a series of cases, the Supreme Court has held that a federal court may certify a question of doubtful state law to a state supreme court for resolution whenever the state has adopted such a procedure. In Lehman Brothers v. Schein, 416 U.S. 386, 389, 94 S.Ct. 1741, 1743, 40 L.Ed.2d 215 (1974), the Court commented approvingly on certification saying, "[t]hat path is open to this Court and to any court of appeals of the United States. We have, indeed, used it before as have courts of appeals." The Court noted that resort to the procedure, in addition to its practical advantages, also "helps build a cooperative judicial federalism." Id. at 391, 94 S.Ct. at 1744.
When use of certification was first suggested by the Court, it said that the Florida legislature,
"[W]ith rare foresight, has dealt with the problem of authoritatively determining unresolved state law involved in federal litigation by a statute which permits a federal court to certify such a doubtful question of state law to the Supreme Court of Florida for its decision. . . . Even without such a facilitating statute we have frequently deemed it appropriate, where a federal constitutional question might be mooted thereby, to secure an authoritative state court's determination of an unresolved question of its local law."
Clay v. Sun Insurance Office Ltd., 363 U.S. 207, 212, 80 S.Ct. 1222, 1225, 4 L.Ed.2d 1170 (1960) (footnote and citations omitted). In Zant v. Stephens, ___ U.S. ___, ___, 102 S.Ct. 1856, 1859, 72 L.Ed.2d 222 (1982), the Court said, "We invoke that [Georgia certification] statute to certify the following question [of state law]. . . ." See also Aldrich v. Aldrich, 375 U.S. 249, 84 S.Ct. 305, 11 L.Ed.2d 304 (1963); Dresner v. City of Tallahassee, 375 U.S. 136, 84 S.Ct. 235, 11 L.Ed.2d 208 (1963).
The federal court's reliance on state law as authority for certification has never been questioned, although doubt has been expressed that, absent a state enabling statute, the procedure would be permissible. See, e.g., England v. Louisiana State Board of Medical Examiners, 375 U.S. 411, 433-34, 84 S.Ct. 461, 475-76, 11 L.Ed.2d 440 (1964) (Douglas, J., concurring); Turnbull v. Bonkowski, 419 F.2d 104, 106 (9th Cir. 1969). See also 17 C. Wright, A. Miller, E. Cooper, Federal Practice Procedure § 4248 (1978).
When the authority for a federal court to certify a question to the state court, absent a state statute allowing the procedure has been questioned, it has not been from the perspective of the federal court's power to do so. Rather, the issue has been whether the state courts can constitutionally be compelled to answer a certified question if they lack constitutional or legislative authority to do so. See Kurland, "Toward A Co-operative Judicial Federalism: The Federal Court Abstention Doctrine," 24 F.R.D. 481, 490 (1959); 73 Harv.L. Rev. 1358, 1368-69 (1960); Wright, "The Federal Courts and the Nature and Quality of State Law," 13 Wayne L.Rev. 317, 325 (1967).
It appears that the inherent power that is vested in the federal courts "to manage their own affairs so as to achieve the orderly and expeditious disposition of cases," Link v. Wabash Railroad Co., 370 U.S. 626, 630-31, 82 S.Ct. 1386, 1388-89, 8 L.Ed.2d 734 (1962), is the underlying federal basis that permits the court to elect to use such a state mechanism, if available. See also, Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 507, 67 S.Ct. 839, 842, 91 L.Ed. 1055 (1947) (federal court has inherent power to transfer case to another district court). In the situation where a certifiable question of state law is raised, as well as the type of case presented here, the litigants would normally be remitted to the state court for resolution of the issue or case. But just as with certification, when the state permits the federal court to transfer the case, rather than leaving the parties to proceed on their own motion, a more orderly and efficient procedure is achieved.
The cooperative federalism that is so much a part of the certification process similarly inheres in the transfer statute enacted by Pennsylvania. It is designed to prevent the parties from being trapped by jurisdictional technicalities that prevent a resolution of disputes on the merits. Obviously the limited and often uncertain jurisdiction of the federal courts poses a hazard to even an alert litigant. Pennsylvania's willingness to accept jurisdiction over cases improvidently brought in the federal courts represents an enlightened effort which deserves sympathetic consideration by this court. The Supreme Court's enthusiastic reception of the analogous certification procedure without requiring congressional authorization convinces us that we can take a similar stance with respect to the transfer provision here.
As the commentaries to the Pennsylvania Judicial Code note, the provision was intended to eliminate the need to file state court protective actions when a litigant is uncertain whether he has correctly filed in the federal forum — the precise problem presented in this case. See Pennsylvania Bar Association, Legislative Bulletin (May 17, 1978), reporting the proposal submitted by a Committee of the Pennsylvania Conference of State Trial Judges, chaired by The Honorable Robert A. Doyle of the Court of Common Pleas of Allegheny County and a Pennsylvania Bar Association Special Committee on the Judicial Code.
Ordinarily, we would return this matter to the district court to determine whether the pendent claims should be transferred. Because of the length of time which has already elapsed in this litigation, and because we envision no equitable considerations which would bar transfer, we believe that prompt action on our part is required. Accordingly, we will remand this matter to the district court with directions that it transfer the pendent cases to the Court of Common Pleas of Erie County, Pennsylvania, pursuant to the terms of 42 Pa.Cons. Stat.Ann. § 5103.
The parties did not cite the provisions of the Pennsylvania Judicial Code in the district court, but we are confident that had they done so, the case would have been transferred, rather than dismissed.