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ANDREW H. v. AMBACH

January 23, 1984

ANDREW H., a minor, by his mother, IRENE H., et al., Plaintiffs,
v.
Gordon M. AMBACH, individually and as Commissioner of Education of the State of New York, et al., Defendants



The opinion of the court was delivered by: GAGLIARDI

MEMORANDUM DECISION

 GAGLIARDI, District Judge.

 Plaintiffs have brought this action against Gordon M. Ambach, the Commissioner of Education of New York State, and Michael Finnerty, Director of the Budget of New York State. *fn1" Plaintiffs seek to enjoin defendants from enforcing the state's newly-adopted method of computing rates for reimbursement of private schools that teach handicapped children. *fn2" Defendants have moved to dismiss this action pursuant to Rule 12(b)(3) or, in the alternative, to transfer it pursuant to 28 U.S.C. § 1406(a) to the Northern District of New York on the grounds of improper venue.

 Background

 Plaintiffs claim that the defendants' current system of rate-setting fails to reimburse private schools for the actual costs of educating handicapped students and thus violates the right of the handicapped under federal and state law to a free education. *fn3" Most of the individual plaintiffs reside in the Southern District of New York. Plaintiffs also seek the certification of a class composed of all handicapped students affected by defendants' rate-setting methodology. Plaintiffs claim that the "largest concentration" of such students resides in the Southern District of New York.

 Commissioner Ambach was the state official responsible for establishing the challenged reimbursement methodology; Budget Director Finnery approved it. Both defendants perform their official duties in Albany, New York, which is located in the state's Northern District. The Division of the Budget maintains no office outside Albany. The Department of Education has offices throughout the state, including a Manhattan office for its Division of Program Monitoring of the Office for the Education of Children with Handicapping Conditions (the "Division"). The Division has the responsibility for assuring that public and private schools for the handicapped meet the requirements of federal and state law. Staff from the Manhattan office visit the schools and review their staffing levels and other program areas. The Division staff do not suggest or in any way affect the computation of rates for tuition reimbursement.

 Discussion

 Plaintiffs assert that venue for this action is proper in the Southern District of New York under 28 U.S.C. § 1391(b) by reason of the impact of the challenged practices within the district. They further assert that the fact that the Education Department maintains an office within the district is a sufficient ground for venue here under 28 U.S.C. § 1392(a). Defendants argue that neither statute supports venue in this case.

 A. Venue Under Section 1391(b)

 Section 1391(b) states the general rule regarding venue in an action based on federal question jurisdiction:

 
A civil action wherein jurisdiction is not founded solely on diversity of citizenship may be brought only in the judicial district where all defendants reside, or in which the claim arose, except as otherwise provided by law.

 Plaintiffs do not contend that "all defendants reside" in the Southern District; rather, they claim that the Southern District is "the judicial district . . . in which the claim arose." Defendants assert that the claim arose only in the Northern District, where defendants Ambach and Finnerty adopted the challenged rate-setting methodology.

 Plaintiffs concede that venue would be proper in the Northern District on this ground, but argue that a claim may arise in more than one district. In so contending, plaintiffs rely on a broad interpretation of section 1391(b) that seems at odds with the language of the statute, which supports an "inference that the draftsmen assumed that every claim arises in some one district." 1 Moore's Federal Practice para. 9.142[5.2] at 1431. The Supreme Court has stated that if venue in more than one district is ever available, it is only in "unusual" cases:

 
The broadest interpretation of the language of § 1391(b) that is even arguably acceptable is that in the unusual case in which it is not clear that the claim arose in only one specific district, a plaintiff may choose between those two (or conceivably even more) districts that with approximately equal plausibility -- in terms of the availability of witnesses, the accessibility of other relevant evidence, and ...

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