California Expanded Metal Products Company et al v. James Klein et al

Filing 51

ORDER by Judge Dean D. Pregerson: GRANTING 40 MOTION to Dismiss Case or Transfer Case. This entire action is transferred to the Western District of Washington, Seattle. ( MD JS-6. Case Terminated ) (shb)

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UNITED STATES DISTRICT COURT

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CENTRAL DISTRICT OF CALIFORNIA

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CALIFORNIA EXPANDED METAL
PRODUCTS COMPANY, a
California corporation;
CLARKWESTERN DIETRICH
BUILDING SYSTEMS LLC, an
Ohio limited liability
company Guardian Ad Litem
CLARKDIETRICH BUILDING
SYSTEMS,

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Plaintiff,

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v.
JAMES A. KLEIN, an
individual; BLAZEFRAME
INDUSTRIES, LTD., a
Washington Company; SAFTI
SEAL, ICN., a Washington
Company,

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Defendants.
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___________________________

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Case No. CV 18-00242 DDP (MRWx)

ORDER GRANTING DEFENDANTS’ MOTION
TO TRANSFER

[Dkt. 40]

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Presently before the court is Defendants James A. Klein

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(“Klein”), BlazeFrame Industries (“BlazeFrame”), and Safti-Seal,

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Inc. (Safti Seal”)’s Motion to Dismiss or, in the Alternative,

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Transfer.

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court grants the motion and adopts the following Order.
I.

Having considered the submissions of the parties, the

Background

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Defendant Klein is the named inventor of certain patented

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technologies related to fire-stopping head of wall assemblies used

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in the construction industry.

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comprised of a header with an intumescent strip of material

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attached.

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to seal the gap between the header and the ceiling, inhibiting the

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spread of smoke and fire.

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In essence, the assemblies are

When exposed to heat, the intumescent material expands

In 2012, a patent dispute arose between BlazeFrame and
Plaintiff California Expanded Metal Products Company (“CEMCO”) in

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the Western District of Washington.

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suit was transferred to this Court and consolidated with a second

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action by CEMCO against Plaintiff Clarkwestern Dietrich Building

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Systems LLC (“Clarkwestern”), Klein, and Blazeframe.

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DDP-MRW.)

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(CV 13-4669 DDO-MRW.)

That

(CV 12-10791-

The case ultimately settled.

In 2016, CEMCO and Clarkwestern filed a new suit against Klein

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and Blazeframe (“the second suit”), alleging patent infringement

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and breach of contract arising out of the settlement of the earlier

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litigation.

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“Second Agreement”.)

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Blazeframe) agreed to relinquish any claim to certain disputed

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patents and licenses.

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(CV 16-5968-DDP-MRW.)

That case also settled (the

Under the Second Agreement, Klein (and

In the instant suit, Plaintiffs allege that Klein formed a new

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company, Safti-Seal, that is producing and selling head of wall

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assemblies that infringe upon the patents at issue in the earlier

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litigation.

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Klein, Blazeframe, and Safti-Seal, breach of contract claims

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against Klein and Blazeframe related to the Second Agreement, and

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an unfair competition claim against Klein and Safti-Seal.

Plaintiffs allege patent infringement claims against

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Defendants now move to dismiss or transfer the Complaint for

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improper venue.

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II.

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Legal Standard
A party may file a motion to dismiss for improper venue

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pursuant to Federal Rule of Civil Procedure 12(b)(3).

“The

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district court of a district in which is filed a case laying venue

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in the wrong division or district shall dismiss, or if it be in the

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interest of justice, transfer such case to any district or division

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in which it could have been brought.”

28 U.S.C. § 1406(a).

It is

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the plaintiff’s burden to show that venue is proper.

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Marketing Group, LLC v. Your Store Online, LLC, 666 F.Supp.2d 1109,

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1126 (C.D. Cal. 2009).

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III. Discussion

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Allstar

Plaintiffs’ Complaint alleges that venue is proper in this

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district pursuant to 28 U.S.C. § 1391.

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argue that under the patent venue statute, 28 U.S.C. § 1400(b),

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this district is not a proper venue for this case, which must

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therefore be dismissed or transferred.

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(Complaint ¶ 8.) Defendants

In 2017, the Supreme Court decided TC Heartland LLC v. Kraft

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Foods Group Brands LLC, 137 S.Ct. 1514 (2017), which some courts

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have characterized as a “sea change” in the law of patent venue.

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See OptoLum, Inc. v. Cree, Inc., No. CV-16-03828-PHX-DLR, 2017 WL

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3130642, at *2 (D. Ariz. July 24, 2017) (citing Westech Aerosol

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Corp. v. 3M Co., No. C17-5067-RBL, 2017 WL 2671297, at *2 (W.D.

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Wash. June 21, 2017).) In TC Heartland, the Court reemphasized that

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the patent venue statute, 28 U.S.C. § 1400(b), is separate and

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distinct from the broader, general venue statute at 28 U.S.C. §

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1391(c).

The latter provides, for venue purposes, that a
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corporation “shall be deemed to reside . . . in any judicial

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district in which [it] is subject to the court’s personal

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jurisdiction . . . .”

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states that a patent infringement action may be brought “in the

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judicial district where the defendant resides, or where the

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defendant has committed acts of infringement and has a regular and

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established place of business.”

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interpreted Section 1400(b)’s definition of “resides” to include

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only the state of a corporation’s incorporation, rejecting the

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argument that Section 1400(b) incorporates the Section 1391(c)

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definition of corporate residence.

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1517 (citing Fourco Glass Co. v. Transmirra Products Corp., 353

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U.S. 222, 226 (1957)).

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that a defendant’s “regular and established place of business” must

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be a “physical, geographical location” within a given district.

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re Cray, Inc., 871 F.3d 1355, 1362 (Fed. Cir. 2017).

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28 U.S.C. § 1391(c).

Section 1400(b)

28 U.S.C. § 1400(b).

The Court

TC Heartland, 137 S. Ct. at

The Federal Circuit has since clarified

In

Here, there is no dispute that Klein, Blazeframe, and Safti-

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Seal all reside in the state of Washington.

Indeed, Plaintiffs

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agree that, under TC Heartland, the proper venue would be in

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Washington if the Complaint were to assert purely patent claims.

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(Opposition at 6.)

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Complaint alleges both patent and non-patent claims, Section

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1400(b) should not control.

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this Court discovered, any authority post-dating TC Heartland that

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would allow the court to simply disregard Section 1400(b) where

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patent claims are asserted.

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V. Red.com, Inc., No. C17-0217JLR, 2017 WL 4758761 (W.D. Wash. Oct.

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20, 2017) did address venue for patent and non-patent claims

Plaintiffs contend, however, that because their

Plaintiffs have not cited, nor has

Although the court in Jinni Tech Ltd.

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separately, it dismissed the former for failure to conform to

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Section 1400(b), and in no way suggested that the result would have

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been different had the claims been more intertwined.

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WL 4758761 at *10, 13.

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that the breach of contract claims are “ancillary” to the patent

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claims, this Court cannot agree.

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recognize that “[t]o determine the breach of contract claims . . .

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, it will be necessary to determine whether the Safti-Seal products

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infringe the patents that are the subject of the contract.”

Jinni, 2017

Furthermore, to the extent Plaintiffs argue

Indeed, Plaintiffs themselves

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(Opposition at 7:4-5.)

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that the contract claims are ancillary to the patent claims, rather

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than the reverse.

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Under such circumstances, it would appear

Plaintiffs also argue that this Court can avoid the

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application of Section 1400(b) by applying the doctrine of pendent

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venue, under which courts have the discretion to find venue proper,

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even where it is otherwise lacking, so long as venue is proper on

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another, closely related claim.

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Koch, 942 F. Supp. 2d 983, 998 (N.D. Cal. 2013); see also Gamboa v.

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USA Cycling, Inc., No. 2:12-CV-10051-ODW, 2013 WL 1700951, at *4

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(C.D. Cal. Apr. 18, 2013) (recognizing that the “pendent venue

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doctrine has received limited acceptance but is at least a

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recognized doctrine.”).

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unquestionably proper for the contract claims here, and because the

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patent claims are indisputably closely related to those claims,

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this Court can find this district an appropriate venue for the

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patent claims under the pendent venue doctrine.

Martensen v. Koch, Martensen v.

Because, Plaintiffs argue, venue is

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Although Plaintiffs do not point to any authority for the

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post-TC Heartland application of the pendent venue doctrine to
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circumstances involving patent claims, other courts have addressed

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similar questions.

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Watters Design Inc., No. 16-CV-2205 (VSB), 2017 WL 4997838(S.D.N.Y.

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Oct. 20, 2017), for example, explicitly declined to apply pendent

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venue over patent claims in light of TC Heartland, distinguishing

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earlier cases that relied upon Federal Circuit precedent abrogated

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by TC Heartland.

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Wet Sounds, Inc. V. Powerbass USA, Inc., No. CV H-17-3258, 2018 WL

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1811354 (S.D. Tex. Apr. 17, 2018), elaborated upon the Jenny Yoo

The court in Jenny Yoo Collection, Inc. v.

Jenny Yoo, 2017 WL 4997838 at *7.

The court in

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court’s rationale, explaining that courts applying the pendent

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venue doctrine typically follow one of two approaches, focusing

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either on the specificity of the respective venue statutes at issue

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or, alternatively, on the “primary claim” at issue.1

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of TC Heartland’s prescription that Section 1400(b) “is the sole

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and exclusive provision controlling venue in patent infringement

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actions and is not to be supplemented by § 1391(c),” the

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specificity-focused approach weighs against the application of

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pendent venue to cases involving patent claims.

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S. Ct. at 1519 (internal quotation, alterations, and citation

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omitted).

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suggested that pendent venue is categorically inapplicable to

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patent cases.

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Inc., No. C15-1984JLR, 2018 WL 1457254 at *7 (W.D. Wash. Mar. 23,

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2018).

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also militates against application of pendent venue.

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above, the breach of contract claims cannot be resolved without

In the wake

TC Heartland, 137

Indeed, for that reason, at least one court has

See National Products, Inc. v. Arkon Resources,

Here, as in Wet Sounds, the primary claim-focused approach
As discussed

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The Wet Sounds Order issued after the completion of briefing
on the instant motion.
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first resolving the patent infringement claims.

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pendent jurisdiction is applicable in the patent context, the

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circumstances here do not warrant the invocation of the doctrine.

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Thus, even if

Plaintiffs also ask, in the alternative, that this court stay

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the patent claims until the breach of contract and unfair

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competition claims are fully litigated.

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fact that, as Plaintiffs acknowledge, the non-patent claims cannot

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be resolved without a determination of the patent question, that

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course of action would not serve the interests of justice,

However, in light of the

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including judicial economy, avoidance of piecemeal litigation, and

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conservation of party resources.

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venue is improper, this court must either dismiss or transfer the

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case.

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exercise its inherent power to stay proceedings under these

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circumstances, the court cannot find a compelling reason to do so,

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notwithstanding its familiarity with the procedural history of this

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case.

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28 U.S.C. § 1406(a).

Furthermore, where, as here,

Even assuming that this Court could

See, e.g. Dietz v. Bouldin, 136 S. Ct. 1885, 1892 (2016).
As Plaintiffs put it, “it makes better sense to keep all the

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claim[s] together because they are based on the same nucleus of

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operative facts.”

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only proper in Washington for Plaintiffs’ patent claims and because

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the remaining claims are inextricably intertwined with those patent

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claims, this entire action is transferred to the Western District

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of Washington.2

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IV.

(Opp. at 13:6-7)

Accordingly, because venue is

Conclusion

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Where venue is proper for all claims against some, but not
all, defendants, severance of some claims may be warranted. See,
e.g., Wet Sounds, 2018 WL 1811354 at *4.
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For the reasons stated above, Defendants’ motion is GRANTED.

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This entire action is transferred to the Western District of

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Washington.

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IT IS SO ORDERED.

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Dated: April 30, 2018
DEAN D. PREGERSON
United States District Judge

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