Anza Technology, Inc. v. Mushkin, Inc.,

Filing 40

ORDER signed by Senior Judge William B. Shubb on 12/20/17 GRANTING 29 30 Motions to Dismiss or Transfer; plaintiff's claims against Mushkin are SEVERED AND TRANSFERRED to the District of Colorado for all further proceedings. Plaintiff's claims against Avant are SEVERED AND TRANSFERRED to the Western District of Texas for all further proceedings. CASE TRANSFERRED (Benson, A.)

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1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 ANZA TECHNOLOGY, INC., 13 14 15 16 17 18 19 CIV. NO. 2:17-00656 WBS EFB Plaintiff, ORDER RE: MOTIONS TO DISMISS OR TRANSFER v. MUSHKIN, INC., a Colorado Corporation, d/b/a ENHANCED NETWORK SYSTEMS, INC.; and AVANT TECHNOLOGY, INC., a Nevada corporation, d/b/a MUSHKIN ENHANCED MFG, Defendants. 20 ----oo0oo---- 21 22 Plaintiff Anza Technology, Inc. (“Anza”) brought this 23 patent infringement action against Mushkin, Inc. 24 Avant Technology, Inc. (“Avant”) based on defendants’ alleged use 25 of certain tools and techniques in the manufacture of integrated 26 circuit chips. 27 under Federal Rule of Civil Procedure 12(b)(3) (“Rule 12(b)(3)”); (“Mushkin”) and Mushkin moves for dismissal for improper venue 28 1 1 dismissal for improper joinder under Federal Rule of Civil 2 Procedure 21 (“Rule 21”); or severance and transfer under Rule 3 21, 28 U.S.C. § 1404(a), or 28 U.S.C. § 1406(a). 4 29.) 5 Procedure 12(b)(6) (“Rule 12(b)(6)”); dismissal for improper 6 venue under Rule 12(b)(3); or transfer under 28 U.S.C. § 1404(a) 7 or 28 U.S.C. § 1406(a). 8 motions on December 18, 2018. 9 I. (Docket No. Avant moves for dismissal under Federal Rule of Civil The court held oral argument on the Legal Standard 10 Under 28 U.S.C. § 1406(a), if a case is filed in an 11 improper venue, the district court “shall dismiss, or if it be in 12 the interest of justice, transfer such case to any district or 13 division in which it could have been brought.” 14 improper venue under Rule 12(b)(3), the court need not accept the 15 pleadings as true and may consider supplemental written materials 16 and facts outside the pleadings in deciding the motion. 17 Clinton, 822 F. Supp. 2d 1048, 1079 (E.D. Cal. 2011) (England, 18 J.) (citing, inter alia, Murphy v. Schneider Nat’l, Inc., 362 19 F.3d 1133, 1137 (9th Cir. 2004)). 20 improper venue or to transfer venue to a proper court is a matter 21 within the sound discretion of the district court. 22 Supp. 2d at 1079 (citing Cook v. Fox, 537 F.2d 370, 371 (9th Cir. 23 1976)). 24 On a motion for Munns v. The decision to dismiss for Munns, 822 F. Venue in patent cases is governed by 28 U.S.C. § 25 1400(b), rather than the more permissive general venue statute, 26 28 U.S.C. § 1391. 27 LLC, 137 S. Ct. 1514, 1518-19 (2017). 28 infringement actions may only be brought in (1) “the judicial TC Heartland LLC v. Kraft Foods Grp. Brands 2 Under § 1400(b), patent 1 district where the defendant resides” or (2) “where the defendant 2 has committed acts of infringement and has a regular and 3 established place of business.” 4 28 U.S.C. § 1400(b). For purposes of § 1400(b), “a domestic corporation 5 ‘resides’ only in its State of incorporation.” TC Heartland, 137 6 S. Ct. at 1517. 7 standard requires more than the minimum contacts necessary for 8 establishing personal jurisdiction or for satisfying the doing 9 business standard of the general venue provision.” “[T]he regular and established place of business In re Cray 10 Inc., 871 F.3d 1355, 1361 (Fed. Cir. 2017). 11 requires that “(1) there must be a physical place in the 12 district; (2) it must be a regular and established place of 13 business; and (3) it must be the place of the defendant.” 14 1361. 15 II. 16 This standard Id. at Analysis Here, there is no dispute that both Mushkin, a Colorado 17 corporation, and Avant, a Nevada corporation with its principal 18 place of business in Texas, reside outside the Eastern District 19 of California, and therefore venue does not lie under the first 20 prong of § 1400(b). 21 any claim by plaintiff that either Mushkin and Avant have a 22 regular and established place of business in the Eastern District 23 of California, and defendants’ evidence shows that they do not. 24 (See Mushkin Mot. Dismiss Stathakis Decl. ¶ 11 (Docket No. 29-2) 25 (stating that Mushkin has no physical place of business, 26 warehouse, inventory, employees or sales representatives, or 27 continual presence in the Eastern District of California); 28 Mushkin Peddecord Decl. ¶ 9 (Docket No. 29-3) (stating that Avant (See 1st Am. Compl. ¶¶ 7, 9.) 3 Nor is there 1 has no physical place of business, warehouse, inventory, 2 employees or sales representatives, or continual presence in 3 California or Colorado).) 4 at oral argument that venue was not proper in the Eastern 5 District of California, and the court agrees.1 6 III. Remedy 7 Most importantly, plaintiff conceded Having determined that venue does not lie in the 8 Eastern District of California, the court must determine whether 9 the appropriate remedy is dismissal or transfer. The parties 10 agree that the court may sever the case and transfer plaintiff’s 11 claims against Mushkin to the District of Colorado, where Mushkin 12 resides and has a regular and established place of business, and 13 transfer the claims against Avant to the Western District of 14 Texas, where Avant is headquartered. 15 that the case be dismissed, while plaintiff prefers that the 16 entire case should be transferred to the Western District of 17 Texas. 18 However, defendants prefer It was not apparent that venue was improper in the 19 Eastern District of California at the time this action was filed, 20 before the Supreme Court’s decision in TC Heartland. 21 Accordingly, because all parties agree that plaintiff’s claims 22 may be brought separately in the District of Colorado and the 23 24 25 26 27 28 1 Because the Eastern District of California is not a proper venue for either defendant, the court will deny defendants’ motions and plaintiff’s request to transfer to the extent they rely on 28 U.S.C. § 1404(a). See, e.g., Action Embroidery Corp. v. Atl. Embroidery, Inc., 368 F.3d 1174, 1181 (9th Cir. 2004) (where venue is improper, defendant may move for dismissal or transfer under § 1406(a), and where venue is proper but inconvenient, defendant may move for change of venue under § 1404(a)). 4 1 Western District of Texas, and dismissal may reduce any potential 2 recovery by plaintiff due to statute of limitations issues, the 3 court does not find that maintaining this suit after TC Heartland 4 warrants dismissal under Rule 1406(a). 5 Instead, the court will sever and transfer plaintiff’s 6 claims against Mushkin to the District of Colorado, and the 7 claims against Avant to the Western District of Texas. 8 under § 1406(a) is only permitted “to any district or division in 9 which it could have been brought” and plaintiff has not shown Transfer 10 that the case could have been brought against both defendants in 11 the Western District of Texas. 12 Integrated Network Sols., Corp., No. 2:04-cv-01971-TLN, 2014 WL 13 2987662, at *4 (E.D. Cal. July 1, 2014) (citation omitted) (“When 14 there are multiple parties and/or multiple claims in an action, 15 the plaintiff must establish that venue is proper as to each 16 defendant and as to each claim.”). 17 See, e.g., Wordtech Sys. Inc. v. Mushkin has provided evidence establishing (1) it is 18 incorporated in and its headquarters and principal place of 19 business are in Colorado; (2) it sold its entire memory 20 components business to Avant in 2012 and is no longer involved in 21 the design, manufacture, assembly, or importation of integrated 22 circuit memory products, including any such products under the 23 Mushkin name, which it no longer uses; (3) it has no co-branding 24 relationship with Avant with respect to Mushkin-branded memory 25 products; and (4) it has never owned or occupied any facility in 26 Texas, including Avant’s facility in Pflugerville, and has no 27 regular or continual business presence in Texas. 28 Decl.) (Stathakis Defendants have also provided evidence that Avant 5 1 operates under its trade name as Mushkin Enhanced MFG and that 2 since the 2012 asset sale, Avant has been the sole assembler and 3 seller of Mushkin brand memory products under the Mushkin 4 Enhanced MFG name. 5 (Peddecord Decl. ¶¶ 5-8.) In the face of this evidence, any ambiguity on the 6 mushkin.com website and any ambiguity regarding the asset sale 7 from Mushkin to Avant are insufficient to show that Mushkin has a 8 regular and established place of business in the Western District 9 of Texas. Similarly, the fact that Mushkin has a registered 10 agent with the Texas comptroller does not show that the 11 corporation has a regular and established place of business 12 within Texas. 13 not proper as to Mushkin, and the court may not transfer the 14 claims against Mushkin to that district. 15 parties agree that venue is proper as to plaintiff’s claims 16 against Mushkin in the District of Colorado and as to plaintiff’s 17 claims against Avant in the Western District of Texas, the court 18 will sever and transfer plaintiff’s claims to those districts. 19 Thus, venue in the Western District of Texas is However, because the IT IS THEREFORE ORDERED that defendants’ Motions to 20 dismiss or transfer for improper venue (Docket Nos. 29, 30) be, 21 and the same hereby are, GRANTED. 22 Mushkin are hereby SEVERED AND TRANSFERRED to the District of 23 Colorado for all further proceedings. 24 Avant are hereby SEVERED AND TRANSFERRED to the Western District 25 of Texas for all further proceedings.2 26 27 28 2 Plaintiff’s claims against Plaintiff’s claims against As all claims will be The court expresses no opinion as to whether defendants were properly joined in this suit and whether plaintiff sufficiently alleged its claims for patent infringement against either defendant. 6 1 transferred out of the Eastern District of California, the Clerk 2 of Court is instructed to close this case after transfer is 3 complete. 4 Dated: December 20, 2017 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7

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