Quest Integrity USA LLC v. Clean Harbors Industrial Services Inc.
MEMORANDUM OPINION. Signed by Judge Sue L. Robinson on 7/8/2015. Associated Cases: 1:14-cv-01482-SLR, 1:14-cv-01483-SLR(nmfn)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
QUEST INTEGRITY USA, LLC,
CLEAN HARBORS INDUSTRIAL
QUEST INTEGRITY USA, LLC,
) Civ. No. 14-1482-SLR
) Civ. No. 14-1483-SLR
COKEBUSTERS USA INC.,
Thomas C. Grimm, Esquire and Jeremy A. Tigan, Esquire of Morris, Nichols, Arsht &
Tunnell LLP, Wilmington, Delaware. Counsel for Plaintiff. Of Counsel: Douglas A.
Grady, Esquire, John R. Nelson, Esquire, Richard T. Black, Esquire, Emily R. Kelly,
Esquire, and Benjamin Hodges, Esquire of Foster Pepper, PLLC.
Kelly E. Farnan, Esquire and Selena E. Molina, Esquire of Richards, Layton & Finger,
P.A., Wilmington, Delaware. Counsel for Defendant Clean Harbors Industrial Services,
Inc. Of Counsel: Michael J. Turgeon, Esquire and Robert S. Rigg, Esquire of Vedder
Richard L. Horwitz, Esquire, David E. Moore, Esquire, and Bindu A. Palapura, Esquire
of Potter Anderson & Corroon LLP, Wilmington, Delaware. Counsel for Defendant
Cokebusters USA Inc. Of Counsel: Thomas M. Fulkerson, Esquire, Wesley G. Lotz,
Esquire, and Gavin Uttecht, Esquire of Fulkerson Lotz LLP, and Michael Hudgins,
Esquire and Steven Hudgins, Esquire of The Hudgins Law Firm.
Plaintiff Quest ("plaintiff') initiated two lawsuits on December 15, 2014, by filing
complaints against Cokebusters USA lnc. 1 ("Cokebusters") and Clean Harbors Industrial
Services, lnc. 2 ("Clean Harbors") (collectively, "defendants") individually, 3 asserting
infringement of U.S. Patent No. 7,542,874 ("the '874 patent"), entitled "2D and 3D
Display System and Method for Furnace Tube Inspection." (D.I. 1, ex. A) Plaintiff's
motions for preliminary injunctions against defendants were denied. (D.I. 116)
Presently before the court is a motion to transfer venue to the Southern District of
Texas filed by defendant Cokebusters. (D.I. 25) Defendant Clean Harbors joined that
motion. (Civ. No. 14-1482, D.I. 25) The court has subject matter jurisdiction pursuant
to 28 U.S.C. §§ 1331 and 1338(a). Venue is proper in the District of Delaware pursuant
to 28 U.S.C. §§ 1391 (b)-(c) and 1400(b).
Plaintiff is a limited liability company organized and existing under the laws of the
State of Texas and having its principal place of business in Seattle, Washington. (D.I.
34 at 3) Defendant Clean Harbors is a corporation organized and existing under the
laws of the State of Delaware and having its principal place of business in Norwell,
Massachusetts. Defendant Cokebusters is a corporation organized and existing under
Civ. No. 14-1483. The court refers to the filings in this action unless otherwise
Civ. No. 14-1482.
Plaintiff also filed a complaint against A.Hak Industrial Services US LLC, Civ.
No. 14-1481, but that suit has since been voluntarily dismissed. Plaintiff then filed a
separate action against A.Hak in the Western District of Washington. (D.I. 34 at 4)
the laws of the State of Delaware and having its principal place of business in Houston,
Texas. (D.I. 26 at 3)
Ill. STANDARD OF REVIEW
Section 1404(a) of Title 28 of the United States Code grants district courts the
authority to transfer venue "[f]or the convenience of parties and witnesses, in the
interests of justice ... to any other district or division where it might have been brought."
28 U.S.C. § 1404(a). Much has been written about the legal standard for motions to
transfer under 28 U.S.C. § 1404(a). See, e.g., In re Link-A-Media Devices Corp., 662
F.3d 1221 (Fed. Cir. 2011); Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995);
Helicos Biosciences Corp. v. 11/umina, Inc., 858 F.Supp.2d 367 (D. Del. 2012).
Referring specifically to the analytical framework described in Helicos, the court
starts with the premise that a defendant's state of incorporation has always been "a
predictable, legitimate venue for bringing suit" and that "a plaintiff, as the injured party,
generally ha[s] been 'accorded [the] privilege of bringing an action where he chooses."'
858 F.Supp.2d at 371 (quoting Norwood v. Kirkpatrick, 349 U.S. 29, 31 (1955)). Indeed,
the Third Circuit in Jumara reminds the reader that "[t]he burden of establishing the
need for transfer ... rests with the movant" and that, "in ruling on defendants' motion,
the plaintiffs choice of venue should not be lightly disturbed." 55 F.3d at 879 (citation
The Third Circuit goes on to recognize that,
[i]n ruling on§ 1404(a) motions, courts have not limited their consideration
to the three enumerated factors in§ 1404(a) (convenience of parties,
convenience of witnesses, or interests of justice), and, indeed,
commentators have called on the courts to "consider all relevant factors to
determine whether on balance the litigation would more conveniently
proceed and the interests of justice be better served by transfer to a
Id. (citation omitted). The court then describes some of the "many variants of the
private and public interests protected by the language of§ 1404(a)." Id.
The private interests have included: plaintiff's forum of preference as
manifested in the original choice; the defendant's preference; whether the
claim arose elsewhere; the convenience of the parties as indicated by
their relative physical and financial condition; the convenience of the
witnesses-but only to the extent that the witnesses may actually be
unavailable for trial in one of the fora; and the location of books and
records (similarly limited to the extent that the files could not be
produced in the alternative forum).
The public interests have included: the enforceability of the judgment;
practical considerations that could make the trial easy, expeditious, or
inexpensive; the relative administrative difficulty in the two fora resulting
from court congestion; the local interest in deciding local controversies at
home; the public policies of the fora; and the familiarity of the trial judge
with the applicable state law in diversity cases.
Id. (citations omitted) (emphasis added).
With the above "jurisdictional guideposts" in mind, the court turns to the "difficult
issue of federal comity" that transfer motions present. EE. O.C. v. Univ. of Pa., 850
F.2d at 976. Plaintiff has not challenged defendants' assertion that venue would also be
proper in the Southern District of Texas; therefore, the court will not address this further.
See 28 U.S.C. § 1404(a); (D.I. 34)
The parties have all chosen legitimate forums in which to pursue the instant
litigation. Both defendants are Delaware corporations. A party's state of incorporation
is a traditional and legitimate venue, as is the locus of a party's business activities.
Defendants argue that the court should give less deference to plaintiff's choice of forum
because Delaware is not "home turf' for either party (D.I. 26 at 3-7) and that litigation in
Texas would be more appropriate because their office, headquarters, operations,
facilities, and employees are based in the Southern District of Texas, their principal
place of business is Houston, and all relevant documents are in Houston and/or the
United Kingdom. (D.I. 26 at 7-8) Indeed, the basis of their preference for the Southern
District of Texas is that "Houston is the most convenient and cost-effective locale for
hearings or trial." (D.I. 26 at 8) However, given that "convenience" is separately
considered in the transfer analysis, the court declines to elevate defendants' choice of
venue over the choice of the plaintiff. That plaintiffs have historically been accorded the
privilege of choosing their preferred venue for pursuing their claims remains a significant
A claim for patent infringement arises wherever someone has committed acts of
infringement, to wit, "makes, uses, offers to sell, or sells any patented invention" without
authority. See generally 35 U.S.C. § 271 (a); Red Wing Shoe Co., Inc. v. HockersonHalberstadt, Inc., 148 F.3d 1355, 1360 (Fed. Cir. 1998) (an infringement claim "arises
out of instances of making, using, or selling the patented invention"). Plaintiff alleges
infringing activity by defendants in multiple states, including Washington, California,
Louisiana, Delaware, and Michigan. Defendants argue that because plaintiff's
complaint does not specify a particular locale of alleged infringement, the best measure
is where customers are located and where jobs are conducted. (D. I. 26 at 11) The
court disagrees. Defendants admit to engaging in infringing conduct in Delaware. (D.I.
34 at 13)
That fact negates the argument that the alleged infringement is focused in
the Texas Gulf Coast region.
The Third Circuit in Jumara indicated that, in evaluating the convenience of the
parties, a district court should focus on the parties' relative physical and financial
condition. In this case, defendant Cokebusters alleges that it is a "fraction of the size of
Quest." (D.I. 26 at 8) On the other hand, plaintiff contends that defendant Clean
Harbors is part of a $3.5 billion revenue company. (D.I. 34 at 10) Defendant
Cokebusters further asserts that "requiring management to travel 1500 miles away from
its headquarters and base of operations for hearings or trial would severely disrupt
operations and drain its assets." (D.I. 26 at 8)
With respect to the convenience of the witnesses, it is not whether witnesses are
inconvenienced by litigation but, rather, whether witnesses "actually may be unavailable
for trial in one of the fora" that is the relevant consideration in this analysis. Jumara, 55
F.3d at 879. Defendants argue that more than a dozen refining companies are located
in Texas and that Houston is within driving distance for any potential non-party
witnesses who live in Texas or Louisiana. (D.I. 26 at 9) They further contend that most
refineries and a number of their customers in this country are in Texas or in the Gulf
Coast region, claiming that refinery customers are key fact witnesses and that this case
should be decided in Texas, where the affected customers can be heard. 4 (D.I. 26 at 811) As for the "handful of witnesses in the UK," defendant Cokebusters argues that it
would be more convenient for them to travel to Texas, where they could combine their
trip with business at the Houston headquarters. (D.I. 41 at 2) Finally, defendants assert
generally that there are potential witnesses who "are unlikely to travel to Delaware
If the record presented in the preliminary injunction proceedings is any
indication of what a trial record will look like, the evidence will consist of reports of
various inspections, where defendants' employees are the authors, not the customers.
voluntarily." (D.I. 26 at 12) See Smart Audio Techs., L.L.C. v. Apple, Inc., 910
F.Supp.2d 718, 732 (D. Del. 2012) ("[T]his factor is only given weight when there is
some reason to believe that a witness actually will refuse to testify absent a subpoena.")
Although it is possible that the Southern District of Texas is a more convenient forum
than Delaware for some witnesses, defendants have not indicated that any particular
witness who may be called upon to testify at trial would be unwilling to do so. 5
The Third Circuit in Jumara advised that the location of books and records is only
determinative if "the files c[an] not be produced in the alternative forum." Jumara, 55
F.3d at 879. Defendants assert that documents relevant to its business, operations,
marketing, financials, and customer service are accessible and managed in Texas.
(D.I. 26 at 9) However, consistent with the realities of modern technology, this court's
view is that virtually all businesses maintain their books and records in electronic format
readily available for review and use at any location. Indeed, there is nothing in the
record that indicates that the parties have experienced any difficulty conducting
discovery thus far, which has required a significant amount of transmission of
documents from both parties. With respect to trial, defendants fail to show how these
documents are incapable of being presented at trial in Delaware.
The court recognizes that trial in Texas may be easier and less expensive for
defendants, where their operations are located. Trial in Texas would not be
burdensome for plaintiff, since it also maintains offices and conducts business in Texas
With respect to trials, in the nine patent jury trials this judicial officer conducted
between March 2010 and October 2011, an average of three fact witnesses per party
appeared live for trial, with the average length of trial being 28 hours (with the parties
often using less time than allocated, on average, 25 hours). Further, depositions in the
cases over which this judicial officer presides are generally taken where the deponents
reside or work. There is no suggestion that this case will be an exception.
despite having its principal place of business in Washington. (D.I. 34 at 12; D.I. 26 at 34) Nonetheless, because less than 10% of cases are resolved through trial, and
because trials in most busy districts are of limited duration, this factor should not be
accorded significant weight. It certainly should not become the tail that wags the dog.
With respect to administrative difficulty, 6 trial in this case will be scheduled
consistent with the parties' proposals. Local interest in deciding local controversies is
not a dispositive factor, as patent litigation does not constitute a local controversy in
most cases. Indeed, patent litigation implicates constitutionally protected property
rights, is governed by federal law reviewed by a court of appeals of national (as
opposed to regional) stature, and affects national (if not global) markets. See Cradle IP
v. Texas Instruments, Inc., 923 F.Supp.2d 696, 700-01 (D. Del. 2013).
The remaining Jumara public interest factors-the enforceability of a judgment,
the public policies of the fora, and the familiarity of the judge with state law-carry little
weight in this transfer analysis, as they are mostly neutral or largely irrelevant to patent
cases. The parties agree on this point. (D.I. 26 at 13; D.I. 34 at 14)
In sum, defendants have the burden of persuading the court that transfer is
appropriate, not only for its convenience but in the interests of justice. In this case,
plaintiff chose a legitimate forum which both defendants have in common-their state of
Regarding the issue of convenience, defendants rely, in part, on efficiency that
would result from consolidating plaintiff's cases against defendants with plaintiff's case
against A.Hak in the Southern District of Texas, contending that all defendants would
prefer to litigate in the Southern District of Texas. (D.I. 26 at 11) Notably, however,
plaintiff alleges that A.Hak has not moved to transfer from the Western District of
Washington and has not agreed to keep the same schedule even if transfer should
occur. (D.I. 34 at 13) Both points negate defendants' argument that consolidation in
Texas would be more efficient.
incorporation. As is usual in these cases, the convenience factors do not weigh in favor
of transfer because discovery is a local event and trial is a limited event. 7 Although
Delaware is not the locus of any party's business activities, it is a neutral forum. The
court is not persuaded that transfer is warranted in the interests of justice. For the
foregoing reasons, defendants' motion to transfer venue (D.I. 25) is denied. An order
As noted, discovery will take place electronically or where the deponents reside
or work. Moreover, most trials now are scheduled for less than seven days, and involve
only a handful of live witnesses and a limited number of documents.
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