002152706 Ontario Limited et al v. Changer & Dresser Corp.
Filing
116
DECISION AND ORDER. Defendant's alternative motion to transfer (Dkt. 101) is GRANTED; Defendant's motion to dismiss for improper venue (Dkt. 101) is DISMISSED as moot. The Clerk of Court is directed to take all steps necessary to transfer this matter to the Northern District of Alabama. Signed by Hon. Leslie G. Foschio on 7/19/2018. (SDW)-CLERK TO FOLLOW UP-
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
002152706 ONTARIO LIMITED,
JEC DISTRIBUTORS INC.,
Plaintiffs,
DECISION
and
ORDER
v.
15-CV-20S(F)
CHANGER & DRESSER, INC.,
Defendant.
APPEARANCES:
HARTER, SECREST AND EMERY LLP
Attorneys for Plaintiffs
DANIEL J. ALTIERI,
MICHAEL J. BERCHOU,
Lauren R. Mendolera, of Counsel
50 Fountain Plaza, Suite 1000
Buffalo, New York 14202-2293
BURR & FORMAN LLP
Attorneys for Defendant
RYAN M. CORBETT,
HARVEY S. KAUGET, of Counsel
201 N. Franklin Street, Suite 3200
Tampa, Florida 33602
JURISDICTION
This matter was referred to the undersigned for all dispositive and non-dispositive
motions by Order of District Judge William M. Skretny, filed November 16, 2017 (Dkt.
98). It is presently before the court on Defendant’s motion, filed December 11, 2017, to
dismiss pursuant to Fed.R.Civ.P. 12(b)(1) for lack of subject matter jurisdiction,
Fed.R.Civ.P. 12(b)(3) for lack of proper venue, and, alternatively, pursuant to 28 U.S.C.
§ 1406(a), to transfer the case to the Northern District of Alabama. 1 (Dkt. 101)
(“Defendant’s motion”).
1
A motion to transfer pursuant to 28 U.S.C. § 1406(a) is non-dispositive. See Moog, Inc. v. Newport
Aeronautical, Inc., 2018 WL 344238, at *1 n. 1 (W.D.N.Y. June 23, 2016) (citing Watson v. Wright, 2011
BACKGROUND AND FACTS2
This patent infringement action alleges Defendant’s infringement of Plaintiffs’
’281, ’609 and ’639 patents for Plaintiffs’ spot welding cap changer invention facilitates
spot welding. Plaintiffs’ ’609 continuation patent was added by stipulation in Plaintiffs’
Third Amended Complaint; Plaintiffs’ ’639 and ’814 continuation patents were added by
court permission, over Defendant’s opposition, in Plaintiff’s Fourth and Fifth Amended
Complaints. See 002152706 Ontario Limited, et al. v. Changers & Dresser, Inc., 2016
WL 9488725, *1 (W.D.N.Y. Oct. 31, 2016) (permitting Fourth Amended Complaint);
002152706 Ontario Limited, et al. v. Changers & Dresser, Inc., 15-CV-00020S(F), Dkt.
97, Nov. 13, 2017 (permitting Fifth Amended Complaint). In the original Complaint, the
Amended Complaint (Dkt. 5), and Plaintiffs’ First, Second, Third, and Fourth Amended
Complaints, Plaintiffs alleged venue was proper in this district under 28 U.S.C. § 1391
(the general venue statute) and § 1400(b) (the patent venue statute). In Defendant’s
motion to dismiss the Amended Complaint, filed March 31, 2015 (Dkt. 8), Defendant did
not object to Plaintiffs’ asserted venue in this district. The parties stipulated to permit
Plaintiffs to file a Second Amended Complaint (Dkt. 11), which Judge Skretny approved
on April 21, 2015 (Dkt. 13). In Defendant’s answer to the Second, Third, and Fourth
Amended Complaints, which asserted the same basis for venue, Defendant admitted
venue was proper.3 See, e.g., Dkt. 55 ¶ 13. Defendant further asserted venue was
proper for Defendant’s invalidity counterclaims asserted in Defendant’s Answers to
WL 1118608, at *6 (“Motions to transfer venue are non-dispositive.”) (citing Anscombe Broadcasting Grp,
Ltd. v. RJM Communications, Inc., 2004 WL 249164, at *1 n. 1 (W.D.N.Y. Nov. 4, 2004) (considering
motions to transfer a “non-dispositive pretrial determination made pursuant to 28 U.S.C. § 636(b)(1)(A)”
and citing cases)).
2
Taken from the pleadings and papers filed in this action.
3
No answer was filed for the Complaint and Amended Complaint.
2
Plaintiffs’ Second, Third, and Fourth Amended Complaints. See, e.g., Dkt. 55 (Answer
to Fourth Amended Complaint) ¶ 7 (“Venue is proper in this district.”). By papers filed
June 6, 2017 (Dkt. 71), Defendant moved, pursuant to Fed.R.Civ.P. 12(b)(3) (“Rule
12(b)(3)”), together with Memorandum of Law in support (Dkt. 71-1), to dismiss
Plaintiffs’ Fourth Amended Complaint for lack of proper venue, or transfer the case to
the Northern District of Alabama pursuant to 28 U.S.C. § 1406(a) (“§ 1406(a)”), based
on the Supreme Court’s recent decision in TC Heartland LLC v. Kraft Foods Grp.
Brands, LLC, 137 S.Ct. 1514 (2017) (“TC Heartland”), decided May 22, 2017, in which
the Court held that patent cases are required to satisfy the patent venue requirements
of 28 U.S.C. § 1400(b) and may not be venued pursuant to the general venue
provisions of 28 U.S.C. § 1391(c) (“Defendant’s motion”). Plaintiffs’ Memorandum of
Law In Opposition To Defendant’s Motion was filed June 30, 2017 (Dkt. 81);
Defendant’s Reply Memorandum was filed July 7, 2017 (Dkt. 82).
On December 11, 2017, Defendant moved to dismiss Plaintiffs’ Fifth Amended
Complaint filed on November 27, 2017 (Dkt. 100) pursuant to Fed.R.Civ.P. 12(b)(2)
(“Rule 12(b)(2)”) for lack of subject matter jurisdiction based on Plaintiffs’ lack of
standing as well as improper venue in this district under Rule 12(b)(3) (“Defendant’s
Rule 12(b)(2) motion”). Plaintiffs’ Memorandum of Law in opposition was filed January
5, 2018 (Dkt. 105); Defendant’s Reply Memorandum was filed January 19, 2018 (Dkt.
108). Defendant’s December 2017 Rule 12(b)(2) motion asserts that because the
Plaintiffs’ original patent assignee, Copperhead Industrial, Inc. (“Copperhead”), an
Ontario corporation, is not the named Plaintiff, the Plaintiff 002152706 Limited Ontario
corporation lacks standing. By papers filed December 22, 2016, Plaintiffs’ cross-moved
3
to substitute Copperhead as the real party in interest as plaintiff in this action, in lieu of
002152706 Ontario Limited, which corporation Plaintiffs contend was mistakenly named
as assignee of the original patent and one of the Plaintiffs in this action. (Dkt. 65)
(“Plaintiffs’ Cross-Motion). Plaintiff JEC Distributors Inc. is a U.S. distributor of Plaintiffs’
spot welding cap changers whose standing is also subject to Defendant’s motion. In
Plaintiffs’ Cross-Motion Plaintiffs also sought a stay of Defendant’s parallel declaratory
action based on the same patent infringement claims Defendant commenced in 2016 in
the Northern District of Alabama (“the Alabama action”), which action has been stayed
by the district court in the Alabama action pending determination of Plaintiffs’ and
Defendant’s motions in this district. See Dkt. 71-1 at 9 n. 4. Defendant’s motion to
dismiss or transfer is predicted on the fact, not disputed by Plaintiffs, that Defendant is
neither a New York State corporation nor does it have a principal place of business in
this district as required by § 1406(b) for proper venue of a patent case. Oral argument
on Defendant’s motion was deemed unnecessary.
DISCUSSION
1.
Improper Venue.
In TC Heartland, the Supreme Court reaffirmed its decision in Fourco Glass Co.
v. Transmirra Products Corp., 353 U.S. 222, 226 (1957), that 28 U.S.C. § 1400(b), the
patent venue statute, controls the question of the proper venue for a patent infringement
claim against a defendant corporation. TC Heartland Products Corp., 137 S.Ct. at
1520-21. Specifically, the Court held that § 1400(b)’s requirement that a corporate
defendant be sued either where it “resides,” i.e., its place of incorporation or corporate
4
domicile, or where it both has infringed and maintains a principal place of business,
does not include the broader definition of corporate residence enacted by later
amendment to the general venue statute as enacted in 1988 and 2011, 28 U.S.C. §
1391(a)(c) (“§ 1391__”), viz., corporation is a resident of “any district in which [the
defendant] is subject to the court’s personal jurisdiction with respect to the civil action in
question.” § 1391(c). The Court further held that subsequent decisions, particularly VE
Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed.Cir. 1990) (“VE
Holding Corp.”), that § 1391(c)’s then recently enacted broader definition of corporate
residence also redefined the term “resides” as used in § 1400(b), were erroneous
thereby requiring that the term as used in § 1400(b) means the defendant’s domicile, or,
in the case of a defendant corporation, the defendant’s “‘state of incorporation only.’”
TC Heartland, LLC, 137 S.Ct. at 1519 (quoting Fourco Glass Co., 353 U.S. at 226).
Here, the parties agree that Defendant, a subsidiary of Kyokutoh Co. Ltd., a Japanese
entity, is an Alabama corporation with its principal place of business in Birmingham,
Alabama within the Northern District of Alabama. Dkt. 100 ¶ 8. Plaintiffs do not allege
Defendant maintains a principal office in this district. See Dkt. 11 ¶¶ 12-17. Thus,
unless Defendant, by failing to assert improper venue for the Fifth Amended Complaint
as a defense either by pleading it as an affirmative defense pursuant to Fed.R.Civ.P.
12(b)(3) or by motion pursuant to Fed.R.Civ.P. 12(b)(3), is found to have waived such
defense as provided in Fed.R.Civ.P. 12(h)(1)(A), the action is subject to dismissal or
transfer under § 1406(a).4 However, for such a waiver to occur, a later asserted
4
Section 1406(a) as relevant provides that “[t]he district court of a district in which is filed a case laying
venue in the wrong . . . district shall dismiss, or if it be in the interest of justice, transfer such case to any
district . . . in which it could have been brought.”
5
defense of improper venue, not included in a defendant’s responsive pleading or Rule
12(b)(3) motion, the defense must have been “‘available to the [defendant]’ when the
defendant made the initial Rule 12(b) motion.” In re Micron Technology, Inc., 875 F.3d
1091, 1096 (Fed.Cir. 2017 (quoting Fed.R.Civ.P. 12(g)(2) (“Rule 12(g)(2)”)) (“In re
Micron Technology”).
In this case, Plaintiffs contend that Defendant’s failure to include Plaintiffs’
improper, i.e., in violation of § 1400(b), venue defense in any of Defendant’s answers to
Plaintiffs’ amended complaints or in Defendant’s prior motion to dismiss pursuant to
Rule 12(b)(2) for lack of subject matter jurisdiction based on Plaintiffs’ lack of standing,
filed December 1, 2016 (Dkt. 59), Defendant has waived such defense. Dkt. 81 at 8.
Plaintiffs further contend that even if such waiver by Defendant has not occurred,
Defendant by failing to assert improper venue as an affirmative defense in Defendant’s
previous answers, and by asserting this district is a proper venue for its invalidity
counterclaims, has consented to venue in this district. Dkt. 81 at 11-12. However, in In
re Micron Technology, the Federal Circuit held that because its 1990 ruling in VE
Holding Corp., approving venue in a patent case using the broader definition of a
corporation’s residence as currently defined in § 1391(c) was, up to the date, May 22,
2016, of the Supreme Court’s decision in TC Heartland, controlling precedent in
pending patent cases, an improper venue defense based on a lack of compliance with
the special venue requirements of § 1400(b) was not “available to defendant,” for
purposes of Rule 12(g)(2) and therefore could not be waived pursuant to Rule 12(h)(1)
as any motion prior to TC Heartland seeking to assert such a defense would have been
considered futile. In re Micron Technology, LLC, 875 F.3d at 1097-98. Plaintiffs
6
alternatively argue Defendant nevertheless waived the venue defense by not
challenging venue through a motion pursuant to 28 U.S.C. § 1404(a) (permitting transfer
based on convenience of witnesses).5 Dkt. 81 at 10-11. This creative argument
however, ignores the fundamental purpose of § 1400(b), i.e., to provide defendants with
a greater degree of venue protection in a patent infringement case. See In re Cray,
Inc., 871 F.3d 1355, 1361 (Fed. Cir. 2017) (“Congress adopted the predecessor to §
1400(b) as a special venue statute in patent infringement actions to eliminate the
‘abuses engendered’ by previous venue provisions allowing such suits to be brought in
any district in which the defendant could be served.” (quoting Schnell v. Peter Eckrich &
Sons, Inc., 365 U.S. 260, 262 (1961))). A change of venue pursuant to § 1404(a)
provides an entirely different form of relief not comparable to improper venue which
requires either dismissal or transfer under § 1406(a). For example, relief under §
1404(a) is discretionary and, with the advent of video conference technology which can
obviate the need for long-distance travel for witnesses to the court for trial, has become
problematic. See, e.g., JetBlue Airways Corp. v. Helferich Patent Licensing, LLC, 960
F.Supp.2d 383, 399 (E.D.N.Y. 2013) (noting available use of video-conferencing to
reduce inconvenience to witnesses) (citing Longo v. Wal-Mart Stores, Inc., 79
F.Supp.2d 169, 172 (E.D.N.Y 1999)). On the other hand, if the facts support that venue
is improper under § 1400(b), the case will be removed from the wrong venue either by
dismissal or transfer pursuant to § 1406(a). Plaintiffs’ theory that because § 1404(a)
relief is always available Defendant was not prevented from raising the venue issue
5
Although Defendant argues Second Circuit caselaw controls on the question of whether a defense was
or was not available to a defendant, see Dkt. 71-1 at 7 n. 2 (citing caselaw), the proper interpretation of §
1400(b) is controlled by Federal Circuit law. In re Micron Technology, Inc., 875 F.3d at 1098 (citing In re
Cray, Inc., 871 F.3d 1355, 1360 (Fed.Cir. 2017).
7
thus unacceptably blurs the distinct functions of § 1404(a) and § 1400(b), and as such,
does not establish Defendant should be found to have waived its improper venue
defense.
Plaintiffs further argue that because Defendant did not, in Defendant’s answers,
dispute Plaintiffs’ venue allegations Defendant, notwithstanding the recent holding in TC
Heartland, consented to venue in this district. Dkt. 81 at 11-12. This argument also has
several obvious deficiencies. First, while it is true that in Defendant’s prior answers
Defendant arguably acquiesced in Plaintiffs’ venue allegations, it is also the case that in
Defendant’s Answer to Plaintiffs’ Second, Third, and Fourth Amended Complaints
Defendant specifically stated it had not “knowingly or intentionally waived any applicable
defenses” and reserved its rights to advance such defenses “that may become available
. . . during the course of this action.” See Dkt. 55 at 9 (underlining added). Additionally,
the operative pleading at this time is not the Complaint or any of the prior amended
complaints but, see Bethpage Water District v. Northrop Grumman Corp., 884 F.3d 118,
124 n. 8 (2d Cir. 2018) (noting the most recently amended complaint was the operative
pleading), rather, Plaintiffs’ Fifth Amended Complaint is the operative pleading to which
Defendant has not yet answered and, instead, moved against in lieu of an answer
pursuant to Rule 12(b)(3) for improper venue on June 6, 2017 shortly after the TC
Heartland case was decided on May 26, 2017. Moreover, there is no indication of any
contractual relationship between the parties with a forum selection clause specifying this
district for any potential lawsuit. Defendant therefore cannot be said to have consented
to venue based on a non-existent answer to Plaintiffs’ Fifth Amended Complaint.
Finally, the very notion of consent, as Plaintiffs posit, which implies a degree of
8
knowledge of the probable effect of the asserted consent (assuming there is in fact any
real distinction between a waiver and a consent) flies in the face of the relevant facts.
Here, it is plainly evident, as acknowledged by the Federal Circuit’s recent decision in In
re Micron Technology, that patent litigators in pending cases should not be held to the
knowledge that its long-standing precedent in VE Holding Corp. was for 27 years in
error and that the issue should have been relitigated. As the Federal Circuit in In re
Micron Technology observed, “a sufficiently sharp change in the law sometimes is a
ground for permitting a party to advance a position that it did not advance earlier in the
proceeding when the law at the time was strongly enough against that position.” In re
Micron Technology, Inc., 875 F.3d at 1097 (citing Supreme Court caselaw). Therefore,
it is not persuasive to urge, as do Plaintiffs, that Defendant’s failure to oppose Plaintiffs’
assertion of venue in this district at an earlier point in this case and reliance on such
venue for Defendant’s counterclaims constitutes a consent to such venue. Although
Plaintiffs also contend Defendant’s reliance on this district’s venue for Defendant’s
counterclaims established Defendant’s consent to venue in this district, Dkt. 105 at 20
(“in bringing its counterclaims, Defendant affirmatively availed itself of venue in this
District” under § 1391 and § 1400(b)), defendant in In re Micron Technology also
interposed a counterclaim, yet the Federal Circuit in its decision did not allude to such
procedural fact as providing any indicia of defendant’s consent to improper venue. See
In re Micron Technology, Inc., 875 F.3d 1091 (passim). Accordingly, reliance by
Defendant on Plaintiffs’ asserted venue for Defendant’s counterclaims does not
establish Defendant’s consent to such improper venue. Plaintiffs’ contention that
9
Defendant somehow waived its now proffered improper venue defense or consented to
such improper venue in this district is therefore without merit.
Finally, Plaintiffs advances a policy-based argument, Dkt. 81 at 13; Dkt. 105 at
21, in further support of a finding that Defendant consented to venue in this district
because, under a contrary holding, agreements to a specific venue will be placed in
doubt thereby resulting in a plethora of transfers “disrupting judicial efficiency.”
However, as Defendant correctly observes, Dkt. 82 at 12, TC Heartland has already
resulted in a large number of such motions. Moreover, if the Supreme Court believed
such disruption was unacceptable, it could have indicated its decision was not
applicable to pending cases, but it did not. Additionally, there is no factual basis for
Plaintiffs’ contention that existing forum selection agreements, containing consensually
established venue provisions, will be invalidated by a finding in this case that Defendant
did not consent to venue in this district as there is no indication in the record of any such
agreement by the parties. Nor do Plaintiffs explain how finding Defendant did not
consent to venue in this district would imply any potential invalidity of all such
contractual provisions. Thus, Plaintiffs’ policy arguments against Defendant’s transfer
request are baseless.
2.
Non-Rule 12(h)(1) Factors.
Plaintiffs also contend, Dkt. 105 at 19, that this court is nevertheless not required
to grant transfer as Defendant’ requests. The court in In re Micron Technology, in
reversing the district court’s denial of defendant’s motion to dismiss based on improper
venue, required that the district court consider a defendant’s potential forfeiture of its
venue defense based on an exercise of the court’s inherent power to control it docket
10
and administer justice pursuant to Fed.R.Civ.P. 1 (“Rule 1”), for example, a finding that
a defendant’s excessive delay in attacking a plaintiff’s venue allegation results in a loss
of such defense. See In re Micron Technology, Inc., 875 F.3d at 1100-01 (explaining
noting availability of “non-Rule 12(h)(1) factors” to avoid an otherwise required §
1406(a) dismissal or transfer) (citing cases). On remand, in In re Micron Technology,
the district court, based on the record in that case, apparently found no evidence of
defendant’s dilatoriness or improper litigation behavior to support such a potential
forfeiture and loss of defendant’s venue defense and, in accordance with the Federal
Circuit’s remand instruction to consider non-Rule 12(h)(1) factors, nevertheless
transferred the case to the District Court for the District of Delaware, the state of
defendant’s incorporation as defendant had requested. See District of Massachusetts
(Boston) Docket: Dkt. No. 166, Electronic Order of Judge Young filed November 30,
2017.6 In In re Micron Technology, defendant had previously, in August 2016, before
TC Heartland was decided, filed a motion to dismiss for failure to state a claim which the
court granted but defendant did not raise any potential defense based on § 1400(b).
Defendant subsequently answered Plaintiffs’ Amended Complaint and interposed a
counterclaim. Shortly after the Supreme Court’s decision in TC Heartland defendant
filed a motion on June 2, 2017 to dismiss plaintiff’s amended complaint for improper
venue. In re Micron Technology, Inc., 270 F.Supp.2d 331, 332-33 (D.Mass. 2017).
Similarly, in this case, Defendant, as noted, has previously filed a motion to dismiss for
lack of subject matter jurisdiction in December 2016, but did not challenge Plaintiffs’
assertion of venue until June 6, 2017, 11 days after the TC Heartland case was
6
The relevant docket indicates the court conducted a status conference but did not elucidate its reasons
for transfer in a filed decision.
11
decided. Defendant renewed its improper venue defense in its subsequent motion to
dismiss or transfer, filed December 11, 2017, directed to the Fifth Amended Complaint,
filed by Plaintiffs on November 27, 2017 based on permission granted by this court on
November 13, 2017 (Dkt. 97). Thus, the court finds no basis on which to conclude that
Defendant is in any way guilty of an undue lack of diligence in seeking dismissal or
transfer based on improper venue in this district. See also Automated Packaging
Systems, Inc. v. Free-Flow Packaging Int’l, Inc., 2018 WL 400326, at *4 (N.D.Ohio Jan.
12, 2018) (granting transfer to Northern District of California based on defendant’s
principal place of business in that district finding no unreasonable delay warranting
forfeiture of venue defense by defendant in seeking dismissal based on TC Heartland
where defendant moved within one month of the Supreme Court’s ruling, in its answer
defendant had interposed an invalidity and non-infringement counterclaim, the case had
not proceeded past briefing on claim construction, no Markman hearing had been
conducted, no dispositive motions had been ruled upon, the case was stayed for one
year to accommodate an inter partes review, and no trial had been scheduled) (citing
caselaw). Similar factors are present in the instant case: the case was stayed for a
substantial period of time for inter partes review purposes; one such proceeding
remains pending, Defendant asserted invalidity and non-infringement counterclaims, the
parties have exchanged infringement and invalidity contentions and responses, claim
construction briefing has commenced but no Markman hearing has been scheduled,
third party subpoenas have been served and party depositions have been noticed but
not conducted. Dkt. 81 at 6; Dkt. 82 at 12. Additionally, Plaintiffs’ Fifth Amended
Complaint added 94 claims requiring additional infringement and invalidity contentions
12
submissions and claim construction briefing. See Dkt. 108 at 14. However, none of
these considerations support any undue delay in litigating the venue issue on the part of
Defendant, or an attempt by Defendant to improperly obtain a tactical advantage, and
Plaintiffs do not contend that these litigation activities, essential to a patent infringement
action, will be wasted if the case is transferred to the Northern District of Alabama. Nor
do Plaintiffs point to any facts supporting that Plaintiffs will be unduly prejudiced by
Defendant’s requested transfer.
On the same day as it decided In re Micron Technology, the Federal Circuit also
remanded to the District Court for the District of Minnesota the case of Cutsforth, Inc. v.
LEMM Liquidating Company, LLC, 2017 WL 5907556, at *2 (Fed.Cir. Nov. 15, 2017) to
determine whether the presence of non-Rule 12(h)(1) factors that may warrant denial of
a motion to transfer for improper venue based on TC Heartland, LLC. Upon remand,
District Court Judge Susan Richard Nelson determined that no such factors were
present and granted transfer of the case to the Western District of Pennsylvania as she
had previously done. See Cutsforth, Inc. v. LEMM Liquidating Company, LLC, 2018 WL
847763, at **1-5 (D.Minn. Feb. 13, 2018). Particularly, Judge Nelson found, similar to
the facts of the instant case, the defendant had promptly, 16 days after the TC
Heartland decision, moved to dismiss for improper venue, plaintiff’s assertion of
defendant’s tactical gamesmanship was based on “conjecture,” and there was
otherwise no evidence of defendant’s “undue delay, bad faith, or dilatory motive to
warrant rejecting [defendant’s motion to transfer].” Id. at *3. Judge Nelson also found
that any prejudice to plaintiff was outweighed by forcing defendant to litigate in an
improper forum contrary to the requirement of § 1400(b), id., and, finally, while claim
13
construction proceedings had progressed to a point where the court was about to issue
its claim construction ruling, id. at 5, the case was not sufficiently trial ready to warrant a
denial of transfer in order to achieve litigation “efficiency” required by Rule 1. Id. at *5.
The court, therefore, again ordered a transfer to the Western District of Pennsylvania
pursuant to Rule 1406(a). Id. at 6. In doing so, the court noted that all of defendant’s
fact witnesses are in the Pittsburgh area and although fact and expert discovery had
closed, “the underlying work performed by both parties is transferrable and will
ameliorate some of the parties’ future expenditures . . ..” Id. at *4. The facts and
posture of Cutsforth and this case are strikingly similar. In both cases the litigation was
delayed to accommodate an inter partes review, defendants timely moved for dismissal
or transfer, defendants were not guilty of tactical misconduct, plaintiff’s possible
inconvenience was outweighed by deprivation of defendants’ right to litigate in the
proper venue, here, the Northern District of Alabama, where, like Cutsforth, Defendant’s
fact witnesses are likely to reside, Markman proceedings were incomplete, the case
was not trial ready, and the venue problem was not being raised by defendant in close
proximity to a scheduled trial date. As in Cutsforth, such considerations point to a
transfer of this case.7
3.
Transfer Under § 1406(a).
As noted, see Discussion, supra, at 5 n. 4, where improper venue is found, §
1406(a) authorizes a discretionary transfer to any district in which the action has been
brought. In this case, absent Defendant’s waiver or consent, neither of which is
7
Judge Nelson’s decision also thoughtfully emphasizes the need to exercise the court’s inherent
authority to consider non-Rule 12(h)(1) factors as enunciated by the Federal Circuit in In re Micron
Technology with due caution. See Cutsforth, Inc., 2018 WL 847763, at *6 n. 3 (citing caseslaw).
14
present, the case should have been venued in the Northern District of Alabama where
Defendant is incorporated and has its principal place of business as required by §
1400(b). Accordingly, pursuant to § 1406(a), the action should be transferred to the
Northern District of Alabama. See also Automated Packaging Systems, Inc., 2018 WL
400326, at *10 (transfer pursuant to § 1406(a) warranted as in interest of justice and
“‘doubts . . . resolve[d] in favor of preserving the action, particularly where it appears
that venue may be proper in the proposed transferee district’”) (quoting Simpson v.
Performance Prods., Inc. v. NecksGen, Inc., 2017 WL 3616764, at *8 (W.D.N.C. Aug.
23, 2018) (quoting Nation v. United States Gov’t., 512 F.Supp. 121, 126-27 (S.D.Ohio
1981)))). Here, Plaintiffs do not contest that the Northern District of Alabama is a proper
transferee district for § 1406(b) purposes. Finally, considerations of calendar
congestion also favor transfer. As of March 2018, the median time from filing to trial of
a civil case in this district is 57.8 months; for the Northern District of Alabama it is 33.8
months.8 Accordingly, it is fair to assume the parties are more likely to obtain an earlier
final disposition of this matter in the transferee district. Thus, transfer to that district is
consistent with the court’s obligation to promote litigation efficiency, as recognized by In
re Micron Technology, and as required by Rule 1.
CONCLUSION
Based on the foregoing, Defendant’s alternative motion to transfer (Dkt. 101) is
GRANTED; Defendant’s motion to dismiss for improper venue (Dkt. 101) is DISMISSED
8
Http://www.uscourts.gov/statistics/table/na/federal-court-management-statistics/2018/03/31-1.
15
as moot. The Clerk of Court is directed to take all steps necessary to transfer this
matter to the Northern District of Alabama.9
SO ORDERED.
/s/ Leslie G. Foschio
________________________________
LESLIE G. FOSCHIO
UNITED STATES MAGISTRATE JUDGE
Dated: July 19, 2018
Buffalo, New York
9
Given that the case is transferred it is unnecessary for this court to consider Defendant’s motion to
dismiss for lack of subject matter jurisdiction (Dkt. 59) and Plaintiffs’ cross-motion to substitute real party
in interest (Dkt. 65) which will be decided, following transfer, by the Northern District of Alabama District
Court.
16
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?