The Procter & Gamble Company v. Ranir, LLC
ORDER granting 14 Ranir's Motion to Dismiss. P&G's motion for preliminary injunction (Doc. 8) and Ranir's motion to strike or, in the alternative, for leave to file a sur-reply (Doc. 28) are DENIED AS MOOT. This case is DISMISSED without prejudice to refiling in a proper judicial district. This case is TERMINATED in this Court. Signed by Judge Timothy S. Black on 8/17/17. (sct)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
THE PROCTOR & GAMBLE COMPANY, :
Case No. 1:17-cv-185
Judge Timothy S. Black
ORDER GRANTING DEFENDANT’S
MOTION TO DISMISS (Doc. 14)
This civil case is before the Court on the motion of Defendant Ranir, LLC
(“Ranir”) to dismiss the Complaint filed by Plaintiff The Proctor & Gamble Company
(“P&G”) for improper venue (Doc. 14), and the parties’ responsive memoranda (Docs.
The patent venue statute, 28 U.S.C. § 1400(b), provides that civil actions for
patent infringement may be brought in the judicial district (1) “where the defendant
resides” or (2) “where the defendant has committed acts of infringement and has a
regular and established place of business.”
The general venue statute, 28 U.S.C. § 1391(c)(2), states that corporate defendants
in civil cases are “deemed to reside, if a defendant, in any judicial district in which such
defendant is subject to the court’s personal jurisdiction[.]”
The procedural posture in this case is the result of uncertainty regarding where
corporate patent defendants “reside” in light of previously conflicting decisions by the
Supreme Court and the Federal Circuit concerning the relationship between § 1400(b)
and § 1391.
In 1957, the Supreme Court concluded that, for purposes of § 1400(b), a domestic
corporation “resides” only in its state of incorporation. See Fourco Glass Co. v.
Transmirra Products Corp., 353 U.S. 222, 226 (1957). In so holding, the Supreme Court
rejected the notion that § 1400(b) incorporated the broader definition of “residence”
found in § 1391. Id. at 228. The Supreme Court reasoned:
We think it is clear that § 1391(c) is a general corporation venue statute,
whereas § 1400(b) is a special venue statute applicable, specifically, to all
defendants in a particular type of actions, i.e., patent infringement actions.
In these circumstances the law is settled that “However inclusive may be
the general language of a statute, it ‘will not be held to apply to a matter
specifically dealt with in another part of the same enactment. . . . . Specific
terms prevail over the general in the same or another statute which
otherwise might be controlling.’”
Fourco, 353 U.S. at 228-29.
In 1990, the Federal Circuit held that subsequent Congressional amendments to
§ 1391 effectively abrogated the rule announced in Fourco. See VE Holding Corp. v.
Johnson Gas Appliance Co., 917 F.2d 1574 (1990). In 1988, Congress amended
§ 1391(c) to state, in part: “[f]or purposes of venue under this chapter, a defendant that is
a corporation shall be deemed to reside in any judicial district in which it is subject to
personal jurisdiction at the time the action is commenced.” VE Holding, 917 F.2d at
1578. The Federal Circuit held that inclusion of the language “for purposes of venue
under this chapter” incorporated and redefined the definition of “resides” in § 1400(b),
which is also located in Chapter 28 of the United States Code. Id. at 1578-80.
Accordingly, under the Federal Circuit’s interpretation, a corporate defendant in a patent
case was deemed to “reside” in every judicial district in which it was subject to personal
jurisdiction. Id. at 1584.
On March 20, 2017, P&G filed the Complaint. (Doc. 1). The Complaint alleges
Ranir is infringing patents held by P&G used in tooth whitening strip products. (Id.) The
Complaint argues Ranir is attempting to “ride on the coattails of P&G’s success by
selling tooth whitening strips that infringe P&G’s patented technology.” (Id. at ¶ 9). The
Complaint seeks declaratory judgment, preliminary and permanent injunctions,
compensatory damages, treble damages, pre-judgment interest, attorney’s fees and costs.
(Id. at 13).
The Complaint alleges that P&G is incorporated in Ohio with its principal place of
business in Cincinnati, Ohio, and Ranir is a limited liability company organized under the
laws of Delaware with its principal place of business in Grand Rapids, Michigan. (Doc. 1
at ¶¶ 1-2). The Complaint states the Court “has personal jurisdiction over Ranir under
the Ohio long-arm statute (O.R.C. § 2307.382) because Ranir contracts to supply and has
supplied tooth whitening strips that infringe P&G’s intellectual property in this State and
in this District” and “[v]enue is proper in this Court under 28 U.S.C. §§ 1391(b)(2) and
1400(b).” (Id. at ¶¶ 3, 5). The Complaint does not allege that Ranir has a regular and
established place of business in this district.
On March 24, 2017, P&G filed a motion for preliminary injunction. (Doc. 8).
Ranir’s motion to dismiss.
On April 4, 2017, Ranir filed a motion to dismiss for improper venue or, in the
alternative, to stay the proceedings. (Doc. 14). Ranir argues that, pursuant to Fourco,
corporate patent defendants “reside” only in their state of incorporation, and venue is
improper in this district because Ranir is incorporated in Delaware and has its principal
place of business in Michigan. (Id.). Ranir argues the Federal Circuit’s interpretation of
§ 1400(b) announced in VE Holding, and upon which P&G relied in filing here, is
The motion also explained that the Supreme Court recently heard oral argument in
TC Heartland v. Kraft Foods in which the Court would consider whether Fourco or VE
Holding provided the proper interpretation of patent venue. (Doc. 14 at 5-6). In
alternative to dismissal, Ranir requested that this Court stay the proceedings until the
Supreme Court answered that question. (Id. at 6-11).
The Supreme Court’s decision in TC Heartland.
On May 22, 2017, shortly after the motion to dismiss was fully briefed, the
Supreme Court entered a decision in TC Heartland v. Kraft Foods, 137 S. Ct. 1514. The
Supreme Court expressly held corporate patent defendants only “reside” for purposes of
§ 1400(b) in the state in which they are incorporated. Id. at 1520-21. After considering
the holding of TC Heartland and its effect on this case, the Court enters the following
Any civil action for patent infringement “may be brought in the judicial district
where the defendant resides, or where the defendant has committed acts of infringement
and has a regular and established place of business.” 28 U.S.C. § 1400(b).
A defendant may move to dismiss a complaint for improper venue. Fed. R. Civ. P.
12(b)(3). The plaintiff bears the burden of establishing proper venue after an objection to
venue has been raised. See Ring v. Roto-Rooter Servs. Co., No. 1:10-cv-179, 2010 U.S.
Dist. LEXIS 108202, at * 9 (S.D. Ohio Sept. 28, 2010) (Dlott, J) (citation omitted). A
district court has discretion to choose the appropriate procedure of deciding a motion to
dismiss for improper venue: it may hold an evidentiary hearing or it may determine the
motion without a hearing on the basis of the affidavits alone. Id.
Venue is improper in the Southern District of Ohio.
Ranir argues venue is improper under § 1400(b) because Ranir is not incorporated
in Ohio. (Doc. 14 at 5-6). The Court agrees. See TC Heartland, 137 S. Ct. at 1520-21.
P&G offers several arguments in response to Ranir’s motion. First, P&G
originally argued that Ranir cannot rely on speculation that the Supreme Court will
overturn VE Holding. (Doc. 23 at 2). That argument fails; as we now know, the
Supreme Court did overrule VE Holding. TC Heartland, 137 S. Ct. at 1520.
Second, P&G argues that the Supreme Court did not “address whether its decision
should be applied retroactively[.]” (Doc. 34 at 1). This argument fails for two reasons.
Initially, “[w]hen [the Supreme Court] applies a rule of federal law to the parties before
it, that rule is the controlling interpretation of federal law and must be given full
retroactive effect in all case still open on direct review and as to all events, regardless of
whether such events predate or postdate [the] announcement of the rule.” Fusilamp, LLC
v. Littlefuse, Inc., No. 10-20528, 2017 U.S. Dist. LEXIS 97771, at * 2 (S.D. Fla. June 12,
2017) (citation omitted). The fact that P&G filed this case prior to the Supreme Court’s
decision in TC Heartland does not mean it may proceed under an improper theory of
venue. See Blue Spike LLC v. Contixo Inc., No. 6:16-cv-1220-JDL, 2017 U.S. Dist.
LEXIS 116749, at ** 2-10 (E. D. Tex. July 26, 2017) (granting defendant’s motion to
dismiss a patent-infringement complaint, filed in October, 2016, for improper venue in
light of TC Heartland).
In any event, there is nothing to retroactively apply. The Supreme Court’s
decision makes it clear that Fourco was always correct and VE Holding Corp. was
always wrong. TC Heartland, 137 S. Ct. 1520. This is demonstrated by the fact that
courts have rejected the argument that TC Heartland is a “change” of law allowing
defendants to raise previously waived venue challenges. See Navico, Inc. v. Garmin Int’l,
Inc., No. 2:16-cv-190, 2017 U.S. Dist. LEXIS 106461, at * 7 (E. D. Tex. July 11, 2017)
(“the Supreme Court itself expressly rejected the notion that venue law in patent cases
changed after Fourco”); Amax, Inc. v. Acco Brands Corp., No. 16-10695, 2017 U.S. Dist.
LEXIS 101127, at *6 (D. Mass. June 29, 2017) (“Since 1957, the Supreme Court has
consistently held that venue in patent cases is determined by 28 U.S.C. 1400(b).”);
Cobalt Boats, LLC v. Sea Ray Boats, Inc., No. 2:15-21, 2017 U.S. Dist. LEXIS 90728, at
* 8 (E.D. Va. June 7, 2017) (“Based on the Supreme Court’s holding in TC Heartland,
Fourco has continued to be binding since it was decided in 1957, and thus, it has been
available to every defendant since 1957.”); iLife Techs., Inc. v. Nintendo of Am., Inc., No.
3:13-cv-04987, 2017 U.S. Dist. LEXIS 98698, at * 17 (N.D. Tex. June 27, 2017).
As one court explained, Fourco has been the law since 1957:
In VE Holding, the Federal Circuit clearly thought that Congress had
implicitly overridden Fourco by statutory amendment. However, until the
Supreme Court considered the question, Fourco remained the law. The
intervening twenty-seven years may have created reliance on VE Holding
by litigants, including [Defendant], but that ‘does not change the harsh
reality’ that a party could have ‘ultimately succeeded in convincing the
Supreme Court to reaffirm Fourco, just as the petitioner in TC Heartland
Ilife Techs., 2017 U.S. Dist. LEXIS 98698, at * 17. Under this reasoning, Fourco has
been the law for 60 years, and venue was never proper in this case.
Third, P&G argues Ranir failed to object to personal jurisdiction and accordingly
is deemed to “reside” here for purposes of venue. (Doc. 23 at 5). In support of this
argument, P&G cites several cases in which courts have denied a motion to dismiss for
improper venue when the defendant waived its objection to personal jurisdiction. (Id.)
The reasoning in these cases is that “not challenging personal jurisdiction in a motion to
dismiss challenging venue concedes personal jurisdiction, which in turn establishes
venue.” Twenty First Century Commc’ns, Inc. v. TechRadium, Inc., No. 2:09-cv-1118,
2010 WL 3001721, at * 4 (S.D. Ohio July 30, 2010) (Frost, J).
This argument fails. A defendant’s waiver of personal jurisdiction can only
“establish” venue if venue is proper everywhere the defendant is subject to personal
jurisdiction. TC Heartland, 137 S. Ct. at 1520-21.
Fourth, P&G argues that the Court “has the power to issue a preliminary
injunction before taking action on a motion alleging improper venue.” (Doc. 34 at 2).
The Court does not agree. P&G cites to three cases in which the Court entered a
preliminary injunction prior to transferring the case to another district: C&A Plus, Inc. v.
Pride Sols., LLC, No. A3-02-118, 2003 U.S. Dist. LEXIS 13266 (D.N.D. Feb. 7, 2003);
Get in Shape Franchise, Inc. v. TFL Fishers, LLC, 167 F. Supp. 3d 173 (D. Mass. 2016);
and Colley v. James, No. 15-cv-1385, 2017 U.S. Dist. LEXIS 73363 (D. D.C. May 15,
2017). These cases are distinguishable: the court in each of these cases entered
preliminary injunctive relief on claims that were subsequently transferred pursuant to
§ 1404, which means venue was proper in the first court but transferred to a more
convenient court “in the interest of justice.” This case is subject to § 1406 because venue
is improper—not merely inconvenient—in this district.
Courts faced with an argument that venue is improper must resolve that issue prior
to addressing the merits of any claim, including a preliminary injunction. See Larson v.
Galliher, No. 2:06-cv-1471, 2007 U.S. Dist. LEXIS 2069, at * 3 (D. Nev. Jan. 5, 2007)
(“Before reaching the merits of the cybersquatting allegation and corresponding request
for injunctive relief, the Court must first decide the threshold issue if jurisdiction and
venue is appropriate in this matter.”); Baldwin Hardward Corp. v. Harden Industries,
Inc., 663 F. Supp. 82, 86 (S.D. N.Y. 1987) (“In light of our disposition of the venue issue,
we decline to reach the merits of [plaintiff’s] motion for a preliminary injunction.”); Budd
Co. v. United States Dep’t of Transp., 89 F.R.D. 555, 556 (E.D. Pa. 1981) (“Before this
court can consider the merits of Budd’s claim, particularly its motion for preliminary
injunction, it must address and decide the defendants’ alternative motion to dismiss or
transfer this action due to improper venue.”).
Contrary to P&G’s assertion, it is reversible error to address injunctive relief prior
to a claim of improper venue:
In measuring an application for a preliminary injunction, the Court must
first determine if plaintiff has adequately set forth jurisdiction and venue
when it is challenged. Plaintiff argues that prior to deciding whether
plaintiff is properly in federal court, and/or in the correct district, that this
Court must decide the motion for a preliminary injunction. The cases
plaintiff cites for this proposition are not persuasive, nor has my research
uncovered authority to support plaintiff’s contention. In fact, the cases
suggest the opposite result. Maybelline Co. v. Noxell Corp., 813 F.3d 901
(8th Cir. 1987); Noxell Corp. v. Firehouse No. 1 Bar-B-Que Rest., 245 U.S.
App. D.C. 242, 760 F.2d 312 (1985); Dollar Sav. Bank v. First Sec. Bank of
Utah, 746 F.2d 208 (3rd. Cir. 1984). In these cases, preliminary injunctions
issued by District Courts were vacated by the Court of Appeals because the
District Courts had erred in not first establishing whether or not venue was
properly placed in the respective District Courts where the actions were
U.S. Golf Ass’n v. U.S. Amateur Golf Ass’n, 690 F. Supp. 317, 319 (D. N.J. 1988).
Fifth, P&G requested, in an off-the-record letter emailed to Chambers and Ranir,
that P&G be permitted to conduct limited discovery relating to the issue of venue. P&G
argues it should be afforded the opportunity to conduct discovery on the extent of Ranir’s
connections to Ohio to see whether venue is proper under the other prong of § 1400(b),
i.e., whether Ranir has a “regular and established place of business” in Ohio.
The Court does not agree with this approach and overrules P&G’s request for
discovery. P&G could have argued in its opposition to the motion to dismiss that venue
was proper because Ranir has a “regular and established place of business” in Ohio. It
did not. Instead, P&G argued, exclusively, that venue was proper because Ranir is
subject to personal jurisdiction here. As the Supreme Court clarified, that is not the law.
TC Heartland, 137 S. Ct. at 1520-21. At this point, the Court will not allow P&G to
switch theories to take a second bite at the apple, especially when doing so would require
Ranir to engage in a second round of discovery and briefing in a district in which P&G’s
original basis for venue has already been proven incorrect.
This Court will dismiss the Complaint.
Having determined that the venue is improper in this district, the Court is
instructed to “dismiss, or if it be in the interest of justice, transfer such case to any district
or division in which it could have been brought.” 28 U.S.C. § 1406(a).
The Court cannot conclude that the interest of justice requires a transfer. The
parties spent the entirety of their briefing on the motion to dismiss debating which statute
applied to patent venue and predicting the outcome and effect of TC Heartland. Aside
from the assertions that Ranir is incorporated in Delaware and has its principal place of
business in Michigan, neither party submitted any evidence as to what other districts, if
any, this case “could have been brought” in, nor did the parties submit any substantive
argument as to why it would (or would not) be in the interest of justice to transfer this
case to any one of those judicial districts.
Because the Court is without the facts and arguments necessary to conclude that
the interest of justice requires a transfer to any particular judicial district, it will dismiss
this case, without prejudice, and allow P&G to choose a proper venue from those judicial
districts available to it in light of the Supreme Court’s decision in TC Heartland.
For these reasons, Ranir’s motion to dismiss (Doc. 14) is GRANTED. P&G’s
motion for preliminary injunction (Doc. 8) and Ranir’s motion to strike or, in the
alternative, for leave to file a sur-reply (Doc. 28) are DENIED AS MOOT. This case is
DISMISSED without prejudice to refiling in a proper judicial district. The Clerk shall
docket a judgment accordingly, whereupon this case is TERMINATED in this Court.
IT IS SO ORDERED.
Timothy S. Black
United States District Judge
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