Marketfleet Puerto Rico, Inc. v. Yardstash Solutions, LLC.
Filing
15
MEMORANDUM AND ORDER re 9 Motion to Dismiss for Lack of Jurisdiction: GRANTED. Accordingly, this action is TRANSFERRED to the Eastern District of California. Signed by Judge Francisco A. Besosa on 08/31/2018. (brc)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
MARKETFLEET PUERTO RICO, INC.,
derivatively on behalf of
MARKETFLEET INC.,
Plaintiff,
Civil No. 18-1112 (FAB)
v.
YARDSTASH SOLUTIONS, LLC,
Defendant.
MEMORADUM AND ORDER 1
BESOSA, District Judge.
Before
the
Court
is
defendant
Yardstash
Solutions,
LLC
(“Yardstash”)’s motion to transfer pursuant to 28 U.S.C. § 1404(a)
(“section 1404”).
(Docket No. 9.)
For the reasons set forth
below, the Court GRANTS Yardstash’s motion to transfer.
I.
Factual Background
This action concerns a patent infringement claim.
No. 9 at p. 7.)
(Docket
Yardstash is a Delaware incorporated limited
liability company with its principal place of business in San
Diego, California.
(Docket No. 11, Ex. 1 at pp. 13-14; Docket
No. 9, Ex. 1 at p. 1.)
San Diego is located in the Southern
District of California.
Marketfleet is a Delaware corporation
1
Jeremy S. Rosner, a third-year student at Emory University School of Law,
assisted in the preparation of this Memorandum and Order.
Civil No.
18-1112 (FAB)
with
principal
its
2
place
of
(Docket No. 9, Ex. 9 at p. 7.)
District of California.
A.
business
in
Chico,
California.
Chico is located in the Eastern
Id.
The California Litigation
Yardstash purportedly owns a patent for a storage tent
pursuant to United States Patent No. D689,579 (“Patent 579”).
(Docket No. 2; Docket No. 9, at p. 7.)
According to Yardstash,
Marketfleet infringed Patent 579 by “making, offering for sale,
selling, and/or shipping a nearly identical product to [Patent
579].”
(Docket No. 9, Ex. 3 at p. 4.)
On March 28, 2017, Yardstash commenced an action in the
Southern District of California, alleging violations of United
States patent law and California law.
Docket No. 9, Ex. 3 at
pp. 7-8; see 35 U.S.C. §§ 284 et seq., Cal. Bus. & Prof. Code
§ 17200 et seq.
Subsequently, the District Court for the Southern
District of California transferred Yardstash’s patent infringement
claims to the Eastern District of California pursuant to 28 U.S.C.
§ 1406(a).
B.
Id. at pp. 6-8.
The Puerto Rico Litigation
On February 26, 2018, Marketfleet PR filed a derivative
complaint against Yardstash in the District of Puerto Rico on
behalf of Marketfleet.
(Docket No. 1 at pp. 1-2, 4.)
Marketfleet
PR is incorporated in Puerto Rico, and maintains its principal
Civil No.
18-1112 (FAB)
place of business in Puerto Rico.
3
Id. at p. 3.
Marketfleet PR
requests that this Court issue a declaratory judgment, holding
either that Marketfleet’s storage tent does not infringe Patent
579, or that Patent 579 is invalid.
Id.
On May 15, 2018,
Yardstash moved to transfer the claims asserted by Marketfleet PR
to the Eastern District of California pursuant to section 1404.
(Docket No. 9 at p. 29.) 2
II.
Transfer Pursuant to 28 U.S.C. Section 1404
Pursuant section 1404, “a district court may transfer any
civil action to any other district or division where it might have
been brought . . . in the interest of justice.”
§ 1404(a).
28 U.S.C.
Congress adopted this statute “to prevent the waste
of time, energy and money, and to protect litigants, witnesses and
the public against unnecessary inconvenience and expense.”
Van
Dusen v. Barrack, 376 U.S. 612, 616 (1964) (citation omitted).
Yardstash shoulders the burden of proving that transfer is proper,
“because of the strong presumption in favor of plaintiff’s choice
2 Yardstash also moves to dismiss the complaint for lack of jurisdiction and
improper venue pursuant to Federal Rule of Civil Procedure 12(b)(2) and (3)
(“Rule 12(b)”).
(Docket No. 9.)
Because Marketfleet PR’s claims are
transferred to the Eastern District of California, this Court need not address
whether jurisdiction and venue are proper in the District of Puerto Rico.
See
Antilles Cement Corp. v. Aalborg Portland A/S, 526 F. Supp. 2d 205, 207 (D.P.R.
2007) (Acosta, J.) (citing Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 2425 (1988)) (“[W]here transfer to another federal jurisdiction is viable, the
proper remedy is not dismissal of the complaint [based on lack of personal
jurisdiction or venue] but rather a determination of whether transfer is
proper”.).
Civil No.
18-1112 (FAB)
of venue.”
4
Arroyo-Pérez v. Demir Group Int’l., 733 F. Supp. 2d
at 319 (citations omitted); see Villalobos v. North Carolina
Growers Ass’n., 42 F. Supp. 2d 131, 142 (D.P.R. 1999) (Fusté, J.)
(citation omitted) (“The burden of proof is on the movant and
unless the balance is strongly in favor of the defendant, the
plaintiff’s
choice
of
forum
should
rarely
be
disturbed.”)
(citation and internal quotation omitted).
Courts
transfer
possess
discretion
according
to
an
in
“adjudicat[ing]
individualized,
consideration of convenience and fairness.”
motions
case-by-case
Astro-Med, Inc. v.
Nihon Kohden Am., Inc., 591 F.3d 1, 12 (1st Cir. 2009).
determine
whether
transfer
following four factors:
is
warranted,
for
Courts
consider
To
the
(1) the convenience of the parties and
witnesses, (2) the availability of documents, (3) the possibility
of consolidation, and (4) the order in which the district court
obtained jurisdiction.”
Albizu Rodríguez, v. Carlos Albizu Univ.,
585 F. Supp. 2d 240, 244 (D.P.R. 2008) (Besosa, J.) (citation
omittied).
III. Discussion
All factors weigh in favor of transfer.
Accordingly, the
Court transfers this action to the Eastern District of California.
Civil No.
18-1112 (FAB)
A.
5
Convenience of the Parties and Witnesses
In the context of section 1404, “the convenience of
witnesses is probably the most important factor in deciding whether
to transfer.”
Ponce de León Hosp. Corp. v. Avalon Logistics,
Inc., 117 F. Supp. 3d 124, 132 (D.P.R. 2015) (Domínguez, J.)
(citation omitted).
The movant must “show that it would be
inconvenienced by the chosen venue.”
2d at 319 (citation omitted).
Arroyo-Pérez, 733 F. Supp.
Courts need not defer to the
plaintiff’s choice of forum when there is no connection between
the
selected
complaint.
jurisdiction
and
the
allegations
underlying
the
See Fash Obalco v. M.K.M. Indus., 888 F. Supp. 344,
349 (D.P.R. 1995) (Domínguez, J.) (internal citations omitted)
(“Where
the
residence,
forum
or
chosen
bears
no
by
plaintiff
obvious
is
connection
not
to
his
the
place
case,
of
the
defendant’s residence gains importance in determining the relative
convenience of the parties.”).
Marketfleet
PR
is
a
Puerto
Rico
corporation,
maintains its principal place of business in Puerto Rico.
No. 9, Ex. 4 at pp. 2-3; Docket No. 9, Ex. 2 at p. 2.)
PR, however, is suing on behalf of Marketfleet.
p. 1.)
and
(Docket
Marketfleet
(Docket No. 1 at
Marketfleet’s officers, directors, and employees are
Civil No.
18-1112 (FAB)
6
located in California. 3
Yardstash’s officers, directors, and
employees
are
also
located
in
California.
4
George
Barker
(“Barker”) is the inventor of the storage tent corresponding to
Patent 579.
(Docket No. 9, Ex. 1 at p. 1.)
Barker is the most
important witness in the case, and resides in California.
Id.;
see SCVNGR, Inc. v. eCharge Licensing, LLC, No. 13-12418, 2014
U.S. Dist. LEXIS 135408, at *21 (D. Mass. Sept. 25, 2014) (holding
that “the most significant witnesses in a patent infringement case
are
the
inventors”).
Consequently,
the
Eastern
District
of
California is a more convenient forum to litigate the purported
infringement of Patent 579.
B.
Availability of Documents
With regard to the second factor, “[d]ue to recent
technological advances, reliance on physical copies of documents
and
records
has
diminished
now
that
documents
more accessible through electronic means.”
have
become
Ponce de León Hosp.
Corp., 117 F. Supp. 3d at 133 (citation omitted).
This litigation
involves online retail, entailing proof of purchase and sales
records that are stored electronically.
at pp. 2, 5 and 7.
See Docket No. 11, Ex. 1
Moreover, Patent 579 is logged electronically
3
See Docket No. 1 at p. 3; Ex. 2 at pp. 2-3; Ex. 6 at pp. 2-3; Ex. 7 at p. 2;
Ex. 7 at pp. 6-7; Docket No. 11, Ex. 1.
4
See Docket No. 1 at p.3; Docket No. 9, Ex. 1 at p. 1; Ex. 3 at p. 2.
Civil No.
18-1112 (FAB)
7
with the United States Patent and Trademark Office.
No. 2; Docket No. 9 at p. 7.)
(Docket
Accordingly, the availability of
documents is no reason to deny Yardstash’s motion to transfer.
C.
Possibility of Consolidation
Jurisdiction was Obtained
and
Order
in
which
The third and fourth factors of the section 1404 analysis
“prevent duplication and inconsistent rulings.”
F. Supp. 2d at 321.
Arroyo-Pérez, 733
With regard to the third factor, transfer is
appropriate when the actions subject to consolidation are in the
early stages of litigation.
Cf. Codex Corp. v. Milgo Elec. Corp.,
553 F.2d 735, 739 (1st Cir. 1977).
The fourth factor establishes
that “the first filed action is generally preferred in a choiceof-venue decision.”
Cianbro Corp. v. Curran-Lavoie, Inc., 814
F.2d 7, 11 (1st Cir. 1987); see N.Y. Wiping & Indus. Prod. Co. v.
Rocky Brands, Inc., No. 09-1237, 2009 U.S. Dist. LEXIS 77827 at *6
(D.P.R. Aug. 31, 2009) (Fusté, J.) (“Where the parties have filed
two actions in separate districts, however, and the actions are
nearly identical, ‘the first-filed action is generally preferred
in a choice of venue decision.’”) (citation omitted).
The cases pending in the District of Puerto Rico and the
Eastern District of California are both in the pre-trial stages.
See Docket No. 9, Ex. 10 at p. 5; Docket No. 11; Docket No. 12.
The
Eastern
District
of
California
infringement claim regarding Patent 579.
case
concerns
a
patent
(Docket No. 9, Ex. 3 at
Civil No.
p. 2.)
18-1112 (FAB)
8
The case before this Court pertains to the validity and
enforceability Patent 579.
(Docket No. 1 at pp. 1-2.)
Because
both cases involve nearly identical facts, they are subject to
consolidation.
The
See Albizu, 585 F. Supp. 2d at 244.
Southern
District
of
California
transferred
Yardstash’s patent infringement action to the Eastern District of
California on February 16, 2018.
(Docket No. 9, Ex. 9 at p. 8.)
The case before this Court commenced ten days later on February 26,
2018.
See Docket No. 1 at p. 19.
Accordingly, all factors weigh
in favor of transfer to the Eastern District of California.
IV.
Conclusion
For the reasons set forth above, the Court GRANTS Yardstash’s
motion to transfer.
(Docket No. 9.)
Accordingly, this action is
TRANSFERRED to the Eastern District of California.
IT IS SO ORDERED.
San Juan, Puerto Rico, August 31, 2018.
s/ Francisco A. Besosa
FRANCISCO A. BESOSA
UNITED STATES DISTRICT JUDGE
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