B.E. Technology, L.L.C. v. Groupon, Inc.
Filing
40
ORDER denying 21 Motion to Change Venue. Signed by Chief Judge Jon Phipps McCalla on 7/12/13. (McCalla, Jon)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
B.E. TECHNOLOGY, LLC,
Plaintiff,
v.
GROUPON, INC.,
Defendant.
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No.: 2:12-cv-02781-JPM-cgc
ORDER DENYING MOTION TO TRANSFER
Before the Court is Defendant Groupon, Inc.’s (“Defendant”
or “Groupon”) Motion to Transfer Venue Pursuant to 28 U.S.C.
§ 1404(a), filed January 10, 2013.
(ECF No. 21.)
For the
reasons that follow, the Motion is DENIED.
I.
BACKGROUND
This case concerns Defendant Groupon’s alleged infringement
of United States Patent No. 6,628,314 (the “‘314 patent”).
No. 1.)
(ECF
Plaintiff B.E. Technology, LLC (“Plaintiff or “B.E.”),
is the assignee of the ‘314 patent (ECF No. 27 at 2), currently
owning “all right, title, and interest in the ‘314 patent, and
has owned all right, title, and interest throughout the period”
of the alleged infringement (ECF No. 1 ¶ 10).
B.E. alleges that Groupon infringed the ‘314 patent “by
using a method of providing demographically targeted advertising
that directly infringes at least Claim 11 of the ‘314 patent
either literally or under the doctrine of equivalents.”
(Id.
¶ 11.)
B.E. filed a Complaint in this Court on September 10, 2012.
(ECF No. 1.)
Groupon filed its Answer and Counterclaim on
December 31, 2012.
(ECF No. 19.)
Groupon filed its Motion to
Transfer Venue on January 10, 2013.
(ECF No. 21.)
B.E. filed a
Motion to Dismiss Defendant’s Counterclaim and Motion to Strike
on January 25, 2013.
(ECF No. 24.)
B.E. filed its Response in
Opposition to Defendant’s Motion to Transfer Venue on January
31, 2013.
(ECF No. 27.)
With leave of Court, Groupon filed a
Reply Memorandum in Support of Its Motion to Transfer on
February 19, 2013.
(ECF No. 34.)
On February 1, 2013, Groupon
filed a Motion to Stay pending resolution of its Motion to
Transfer Venue.
(ECF No. 28.)
The Court granted Groupon’s
Motion to Stay on February 11, 2013.
(ECF No. 32.)
Groupon seeks to transfer this case to the Northern
District of California, where the allegedly infringing
technology is “principally developed and maintained.”
21-1 at 2.)
(ECF No.
Groupon notes that while its “business operations
are headquartered in Chicago, Illinois,” and “Chicago would
normally be the preferred forum for Groupon, the likely Groupon
witnesses, documents, and other relevant evidence associated
with the accused products and services are located in the
Northern District of California.”
2
(Id.)
B.E. opposes Groupon’s Motion to Transfer.
B.E. is a
limited-liability company incorporated in Delaware.
¶ 2.)
(ECF No. 1
B.E. was originally registered in Michigan, but formally
registered to conduct business in Tennessee in September 2012.
(ECF No. 27 at 2.)
B.E. contends that Memphis, Tennessee, is
its principal place of business.
(ECF No. 1 ¶ 2.)
Martin David
Hoyle (“Hoyle”), B.E.’s founder and CEO, is the named-inventor
of the ‘314 patent.
(ECF No. 27 at 1, 2.)
resident of Tennessee since April 2006.
Hoyle has been a
(Id.)
B.E. argues that transfer is inappropriate because it has
substantial connections with this district.
B.E. argues that
Hoyle has been present in the Western District of Tennessee
since 2006, and B.E. “since at least 2008,” and that this
district is B.E.’s principal place of business.
(Id. at 5.)
B.E. also argues that none of its witnesses are located in the
Northern District of California.
(Id. at 7.)
Further, B.E.
argues that its corporate documents, including documents
relating to the “conception and reduction to practice” of the
patent-in-suit, are located in this District.
(Id. at 5.)
II. STANDARD
Groupon moves the Court to transfer this case to the
Northern District of California pursuant to 28 U.S.C. § 1404(a).
(ECF No. 21-1 at 1.)
The statute provides that “[f]or the
convenience of the parties and witnesses, in the interest of
3
justice, a district court may transfer any civil action to any
other district or division where it might have been brought.”
28 U.S.C. § 1404(a).
“As the permissive language of the
transfer statute suggests, district courts have ‘broad
discretion’ to determine when party ‘convenience’ or ‘the
interest of justice’ make a transfer appropriate.”
Reese v. CNH
Am. LLC, 574 F.3d 315, 320 (6th Cir. 2009).
In determining whether to transfer a case under § 1404(a),
the court must first determine whether the claim could have been
brought in the transferee district.
28 U.S.C. § 1404(a)
(allowing transfer to any other district in which the claim
“might have been brought”).
Once the court has made this
threshold determination, the court must then determine whether
party and witness “convenience” and “the interest of justice”
favor transfer to the proposed transferee district.
Reese, 574
F.3d at 320; Esperson v. Trugreen Ltd., No. 2:10-cv-02130-STAcgc, 2010 WL 4362794, at *5 (W.D. Tenn. Oct. 5, 2010), adopted
2010 WL 4337823 (W.D. Tenn. Oct. 27, 2010).
In weighing these
statutory factors, the court may still consider the private- and
public-interest factors set forth in the pre-Section 1404(a)
case, Gulf Oil v. Gilbert, 330 U.S. 501, 508-09 (1947), but
courts are not burdened with “preconceived limitations derived
from the forum non conveniens doctrine.”
Norwood v.
Kirkpatrick, 349 U.S. 29, 31 (1955) (quoting All States Freight
4
v. Modarelli, 196 F.2d 1010, 1011 (3d Cir. 1952)) (internal
quotation marks omitted); Esperson, 2010 WL 4362794, at *5.
The
United States Court of Appeals for the Sixth Circuit has stated
that when deciding “a motion to transfer under § 1404(a), a
district court should consider the private interests of the
parties, including their convenience and the convenience of
potential witnesses, as well as other public-interest concerns,
such as systemic integrity and fairness, which come under the
rubric of ‘interests of justice.’”
Moore v. Rohm & Haas Co.,
446 F.3d 643, 647 n.1 (6th Cir. 2006).
Additionally, the “interest of justice” factor has been
interpreted broadly by courts, influenced by the individualized
circumstances of each case.
The United States Court of Appeals
for the Federal Circuit has set forth a non-exhaustive list of
pertinent public-interest factors:
The
public
interest
factors
include
(1)
the
administrative
difficulties
flowing
from
court
congestion; (2) the local interest in having localized
interests decided at home; (3) the familiarity of the
forum with the law that will govern the case; and (4)
the avoidance of unnecessary problems of conflicts of
laws or in the application of foreign law.
In re Acer Am. Corp., 626 F.3d 1252, 1254 (Fed. Cir. 2010); see
also In re Nintendo Co., Ltd., 589 F.3d 1194, 1198 (Fed. Cir.
2009)
(finding
the
local-interest
factor
weighed
heavily
in
favor of transfer); Cincinnati Ins. Co. v. O’Leary Paint Co.,
676
F.
Supp.
2d
623,
633
(W.D.
5
Mich.
2009)
(considering
additional factors such as the relative docket congestion of
each district).
Initially, B.E. argues that there is a strong presumption
in favor of its choice of forum, and that its choice of forum
should not be disturbed unless the defendant carries its burden
to demonstrate that the balance of convenience strongly favors
transfer.
(ECF No. 27 at 4-6.)
B.E.’s argument is erroneously
derived from the more stringent forum-non-conveniens standard.
Compare Hunter Fan Co. v. Minka Lighting, Inc., No. 06–2108
M1/P, 2006 WL 1627746 (W.D. Tenn. June 12, 2006) (applying the
appropriate private- and public-interest factors but relying on
the forum-non-conveniens doctrine to accord strong deference to
the plaintiff’s choice of forum), with OneStockDuq Holdings, LLC
v. Becton, Dickinson, & Co., No. 2:12–cv–03037–JPM–tmp, 2013 WL
1136726, at *3 (W.D. Tenn. Mar. 18, 2013), and Roberts Metals,
Inc. v. Florida Props. Mktg. Grp., Inc., 138 F.R.D. 89, 92-93
(N.D. Ohio 1991) (recognizing defendants need to make a lesser
showing to overcome plaintiff’s choice of forum under
§ 1404(a)), aff’d per curiam, 22 F.3d 1104 (6th Cir. 1994).
Although there is a strong presumption in favor of the
plaintiff’s choice of forum under the doctrine of forum non
conveniens, under § 1404(a), a plaintiff’s choice of forum may
be considered, but is entitled to less deference.
Discussing
the difference between the common-law doctrine of forum non
6
conveniens and the federal transfer-of-venue statute in Norwood,
the Supreme Court stated,
When Congress adopted § 1404(a), it intended to
do more than just codify the existing law on forum non
conveniens. . . . [W]e believe that Congress, by the
term “for the convenience of parties and witnesses, in
the interest of justice,” intended to permit courts to
grant
transfers
upon
a
lesser
showing
of
inconvenience.
This is not to say that the relevant
factors have changed or that the plaintiff’s choice of
forum is not to be considered, but only that the
discretion to be exercised is broader.
Norwood, 349 U.S. at 32; see also Lemon v. Druffel, 253 F.2d
680,
685
(6th
Cir.
1958)
(“The
choice
of
the
forum
by
the
petitioner is no longer as dominant a factor as it was prior to
the ruling in Norwood v. Kirkpatrick[.]”); Esperson, 2010 WL
4362794, at *5-6.
Groupon’s burden under § 1404(a) is to demonstrate that a
change of venue to the transferee district is warranted.
See
Eaton v. Meathe, No. 1:11-cv-178, 2011 WL 1898238, at *2 (W.D.
Mich. May 18, 2011); Amphion, Inc. v. Buckeye Elec. Co., 285 F.
Supp. 2d 943, 946 (E.D. Mich. 2003); Roberts Metals, Inc., 138
F.R.D. at 93.
“Merely shifting the inconvenience from one party
to another does not meet Defendant’s burden.”
McFadgon v. Fresh
Mkt., Inc., No. 05-2151-D/V, 2005 WL 3879037, at *2 (W.D. Tenn.
Oct. 21, 2005).
“[T]he movant must show that the forum to which
he desires to transfer the litigation is the more convenient one
vis a vis the Plaintiff’s initial choice.”
7
Roberts Metals,
Inc., 138 F.R.D. at 93 (quoting Mead Corp. v. Oscar J. Boldt
Constr. Co., 508 F. Supp. 193, 198 (S.D. Ohio 1981)) (internal
quotation marks omitted).
If the court determines that the
“balance between the plaintiff’s choice of forum and defendant’s
desired forum is even, the plaintiff’s choice of [forum] should
prevail.”
Stewart v. Am. Eagle Airlines, Inc., No. 3:10-00494,
2010 WL 4537039, at *2 (M.D. Tenn. Nov. 3, 2010).
III. ANALYSIS
Groupon asserts that B.E. could have brought this action in
the Northern District of California.
(See ECF No. 21-1 at 8-9.)
B.E. does not dispute this assertion.
(See ECF No. 27 at 4.)
The Court agrees with the parties that B.E. could have brought
suit in the Northern District of California as personal
jurisdiction over Groupon exists in that district.
Therefore,
the only issue remaining is whether the balance of the statutory
factors — the convenience to the witnesses, the convenience to
the parties, and the interest of justice — favors transfer to
the Northern District of California.
The Court will address
each statutory factor separately and balance these factors to
determine whether transfer to the Northern District of
California is proper pursuant to § 1404(a).
A.
Convenience of the Witnesses
When asserting that a transferee district is more
convenient for witnesses, a party “must produce evidence
8
regarding the precise details of the inconvenience” of the forum
chosen by the plaintiff.
Esperson, 2010 WL 4362794, at *8.
To
satisfy its burden, the movant must do “more than simply
assert[] that another forum would be more appropriate for the
witnesses; he must show that the witnesses will not attend or
will be severely inconvenienced if the case proceeds in the
forum district.”
at 93).
Id. (quoting Roberts Metals, Inc., 138 F.R.D.
Further, “[t]o sustain a finding on [this factor] . . .
the party asserting witness inconvenience has the burden to
proffer, by affidavit or otherwise, sufficient details
respecting the witnesses and their potential testimony to enable
a court to assess the materiality of evidence and the degree of
inconvenience.”
Eaton, 2011 WL 1898238, at *3 (quoting Rinks v.
Hocking, 1:10-CV-1102, 2011 WL 691242, at *3 (W.D. Mich. Feb.
16, 2011)) (internal quotation marks omitted).
It is the
“materiality and importance of the testimony of prospective
witnesses, and not merely the number of witnesses,” that is
crucial to this inquiry.
Rinks, 2011 WL 691242, at *3.
Groupon contends that witness convenience favors transfer
to the Northern District of California.
10-11; ECF No. 34 at 4-5.)
(ECF No. 21-1 at 4-5,
To support this contention, Groupon
asserts that the majority of the witnesses on which it intends
to rely are located in the transferee district.
These witnesses
include “engineers and employees” and numerous third-party
9
prior-art witnesses.
(ECF No. 21-1 at 4-7, 10-11; ECF No. 34 at
5-6.)
In response, B.E. argues that transfer to the Northern
District of California would be equally disruptive to its
business and inconvenient to B.E.’s witnesses, “none of whom is
located in the Northern District of California.”
7.)
(ECF No. 27 at
B.E. identifies Hoyle, the named-inventor of the patent-in-
suit and founder and CEO of B.E., as its key witness who is
located in the Western District of Tennessee.
(Id. at 5.)
Because the convenience of party and non-party witnesses is
given different weight, the Court will analyze the witnesses
separately.
See Azarm v. $1.00 Stores Servs., Inc., No. 3:08-
1220, 2009 WL 1588668, at *4 (M.D. Tenn. June 5, 2009) (“[T]he
convenience of potential non-party witnesses, who are not
subject to the control of the parties, is a particularly weighty
consideration, because it is generally presumed that party
witnesses will appear voluntarily in either jurisdiction, but
non-party witnesses, with no vested stake in the litigation, may
not.”).
1.
Party Witnesses
Groupon asserts that “the vast majority of the relevant
engineers and employees relating to the accused products and
services work and/or reside in the Northern District of
California.”
(ECF No. 21-1 at 10.)
10
Groupon specifically
identifies three current employees as potential witnesses with
knowledge of the “design, development, maintenance, and
operation of the accused products and services” that are located
in the Northern District of California:
David Thacker, Senior
Director of Product Management; Amit Aggarwal, Senior Director
in Engineering; and Sean O’Brien, Senior Manager in Software
Engineering.
¶ 5).)
(Id. at 4 (citing Thacker Decl., ECF No. 21-2,
Groupon further acknowledges that “some Groupon
employees with knowledge about Groupon’s products and services
may be located [at its Chicago, Illinois, headquarters,]
including a small group of about 4-5 employees with
responsibility for data collection on Groupon’s website.”
(Id.
at 4 n.4 (citing Thacker Decl., ECF No. 21-2, ¶ 6).)
Groupon does not provide any evidence showing that any
employees will be unwilling to testify in this district if asked
to do so, and only notes generally that travel to the transferor
district would “impose a significant inconvenience for Groupon’s
witnesses.”
(ECF No. 21-1 at 10.)
4362794, at *8.
See Esperson, 2010 WL
Courts have noted that “normally a corporation
is able to make its employees available to testify when needed.”
Clark v. Dollar Gen. Corp., No. 3-00-0729, 2001 U.S. Dist. LEXIS
25975, at *9 (M.D. Tenn. Mar. 6, 2001); see also Zimmer Enters.
v. Atlandia Imps., Inc., 478 F. Supp. 2d 983, 991 (S.D. Ohio
Mar. 14, 2007) (finding that the convenience of witnesses who
11
are employees “will not ordinarily be considered, or at least,
that the convenience of such employees will not generally be
given the same consideration as is given to other witnesses”).
Accordingly, it appears that Groupon’s employees will be able to
attend absent any evidence to the contrary.
Therefore, regarding Groupon employees, Groupon does not
satisfy its burden.
Groupon argues that due to the distance
between Memphis and the Northern District of California,
approximately 1800 miles, travel to Memphis would impose a
significant inconvenience.
(ECF No. 21-1 at 10-11.)
Yet, the
same is true for B.E.’s witnesses, which B.E. asserts do not
reside in the Northern District of California.
7.)
(ECF No. 27 at
Groupon’s reliance on Returns Distribution Specialists, LLC
v. Playtex Products, Inc., No. 02-1195-T, 2003 WL 21244142 (W.D.
Tenn. May 28, 2003), for the proposition that this factor
“supports transfer where witnesses likely to be called at trial
are important to the operation of the defendant’s business” (ECF
No. 21-1 at 10) is misplaced.
In Returns Distribution
Specialists, the court found that this factor weighed heavily in
favor of transfer because the defendant “presented unrefuted
evidence that certain witnesses that it expects to call to
testify at trial are a ‘core group of employees’ and that it
would be severely disruptive to its business if these employees
were all out of town at the same time.”
12
Returns Distribution
Specialists, 2003 WL 21244142, at *7.
In the instant case, the
Court agrees that Groupon’s specifically identified employees
are located in the transferee district, and that that their
testimony is likely material.
Unlike Returns Distribution
Specialists, however, Groupon has only provided a general
statement about inconvenience and has provided no evidence or
argument regarding how detrimental the absence of these
employees would be to its business.
As a result, the Court
cannot assess the degree to which Groupon’s business would be
disrupted compared to the disruption B.E. will endure due to its
CEO’s absence should the case be transferred.
Accordingly, the
Court finds transfer would only shift the inconvenience to B.E.
See McFadgon, 2005 WL 3879037, at *2.
Therefore, because § 1404(a) provides for transfer “to a
more convenient forum, not to a forum likely to prove equally
convenient or inconvenient,” distance of travel for employee
witnesses does not weigh in favor of transfer.
Hunter Fan, 2006
WL 1627746, at *2 (citing Van Dusen v. Barrack, 376 U.S. 612,
645-46 (1964)).
Groupon further argues that because it intends to call
employee witnesses located in the transferee district and
because B.E. only identified one witness, Hoyle, this factor
weighs in favor of transfer.
(ECF No. 36 at 6-7.)
Groupon
relies on NISSM Corp. v. Time Warner, Inc., No. 07-20624-CIV,
13
2008 WL 540758 (S.D. Fla. Feb. 25, 2008), where the court
granted a transfer in light of the number of the defendants’
witnesses significantly outnumbering the plaintiff’s single
witness, the CEO of NISSM Corp. and inventor of the patent-insuit.
(See ECF No. 34 at 5.)
Recognizing that NISSM Corp. is
persuasive authority, the Court declines to apply its reasoning
in the instant case.
Unlike NISSM Corp., which involved one
plaintiff and four corporate defendants in a single action, the
instant case involves only B.E. and Groupon.
See also Droplets,
Inc. v. Amazon.com, Inc., No. 2:11-CV-392, 2012 WL 3578605 (E.D.
Tex. June 27, 2012) (granting transfer where one plaintiff
brought suit against six defendants in a single action and
transferor district contained only plaintiff’s headquarters and
one witness).
Although B.E. filed infringement actions against
other defendants seeking transfer to the Northern District of
California, motions to transfer venue pursuant to § 1404(a) are
adjudicated “according to an individualized, case-by-case
consideration of convenience and fairness . . . [and] balance
[of] a number of case-specific factors.”
Stewart Org., Inc. v.
Ricoh Corp., 487 U.S. 22, 29 (1988); accord United States v.
Gonzales & Gonzales Bonds & Ins. Agency, Inc., 667 F. Supp. 2d
987, 992 (W.D. Tenn. 2010).
The Court acknowledges that the testimony of Groupon’s
identified employee-witnesses is likely material and that these
14
employees are located in the transferee district.
While B.E.
did not specifically identify any witnesses beyond Hoyle,
however, B.E. does not have the burden to do so.
A simple
numerical advantage is insufficient on the issues raised by a
motion to transfer.
Moreover, B.E. argues that “[i]t is likely that Groupon’s
California-based employees will be deposed in California where
B.E.’s lead counsel is based.”
(ECF No. 27 at 9.)
This further
indicates that the witness-convenience factor does not weigh in
favor of transfer.
See Hunter Fan, 2006 WL 1627746, at *2
(finding relevant that the plaintiff planned to take depositions
of the defendant’s witnesses in California in determining that
the witness convenience factor did not favor transfer).
2.
Non-Party Witnesses
While convenience to party witnesses is an important
consideration, “it is the convenience of non-party witnesses,
rather than employee witnesses . . . that is the more important
factor and is accorded greater weight.”
Steelcase Inc. v. Smart
Techs., 336 F. Supp. 2d 714, 721 (W.D. Mich. Mar. 5, 2004)
(citation omitted) (internal quotation marks omitted).
Groupon
asserts that it has identified at least eleven prior-art patents
“relevant to Groupon’s invalidity defenses and counterclaims.”
(ECF No. 21-1 at 6.)
Groupon states that it is “likely to
subpoena at least the inventors and/or assignees of the patents
15
for documents and testimony in support of their invalidity
defenses.”
(Id. at 7.)
Groupon also identifies an additional
third-party witness, a former employee, who has relevant
knowledge of the accused products and resides in the transferee
district.
(Id. at 7, 11.)
Groupon further contends that these
potential prior-art and third-party witnesses all live in the
Northern District of California or a district within the
subpoena power of the transferee district, therefore they are
subject to compulsory process if the instant case is transferred
and any travel to the Western District of Tennessee would be
inconvenient.
(Id.; see also ECF No. 34 at 5-6.)
B.E. argues that the convenience of third-party witnesses
is not entitled to great weight in the instant case because
Groupon has not established that the “third party testimony will
be material or important.”
(ECF No. 27 at 10.)
B.E. asserts
that Groupon has not stated the “relevance, materiality, and
importance” of the non-party witnesses’ testimony.
(Id. at 11.)
B.E. further argues that prior-art testimony is “almost certain
to be severely limited at the time of trial” and, therefore,
such testimony does not weigh in favor of transfer.
10.)
(Id. at
Additionally, B.E. contends that Groupon has “failed to
establish the current locations of any of the inventors or
assignees,” and “has not presented any evidence that the
inventors and assignees are unwilling to testify in Tennessee or
16
how they would be inconvenienced by testifying here.”
(Id. at
10.)
The availability of compulsory process for unwilling
witnesses is a consideration closely related to the convenienceof-witnesses factor and the costs of procuring the witness, and
therefore is an important consideration for the Court.
See,
e.g., In re Acer, 626 F.3d at 1255; Rinks, 2011 WL 691242, at
*4.
Whether this factor should be given considerable weight
depends on the materiality of the testimony to the resolution of
the case.
Rinks, 2011 WL 691242, at *4.
A federal court in the
Northern District of California would be able to compel the
third-party witnesses to testify at trial, whether located
within the transferee district or within the state of
California.
See Fed.
R. Civ. P. 45(b)(2); Brackett v. Hilton
Hotels Corp., 619 F. Supp. 2d 810, 821 (N.D. Cal. 2008) (“The
California district courts have the power to subpoena witnesses
throughout the state pursuant to [Federal Rule of Civil
Procedure] 45(b)(2)(C) . . . .”)).
In contrast, the third-party
witnesses would not be subject to the subpoena power in this
district, see Fed. R. Civ. P 45(c)(3)(A)(ii), but would be
available for deposition in the Northern District of California
if unwilling to testify in this district.
Therefore, the
testimony of such witnesses potentially would “not be live and
17
therefore could be less persuasive.”
Rinks, 2011 WL 691242, at
*4.
The Court finds that Groupon has met its burden to show the
nature of its proposed non-party witnesses’ testimony, and that
this testimony is likely material to Groupon’s invalidity and
non-infringement contentions.
Groupon, however, has not
indicated why depositions of its non-party witnesses would be
inadequate and live testimony required.
To the extent the non-
party witnesses’ testimony may be presented by deposition,
witness inconvenience would not be an issue.
Further, Groupon
does not state whether it is aware that any of the non-party
witnesses would be unwilling to testify in this district if
asked to do so.
As a result, this factor weighs only slightly
in favor of transfer.
B.
Convenience of the Parties
Groupon argues that the Northern District of California is
“clearly” the more convenient venue. (ECF No. 21-1 at 2.)
While
Groupon organizes its arguments somewhat differently than the
Court, the Court finds the considerations relevant to the
convenience-of-the-parties factor are the location of the
sources of proof and the parties’ financial hardships due to
litigation in the chosen forum.
18
1.
Location of Sources of Proof
Groupon argues that “the vast majority of potentially
relevant documents related to the research, design, and
development of any of the potentially implicated Groupon
products and services is located in the Northern District of
California, while no relevant documents or other evidence are
physically located in the Western District of Tennessee.”
No. 21-1 at 9.)
(ECF
Groupon contends that B.E. “has likely already
produced many, if not all, relevant documents,” in its initial
disclosures relating to the patent-in-suit and Hoyle’s “prior
attempts at forming a business.”
(ECF No. 34 at 1 n.2.)
As
only 220 documents were produced, Groupon believes the “bulk of
relevant documents” are located in the transferee district,
which, in turn, favors transfer.
(Id. at 3.)
B.E. argues that, because its CEO resides in the Western
District of Tennessee, its corporate documents and records,
“including documents demonstrating the conception and reduction
to practice of [the patent-in-suit],” are located in the Western
District.
(ECF No. 27 at 5, 12.)
B.E. notes that while
Groupon’s sources of proof are located in the Northern District
of California, B.E.’s own sources of proof are located in
Tennessee and have been maintained there for years.
12.)
(Id. at
B.E. also contends that “the location of relevant
documentary evidence is increasingly less important in deciding
19
motions to transfer,” and that because documents can be
exchanged electronically the weight given this factor should be
minimal.
(Id. at 12.)
B.E. finally argues that this factor
does not weigh in favor of transfer because “it can be expected
that Groupon will eventually produce its documents to B.E.’s
lead counsel in California, not to B.E. in Tennessee.”
(Id. at
13.)
As an initial matter, the Court disagrees with B.E.’s
contention that advances in electronic document transfer reduce
the importance of the location-of-sources-of-proof factor.
This
notion has been expressly rejected by the Federal Circuit.
See,
e.g., In re Link_A_Media Devices Corp., 662 F.3d 1221, 1224
(Fed. Cir. 2011) (reversing a district court that did not
consider the factor, stating, “While advances in technology may
alter the weight given to these factors, it is improper to
ignore them entirely”); In re Genentech, Inc., 566 F.3d 1338,
1345-46 (Fed. Cir. 2009) (finding clear error where a district
court “minimized the inconvenience of requiring the petitioners
to transport their documents by noting that ‘[t]he notion that
the physical location of some relevant documents should play a
substantial role in the venue analysis is somewhat antiquated in
the era of electronic storage and transmission’” (quoting
Sanofi-Aentis Deutschland GmbH v. Genentech, Inc., 607 F. Supp.
2d 769, 777 (E.D. Tex. 2009))).
20
The Court agrees that it is likely that the sheer volume of
documents Groupon has in its possession outnumbers the patentrelated documents in B.E.’s possession, and that B.E. has
already produced documents related to the ‘314 Patent, but the
Court disagrees that this is enough to tip the balance in favor
of transfer.
The Court finds that both parties maintain
documents in their respective districts; that both sets of
documents will be integral to the proceedings; and that Groupon
will be expected to serve its documents on B.E.’s counsel in
Northern California, not in the Western District of Tennessee.
Taken together, the aforementioned facts indicate that, as to
the location of the sources of proof, the Northern District of
California is a somewhat more convenient venue for the parties
to the instant case.
This factor, however, is not sufficient,
by itself, to require transfer.
2.
Financial Hardships Attendant to Litigating in
the Chosen Forum
Groupon argues that “the vast majority of the relevant
engineers and employees relating to the accused products and
services work and/or reside in the Northern District of
California,” and the “relevant third party witnesses” are also
located there.
(ECF No. 20-1 at 10-11)
As a result, Groupon
contends that travel to Tennessee would “impose a significant
21
inconvenience for Groupon’s witnesses.” (Id.; see also Thacker
Decl., ECF No. 21-2, ¶ 12.)
B.E. states that it “would face a financial burden by
having to litigate in the Northern District of California,”
while Groupon does not assert that it would be “financially
incapable of bearing the expense” of litigating the instant case
in the transferor district.
(ECF No. 27 at 13.)
B.E.’s CEO
Hoyle states that “B.E. will incur expenses it will not incur if
the case remains in Memphis.”
(Hoyle Decl., ECF No. 27-1, ¶ 9.)
The Court has considered “the relative ability of litigants
to bear expenses in any particular forum” among the factors in a
§ 1404(a) case.
Ellipsis, Inc. v. Colorworks, Inc., 329 F.
Supp. 2d 962, 970 (W.D. Tenn. 2004).
In the instant case,
B.E.’s CEO stated that the company will incur additional
expenses, but it has not shown with any specificity how
detrimental those expenses would be to the company.
Further,
while Hoyle stated that his personal financial status would be
adversely affected by litigating in California, he did not state
why or how his personal finances would impact B.E., the party to
the instant case.
(See Hoyle Decl., ECF No. 27-1, ¶ 9.)
The
Court agrees that Groupon has not asserted that it cannot bear
the expense of litigating in the Western District of Tennessee
(see ECF No. 27 at 13), but the Court does not find this to be a
dispositive factor in denying Groupon’s Motion.
22
But see
Siteworks Solutions, LLC v. Oracle Corp., No. 08-2130-A/P, 2008
WL 4415075, at *4 (W.D. Tenn. Sept. 22, 2008) (finding the
relative financial strengths of the parties did not weigh in
favor of transferring the case, as the party opposed to transfer
showed it “ha[d] no net worth, very little revenue, no gross
profits, no assets, and [would have to] borrow from its owners
in order to pay the litigation expenses”).
The Court finds that
the evidence presented is insufficient to make a showing that
B.E. or Groupon will be adversely affected by litigating in
either forum.
The paramount consideration remains whether the
Northern District of California is more convenient to the
parties than B.E.’s chosen forum.
With respect to convenience, the Court finds this factor
does not weigh in favor of transfer.
While Groupon has made a
showing that costs would be reduced for its potential witnesses
if the case were transferred, it has not made a showing that its
business would be disrupted in an appreciable manner should the
case remain in the Western District of Tennessee.
Additionally,
B.E. has made a showing that its business would be disrupted in
having to prosecute the instant case in California.
Groupon has
shown that the Northern District of California would be a more
convenient forum for it, but it has not shown that the Northern
District of California is a more convenient forum for both
23
parties.
As a result, the hardship to Groupon does not indicate
transfer is more convenient.
C.
Interests of Justice
Groupon argues that transfer to the Northern District of
California is appropriate based on additional considerations
that pertain to the interests-of-justice factor.
at 12-13; ECF No. 34 at 7-8.)
(ECF No. 21-1
These considerations include the
“public-interest concerns, such as systemic integrity and
fairness,” of the proceedings.
See Moore, 446 F.3d at 647 n.1.
In the instant case, the Court will consider the relative trial
efficiency of the transferee and transferor districts and the
localized interest in the litigation.
1.
Trial Efficiency
Groupon argues that while “the Western District of
Tennessee has a shorter median time from filing to trial, . . .
the average docket of pending case per judge is actually higher
in the Western District of Tennessee than in the Northern
District of California.”
(ECF No. 34 at 7.)
Groupon admits,
however, that in general this factor is neutral.
(Id.)
B.E. argues that “transfer to the Northern District of
California would likely delay trial of this case by at least one
year.”
(ECF No. 27 at 14.)
B.E. cites the 2011 Federal Court
Management Statistics for both districts to illustrate that the
median time from filing to trial in the Northern District of
24
California was 35.4 months, while the median time from filing to
trial in the Western District of Tennessee was 20.8 months.
(Id. (citing ECF No. 27-4).)
The Court agrees with Groupon and finds this factor neutral
to its determination of whether the Northern District of
California is the more convenient forum.
2.
Local Interest
Groupon argues that the Northern District of California has
strong local ties to the instant case because “it is the base of
operations for the development of the accused products and
services, and is home to relevant Groupon witnesses and
evidence.”
(ECF No. 21-1 at 13.)
Groupon also argues that the
Northern District of California is “especially interested in the
outcome of this litigation considering that the conduct of
companies, employees, and third parties located in the Northern
District, namely those of the many Defendants B.E. has sued,
including Groupon, has been called into question.”
(Id.)
Additionally, Groupon asserts that B.E.’s ties to the Western
District of Tennessee should be discounted because it
manufactured those ties in anticipation of litigation.
(Id. at
13-14.)
B.E. argues that the Western District of Tennessee has a
substantial local interest in the instant case because the
holder of the patent-in-suit is located in this district and
25
because Groupon has allegedly infringed the patent in this
district.
(ECF No. 27 at 15-16.)
B.E. also asserts that its
ties to Tennessee are not “recent, ephemeral, or manufactured
for the purposes of litigation.”
(Id. at 15)
Hoyle stated that
he has resided in the Western District of Tennessee since 2006,
that Memphis is B.E’s principal place of business, and that the
sources of proof pertinent to the instant case are located in
the district.
(Hoyle Decl., ECF No. 27-1, ¶¶ 2-4, 7-8.)
The Court finds that this factor does not weigh in favor of
transfer.
While Groupon has strong local ties to the Northern
District of California, the Court finds that B.E.’s connection
to the Western District of Tennessee was not manufactured for
the purposes of litigation.
B.E.’s founder and CEO, who is also
the holder of the patent-in-suit, has resided in the district
for seven years.
B.E.’s connections, therefore, are neither
“recent” nor “ephemeral.”
As a result, Groupon has not
demonstrated that the Northern District of California’s local
interest outweighs that of the Western District of Tennessee.
IV.
CONCLUSION
For the foregoing reasons, the Court finds that, in
balancing the statutory factors, Groupon has not demonstrated
that the Northern District of California is a more convenient
forum than the Western District of Tennessee.
Groupon’s Motion to Transfer Venue is DENIED.
26
Therefore,
Accordingly, the Court hereby LIFTS the February 11, 2013,
stay of all proceedings.
(ECF No. 32.)
Regarding B.E.’s Motion
to Dismiss and Motion to Strike, filed January 25, 2013 (ECF No.
24), Defendant shall have fourteen (14) days from the date of
entry of this Order, up to and including July 26, 2013, to file
its Response to B.E’s Motions.
IT IS SO ORDERED this 12th day of July, 2013.
/s/ Jon P. McCalla_______
CHIEF U.S. DISTRICT JUDGE
27
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