Ganas, LLC v. Dell Inc. et al
***FILED IN ERROR. PER JUDGES CHAMBERS. PLEASE IGNORE.***REPORT AND RECOMMENDATION - granted in part and denied in part 132 , it is ORDERED that Ganas claims against ISC be severed into a new case. Signed by Magistrate Judge Roy Payne on 8/26/2013. (ch, ) Modified on 8/27/2013 (ch, ). Modified on 8/27/2013 (ch, ).
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
DELL, INC., et al.
Case No. 2:12-CV-324-JRG-RSP
Before the Court is Defendant ISC's Motion to Dismiss for Misjoinder or Sever and
Transfer Ganas' Claims to the District of Massachusetts (Dkt. No. 132, filed December 14,
2012). ISC argues that the claims should either be dismissed for misjoinder or severed, and also
alleges that the District of Massachusetts is a clearly more convenient forum for this case.
Plaintiff Ganas opposes transfer. After considering all of the record evidence and weighing the
various factors, the Court finds that the claims should be severed, but that ISC has failed to show
that the District of Massachusetts is a clearly more convenient forum for this case.
ISC requests either dismissal for misjoinder or severance, and Ganas does not oppose
severance of its’ claims against ISC. (See Dkt. 158 at 1. F.N. 2). Accordingly, the Court
recommends GRANTING IN PART the Motion to the extent in requests severance of Ganas’
claims against ISC.1
Section 1404(a) provides that “[f]or the convenience of parties and witnesses, in the
interest of justice, a district court may transfer any civil action to any other district or division
The Court notes that it often consolidates related cases for pretrial purposes, but that it need not order that
consolidation in the context of deciding this motion.
where it might have been brought.” 28 U.S.C. § 1404(a) (2006). The first inquiry when
analyzing a case’s eligibility for 1404(a) transfer is “whether the judicial district to which
transfer is sought would have been a district in which the claim could have been filed.” In re
Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004) (“In re Volkswagen I”).
Once that threshold is met, courts analyze both public and private factors relating to the
convenience of parties and witnesses as well as the interests of particular venues in hearing the
case. See Humble Oil & Ref. Co. v. Bell Marine Serv., Inc., 321 F.2d 53, 56 (5th Cir. 1963); In
re Nintendo Co., Ltd., 589 F.3d 1194, 1198 (Fed. Cir. 2009); In re TS Tech USA Corp., 551 F.3d
1315, 1319 (Fed. Cir. 2009). The private factors are: 1) the relative ease of access to sources of
proof; 2) the availability of compulsory process to secure the attendance of witnesses; 3) the cost
of attendance for willing witnesses; and 4) all other practical problems that make trial of a case
easy, expeditious, and inexpensive. In re Volkswagen I, 371 F.3d at 203; In re Nintendo, 589
F.3d at 1198; In re TS Tech, 551 F.3d at 1319. The public factors are: 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 conflict of laws or in the application of foreign law. In re
Volkswagen I, 371 F.3d at 203; In re Nintendo, 589 F.3d at 1198; In re TS Tech, 551 F.3d at
The plaintiff’s choice of venue is not a factor in this analysis. In re Volkswagen of Am.,
Inc., 545 F.3d 304, 314-15 (5th Cir. 2008) (“In re Volkswagen II”). Rather, the plaintiff’s choice
of venue contributes to the defendant’s burden in proving that the transferee venue is “clearly
more convenient” than the transferor venue. In re Volkswagen II, 545 F.3d at 315; In re
Nintendo, 589 F.3d at 1200; In re TS Tech, 551 F.3d at 1319. Furthermore, though the private
and public factors apply to most transfer cases, “they are not necessarily exhaustive or
exclusive,” and no single factor is dispositive. In re Volkswagen II, 545 F.3d at 314-15.
Timely motions to transfer venue “should [be given] a top priority in the handling of [a
case],” and “are to be decided based on ‘the situation which existed when suit was instituted.’”
In re Horseshoe Entm’t, 337 F.3d 429, 433 (5th Cir. 2003); In re EMC Corp., Dkt. No. 2013M142, 2013 WL 324154 (Fed. Cir. Jan. 29, 2013) (quoting Hoffman v. Blaski, 363 U.S. 335, 443
Neither party contends that venue is improper in the Eastern District of Texas or in the
District of Massachusetts.
Private Interest Factors
Cost of Attendance for Willing Witnesses
“The convenience of the witnesses is probably the single most important factor in a
transfer analysis.” In re Genentech, Inc., 566 F.3d 1388, 1342 (Fed. Cir. 2009). While the Court
must consider the convenience of both the party and non-party witnesses, it is the convenience of
non-party witnesses that is the more important factor and is accorded greater weight in a transfer
of venue analysis. Aquatic Amusement Assoc., Ltd. v. Walt Disney World Co., 734 F.Supp. 54,
57 (N.D.N.Y. 1990); see also Wright & Miller, Federal Practice and Procedure § 3851. “A
district court should assess the relevance and materiality of the information the witness may
provide.” In re Genentech, Inc., 566 at 1343. However, there is no requirement that the movant
identify “key witnesses,” or show “that the potential witness has more than relevant and material
information . . . .” Id. at 1343-44.
Defendant ISC’s Witnesses
ISC maintains its headquarters in Cambridge, Massachusetts. (Grabscheid Decl., Dkt.
No. 134.) In support of its motion, ISC relies on a declaration by Paul Grabscheid, Vice
President for Strategic Planning. (Id.) According to Mr. Grabscheid, “most, if not all” the ISC
employees involved in the design, development, operation and maintenance of the accused
systems are located in Cambridge, MA and Sydney, Australia. (Id.) Mr. Grabscheid does not
state how many employees ISC employs at these locations, what other locations may house
relevant employees, and does not identify what information or knowledge these employees may
possess. (Id.) Importantly, Mr. Grabscheid does not show that ISC’s relevant witnesses are
located in Massachusetts instead of Australia.
Plaintiff Ganas’ Witnesses
Ganas’ President and sole member is Daniel Perez, who is located in Texas. Ganas relies
on an affidavit of Mr. Perez, who notes that he was born, raised, educated, and currently resides
in Texas. (Perez Decl., Dkt. No. 158-4). ISC alleges that Mr. Perez’s presence in Texas is
“recent, ephemeral, and an artifact of litigation,” an allegation that appears to this Court to be
flatly untrue in light of Mr. Perez’s sworn statements. (Mot. at 8.) ISC offers no support for its
allegation to the contrary.
Third Party Witnesses
ISC’s arguments with regard to the party witnesses primarily represents an effort to
simply substitute ISC’s convenience for Ganas’; thus, this Court gives greater weight to the cost
of attendance of non-party witnesses. The parties identify three third-party witnesses in this
ISC points to the inventor/original owner of the patents-in-suit and the prosecuting
attorney, who reside in Ottawa, Canada, and Arlington, Virginia, respectively. It is unclear how
much material information these parties will possess. The Court notes that although neither of
these witnesses resides in either the Eastern District of Texas or the District of Massachusetts,
and either location would represent a substantial burden to the witnesses, that both locations are
closer to the District of Massachusetts than the Eastern District of Texas.
Ganas identifies the Texas Department of Information Resources, which is within the
subpoena power of this Court.
According to Ganas, “[t]his department contracted for the
accused Ensemble software product in 2007, a contract that ran at least 3 years” and is material
because it “can provide valuable testimony on Ensemble’s functioning and pricing, both of
which are critically important given that Ensemble is essentially a tool for connecting other
software applications.” (Resp. at 4.) The Court observes that the Eastern District of Texas
would be very convenient for the Texas Department of Information Resources, and that the
transfer of the case to the District of Massachusetts would be burdensome.
The Court finds that in light of one non-party witness being squarely within the subpoena
power of the Eastern District of Texas, and two non-party witnesses being outside either district
but closer to the District of Massachusetts than the Eastern District of Texas, this factor is
Relative Ease of Access to Sources of Proof
In some patent infringement cases, “the bulk of the relevant evidence usually comes from
the accused infringer.” In re Genentech, Inc., 566 F.3d 1338, 1345 (Fed. Cir. 2009) (citation
omitted). The Court notes that this case is somewhat anomalous in that Ganas has a substantial
amount of “documents and source code.” (Resp. at 8.) In fact, Ganas notes that in its past patent
infringement cases, Ganas’ production has been over 10 times the size of even the most
substantial document production from any defendant. ISC notes that its documents are located
in Sydney, Australia and Cambridge, Massachusetts, but does not state the amount or materiality
of those materials. (Grabscheid Decl. at par. 5.)
The Court finds that in light of Ganas’ substantial number documents in the Eastern
District of Texas and ISC’s document split between Australia and the District of Massachusetts,
this factor slightly disfavors transfer.
Availability of Compulsory Process to Secure the Attendance of Witnesses
Some, but apparently not all, of ISC’s employees are within the subpoena power of the
District of Massachusetts. Ganas’ sole member is located within the subpoena power of the
Eastern District of Texas. As noted above, only one non-party witness, the Texas Department of
Information Resources, is within the subpoena power of either court (the Eastern District of
Texas). The Court finds that this factor disfavors transfer.
All Other Practical Problems that Make Trial of a Case Easy, Expeditious,
First, there are a number of copending claims, all in the Eastern District of Texas, and
transferring ISC would result in a single disparate case in the District of Massachusetts, leading
to a risk of inconsistent rulings and the waste “…of time, energy and money that § 1404(a) was
designed to prevent.” In re Volkswagen of Am., Inc. 566 F.3d 1349, 1351 (Fed. Cir. 2009)
(quoting Continental Grain Co. v. The FBL-585, 364 U.S. 19, 26 (1960)). Additionally, this
Court has extensive experience with the patents-in-suit from Ganas v. Sabre Holdings Corp.,
2:10-cv-320. These factors strongly disfavor transfer. See, e.g., In re Vistaprint, 628 F.3d 1342,
1346 (Fed. Cir. 2010).
Public Interest Factors
Local Interest in Having Localized Interests Decided at Home
ISC argues that the District of Massachusetts has a substantial local interest in this case
because it “has a strong local interest in deciding the outcome of claims against its corporate
resident.” (Mot. at 14.) The Court notes that the connection alleged by ISC is not a connection
to “the events that gave rise to this suit,” as suggested by In re Volkswagen II, but rather arises
from the fact that some residents of the District of Massachusetts may have an interest, financial
and otherwise, in ISC itself – a theory which raises concerning fairness implications. 545 F.3d at
318. The Court finds that this factor is neutral.
Familiarity of the Forum With the Law that Will Govern the Case,
Administrative Difficulties Flowing From Court Congestion, and
Avoidance of Unnecessary Problems of Conflict of Laws or in the
Application of Foreign Law
The Court finds that the remaining public interest factors are neutral.
After reviewing the relevant evidence and factors, the Court finds that ISC has failed to
meet its burden of showing that the District of Massachusetts is a clearly more convenient forum
for this case. Accordingly, the Court recommends that ISC’s Motion be GRANTED IN PART
to the extent ISC requests severance of Ganas’ claims against it, and DENIED as to the
remaining requested relief. Accordingly, the Court recommends that it be ORDERED that
Ganas’ claims against ISC be severed into a new case.
A party’s failure to file written objections to the findings, conclusions, and
recommendations contained in this report within fourteen days after being served with a copy
shall bar that party from de novo review by the district judge of those findings, conclusions, and
recommendations and, except on grounds of plain error, from appellate review of unobjected-to
factual findings, and legal conclusions accepted and adopted by the district court. Fed. R. Civ. P.
72(b)(2); see Douglass v. United Servs. Auto. Ass’n, 79 F.3d 1415, 1430 (5th Cir. 1996) (en
SIGNED this 3rd day of January, 2012.
SIGNED this 26th day of August, 2013.
ROY S. PAYNE
UNITED STATES MAGISTRATE JUDGE
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