Elbit Systems Land and C4I Ltd. et al v. Hughes Network Systems, LLC et al

Filing 394

MEMORANDUM OPINION AND ORDER - denying #130 Motion to Sever and Transfer Claims. Signed by Magistrate Judge Roy S. Payne on 6/23/17. T(ch, )

IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
ELBIT SYSTEMS LAND AND C4I LTD.,
ELBIT SYSTEMS OF AMERICA, LLC,

Plaintiffs,
v.
HUGHES NETWORK SYSTEMS, LLC,
BLUETIDE COMMUNICATIONS, INC.,
COUNTRY HOME INVESTMENTS, INC.,

Defendants.

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Case No. 2:15-CV-00037-RWS-RSP

MEMORANDUM OPINION AND ORDER
Before the Court is Defendants’ Motion to Sever and Transfer Claims Against Hughes
Network Systems, LLC and Stay Claims Against the Two Remaining Customer Defendants. Dkt.
130. Defendants’ motion is DENIED.
BACKGROUND
Elbit filed this action on January 21, 2015. Dkt. 1. About 16 months later, on May 24, 2016,
Hughes Network Systems, LLC (“Hughes”), BlueTide Communications, Inc. (“BlueTide”), and
Country Home Investments, Inc. (“Country Home”) electronically filed a “Sealed Document” via
the Court’s Case Management/Electronic Case Files (“ECF”) system, requesting that the Court
sever claims against Hughes, transfer those claims to the District of Maryland, and stay the
remaining claims against BlueTide and Country Home. See Dkt. 130. Defendants’ counsel did not
file the Sealed Document as a “motion” using the appropriate ECF event.1 Although the Clerk’s

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The Court keeps track of pending motions by running motions reports through the ECF system,
but a document that has not been electronically filed as a “motion” will not appear on a motions
report or on the Court’s biannual Civil Justice Reform Act Report. It would not be practical for the
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Office ordinarily reviews filings as part of quality control, the Clerk’s Office did not identify
Defendants’ sealed document, and the document was never converted into a pending motion in
ECF. The case progressed, and Defendants’ counsel did not bring the motion to the Court’s
attention until June 2, 2017, more than a year after it was filed and only about two months from
trial.2
DISCUSSION
“The delay associated with transfer may be relevant in ‘rare and special circumstances,”
and the Fifth Circuit has found such circumstances present “where a ‘transfer [of] venue would
have cause yet another delay in [an already] protracted litigation.” In re Radmax, Ltd., 720 F.3d
285, 289 (5th Cir. 2013) (quoting In re Horseshoe Entm’t, 337 F.3d 429, 435 (5th Cir.2003) and
Peteet v. Dow Chem. Co., 868 F.2d 1428, 1436 (5th Cir.1989)). While “garden-variety delay
associated with transfer is not to be taken into consideration when ruling on a § 1404(a) motion to
transfer,” id., the failure to seek transfer until 18 months after the movant knew of the facts
supporting transfer has been given significant consideration, see Peteet, 868 F.2d at 1436; see also
In re Wyeth, 406 F. App’x 475, 477 (Fed. Cir. 2010) (“Without reasonable promptness on the part
of the movant, a case proceeds, requiring the court to expend time and effort that might become
wasted upon transfer.”). Indeed, the purpose of § 1404(a) is “to facilitate just, convenient, efficient,

Court to periodically peruse each case on ECF to determine whether a motion might have been
missed.
See Judge Richard G. Kopf, “What to do when your summary judgment motion goes missing in
federal
court,”
Hercules
and
the
Umpire
(Sept.
13,
2013),
https://herculesandtheumpire.com/2013/09/13/what-to-do-when-your-summary-judgmentmotion-goes-missing-in-federal-court/ (last visited June 21, 2017, 2:00 PM) (“No federal judge
that I know of would ever punish a litigant or lawyer because a concern about delay was
respectfully voiced. The judge might be grumpy (read ‘embarrassed’), but you won’t be
‘punished.’”).
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and less expensive determination.” In re Nintendo of Am., Inc., 756 F.3d 1363, 1365 (Fed. Cir.
2014).
With only a month left before trial begins, the Court confronts rare and special
circumstances, to say the least. Notwithstanding the fact that Defendants only recently informed
the Court about their pending transfer motion, Defendants waited some 16 months after the case
was filed to seek transfer. Few if any facts allegedly supporting transfer were discovered in the
course of litigation. There was no excuse to wait so long to seek transfer, all while “discovery was
conducted, protective orders were issued, individual disclosures were turned over, infringement
and invalidity contentions were exchanged, and an extensive amount of documents were
produced.” Wyeth, 406 at 477. Not to mention the numerous hearings and Orders from the Court
during this time. Whether or not Defendants’ 16 month delay alone is enough to warrant denial of
transfer, it carries significant weight. See Peteet, 868 F.2d at 1436.
To make matters worse, Defendants did not file the transfer motion in a way that would
bring the motion to the Court’s attention. The motion was filed as a “sealed document” amongst a
busy docket sheet that at the time had over 120 entries. While the Court readily admits some fault
in not identifying the document as a motion, the Court cannot be required to regularly review
docket sheets in individual cases to make sure that parties have filed their motions correctly.
Motions sometimes fall through the cracks, and when that happens, the movant inevitably calls or
emails the Court with a polite reminder. That did not happen in this case. Defendants’ reminder
did not come until more than a year after the motion was filed, with trial less than two months
away. This too carries significant weight. See Peteet, 868 F.2d at 1436.
Finally, to the extent the Court is required to consider the relevant public and private
interest factors under the rare circumstances of this case, the Court finds on the basis of the record

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that existed at the time Defendants’ motion was filed that Defendants’ have not shown the District
of Maryland to be clearly more convenient than this district. See In re Volkswagen AG, 371 F.3d
201, 203 (5th Cir. 2004) (“Volkswagen I”); In re Volkswagen of Am., Inc., 545 F.3d 304, 315 (5th
.
Cir. 2008) (“Volkswagen II”).
CONCLUSION
Defendants only request the combined relief of severance, transfer, and stay. Under the
circumstances, transfer at this point is not warranted. Elbit has represented that it would agree to
dismiss the remaining two customer defendants. Hughes is indemnifying those defendants in any
event. Accordingly, there is no basis for severing and staying the customer suits in the absence of
a justifiable reason to transfer the case against Hughes to the District of Maryland. Accordingly,
Defendants’ motion to sever, transfer, and stay, Dkt. 130, is DENIED.
SIGNED this 3rd day of January, 2012.
SIGNED this 23rd day of June, 2017.

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ROY S. PAYNE
UNITED STATES MAGISTRATE JUDGE

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