CAFC allows Venue Transfer to Texas

In re Volkswagen (Fed. Cir. 2008) (nonprecedential denial of mandamus)

In July 2007, MHL filed a patent infringement suit against VW in the Eastern District of Texas. Hoping to avoid that venue, the automobile company countersued in the Eastern District of Michigan. Although primarily a declaratory judgment action, VW included Michigan state law claims of unfair competition, defamation, trade disparagement, and abuse of process. In a preliminary hearing, the Michigan court declined its powers of supplemental jurisdiction over the state law claims and ordered the case be transferred to Texas. Because the transfer was not a final action, VW had no right to an appeal. Instead, it filed a writ of mandamus.

The Federal Circuit considered the writ, but ultimately declined to exercise authority over the case – finding that VW had not shown the importance of immediately deciding the issue. “A party seeking a writ bears the burden of proving that it has no other means of attaining the relief desired.”

In Texas, the 5th Circuit Court of Appeals just released its en banc opinion in another In re VW case. In that case, the 5th Circuit held that the E.D. Texas (Marshall) court had unreasonably refused to transfer VW’s case to a Northern District court in Dallas. The AIPLA filed a brief in that case, noting that the Eastern District of Texas rarely allows an out-transfer. From the AIPLA brief: “The routine filing of patent infringement complaints in the Eastern District of Texas that have essentially no connection to that district has been encouraged by the seeming reluctance of courts in that district to transfer cases under § 1404(a).” [Link]

In another venue case, Judge Patel of the Northern District of California noted that venue games are “perfectly legitimate”

“It is clear that both parties are attempting to achieve tactical advantage in the choice of a forum (which is a perfectly legitimate goal in an adversarial system of justice).” 

In Sorensen v. Phillips, Judge Patel transferred the case to the Southern District of California where a parallel proceeding was already underway (and stayed pending reexamination).

Notes:

 

Tags: ,

About Dennis Crouch

Law Professor at the University of Missouri School of Law. Co-director of the Center for Intellectual Property and Entrepreneurship.

17 thoughts on “CAFC allows Venue Transfer to Texas

  1. With the utmost respect bhr, you said “but that doesn’t mean society should encourage rules that routinely benefit one class of client over another.” How do slight differences (mostly only perceptual differences) in the character of a venue equate to “rules” that “routinely benefit” one “class” of client over another. Do you now or have you ever worked for one or more of: the government, National Organization of Women, EEOC?

    Your post is worded like a Title 5 complaint.

  2. The judiciary was “fixed” by the advent of the Federal Circuit. I would h8te to have been in practice before that. Talk about non-uniformity between jurisdictions and forum shopping…

    It just goes to show that no matter how much better things get, there is always a whiner in the bunch.

  3. “clear” and “clearly” are different. At least they taught us how to read in my law school. I guess while pursuing your “7-Eleven” J.D., you skipped the basic reading exercises. I guess our priorities were indeed a little out of whack since we focussed on the basics like “quantitative and critical analysis” and dropped the “empty, breathless rhetoric” part from our curriculum.

  4. BTW, this very strong en banc 5th Cir. criticism of E.D. TX for refusing transfers of cases filed there to much more appropriate district courts is particularly important because the legislative fix* for that in the patent reform bill died with its failure to pass this term.
    *[which shows how seriously this problem was viewed]

    P.S. I find it quite amazing how many such patent reform legislative proposals now appear to have been Judicially addressed instead in the past three years. (Undoubtedly not always to the liking of those who had opposed them in patent reform legislation). Will next up be long overdue CAFC clairfication of the hotly disputed issue of infringement damages “appportionment”? Or a Sup. Ct. challenge to the CAFC imposed “clear and convincing evidence” requirement?

  5. “Judging by the quality of AllSeeingEye’s comments his law school may not have had its priorities straight.”

    Some of the focus was lost after Falwell passed away.

  6. AllSeeingEye seems to think that I am criticizing lawyers for forum shopping – one might as well criticize a puppy for shitting on the floor. My comments were directed at the judiciary.

    “In my law school, you’d get thrown out of class for using the term “clearly.””

    I note that the only one who used the word “clear” was Judge Patel. Judging by the quality of AllSeeingEye’s comments his law school may not have had its priorities straight.

  7. Would any experts please comment on whether or not it may be too LATE [in spite of the unanimous en banc thrashing the 5th Cir. just gave the E.D. TX judges for refusing venue transfers] for most of the patent suit defendants already dragged into E.D. TX?
    Thank you.

  8. “We can replace jurors with robots too.”

    In essence we have. The robots are called DNA sequencing machines and many jury “findings” have been replaced by the contary findings of these robots.

    /nerd off

  9. You may want to note that, despite popular perception (which is most to blame for forum mobbing and perceptions of “predictable difference in outcome”), the E.D. does not always rule in favor of plaintiffs nor does it hear the greatest number of patent cases, a distinction that belongs, as best I can determine, to the Central District of California. There is nothing wrong with choosing, if possible, a venue where there may be more expertise, or where the judges are less likely to be overturned. I would not, as a plaintiff, want to flock to a forum having a plaintiff friendly reputation but a high reversal rate. The appellate system creates additional degrees of freedom and avenues of remedy that tend to take the edge off of most anti-forum shopping arguments.

  10. I always laugh at the breathless comments against forum shopping. Clearly forum shopping will always occur until our dispute resolution system is governed by HAL, the friendly robot. You might as well say that voir dire should be done away with while you’re at it. We can replace jurors with robots too. Maybe we can replace Mooney with a robot without the capability to blog.

    You don’t read the comments, but you have no problem posting your comments. How blessed we all are.

    As for the rest of my post, you get what you give…baby.

    Now bite me.

  11. To AllSeeingEye: You’re confusing zealous advocacy with social policy. Attorneys should zealously advocate for their clients by making choices that will benefit them, but that doesn’t mean society should encourage rules that routinely benefit one class of client over another. Patent plaintiffs flocking to E.D. Texas is a great indication of an inbalance in the system that needs to be addressed. While forum shopping may be a “perfectly legitimate” goal for an attorney, it is certainly not a legitimate goal for a dispute resolution system. *_Clearly_* the posters were referring to the systemic goals. And it’d be nice if Judges weren’t so cheery about the problem as well.

    The rest of your post reminded me why I usually don’t read the comments.

  12. bhr is “of course” right. Oh really?

    “There should not be predictable differences in outcomes by venue and if there are it utterly discredits the whole system.”

    This is like saying, “…there shouldn’t be shady lawyers out there and if there are, it utterly discredits the whole legal system,” or “…there shouldn’t be any “bad patents” out there, and if there are it utterly discredits the whole system,” or “…there shouldn’t be any “bad patents” out there, and if there are it utterly discredits the whole system,”

    All of the above statements are normative, utopian hogwash, if they weren’t it would discredit reality.

    The fact is no two venues are alike, and any attorney worth their salt would do their client a disservice by not taking advantage of any advantage offered by one jurisdiction over another.

    I always cringe when I hear people like bhr whining about forum shopping as if its some kind of profanity. No more so than looking for the best price for a pair of shoes.

    I also cringe when I hear know-it-alls like Mooney talking about “trivial” and “of course” and “clearly.” You can always tell the gunner by the proliferous use of one or more of the above terms.

    In my law school, you’d get thrown out of class for using the term “clearly.”

  13. bhr is right, of course, and it’s sad that Judge Patel couldn’t be bothered to note this basic fact while preaching the litigator gospel.

  14. “It is clear that both parties are attempting to achieve tactical advantage in the choice of a forum (which is a perfectly legitimate goal in an adversarial system of justice)”

    If the tactical advantage being sought is because there is some systemic and known predisposition in the outcomes in one of the jurisdictions (as opposed to, say, convenience arising from the location of witnesses) it is an argument for a scorched earth reform of the system. There should not be predictable differences in outcomes by venue and if there are it utterly discredits the whole system.

Comments are closed.