Who’s on First? Personal Jurisdiction and the First-to-File Rule

by Dennis Crouch

In re Seattle SpinCo, Inc. (Fed. Cir. 2020)

(a) Wapp Tech first sued UK software company Micro Focus plc (MF PLC) in E.D. Tex. for infringing several of its patent, including U.S. Patent No. 9,971,678 (system for testing app for mobile device). (b) MF PLC then had a two fold response.  First, through its US subsidiaries (MF LLC and SpinCo), the company filed a declaratory judgment (DJ) action in D.Del. Then, the MF PLC moved for dismissal in the Texas case for lack of personal jurisdiction — arguing that it lacked minimum contacts with Texas. The Texas court agreed with MF and granted the motion-to-dismiss.  However, the court permitted Wapp to amend its complaint to add the MF US subsidiaries (MF LLC and SpinCo).  Following that amendment, the Texas case continues, and the Delaware case is stayed pending outcome of the transfer arguments.  The Federal Circuit has now denied mandamus — thus it looks like the case will stay in E.D. Tex.

SpinCo then petitioned the Federal Circuit for mandamus, providing the following timeline chart:

Which Venue is the Right One: The petition for mandamus focuses on what it calls the “first-to-file rule” — arguing that a case should ordinarily remain in the court that first had proper jurisdiction over the case.  Although the Texas case was filed first, the Texas court didn’t have proper jurisdiction until 2019 – a year after the Delaware case was filed.  On appeal, the Federal Circuit found that the law was not so clear:

[Petitioner] cites no appellate court case that has held that first-filed status is determined by which court first secures personal jurisdiction over the parties.

Nor are we aware of any appellate case that has spoken of the first-filed rule in such terms.

Because there was no clear authority compelling action, the Federal Circuit denied mandamus.

Are We Talking in Circles: It is not surprising that there are not appellate decisions on this issue. A writ of mandamus is going to be required in order to get an appellate decision, and the court here holds that no mandamus will be granted without there first being an appellate decision.  This type of prudential venue question is not appealable after final judgment — Any harm caused by an error is already done and will be a moot point by the time final judgment is reached in the case.


5 thoughts on “Who’s on First? Personal Jurisdiction and the First-to-File Rule

  1. 4

    I won on a similar issue in Dist Ct level years ago. Plaintiff named the wrong party. We DJ’d and argued no Art III standing, no case, so nothing for the amendment to relate back to, making our DJ first filed.

    The question should turn on whether the the judicial power was properly invoked by the plaintiff. As long as there is a case – even a defective case – then there is something for an amended complaint to relate back to. Right decision.

  2. 3

    I would think that this depends not on when the court acquired jurisdiction, but on when the parties were added. Petitioners were not party to the Texas litigation until 2019. Did Wapp Tech argue its amendment relates back to the original filing under 15(c)(1)(C)?

  3. 2

    I don’t think it’s right that you need a mandamus petition to get an appellate decision on the first-filed rule.

    Right after the court says “Nor are we aware of any appellate case that has spoken of the first-filed rule in such terms,” it cites the following string of cases, going back to 1824.

    See, e.g., Save Power Ltd. v. Syntek Fin. Corp., 121 F.3d 947, 950 (5th Cir. 1997)(emphasizing priority for the court that first “seized of the issues” (internal quotation marks and citation omitted)); Mann Mfg., Inc. v. Hortex, Inc., 439 F.2d 403, 407 (5th Cir. 1971) (explaining generally that “the court initially seized of a controversy should be the one to decide whether it will try the case”);see alsoPenn Gen. Cas. Co. v. Pennsylvania, 294 U.S. 189, 196 (1935) (giving preference to the court “whose jurisdiction and process are first invoked by the fil-ing of the bill”); Smith v. McIver, 22 U.S. (9 Wheat.) 532 (1824) (“In all cases of concurrent jurisdiction, the Court which first has possession of the subject, must decide it con-clusively.”); see also Cadle Co. v. Whataburger of Alice, Inc., 174 F.3d 599 (5th Cir. 1999) (refusing to incorporate a jurisdictional analysis into the rule)

    As far as I can tell from a few clicks on google scholar, none of these are mandamus cases. Some of these cases involve preliminary injunctions, which can be appealed immediately. In this case, if either Texas or Delaware had dismissed the case on the ground that the other jurisdiction is the first-filed-in jurisdiction, the parties could take could take a regular direct appeal from the dismissal without needing to worry about mandamus. I’m not sure how often a court dismisses rather than stays or transfers when it thinks it’s the second-filed-in juristiction. But the string cite in the opinion at least suggests that it happens enough that there can be a body of appellate precedent on the first-filer rule outside of the mandamus posture.

  4. 1

    Seems that the court could have decided the issue if it wanted to as it was an issue of first impression. It did so in In re BP Lubricants USA, Inc., 637 F.3d 1307, 1310, 1313 (Fed. Cir. 2011) (granting petition for mandamus and ordering district court to dismiss the false marking action with leave to replead because complaint did not meet Rule 9(b) and finding mandamus was proper since the applicability of Rule 9(b) to false marking claims was an issue of first impression – “Until today, this court has not decided whether Rule 9(b) applies to false marking cases or discussed the requisite level of pleading required. In Schlahenhaulf v. Holder, 379 U.S. 104 (1964), the Supreme Court approved the use of mandamus to decide a ‘basic and undecided’ question when the trial court similarly abused its authority in applying the Rules. In addition, trial courts have been in considerable disagreement on this issue, resulting in inconsistent results across the country. Thus, deciding this matter now presents an issue important to ‘proper judicial administration [.]’ The presence of these exceptional circumstances warrants deciding this issue before final judgment.”) Accord Schlagenhauf v. Holder, 379 U.S. 104, 110-11, 85 S. Ct. 234, 238-39, 13 L. Ed. 2d 152 (1964) (ruling that writ of mandamus to vacate order requiring plaintiff to submit to physical and mental examinations under F.R.C.P. Rule 35 could be an appropriate remedy where the case appeared to be the first case to test the Rule). See generally Annotated Patent Digest at § 43:88 Issue of First Impression.

    Guess this particular spin on the first to file rule does not arise with enough frequency for the Fed.Cir. to conclude its deserves consideration by mandamus .

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