by Dennis Crouch
The 5th Circuit Court of Appeals recently decided an important convenient venue case. Granting TikTok’s mandamus petition to have its trade secret case transferred from W.D.Tex to N.D.Cal. The decision does not really break ground in the venue/mandamus debate, but does solidify the Federal Circuit’s parallel approach in patent cases out of the same district. In re TikTok Incorporated, — F.4th —-, 2023 WL 7147263 (5th Cir. 2023). Decision.
A Chinese company – Beijing Meishe Network Tech.Co. (“Meishe”) – sued TikTok for infringing its copyrights and misappropriating traded secrets associated with AV editing software. Although both companies are Chinese in origin, the plaintiffs sued in Judge Albright’s Waco Texas courtroom. Judge Albright is seen as tech-plaintiff friendly and so likely was the key driver for the filing location. Still, TikTok has numerous employees within the district, including 300 in the Waco area. Further, most of the actions associated with the underlying claims took place in China — and so the plaintiffs argued that there was no particular US court that would be clearly better. The reality though is that TikTok has most of its US employees in California.
Judge Albright denied TikTok’s motion to transfer venue and TikTok then petitioned the 5th Circuit for a writ of mandamus who has now granted the motion and ordered the case transferred to N.D. Cal.
28 U.S.C. § 1404(a) is the federal statutory provision that governs requests to transfer venue in civil cases. It applies particularly in situations where venue in the original court is “proper,” but still inconvenient or may otherwise frustrate justice. It provides that a district court may transfer a civil action to another federal district court if the court determines the transfer is warranted based on the “convenience of the parties and witnesses” and “the interests of justice.”
Under § 1404(a), district court generally has broad discretion to grant or deny a transfer motion. But, the party requesting transfer must at least show that convenience and justice factors weigh in favor of litigation proceeding in the proposed transferee district rather than the district where the action was initially filed. Although a district court has discretion, the Fifth Circuit has held that § 1404(a) motions should be granted if the movant demonstrates that the transferee venue is “clearly more convenient.” In re Volkswagen of Am., Inc., 545 F.3d 304 (5th Cir. 2008). This process requires weighing factors like the ease of access to sources of proof, availability of witnesses, and the connection between the venue and the events underlying the dispute. Prior Fifth Circuit decisions have emphasized that the analysis focuses on convenience, not on “any particular circumstance in isolation.” In re Radmax, Ltd., 720 F.3d 285 (5th Cir. 2013). Mandamus is designed as a rare mechanism similar to interlocutory appeal, and only permitted based upon “clear and indisputable” abuse of discretion. In TikTok, the appellate panel explained:
Mandamus is an extraordinary remedy that should be granted only in the clearest and most compelling cases. To obtain mandamus relief, TikTok must show (1) there are no other adequate means to attain the desired relief; (2) the right to issuance of the writ is clear and indisputable; and (3) the issuance of the writ is appropriate under the circumstances.
In re TikTok Inc., 2023 WL 7147263, at *3 (5th Cir. 2023) (internal citations omitted). In most situations, a district court error can only be appealed after final judgment. But, inconvenient venue (absent a greater due process violation) is generally not appealable post-trial and not a justification for a new trial. What that means is that mandamus is typically the only mechanism available to obtain reversal of an erroneous inconvenient venue decision.
The Fifth Circuit granted TikTok’s petition. It held that the district court clearly abused its discretion in analyzing multiple § 1404(a) factors. Two examples: (1) The district court erred in finding that access to sources of proof was neutral when the relevant source code and TikTok employees with access were located in California, not Texas. (2) The district court abused its discretion in weighing the cost of attendance for willing witnesses and court congestion against transfer.
The In re TikTok Decision Does Not Reflect a Change in Precedent
In my view, this new decision applies the Fifth Circuit’s established § 1404(a) jurisprudence, and also solidifies the Federal Circuit’s parallel patent cases that purport to apply Fifth Circuit law. There has been a paucity of 5th Circuit precedent on point, and so this helps back-fill that foundation.
On the one hand, the Fifth Circuit explained that mandamus should be rare. But, on the other hand, the panel still granted the mandamus and transfer. The insight then is that rare things happen — perhaps more often than we think. Here, the appellate court identified this case as an “unprecedented situation” with no connection between the plaintiff’s claims and the Western District of Texas. This, the case turns on the case’s unique lack of any connection between the forum and the dispute. As the court stated, “[o]ur holding today is restricted to the outlandish facts of this case.” The appellate panel did not mention that the plaintiffs had alleged that copyright infringement occurred in the W.D.Tex.
The Fifth Circuit’s decision in In re TikTok provides support for the Federal Circuit’s approach to venue transfer in patent cases. Like the Fifth Circuit, the Federal Circuit has shown a willingness to grant mandamus to transfer patent cases out of the Western District of Texas in situations where the convenience factors strongly favor another venue. Although the Federal Circuit applies Fifth Circuit precedent to the issue, there has been limited Fifth Circuit authority directly on point regarding venue transfer and mandamus in civil suits. The In re TikTok decision thus lends support to the Federal Circuit’s body of law.