Federal Circuit Reverses the Eastern District of Texas Twice More on Venue
Four times over the course of less than a year, the Federal Circuit has reversed a decision by the Eastern District of Texas (EDTex) denying a motion to transfer venue under 28 U.S.C. § 1404(a). Posts on the first two decisions, In re: TS Tech USA Corp., 551 F.3d 1315 (Fed. Cir. 2008) and In re: Genentech, 566 F. 3d 1338 (Fed. Cir. 2009), can be found here and here.
Last month, the Federal Circuit issued two more writs of mandamus reversing the EDTex for refusing to transfer a patent case to a different venue. See In re: Nintendo Co., Ltd., Misc. No. 914, 2009 U.S. App. LEXIS 27647 (Fed. Cir. Dec. 17, 2009); In re: Hoffman-La Roche Inc., Misc. No. 911, 2009 U.S. App. LEXIS 26244 (Fed. Cir. Dec. 2, 2009).
In Hoffman, the Court reversed a decision by EDTex Chief Judge Folsom denying transfer of a pharmaceutical patent case to the Eastern District of North Carolina.
- The Federal Circuit rejected the reasoning (which can be found in numerous EDTex cases) that where a case is “decentralized” because witnesses and documents are located across the country, transfer should be denied.
- The court held that the district court improperly ignored the significant contrast between the strong connections the cause of action had with North Carolina, where the accused drug was developed, and the Eastern District of Texas, which had no factual connection to the case.
- The Court also held that a plaintiff could not manipulate venue by transferring documents to litigation counsel in the EDTex, calling the assertion that these were “Texas” documents a “fiction” and characterizing the district court’s ruling as having “no legally rational basis.”
In Nintendo, the Court used similarly strong language in reversing a denial of transfer by Judge Davis, holding that “in a case featuring most witnesses and evidence closer to the transferee venue with few or no convenience factors favoring the venue chosen by the plaintiff, the trial court should grant a motion to transfer.”
- Unlike Judge Folsom in Hoffman-La Roche, Judge Davis acknowledged that the Western District of Washington had a strong interest in the dispute, while the EDTex did not.
- As in Hoffman-La Roche, the Federal Circuit rejected the reasoning that the EDTex was as convenient as any other forum because witnesses and documents were located in several locations. Instead, the Court should have more strongly considered the convenience of witnesses who must travel farther to reach the EDTex and the location of the Defendant’s documents in Washington.
- The Federal Circuit also chided the EDTex court for glossing over a record “without a single relevant factor favoring the plaintiff’s chosen venue.”
Despite the strong messages that the Federal Circuit continues to send regarding venue motions in the EDTex, it remains to be seen whether the district judges will listen. Hoffman-La Roche and Nintendo will be helpful to sole defendants sued in the EDTex, but transfer will continue to remain difficult where there are multiple defendants in different forums.
