Federal Circuit Grants Mandamus, Transfers Case Out of E.D. of Texas

It was bound to happen sooner or later. Initiating patent litigation in East Texas--and keeping it there--just got a littler harder. Today, the CAFC granted an extraordinary writ of mandamus filed by TS Tech. USA Corporation, transferring a patent case out of the E.D. of Texas that was filed by Lear Corp., No. 2:07-CV-406. Applying Fifth Circuit law, Judge Rader wrote for the panel (Rader, Michel, and Prost), finding that the district court (Judge Ward) abused its discretion in an order refusing to transfer a case to Ohio pursuant to a motion under 28 U.S.C. 1404.

From the order:

"Despite correctly applying some of the factors, the district court’s § 1404(a) analysis contained several key errors. First, the district court gave too much weight to Lear’s choice of venue under Fifth Circuit law. While the plaintiff’s choice of venue is accorded deference, In re Horseshoe Entm’t, 337 F.3d 429, 434-35 (5th Cir. 2003), Fifth Circuit precedent clearly forbids treating the plaintiff’s choice of venue as a distinct factor in the § 1404(a) analysis.

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Second, the district court ignored Fifth Circuit precedent in assessing the cost of attendance for witnesses. It goes without saying that "[a]dditional distance [from home] means additional travel time; additional travel time increases the probability for meal and lodging expenses; and additional travel time with overnight stays increases the time which these fact witnesses must be away from their regular employment." In re Volkswagen AG, 371 F.3d 201, 205 (5th Cir. 2004) ("Volkswagen I"). Because it generally becomes more inconvenient and costly for witnesses to attend trial the further they are away from home, the Fifth Circuit established in Volkswagen I a "100-mile" rule, which requires that "[w]hen the distance between an existing venue for trial of a matter and a proposed venue under § 1404(a) is more than 100 miles, the factor of inconvenience to witnesses increases in direct relationship to the additional distance to be traveled." 371 F.3d at 204-05. The district court’s order here completely disregarded the 100-mile rule.

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Third, the district court erred by reading out of the § 1404(a) analysis the factor regarding the relative ease of access to sources of proof. As acknowledged in the district court’s order, the vast majority of physical and documentary evidence relevant to this case will be found in Ohio, Michigan, and Canada, and none of the evidence is located in Texas.

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Finally, the district court disregarded Fifth Circuit precedent in analyzing the public interest in having localized interests decided at home. As in Volkswagen I and Volkswagen II, there is no relevant connection between the actions giving rise to this case and the Eastern District of Texas except that certain vehicles containing TS Tech’s headrest assembly have been sold in the venue.

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The district court’s reason for concluding that the public interest factor disfavored transfer—that the citizens of the Eastern District of Texas had a "substantial interest" in having the case tried locally because several of the vehicles were sold in that venue, Lear, No. 2:07-CV-406, slip op. at 6—was unequivocally rejected by the Fifth Circuit in Volkswagen I and Volkswagen II. Here, the vehicles containing TS Tech’s allegedly infringing headrest assemblies were sold throughout the United States, and thus the citizens of the Eastern District of Texas have no more or less of a meaningful connection to this case than any other venue."