Summary
transferring action because, inter alia, the defendant proved that the related actions involved overlapping witnesses
Summary of this case from Johnson v. Big Lots Stores, Inc.Opinion
CIVIL ACTION NO. 3:03-CV-1536-G
December 5, 2003
MEMORANDUM ORDER
Before the court is the motion of the defendant PNI Corporation ("PNI") to stay or enjoin this case until the conclusion of a related action already pending in the United States District Court for the Northern District of California or, alternatively, to transfer this case to that district pursuant to 28 U.S.C. § 1404(a), or to otherwise dismiss this case for refiling in that district. For the reasons discussed below, PNI's alternative motion to transfer is granted, and PNI's further motions to stay or enjoin and to dismiss are denied as moot.
I. BACKGROUND
This case involves a patent dispute between PNI and the Whistler Group, Inc. ("Whistler"). Plaintiff Whistler is a Texas corporation with its principal place of business in Bentonville, Arkansas. See Plaintiff the Whistler Group, Inc.'s Original Complaint ("Complaint") ¶ 4; Plaintiff the Whistler Group, Inc.'s Brief in Opposition to Defendant PNI Corporation's Motion to Stay or Enjoin or, Alternatively, to Transfer or Dismiss ("Opposition Brief") at 5. Defendant PNI is a California corporation with its principal place of business in Santa Rosa, California. See Memorandum of Points and Authorities in Support of Defendant PNI Corporation's Notice of Motion and Motion to Stay or Enjoin or, Alternatively, to Transfer or Dismiss ("Motion") at 2. Both corporations are in the business of designing and selling radar/laser detectors. See Opposition Brief at 2, 3; Motion at 1.On May 30, 2003, PNI filed suit in the United States District Court for the Northern District of California (the "California litigation"), alleging that Whistler had infringed and continued to infringe PNI's U.S. Patent No. 6,549,145 (issued Apr. 15, 2003) ("`145 Patent"). See PNI's Complaint for Patent Infringement at 1, No. C-03-2562, attached to Motion as Exhibit C; see also Motion at 1. Simply stated, PNI's `145 Patent is a combination radar/laser detector with multi-sensing technology that is programmed to provide a range of functions, including weather information and road conditions. See `145 Patent at 1, attached to Motion as Exhibit A; Reply at 5 ("multi-sensing technology"); Opposition Brief at 2 ("digital compass technology"). Nearly six weeks later, on July 8, 2003, Whistler filed the instant suit in the United States District Court for the Northern District of Texas (the "Texas litigation"), alleging that PNI had infringed and continued to infringe Whistler's U.S. Patent No. 5,990,821 (issued Nov. 23, 1999) ("`821 Patent"). See Complaint ¶¶ 7-13. Whistler's `821 Patent discloses a lens structure for improving the detection of a radar signal. See `821 Patent, attached to Complaint as Exhibit A; Opposition Brief at 2 ("speed detection systems") and 3 ("lens structure used for improving the detection of a radar signal"); Reply at 2. On September 22, 2003, PNI filed this motion to stay or enjoin this action pending resolution of the California litigation or, alternatively, to transfer this action to the Northern District of California or dismiss this action for refiling in that district. See generally Defendant PNI Corporation's Notice of Motion and Motion to Stay or Enjoin or, Alternatively, to Transfer or Dismiss.
II. ANALYSIS A. The Legal Standard
A district court may transfer any civil case "[f]or the convenience of parties and witnesses, in the interest of justice, . . . to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). The purpose of Section 1404(a) "is to prevent the waste `of time, energy and money' and `to protect litigants, witnesses and the public against unnecessary inconvenience and expense. . . .'" Van Dusen v. Barrack, 376 U.S. 612, 616 (1964) (quoting Continental Grain Company v. Barge FBL-585, 364 U.S. 19, 26, 27 (I960)). The decision to transfer a pending case is committed to the sound discretion of the district court. Jarvis Christian College v. Exxon Corporation, 845 F.2d 523, 528 (5th Cir. 1988); see also Balawajder v. Scott, 160 F.3d 1066, 1067 (5th Cir. 1998), cert. denied, 526 U.S. 1157 (1999); Caldwell v. Palmetto State Savings Bank of South Carolina, 811 F.2d 916, 919 (5th Cir. 1987). In exercising its discretion, the court considers "all relevant factors to determine whether or not on balance the litigation would more conveniently proceed and the interests of justice be better served by transfer to a different forum." Peteet v. Dow Chemical Company, 868 F.2d 1428, 1436 (5th Cir.) (internal quotations and citations omitted), cert. denied, 439 U.S. 935 (1989).
Generally, the plaintiff is afforded some deference in choosing a forum. Time, Inc. v. Manning, 366 F.2d 690, 698 (5th Cir. 1966); Lindloff v. Schenectady International, 950 F. Supp. 183, 185 (E.D. Tex. 1996). However, the plaintiff's choice of forum has reduced significance where most of the operative facts occurred outside the district. Lindloff, 950 F. Supp. at 185; see also Robertson v. Kiamichi Railroad Company, L.L.C., 42 F. Supp.2d 651, 656 (E.D. Tex. 1999). The plaintiffs forum choice is also given less weight when the plaintiff brings suit outside its home district. Hanby v. Shell Oil Company, 144 F. Supp.2d 673, 677 (E.D. Tex. 2001); Rock Bit International, Inc. v. Smith International, Inc., 957 F. Supp. 843, 844 (E.D. Tex. 1997); Alexander Alexander, Inc. v. Donald F. Muldoon Company, 685 F. Supp. 346, 349 (S.D.N.Y. 1988).
In deciding whether to transfer a case, the court should consider (1) the convenience of the parties, (2) the convenience of material witnesses, (3) the availability of process to compel the presence of unwilling witnesses, (4) the cost of obtaining the presence of witnesses, (5) the relative ease of access to sources of proof, (6) calendar congestion, (7) where the events in issue took place, and (8) the interests of justice in general. Minka Lighting, Inc. v. Trans Globe Imports, Inc., No. 3:02-CV-2538-G, 2003 WL 21251684 at *2 (N.D. Tex. May 23, 2003) (Fish, CJ); see also Gundle Lining Construction Corporation v. Fireman's Fund Insurance Company, 844 F. Supp. 1163, 1165 (S.D. Tex. 1994). Each of these factors will be analyzed to determine whether this case should be transferred to the United States District Court for the Northern District of California.
B. Factor (1): The Convenience of the Parties
It is clear that, as a matter of convenience and economics, PNI — a California corporation — would benefit from litigating this matter in its home district rather than halfway across the country in the Northern District of Texas. It is equally clear that, as a matter of convenience and economics, Whistler would benefit by retaining this action in the Northern District of Texas. Notwithstanding the benefits of having a home district advantage, a shift of inconvenience from one party to another normally will not justify transfer. See Medi USA, L.P. v. Jobst Institute, Inc., 791 F. Supp. 208, 211 (N.D. Ill. 1992).
The court is persuaded, however, by PNI's contention that "client economy would . . . be served by hearing both actions before the same tribunal." Reply at 6. In this case, not only are the parties to each suit identical, see Motion at 5; Reply at 7, 8; but see Opposition Brief at 2, 8, but, as discussed below, hearing both radar detector patent infringement cases before the same tribunal will conserve time, energy, and money for everyone involved. See Ferens v. John Deere Company, 494 U.S. 516, 531 (1990) ("[T]o permit a situation in which two cases involving precisely the same issues are simultaneously pending in different [d]istrict [c]ourts leads to the wastefulness of time, energy and money that § 1404(a) was designed to prevent.") (quoting Continental Grain, 364 U.S. at 26); see also Reply at 6. Given these considerations, the court concludes that the convenience of the parties weighs in favor of a transfer.
Whistler argues that "[t]he parties to the California and [Texas] litigation are different," because while PNI sued both Whistler and Wal-Mart Stores, Inc. ("Wal-Mart") in the California litigation, Whistler sued only PNI in the Texas litigation. Opposition Brief at 2, 8. However, in its reply, PNI produced a document entitled "Mutual Release" that released Wal-Mart from the California litigation. See Mutual Release, attached to Reply as Exhibit A. This document was signed by Wal-Mart on August 25, 2003, Whistler on September 29, 2003 (Whistler filed its Opposition Brief on October 4, 2003), and PNI on October 7, 2003. Id. With Wal-Mart's release from the California litigation, the parties to both suits are the same.
C. Factors (2), (3), and (4): The Convenience of Material Witnesses, Availability of Process, and Cost of Obtaining Witnesses
The convenience of the witnesses is often regarded as the most important factor to be considered in deciding whether to transfer venue. Travelers Indemnity Company of America v. National Union Fire Insurance Company of Pittsburgh, Pennsylvania, No. 3:02-CV-0585-G, 2002 WL 1575409 at *2 (N.D. Tex. July 16, 2002) (Fish, CJ); Gundle, 844 F. Supp. at 1166; Fletcher v. Southern Pacific Transportation Company, 648 F. Supp. 1400, 1401-02 (E.D. Tex. 1986). Of the witnesses, the convenience of the non-party witnesses is accorded the greatest weight. Travelers Indemnity, 2002 WL 1575409 at *2; Gundle, 844 F. Supp. at 1166. A party seeking a transfer for the convenience of witnesses "must specifically identify the key witnesses and outline the substance of their testimony." N2 Consulting, LLC v. Engineered Fastener Company, No. 3-02-CV-0308-BD, 2002 WL 31246770 at *3 (N.D. Tex. Oct. 2, 2002) (Magistrate Judge Kaplan) (internal quotations and citations omitted).Here, PNI alleges that "[m]ost, if not all," of its currently known material witnesses are located in California and hints that obtaining the presence of these witnesses for trial in Texas would be inconvenient and costly. See Motion at 2, 7. Although two potential witnesses identified by PNI — the inventors of the patents allegedly infringed — are California residents, see id. at 6-7, PNI fails specifically to identify any other potential party or non-party witness. See N2 Consulting, 2002 WL 31246770 at *3; AMS Staff Leasing v. Starving Students, Inc., No. 3-03-CV-0383-BD, 2003 WL 21436476 at *2 (N.D. Tex. Jun. 18, 2003) (Magistrate Judge Kaplan). Nor has PNI shown that transfer is necessary to compel the attendance of any witness, that any witness would be either unwilling or unable to travel to Texas for trial, or that the testimony of any witness is important to this case. See id. at *3.
If the inventors of the `145 Patent are employees of PNI, their convenience is entitled to less weight because PNI is able to compel their attendance at trial. See AMS Staff Leasing p. Starving Students, Inc., No. 3:03-CV-0383-BD, 2003 WL 21436476 at *3 (N.D. Tex. June 18, 2003) (Magistrate Judge Kaplan). Whether the inventors are non-party witnesses and their convenience is entitled to greater weight, the court cannot tell.
Despite PNI's failure specifically to identify the key witnesses and outline the substance of their testimony, the court concludes that the convenience of the parties weighs in favor of a transfer given the added convenience and economies arising from hearing the California and Texas litigations before the same tribunal. It does not appear that transfer would cause any additional inconvenience to Whistler's witnesses, who already reside outside of Texas — in Massachusetts and Arkansas. See Opposition Brief at 7. Moreover, given the relatedness of the patented devices at issue, the court is convinced that the witnesses in both cases will overlap — although the extent of overlap is unknown. See Reply at 4; Opposition Brief at 7.
D. Factors (5) and (7): Where the Events Took Place and Sources of Proof
In a patent infringement action, the preferred forum is that which is the center of gravity of the accused activity. Minka Lighting, 2003 WL 21251684 at *3; accord Laitram Corporation v. Hewlett-Packard Company, 120 F. Supp.2d 607, 609 (E.D. La. 2000); Proshot Golf, Inc. v. Leading Edge Technologies, Inc., No. 3:96-CV-1906-D, 1996 WL 673265 at *2 (N.D. Tex. Oct. 31, 1996). Indeed, "[t]he trier of fact ought to be as close as possible to the milieu of the infringing device and the hub of activity centered around its production." Minka Lighting, 2003 WL 21251684 at *3 (quoting S.C. Johnson Son, Inc. v. Gillette Company, 571 F. Supp. 1185, 1188 (N.D. Ill. 1983)). In finding that center of gravity, a district court should consider the location of a product's development, testing, research, and production. Id.; see also Laitram Corporation, 120 F. Supp.2d at 609; Proshot Golf, 1996 WL 673265 at *2. The location of the alleged infringer (here, PNI)'s — principal place of business, therefore, is often the critical and controlling consideration in adjudicating a motion to transfer venue. Id.; Houston Trial Reports, Inc. v. LRP Publications, Inc., 85 F. Supp.2d 663, 668 (S.D. Tex. 1999) (citations omitted).In the case sub judice, PNI's motion reveals that the events at issue took place in California and that its sources of proof, consisting principally of witnesses, prior art, and documentary evidence, are located in California. See Motion at 5-7. Whistler, however, offers no refuting evidence — perhaps because none exists — that the events giving rise to its cause of action took place in Texas or that its sources of proof are situated in Texas. In fact, the "center of gravity" of the accused activity — i.e., the place where product development, testing, research, and production as well as any marketing and sales decisions occurred — is most likely PNI's home offices in Santa Rosa, California. Consequently, the factors concerning the locus of the events in issue and access to sources of proof weigh in favor of transfer.
E. Factor (6): Calendar Congestion
Neither party has presented arguments related to the comparative calendar congestion ( i.e., the amount of time needed to adjudicate a civil dispute) in the Northern District of Texas or the Northern District of California. This factor thus has neutral weight in the analysis.
F. Factor (8): The Interest of Justice
"Piecemeal litigation in the complex and technical area of patent and trademark law is especially undesirable." Datatreasury Corporation v. First Data Corporation, 243 F. Supp.2d 591, 594 (N.D. Tex. 2003) (Magistrate Judge Kaplan) (citing Smiths Industries Medical Systems, Inc. v. Ballard Medical Products, Inc., 728 F. Supp. 6, 7 (D.D.C. 1989)). In such cases, the interest of justice may dictate transfer "to prevent an extravagantly wasteful and useless duplication of the time and effort of the federal courts by the simultaneous trial of two complex and elaborate cases involving substantially the same factual issues." General Tire Rubber Company v. Watkins, 373 F.2d 361, 362 (4th Cir.), cert. denied, 386 U.S. 960 (1967). By permitting two different courts to interpret the same patent claims, there is a heightened risk of inconsistent rulings which, in turn, promotes uncertainty and impedes the administration of justice. Datatreasury, 243 F. Supp.2d at 596. This untenable prospect favors resolving related patent cases in the same forum whenever possible, see id. at 594, 596, even if the convenience of the parties and witnesses calls for a different result. See 15 WRIGHT, MILLER COOPER, FED. PRAC PROC.2d § 3854 at 439-40 (1986) (suggesting that "the interest of justice may be decisive in ruling on a transfer motion even though the convenience of the parties and witnesses point in a different direction.").
PNI argues that "the interest of justice" requires transferring this case to California where a related patent infringement action is currently pending. See Motion at 7, 8; Reply at 3. The court agrees. See, e.g., Jarvis Christian College, 845 F.2d at 528-29 (concluding that the existence of related litigation in a transferee court is a factor that weighs strongly in favor of transfer). Because the California and Texas litigations involve overlapping core issues, common subject matter, and closely related questions, this Texas litigation should be transferred to the Northern District of California. See Texas Instruments, Inc. v. Micron Semiconductor, Inc., 815 F. Supp. 994, 997 (E.D. Tex. 1993) ( citing Superior Savings Association v. Bank of Dallas, 705 F. Supp. 326, 328-329 (N.D. Tex. 1989)). Having reviewed arguments from both parties, the court concludes that the similarities in these two litigations are prevalent: (1) both involve exactly the same parties; (2) both involve an examination of prior radar detector art and the validity and scope of similar patents; (3) both will involve overlapping witnesses; and (4) both will involve substantially related questions of fact and, correspondingly, overlapping discovery. See Motion at 5; Reply at 3; but see Opposition Brief at 6. Where such substantial similarities exist, the parties and witnesses, the public, and the courts are entitled to be free from the waste of duplicative litigation.
Whistler argues that because the California and Texas litigations involve "distinct patents that cover distinct technologies," they do not require resolution in the same venue. Opposition Brief at 2. Whistler, however, fails to provide supporting evidence and legal authority to validate this argument. In fact, that actions be identical or duplicative is not a prerequisite to transfer. On the contrary, the court need only determine that "the two actions involve closely related questions or common subject matter, or that the core issues substantially overlap." Texas Instruments, 815 F. Supp. at 997. Having thus concluded, the court finds that the interests of justice would be best served by a transfer.
Transferring this Texas litigation to the Northern District of California will serve the objectives of efficient litigation and substantive justice. See Sundance Leasing Company v. Bingham, 503 F. Supp. 139, 140 (N.D. Tex. 1980) ("Considerations of judicial economy and efficiency clearly support a policy of having substantially similar matters litigated before the same tribunal."). The district court in Levitt v. State of Maryland Deposit Insurance Fund Corporation, 643 F. Supp. 1485 (E.D.N.Y. 1986) stated:
[t]ransfer of an action to a district where a related case is pending enables more efficient conduct of pretrial discovery, saves witnesses time and money in both trial and pretrial proceedings, and avoids duplicative litigation and inconsistent results, thereby eliminating unnecessary expense to the parties while at the same time serving the public interest.Id. at 1493 (citations omitted). Similarly here, because there is pending in the Northern District of California a suit pertaining to same technology and similar patents, this infringement action could be more efficiently managed in that venue, see Optical Recording Corporation v. Capitol-EMI Music, Inc., 803 F. Supp. 971, 973-74 (D. Del. 1992), and the risk of inconsistent results from both litigations would be avoided. See Datatreasury, 243 F. Supp.2d at 596.
Whistler asserts that a transfer is inappropriate because it would "introduce additional delay into both proceedings at the expense of judicial economy." Opposition Brief at 8. But much work remains before this case can proceed to trial, including additional discovery, motion practice, and judicial construction of the patents-in-suit. See, e.g., A.P.T., Inc. v. Quad Environmental Technologies Corporation, Inc., 698 F. Supp. 718, 723-24 (N.D. Ill. 1988) (requiring transfer to "conserve judicial resources and provide for the efficient adjudication of complex litigation due to the possibility of consolidating both discovery and trial"). Although a case management order has been issued and initial disclosures have been exchanged in the California litigation, see Opposition Brief at 8-9, "[n]either the passage of time nor involvement in discovery is a reason alone for denying transfer." Mag Instrument, Inc. v. Sears Roebuck Company, No. H-8-2216, 1990 WL 124071 at *3 (S.D. Tex. Jan. 31, 1990). Moreover, although delay may be a factor, it is incumbent upon Whistler to show that it will be prejudiced by such a transfer. Id. at *4. Whistler has not made such a showing.
"The preference for honoring a plaintiff's choice of forum is simply that, a preference; it is not a right." E. I. Dupont de Nemours Company v. Diamond Shamrock Corporation, 522 F. Supp. 588, 592 (D. Del. 1981). Thus, although Whistler's forum choice is clearly a factor to be considered in the venue transfer analysis, "in and of itself it is neither conclusive nor determinative." In re Horseshoe Entertainment, 337 F.3d 429, 434 (5th Cir. 2002) (citing Garner v. Wolfinbarger, 433 F.2d 117, 119 (5th Cir. 1970)), cert. denied, ___ S.Ct. ___, 2003 WL 22289876 (Dec. 1, 2003); Shoemake v. Union Pacific Railroad Company, 233 F. Supp.2d 828, 830 (E.D. Tex. 2002). Here, Whistler's choice of forum is given less weight because few, if any, of the operative facts appear to have occurred within this district. See, e.g., Minka Lighting, 2003 WL 21251684 at *4; Dearing v. Sigma Chemical Company, 1 F. Supp.2d 660, 665 (S.D. Tex. 1998); Quicksilver, Inc. v. Academy Corporation, No. 3:98-CV-1772-R, 1998 WL 874929 at *4 (N.D. Tex. Dec. 3, 1998). Consequently, Whistler's choice of forum is not enough to outweigh the balance of the other factors discussed above that favor a transfer to the Northern District of California. See Shoemake, 233 F. Supp.2d at 830-31; Hanby, 144 F. Supp.2d at 677; Robertson, 42 F. Supp.2d at 656; Rock Bit, 957 F. Supp. at 844.
III. CONCLUSION
PNI has met its burden of demonstrating that "the balance of convenience and justice" weighs heavily in favor of transfer. Minka Lighting, 2003 WL 21251684 at *4 (quoting State Street Capital Corporation v. Dente, 855 F. Supp. 192, 197 (S.D. Tex. 1994)). Litigation of all issues arising under the `145 and `821 patents in one place, before one court, would better serve the ends of efficient litigation and substantial justice. Accordingly, PNI's alternative motion to transfer venue is GRANTED and this action is TRANSFERRED, pursuant to 28 U.S.C. § 1404(a), to the United States District Court for the Northern District of California.
In light of this disposition, PNI's motions to stay or enjoin this case or, alternatively, to dismiss this case for refiling, are DENIED as moot.