On December 3, 2013, the United States Supreme Court in a unanimous decision made an important ruling that supports forum selection clauses in interstate contracts. In Atlantic Marine Construction Co., Inc. v. United States District Court for the Western District of Texas, et. al. (12-929, December 3, 2012) the Court ruled that absent extraordinary circumstances, the district court should transfer a matter to the forum identified in a valid forum selection clause when a defendant files a 28 U.S.C. § 1404(a) motion to transfer. This opinion is important as it resolves a circuit split regarding the enforceability of forum selection clauses and establishes that the party opposing the forum selected in the contract carries the burden in motions to enforce forum selection clauses, and adds more certainty to parties in the interstate context.

Citing the parties’ forum selection clause, AMC sought to dismiss J-Crew’s complaint or, in the alternative, transfer it to a federal district court in Virginia. AMC relied on Rule 12(b)(3) of the Federal Rules of Civil Procedure, which permits dismissal for “improper venue,” and 28 U.S.C. § 1406(a), which requires dismissal or transfer of a lawsuit “laying in the wrong division or district.”In the alternative, AMC moved to transfer the lawsuit under 28 U.S.C. § 1404(a), which provides that “[f]or the convenience of the parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought or to any district or division to which all parties have consented.” In response, given that the parties’ subcontract did not contain a choice of law provision, J-Crew strategically dismissed its Federal Miller Act payment bond claim so that only its Texas-based claims remained.

In Atlantic Marine Construction Co., Inc. v. United States Dist. Ct. for W.D. Tex., No. 12-929, 2013 U.S. LEXIS 8775 (U.S. Dec. 3, 2013), the Supreme Court of the United States held unanimously that when parties have agreed contractually to a valid forum-selection clause, the analysis for a motion to transfer venue under 28 U.S.C. §1404(a) is adjusted as follows: (1) a court should give no weight to the plaintiff’s choice of forum; (2) a court should not consider arguments about the parties’ private interests; and (3) if a court transfers a case to the parties’ preselected venue, the transferee court will not carry with it the transferring venue’s choice-of-law rules. This adjusted Section 1404(a) analysis requires near absolute deference to the forum designated in a valid contractual forum-selection clause.

Thus, given that Tex. Bus. & Com. Code Ann. § 272.001 makes out-of-state forum selection clauses voidable at a contractor’s option, J-Crew argued that AMC’s motion to dismiss/transfer was moot because the federal court was required to enforce Texas public policy. In the alternative, even if Texas law did not control, J-Crew argued the judge should exercise his discretion under 28 U.S.C. § 1404 to keep the lawsuit in Texas notwithstanding the forum selection clause, given that § 1404 permits a court to consider “the convenience of parties and witnesses” and “the interest of justice” in deciding whether to transfer a case. Under a § 1404 analysis, the forum selection clause specifying venue in Virginia would be just one of many factors to be considered, along with the fact that all the work occurred in Texas, J-Crew and its subcontractors were located in Texas, and, as noted above, Texas public policy disfavors litigation anywhere else.

The most-cited example comes from the Darvocet MDL. SeeIn re Darvocet, Darvon and Propoxyphene Prods. Liab. Litig., 939 F. Supp. 2d 1376 (J.P.M.L 2013) (“Section 1332(d)(11)(C)(i) does not prohibit Section 1407 transfer of an action removed pursuant to CAFA's mass action provision so long as another ground for removal is asserted.”). The second method is to seek transfer not under section 1407, but instead under 28 U.S.C § 1404, the general venue transfer statute. This strategy also comes out of the Darvocet litigation, Romo v. McKesson Corp., No. ED 12-2036, 2015 WL 3622620 (C.D. Cal. June 9, 2015), and all we can say is that we wish we had thought of it ourselves.

The US Court of Appeals for the Federal Circuit issued a rare grant of two mandamus petitions directing the US District Court for the Western District of Texas to transfer the underlying patent infringement actions to the US District Court for the Northern District of California pursuant to 28 U.S.C. § 1404(a). In re: Samsung Elecs. Co., Ltd., Case Nos. 21-139, -140 (Fed. Cir. June 30, 2021) (Dyk, J.)Ikorongo Technology owned four patents directed to functionalities allegedly performed by applications run on the accused mobile products sold by Samsung and LG. Ikorongo Technology assigned to Ikorongo Texas—an entity formed only weeks before—exclusive rights to sue for infringement of those patents within specified parts of the state of Texas, including certain counties in the Western District of Texas, while retaining the rights to the patents in the rest of the United States.

Atlantic moved to dismiss the action under 28 U.S.C. § 1406(a) and Federal Rule of Civil Procedure 12(b)(3) for “wrong” or “improper” venue. In the alternative, Atlantic moved to transfer the action to Virginia pursuant to 28 U.S.C. § 1404(a) which provides that a district court may transfer a civil action for “the convenience of parties and witnesses” and to otherwise promote “the interest of justice.” The District Court denied Atlantic’s motion.

The Federal Circuit is charged with disposing of the mandamus petitions that regularly arise from decisions denying transfer under 28 U.S.C. § 1404(a) in Texas patent litigation. The Fifth Circuit, whose law the Federal Circuit applies in such cases, rarely issues precedential transfer opinions—not even one a year over the last fifteen years. Few, if any, bear on the kinds of evidence and arguments commonly offered as part of transfer disputes in modern patent litigation. InIn re TikTok, Inc., No. 23-50575, 2023 U.S. App. LEXIS 28880 (5th Cir. Oct. 31, 2023), the Fifth Circuit seized the opportunity to provide guidance on such evidence and arguments in the context of a high-tech intellectual property case not involving patent claims. Its opinion, issued October 31, 2023, will likely impact the availability of transfer for parties in popular Texas patent venues.The key takeaways from theTikTokopinion are:In software cases, if the defendant only allows certain engineers access to the relevant source code, the location of those engineers will likely bear heavily on the first private interest factor, “the ease of access to sources of pr

The Federal Circuit is charged with disposing of the mandamus petitions that regularly arise from decisions denying transfer under 28 U.S.C. § 1404(a) in Texas patent litigation. The Fifth Circuit, whose law the Federal Circuit applies in such cases, rarely issues precedential transfer opinions—not even one a year over the last fifteen years. Few, if any, bear on the kinds of evidence and arguments commonly offered as part of transfer disputes in modern patent litigation. In In re TikTok, Inc., No. 23-50575, 2023 U.S. App. LEXIS 28880 (5th Cir. Oct. 31, 2023), the Fifth Circuit seized the opportunity to provide guidance on such evidence and arguments in the context of a high-tech intellectual property case not involving patent claims. Its opinion, issued October 31, 2023, will likely impact the availability of transfer for parties in popular Texas patent venues.The key takeaways from the TikTok opinion are:In software cases, if the defendant only allows certain engineers access to the relevant source code, the location of those engineers will likely bear heavily on the first private interest factor, “the ease of access to sources of

Ten days prior to filing its initial complaints, Ikorongo Tech assigned to Ikorongo Texas the exclusive rights to sue for infringement for the patents at issue within specified parts of Texas, including the Western District of Texas. According to the Ikorongo companies, this meant that venue could lie only in Texas, the only place where one of the plaintiffs—Ikorongo Texas—had relevant patent rights.Samsung and LG both moved under 28 U.S.C. § 1404(a) to transfer the suits to the Northern District of California, asserting that 60% of the accused third-party applications were developed by parties in that district, that the majority of potential witnesses resided in that district, and that no potential witness resided in the Western District of Texas.The district court denied the motion, finding that Samsung and LG had failed to establish the threshold requirement under § 1404(a): that the suit “might have been brought” in the transferee district.