Different Bases, Same Result in District of Minnesota Transfer Cases

March 19, 2018

By Katherine J. Rahlin

Moving East in the USAThe District of Minnesota continues to see many cases transferred to other districts after last year’s Supreme Court decision on venue in patent cases in TC Heartland v. Kraft Foods. Last month, in Cutsforth, Inc. v. LEMM Liquidating Co. and Regents of the University of Minnesota v. LSI Corporation and Avago Technologies, Judges Susan Nelson and Wilhelmina Wright both sent patent cases packing after concluding the defendants had not waived their right to object to venue. While both cases resulted in transfer, Judge Nelson analyzed the waiver issue under Rule 1 and Judge Wright did so under Rule 12.

After Transfer Under Rule 12, Federal Circuit Sends Cutsforth Back to Minnesota

February was not the first time a transfer motion was decided in the Cutsforth case. In August 2017, Judge Nelson found venue was improper under Rule 12 and transferred the case to the Western District of Pennsylvania. The court held the defendants had not waived their venue objections because TC Heartland provided an intervening change in the law and the objection was timely raised after the decision was published. But Cutsforth subsequently petitioned the Federal Circuit for a writ of mandamus, and the appeals court sent the case back to Minnesota. The Federal Circuit directed Judge Nelson to its concurrent decision in In re Micron Tech., Inc., which points to Rule 1 as an additional basis for evaluating the timeliness of a venue defense.

Judge Nelson Finds Transfer Still Appropriate Under Rule 1

Rule 1 provides courts with a broad discretion “to secure the just, speedy, and inexpensive determination of every action and proceeding.” In analyzing timeliness under Rule 1, Judge Nelson considered additional discretionary factors articulated by the Federal Circuit in In re Micron, including any alleged improper conduct by the defendants, prejudice to the parties and expended resources, and the closeness of the trial date. Even though the defendants did not raise the issue until after a summary judgment hearing, the court ultimately found none of these factors warranted a forfeiture of the defendants’ venue objections and thus still found transfer appropriate.

No Undue Delay in Filing of Transfer Motion in Regents

In Regents, Judge Wright also found venue was improper but analyzed the issue of waiver solely under Rule 12. The rule states that when a party files a Rule 12 motion but does not assert a venue defense, the venue defense is typically waived. However, if the venue defense was not available at the time the initial Rule 12 motion is filed, the defense is not waived. In Regents, Avago filed its transfer motion seven weeks after the TC Heartland decision. The Regents argued that Avago had forfeited its right to bring the motion due to undue delay.

In determining whether Avago’s motion was timely under Rule 12, Judge Wright considered the length of the delay as well as whether Avago submitted to venue through its conduct during that time period. The court found that a two month delay without more does not establish submission to venue by conduct or waiver of the defense. Given that there was no evidence that Avago submitted to venue by, for example, participating in discovery throughout the delay, the court held the venue defense was not untimely and had not been waived.

Rule 1 Provides More Leeway for Plaintiffs and Additional Hurdles for Defendants

While a court could find that transfer is required and timely raised under Rule 12, it could still exercise the broader discretion afforded to it under Rule 1 and decline to transfer the case. Thus, defendants should be ready to address any relevant issues beyond the timeliness factors of Rule 12 when bringing a transfer motion. On the flip side, the discretionary framework of Rule 1 could provide plaintiffs with an additional avenue to argue against transfer even when waiver under Rule 12 may not apply.

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