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Maxchief Investments Limited v. Plastic Development Group, LLC

United States District Court, E.D. Tennessee, Knoxville Division

December 12, 2016



          Thomas W. Phillips United States District Judge

         This matter is before the Court on Defendant's Motion to Transfer [doc. 17], Defendant's Brief in Support of the Motion [doc. 18], and Plaintiff's Response in Opposition to the Motion [doc. 21]. For the reasons herein, the Court will deny the motion.

         I. Background

         Headquartered in Southfield, Michigan, which is within the Eastern District of Michigan, [Guck Decl., doc. 19, ¶¶ 1, 4; Ballentine Decl., doc. 26, ¶ 4], Defendant Plastic Development Group, LLC (“Plastic Development”) describes itself as “a leading manufacturer and distributor of blow-molded and injection-molded plastic products, including banquet tables, ” [Guck Decl. ¶ 3]. Plaintiff Maxchief Investments Limited (“Maxchief”), which is based in Hong Kong, claims that Plastic Development's bi-fold tables are infringing its rights under United States Patent No. 6, 622, 644 (“the ‘644 Patent”), entitled “Collapsible Table.” [Compl., doc. 1, ¶¶ 4, 7, 9; ‘644 Patent, doc. 1-1, at 2]. As a result, it has brought this action under 35 U.S.C. § 271(a)-(c), (f). [Compl. ¶¶ 7-18]. Plastic Development now requests that this Court transfer this case to the Eastern District of Michigan under 28 U.S.C. § 1404(a). [Mot. to Transfer at 2].

         II. Section 1404(a)

         Venue is the “geographic specification of the proper court or courts for the litigation of a civil action that is within the subject-matter jurisdiction of the district courts in general.” 28 U.S.C. § 1390(a). “Change of venue in patent cases, like other civil cases, is governed by 28 U.S.C. § 1404(a).” In re TS Tech USA Corp., 551 F.3d 1315, 1319 (Fed. Cir. 2008). Section 1404(a) states that “[f]or the convenience of 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.” Section 1404(a)'s purpose is to protect litigants, witnesses, and the public from unnecessary expense and inconvenience. Inghram v. Univ. Indus. Gases, Inc., No. 1:05-CV-19, 2006 WL 306650, at *4 (E.D. Tenn. Feb. 8, 2006) (citing Van Dusen v. Barrack, 376 U.S. 612, 616 (1964)).

         A district court's “first concern” when considering a motion to transfer under § 1404(a) is “whether the action ‘might have been brought, ' in the first instance in the transferee district.” Weltmann v. Fletcher, 431 F.Supp. 448, 450 (N.D. Ohio 1976) (footnote omitted) (citing Cont'l Grain Co. v. FBL-585, 364 U.S. 19, 22 (1960)); see One StockDuq Holdings, LLC v. Becton, Dickinson & Co., 2013 WL 1136726, No. 2:12-cv-03037-JPM-tmp, at *2 (W.D. Tenn. Mar. 18, 2013) (“In determining whether to transfer a case under § 1404(a), a court must first find that the civil action could have been brought in the requested transferee district.” (citing Reese v. CNH Am. LLC, 574 F.3d 315, 320 (6th Cir. 2009))). If a court determines that an action might have been brought in the transferee district, the issue then “becomes whether transfer is justified under the balance of the language of Section 1404(a).” Jamhour v. Scottsdale Ins. Co., 211 F.Supp.2d 941, 945 (S.D. Ohio 2002); see McKee Foods Kingman v. Kellogg Co., 474 F.Supp.2d 934, 936 (E.D. Tenn. 2006) (“First, a defendant must identify an alternate forum in which venue is proper. Next, the defendant must show that the convenience of the parties and witnesses, and the interest of justice, warrant transfer.” (citations omitted)).

         Under § 1404(a), a district court has broad discretion to grant or deny a motion to transfer a case, Phelps v. McClellan, 30 F.3d 658, 663 (6th Cir. 1994), “according to an ‘individualized, case-by-case consideration of convenience and fairness, '” Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (quotation omitted). Although the federal courts do not have a “definitive formula” or “comprehensive list of factors” that they employ when making this case-by-case consideration of convenience and fairness, Inghram, 2006 WL 306650 at *5, they do consider various private and public interests, see Moses v. Bus. Card Express, Inc., 929 F.2d 1131, 1137 (6th Cir. 1991), which include:

(1) convenience of witnesses; (2) availability of judicial process to compel the attendance of unwilling or uncooperative witnesses; (3) location of the relevant documents or records, and the relative ease of access to sources of proof; (4) residence and convenience of the parties; (5) relative financial means of the parties; (6) locus of the operative facts and events that gave rise to the dispute or lawsuit; (7) each forum's familiarity with the governing law; (8) the deference and weight accorded to the plaintiff's choice of forum; and (9) trial efficiency, fairness, and the interests of justice based on the totality of the circumstances.

Ingraham, 2006 WL 306659 at *5 (citing Stewart Org., 487 U.S. at 29-30); see Reese, 574 F.3d at 320. This list of factors is not exhaustive, [1] and the Court may consider “all relevant factors that may make the litigation easy, less expensive, and expeditious.” Dorsey v. Hartford Life & Accident Ins. Co., No. 1:08-cv-243, 2009 WL 703384, at *3 (E.D. Tenn. Mar. 16, 2009). “If the court determines that the ‘balance between the plaintiff's choice of forum and defendant's desired forum is even, the plaintiff's choice of [forum] should prevail.'” Malibu Boats, LLC v. Nautique Boat Co., No. 3:13-CV-656-TAV-HBG, 2014 WL 202379, at *4 (E.D. Tenn. Jan. 16, 2014) (quotation omitted)).

         A. Might Have Been Brought

         An action “might have been brought” in the transferee district if (1) the court in that district has subject matter jurisdiction; (2) the defendant is amenable to service of process from that court; and (3) venue is proper there. McLouth Steel Corp. v. Jewell Coal & Coke Co., 432 F.Supp. 10, 11 (E.D. Tenn. 1976). First, because this action arises under a federal statute, 35 U.S.C. § 271(a)-(c), (f), the district court in the Eastern District of Michigan has subject matter jurisdiction over it. See 28 U.S.C. § 1331 (“The district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States.”). Second, based on Plastic Development's contention that venue is proper in the Eastern District of Michigan, [Def.'s Br. at 5; see Answer, doc. 16, at 9], Plastic Development concedes that it would be amenable to process in that district.

         The third element-the propriety of venue in the Eastern District of Michigan- necessitates a more in-depth analysis by the Court. Plastic Development argues that venue is proper in the Eastern District of Michigan because it is headquartered there. [Def.'s Br. at 5; see Ballentine Decl. ¶ 4]. Under 28 U.S.C. § 1400(b), a provision that governs venue for patent-infringement actions, venue is proper in the district where the defendant “resides.” Under 28 U.S.C. § 1391(c)(2), a general venue provision, a defendant that is a limited liability company, like Plastic Development, resides “in any judicial district in which [it] is subject to the court's personal jurisdiction with respect to the civil action in question, ” in general civil actions and patent-infringement actions. See VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1575, 1580 (Fed. Cir. 1990) (holding that § 1391(c) defines the term “resides” in § 1400(b)); Century Wrecker Corp. v. Vulcan Equip. Co., 733 F.Supp. 1170, 1173 (E.D. Tenn. 1989) (concluding that “Congress intended that § 1391(c) be applied to each and every venue provision found in Chapter 87” and that “§ 1400(b) must be construed in combination with § 1391(c)”); see also Ingram Barge Co. v. Ams. Styrenics, LLC, No. 3:15-cv-0507, 2015 WL 5228154, at *5 (M.D. Tenn. Sept. 8, 2015) (relying on§ 1391(c)(2) to determine the residence of a limited liability company); D&L Distrib., LLC v. Agxplore Int'l, LLC, 959 F.Supp.2d 757, 762 & n.3 (E.D. Pa. 2013) (noting that “[f]or entities, such as limited liability companies . . . venue is proper ‘in any judicial district in which any defendant is subject to the court's personal jurisdiction with respect to the civil action in question” (quoting§ 1391(c)(2))).

         For venue to be proper in the Eastern District of Michigan, Plastic Development must therefore be subject to personal jurisdiction in that district. Personal jurisdiction is “[a] court's power to exercise control over the parties.” Leroy v. Great W. United Corp., 443 U.S. 173, 180 (1979). The federal courts “ordinarily follow state law in determining the bounds of their jurisdiction over [the parties], ” Daimler AG v. Bauman, 134 S.Ct. 746, 753 (2014) (citation omitted), including parties that are corporations or similar entities, see Pennoyer v. Neff, 95 U.S. 714, 735 (1877) (“[A] State, on creating corporations or other institutions . . . may provide a mode in which their conduct may be investigated, their obligations enforced, or their charters revoked, which shall require other than personal service upon their officers or members.”), overruled on other grounds by Shaffer v. Heitner, 433 U.S. 186 (1977))).

         Although Michigan has no statute that addresses personal jurisdiction over limited liability companies, it does have statutes that deal with personal jurisdiction over corporations, see Mich. Comp. Laws §§ 600.711, 600.715, and “the personal jurisdiction rules governing corporations generally have been applied to limited liability companies as well, ” Magna Powertrain De Mexico S.A. De C.V. v. Momentive Performance Materials USA LLC, No. 16-11249, 2016 WL 3574652, at *2 (E.D. Mich. June 16, 2016) (citation omitted). A corporation's place of incorporation and principal place of business are both “paradig[m] . . . bases for general jurisdiction.” Daimler AG, 134 S.Ct. at 760 (quotation omitted); see Mich. Comp. Laws § 600.711(1) (stating that the existence of “[i]ncorporation under the laws of this state” constitutes a sufficient basis for the exercise of personal jurisdiction). A corporation's principal place of business is typically the location where it maintains its headquarters, Hertz Corp v. Friend, 559 U.S. 77, 92-93 (2010), a precept that this Court will extend to Plastic Development as a limited liability company, see Magna Powertrain, 2016 WL 3574652 at *2. Because Plastic Development is headquartered in the Eastern District of Michigan, [Ballentine Decl. ¶ 4], it is subject to the District Court for the Eastern District of Michigan's personal jurisdiction, and venue is therefore proper in the Eastern District of Michigan, see § 1391(c)(2); Union Guardian Tr. Co. v. Detroit Tr. Co., 72 F.2d 120, 121 (1934) (“The trust company is a Michigan corporation, with its principal place of business in the Eastern District of Michigan, and therefore a resident of that district.” (citation omitted)). Satisfied that this action might have been brought in the transferee district, the Court will now proceed to the second leg of the analysis: convenience and the interest of justice.

         B. Convenience

         Simply, one of the parties is likely to be inconvenienced to some extent by having to litigate in either the Eastern District of Tennessee or the Eastern District of Michigan, and the Court has to determine which of these venues is most appropriate by balancing the inconveniences that litigation in either district will pose to the parties. In doing so, it must keep in mind that at the outset a plaintiff's choice of venue receives greater weight than other factors. See Maberry v. Nuclear Fuel Servs., No. 3:13-CV-499, 2013 WL 5560318, at *2 (E.D. Tenn. Oct. 7, 2003) (noting that “the plaintiff's original choice of forum is normally given ‘considerable weight, ' with ‘the balance of convenience, considering all the relevant factors, [needing to] be strongly in favor of a transfer before such will be granted'” (quotation omitted)); see also W. Am. Ins. Co. v. Potts, No. 89-6091, 1990 WL 104034, at *2 (6th Cir. July 25, 1990) (“Foremost consideration must be given to the plaintiff's choice of forum.”); Weinstein v. Friedman, 859 F.Supp. 786, 788 (E.D. Pa. 1994) (“[A] plaintiff's choice of forum is a paramount consideration which should not be lightly disturbed and thus the court should hold defendants to establishing a strong preponderance in favor of transfer.” (citations omitted)). Unless a defendant shows by a preponderance of the evidence that convenience and the interest of justice “strongly favor” transfer, a plaintiff's choice of forum is generally decisive. Inghram, 2006 WL 306650 at *4 (quotations omitted); see Hoffman v. Blaski, 363 U.S. 335, 366 (1960) (“[T]he defendant must satisfy a very substantial burden of demonstrating where ‘justice' and ‘convenience' lie, in order to have his objection to a forum of hardship . . . respected.”); Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970) (“[U]nless the balance of convenience of the parties is strongly in favor of defendant, the plaintiff's choice of forum should prevail.” (citation omitted)); cf. Dowling v. Richardson-Merrell, Inc., 727 F.2d 608, 612 (6th Cir. 1984).

         1. Maxchief's Choice of Forum

         Plastic Development argues that Maxchief's choice of forum in the Eastern District of Tennessee is entitled to less deference because Maxchief is a foreign entity with its principal place of business in Hong Kong. [Def.'s Br. at 5, 8-9; see Compl. ¶ 4]. Maxchief responds by explaining its rationale for filing this case in the Eastern District of Tennessee, pointing out that its “decision was based at least in part on the location of material non-party fact witnesses” and “a longstanding relationship” with its attorneys who are located in Knoxville, Tennessee. [Pl.'s Resp. at 12]. Maxchief then goes on to recite the principle that a plaintiff's forum is entitled to substantial weight. [Id.].

         The question of whether Maxchief's choice of forum is entitled to the typical heft that accompanies a plaintiff's choice of forum, however, depends on whether this venue- the Eastern District of Tennessee-is Maxchief's home forum. See In re LinkAMedia Devices Corp., 662 F.3d 1221, 1223 (Fed. Cir. 2011) (observing that “[w]hen a plaintiff brings its charges in a venue that is not its home forum . . . that choice of forum is entitled to less deference” under § 1404(a) (citations omitted)); Maberry, 2013 WL 5560318 at *4 (noting that under § 1404(a) “courts have indicated that a plaintiff's choice [of forum] is less important when the plaintiff does not reside in the forum” (citation omitted)); cf. Sinochem Int'l Co. v. Malaysia Int'l Shipping Corp., 549 U.S. 422, 430 (2007) (recognizing that when a plaintiff brings a suit outside of its home forum, the presumption in favor of its choice of forum “applies with less force” (quotation omitted)); Dowling, 727 F.2d at 613-14 (noting that “foreign plaintiffs are not entitled to the same presumption in favor of their chosen forum” and that “a foreign plaintiff's choice deserves less deference” (quoting Piper Aircraft Co. v. Reyno, 454 U.S. 235, 256 (1981))).

         Maxchief's contention that it selected this venue because of the location of the non-party witnesses-an independent factor that pertains to the convenience of the witnesses themselves rather than to the sanctity of Maxchief's choice of forum-is therefore inconsequential to whether its choice of forum is entitled to traditional deference. As to Maxchief's attorneys, Maxchief does not state why their whereabouts in this forum should permit venue to endure here. Some courts have in fact held that “[t]he factor of 'location of counsel' is irrelevant and improper for consideration in determining the question of transfer of venue.” In re Horseshoe Entm't, 337 F.3d 429, 434 (5th Cir. 2003); see Solomon v. Cont'l Am. Life Ins. Co., 472 F.2d 1043, 1047 (3d Cir. 1973); Invivo Research, Inc. v. Magnetic Resonance Equip. Corp., 119 F.Supp.2d 433, 438 (S.D.N.Y. 2000). To the extent that Maxchief is proposing that the Court should consider its counsel's location as a factor that comes within the ambits of fairness, Maxchief does not explain why it should receive this charitable treatment over Plastic Development, whose counsel is in Michigan. Simply, because Maxchief is a foreign entity-which is registered in the British Virgin Islands and based in Asia, [Compl. ¶ 4]-it is not at home in this venue and its choice of forum is not imbued with the traditional deference tied to a plaintiff's choice of forum. The Court therefore will not treat Maxchief's choice of forum in this district with fidelity; instead, it will permit it to “give way” if the balance of the remaining factors strongly favor transfer by a preponderance of the evidence. Maberry, 2013 WL 5560318 at *4.

         2. The Convenience of the Witnesses

         The convenience of the witnesses is “often considered to be the most important factor when determining which forum is the most convenient.” KANL, LLC v. Savage Sports Corp., No. 3:13-CV-265-TAV-CCS, 2014 WL 1745443, at *3 (E.D. Tenn. Apr. 30, 2014) (quotation omitted); see In re Genentech, Inc., 566 F.3d 1338, 1343 (Fed. Cir. 2009) (acknowledging the convenience of witnesses as “probably the single most important factor in transfer analysis” (quotation omitted)); see also § 1404(a) (mentioning specifically “the convenience of parties and witnesses”). Under § 1404(a)'s multi-factored analysis, no rigid or catch-all definition of “convenience” exists; again, the analysis is a flexible one, conferring broad discretion on district courts to accommodate the varying circumstances that may distinguish one case from another. Cf. Piper Aircraft, 454 U.S. at 249-50 (“[W]e stated that we would not lay down a rigid rule to govern discretion, and that ‘[e]ach case turns on its facts.' If the central emphasis were placed on any one factor, the [inquiry of convenience] would lose much of the very flexibility that makes it so valuable.” (quoting Williams v. Green Bay & W. R.R. Co., 326 U.S. 549, 557 (1946))). The convenience of the witnesses, however, should not become a “battle of numbers, ” that is, a head count based on the number of witnesses that the parties are able to identify in their respective camps. LaCroix v. Am. Horse Show Ass'n, 853 F.Supp. 992, 1001 (N.D. Ohio 1994) (quotation omitted).

         Rather, a court's focus-and the movant's-under this factor should be on “the relevance and the materiality of the information” that the key witnesses will provide in the litigation. Genentech, 566 F.3d at 1343 (citation omitted); see Smith v. Kyphon, Inc., 578 F.Supp.2d 954, 963 (M.D. Tenn. 2008) (“[T]he party seeking the transfer must clearly specify the essential witnesses to be called and must make a general statement of what their testimony will cover” (citation omitted)); Thomas v. Home Depot, U.S.A., Inc., 131 F.Supp.2d 934, 937 (E.D. Mich. 2001) (recommending that “the parties should provide each witness's name and outline of what material testimony that witness would provide” (citations omitted)). The residence of each key witness is also important. Kendle v. Whig Enters., LLC, No. 2:15-cv-1295, 2016 WL 354876, at *7 (S.D. Ohio Jan. 29, 2016); Thomas, 131 F.Supp.2d at 937. On the whole, the party ...

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