In Re Hoffman-La Roche, Inc.

United States Court of Appeals for the Federal Circuit
Miscellaneous Docket No. 911
IN RE HOFFMANN-LA ROCHE INC.,
ROCHE LABORATORIES INC.,
ROCHE COLORADO CORP., and TRIMERIS, INC.,
Petitioners.
Stephen S. Rabinowitz, Fried, Frank, Harris, Shriver & Jacobson LLP, of New
York, New York, for petitioners Hoffmann-La Roche Inc., et al. With him on the
petition was Randy C. Eisensmith.
Rachel Krevans, Morrison & Foerster LLP, of San Francisco, California, for
respondent Novartis Vaccines and Diagnostics, Inc. With her on the response were
Matthew I. Kreeger and Jason A. Crotty. Of counsel on the response were Samuel F.
Baxter, McKool Smith, P.C., of Marshall, Texas; Rosemary T. Snider, of Dallas,
Texas; and John F. Garvish II, of Austin, Texas.
On Petition for Writ of Mandamus to the United States District Court for the Eastern
District of Texas
Chief Judge David Folsom
United States Court of Appeals for the Federal Circuit
Miscellaneous Docket No. 911
IN RE HOFFMANN-LA ROCHE INC.,
ROCHE LABORATORIES INC.,
ROCHE COLORADO CORP., and TRIMERIS, INC.,
Petitioners.
On Petition for Writ of Mandamus to the United States District Court for the Eastern
District of Texas in case no. 2:07-CV-507, Chief Judge David Folsom.
ON PETITION FOR WRIT OF MANDAMUS
Before LOURIE, FRIEDMAN, and GAJARSA, Circuit Judges.
GAJARSA, Circuit Judge.
ORDER
The petitioners, Hoffmann-La Roche Inc., Roche Laboratories Inc., Roche
Colorado Corp. and Trimeris, Inc., seek a writ of mandamus directing the United States
District Court for the Eastern District of Texas to vacate its orders denying petitioners’
motion to transfer venue, and to direct the court to transfer the case to the United States
District Court for the Eastern District of North Carolina. Novartis Vaccines and
Diagnostics, Inc. (“Novartis”) opposes. The court holds that the district court clearly
abused its discretion in denying petitioners’ motion to transfer venue pursuant to
28 U.S.C. § 1404(a). Accordingly, we grant petitioner’s petition for a writ of mandamus.
I. BACKGROUND
This petition stems from a patent infringement suit brought by Novartis against
the makers of Fuzeon®, a commercial HIV inhibitor drug. Scientists at Duke Medical
Center identified Fuzeon’s 36-amino acid peptide composition. In 1993, those scientists
formed Trimeris to develop the peptide into a possible therapy for HIV infection. Fuzeon
was developed and tested at Trimeris’ labs in Morrisville, North Carolina where relevant
books and documents are currently maintained.
Trimeris partnered with Roche to handle Fuzeon’s complex manufacturing
process and bring the drug to market. The active pharmaceutical ingredient for Fuzeon
is manufactured by Roche at its Colorado facilities. The active ingredient is further
processed by either Hoffmann-La Roche Inc. in Michigan or Hoffmann-La Roche Ltd. in
Switzerland. The drug is then packaged by Hoffmann-La Roche in New Jersey and
marketed nationwide by Hoffmann-La-Roche’s wholly owned subsidiary, Roche
Laboratories, Inc.
Novartis, a company headquartered in California, brought this suit in the Eastern
District of Texas, alleging that Fuzeon infringed its patent. After the parties submitted
their initial disclosures identifying potential witnesses, the petitioners moved to transfer
the suit to the Eastern District of North Carolina, contending that there were no
witnesses or any sources of proof within 100 miles of the Eastern District of Texas. The
petitioners further argued that the bulk of the key documentary evidence was present in
the Eastern District of North Carolina and that a trial in the Eastern District of North
Carolina would be far more convenient for Trimeris’ employee witnesses and four non-
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employee witnesses who reside within 100 miles of the district and all of whom said that
their attendance in the Eastern District of Texas would be inconvenient and unlikely.
Novartis opposed the motion, contending that the Eastern District of Texas was
an appropriate venue because the parties, sources of proof, and witnesses were spread
throughout the country. In their initial disclosures and motion papers, the parties
identified eighteen potential non-party witnesses: four from North Carolina, five from
California, three from Maryland, one from Missouri, two from Alabama, two from
Europe, and one, Dr. Nancy Chang, from Houston, Texas. The parties also identified
seven potential party witnesses: three from North Carolina, three from New Jersey, and
one from Colorado. Novartis also argued that the Eastern District of Texas was
convenient because 75,000 pages of documents relating to the patent were in the
Eastern District of Texas. These documents were sent electronically to Novartis’s local
counsel in the Eastern District of Texas.
The district court for the Eastern District of Texas denied the petitioners’ transfer
motion. The district court stated that this was a “decentralized” case given the various
locations of the potential witnesses and that transfer would merely shift inconveniences
from those witnesses closer to the Eastern District of North Carolina to those witnesses
closer to the Eastern District of Texas, i.e., witnesses in California, Missouri, Colorado,
and Texas. The district court further stated that transfer was unnecessary because only
four non-party witnesses resided in or near the transferee venue, which the district court
did not find to be a substantial number of witnesses. Regarding the ability to secure
attendance of witnesses, the district court explained that transfer was not favored
because it could subpoena Dr. Chang, who resides in Texas, to attend a trial. Next,
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regarding the sources of proof factor, the court found that transfer was not favored
because the sources of proof were spread around the country and Novartis had
transferred 75,000 pages of documents in electronic format to the district. Finally, the
district court stated that neither venue had a localized interest in this matter.
II. DISCUSSION
If the petitioners are correct that the Eastern District of North Carolina is indeed
clearly more convenient, it would be an inadequate remedy to require that they wait until
final judgment to raise that issue in this court on appeal. In re TS Tech USA Corp.,
551 .3d 1315, 1322 (Fed. Cir. 2008). Denial of transfer may be challenged by the filing
of a petition for a writ of mandamus if the petitioner demonstrates a “clear and
indisputable” right to relief. Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 35 (1980);
see also In re Volkswagen of Am., Inc., 545 F.3d 304 (5th Cir. 2008) (en banc) (granting
mandamus and directing the district court to transfer to a clearly more convenient
forum).
It is well established that under the law of the United States Court of Appeals for
the Fifth Circuit, which governs here, TS Tech, 551 F.3d at 1319, mandamus may issue
only upon a showing that the facts and circumstances underlying the district court’s
application of the public and private forum non conveniens factors 1 do not rationally
1
The “private” interest factors include: (1) the relative ease of access to
sources of proof; (2) the availability of compulsory process to secure the attendance of
witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical
problems that make a trial easy, expeditious and inexpensive. Piper Aircraft Co. v.
Reyno, 454 U.S. 235, 241 n.6 (1981). The “public” interest factors to be considered are:
(1) the administrative difficulties flowing from court congestion; (2) the local interest in
having localized interests decided at home; (3) the familiarity of the forum with the law
that will govern the case; and (4) the avoidance of unnecessary problems of conflicts of
law or in the application of foreign law. Volkswagen, 545 F.3d at 315.
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support the district court’s decision, i.e., the district court reached a “patently erroneous”
result or committed a “clear” abuse of discretion. Volkswagen, 545 F.3d at 312.
As in Volkswagen, TS Tech, and our most recent decision, In re Genentech, Inc.,
566 F.3d 1338 (Fed. Cir. 2009), there is a stark contrast in relevance, convenience, and
fairness between the two venues. The accused drug was developed and tested within
the Eastern District of North Carolina and documents and sources of proof remain there
despite Trimeris now having moved its headquarters to the Middle District of North
Carolina. Moreover, the Eastern District of North Carolina’s local interest in this case
remains strong because the cause of action calls into question the work and reputation
of several individuals residing in or near that district and who presumably conduct
business in that community. In addition, there are at least four non-party witnesses
residing within 100 miles of the Eastern District of North Carolina, all of whom could be
compelled for both deposition and trial testimony if the case were transferred to the
district. Furthermore, the district’s less congested docket suggests that the Eastern
District of North Carolina may be able to resolve this dispute more quickly.
Meanwhile, there appears to be no connection between this case and the
Eastern District of Texas except that in anticipation of this litigation, Novartis’ counsel in
California converted into electronic format 75,000 pages of documents demonstrating
conception and reduction to practice and transferred them to the offices of its litigation
counsel in Texas. But, if not for this litigation, it appears that the documents would have
remained a source of proof in California. Thus, the assertion that these documents are
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“Texas” documents is a fiction which appears to be have been created to manipulate
the propriety of venue. 2
This type of tactic was clearly counseled against in Van Dusen v. Barrack, 376
U.S. 612 (1964). There, the Supreme Court explained that Section 1404(a) “should be
construed to prevent parties who are opposed to a change of venue from defeating a
transfer which, but for their own deliberate acts or omissions, would be proper,
convenient and just.” Id. at 625. A plaintiff’s attempts to manipulate venue in
anticipation of litigation or a motion to transfer falls squarely within these prohibited
activities. The district court’s contrary position here has no legally rational basis and
prevents § 1404(a) from carrying “out its design to protect litigants, witnesses and the
public against unnecessary inconvenience and expense. . . .” Continental Grain Co. v.
The FBL-585, 364 U.S. 19, 27 (1960).
The district court also gave too much weight to its ability to compel Dr. Chang’s
attendance at trial. 3 Rule 45 of the Federal Rules of Civil Procedure provides the
2
The Supreme Court has not limited the § 1404(a) analysis to only post-
filing events. See Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988) (permitting
the district court to consider the effect of a forum-selection clause in a contract and the
parties relative bargaining power); but see id. at 35 (SCALIA, J., Dissenting) (asserting
that the statute’s language looks only to the present and future; "the Court inevitably
imports, in my view without adequate textual foundation, a new retrospective element
into the court's deliberations, requiring examination of what the facts were concerning,
among other things, the bargaining power of the parties and the presence or absence of
overreaching at the time the contract was made").
3
The parties dispute the likelihood that Dr. Chang and the North Carolina
witnesses will testify at trial. Because each witness has been identified as having
relevant and material information relating to this suit, we agree with the district court that
the convenience of all five witnesses should be assessed. See Genentech, 566 F.3d at
1343-44. We also note that in its reconsideration order, the district court stated that
“this Court may have subpoena power over all or some of the four ‘non-party’ witnesses
in North Carolina.” That statement was, however, based entirely on Novartis’s own
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district court with authority to compel Dr. Chang’s attendance at trial, even though she
does not reside within 100 miles of the Eastern District of Texas, because she is a
resident of Texas. Fed. R. Civ. P. 45(c)(3)(A)(ii). Yet, because Dr. Chang resides more
than 100 miles outside the Eastern District of Texas, the district court cannot compel her
attendance at a deposition within the district and any such subpoena issued to her is
subject to a motion to quash. Fed. R. Civ. P. 45(c)(3)(A)(ii). See also Volkswagen, 545
F.3d at 316 (finding that this factor favored transfer when the plaintiff’s chosen venue
lacks deposition subpoena power and any trial subpoenas would be subject to motions
to quash).
Citing Volkswagen, 545 F.3d at 316, the district court stated that the Fifth Circuit
weighs this factor “heaviest in favor of transfer” only when a transferee venue has
“absolute subpoena power.“ The district court, citing one of its earlier opinions, held
that there is “absolute subpoena power“ only when “all relevant and material non-party
witnesses reside within the subpoena power of a particular court.“ That position is
inconsistent with Volkswagen which defined “absolute subpoena power“ as subpoena
power “for both depositions and trial.“ Id.; see also Genentech, 566 F.3d at 1345(transferee venue’s subpoena power over a substantial number of witnesses favors
transfer).
In discussing its subpoena power, the district court did not assess convenience
and fairness to Dr. Chang and the other potential witnesses. As the Fifth Circuit
explained in Volkswagen, “[t]hat a district court can deny any motions to quash does not
speculation and Novartis has failed to provide any proof below or in its mandamus
papers supporting its argument that these witnesses are party witnesses or
contractually obligated to attend trial in Texas. In fact, all four North Carolina non-party
witnesses declared that they would likely not attend trial if it were held in Texas.
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address concerns regarding the convenience of parties and witnesses.” 545 F.3d at
316. The district court can only compel one potential non-party witness to testify at trial
and can only do so by inconveniencing her in having to travel more than 100 miles to
attend the trial. In contrast, the Eastern District of North Carolina can compel at least
four potential non-party witnesses for both trial and deposition and can do so without
similar inconvenience to those witnesses. Because the Eastern District of Texas does
not have absolute subpoena power over Dr. Chang, i.e., it does not have the subpoena
power to require that Dr. Chang attend both a trial and a deposition, and because the
Eastern District of North Carolina does have absolute subpoena power over at least four
non-party witnesses, the district court should have considered this factor in favor of
transfer. See Genentech, 566 F.3d at 1345.
The district court also disregarded Volkswagen and Genentech in holding that
the Eastern District of North Carolina had no more of a local interest in deciding this
matter than the Eastern District of Texas. While the sale of an accused product offered
nationwide does not give rise to a substantial interest in any single venue, TS Tech, 551
F.3d at 1321, if there are significant connections between a particular venue and the
events that gave rise to a suit, this factor should be weighed in that venue’s favor.
Genentech, 566 F.3d at 1347; Volkswagen, 545 F.3d at 317-18. The Eastern District of
North Carolina’s interest in this matter is self-evident. Meanwhile, it is undisputed that
this case has no relevant factual connection to the Eastern District of Texas. The
district court ignored this significant contrast, reasoning that “where a number of private
interest factors weigh heavily in one direction, that venue has a slightly greater local
interest,” but “[w]here, however, the factors do not weigh heavily in one direction of [sic]
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the other, no one venue has more or less a meaningful connection to the case than any
other.” By relying exclusively on how other forum non conveniens factors weigh, rather
than assessing the locale’s connection to the cause of action, the district court
essentially rendered this factor meaningless. Therefore, because the Eastern District of
North Carolina has a meaningful local interest in adjudicating the dispute and no
meaningful connection exists with the Eastern District of Texas, this factor also favors
transfer.
Accordingly,
IT IS ORDERED THAT:
The petition is granted and the district court is directed to promptly transfer the
case to the Eastern District of North Carolina.
FOR THE COURT
December 2, 2009 /s/ Jan Horbaly
Date Jan Horbaly
Clerk
cc: Stephen S. Rabinowitz, Esq.
Rachel Krevans, Esq.
Judge, U.S. District Court for the Eastern District of Texas
Clerk, U.S. District Court for the Eastern District of Texas
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