DocketNumber: 2018-130
Judges: Prost, Taranto, Wallach
Filed Date: 5/9/2018
Status: Precedential
Modified Date: 10/18/2024
ORDER
HTC Corporation petitions for a writ of mandamus directing the United States District Court for the District of Delaware to (a) vacate its December 18, 2017 order denying-in-part HTC Corporation's motion to dismiss for improper venue under Federal Rule of Civil Procedure 12(b)(3) ; and (b) dismiss the complaint against HTC Corporation. 3G Licensing, S.A., Orange S.A., and Koninklijke KPN N.V. (collectively, "Respondents") oppose.
In January 2017, Respondents filed their patent infringement suit against HTC Corporation, a Taiwanese corporation with its principal place of business in Taiwan, and its wholly owned U.S. based subsidiary, HTC America, Inc., a Washington corporation with its principal place of business in Seattle, Washington. In June 2017, after Respondents filed their second amended complaint, HTC Corporation and HTC America filed a motion to dismiss for improper venue pursuant to Rule 12(b)(3) or, in the alternative, to transfer the case to the United States District Court for the Western District of Washington pursuant to
In its December 18, 2017 order, the district court found that venue was not proper as to HTC America but was proper as to HTC Corporation. App. 1-7. Following *1352the order, Respondents voluntarily dismissed their suit against HTC America without prejudice. HTC Corporation now files this mandamus petition seeking dismissal for improper venue.
DISCUSSION
A writ of mandamus is a drastic remedy available only in extraordinary circumstances. Such a writ may issue only where the following conditions are met: (1) the petitioner must have no other adequate means to attain the relief desired; (2) the petitioner must demonstrate a "clear and indisputable" right to the issuance of the writ; and (3) "even if the first two prerequisites have been met, the issuing court, in the exercise of its discretion, must be satisfied that the writ is appropriate under the circumstances." Cheney v. U.S. Dist. Court for D.C. ,
I
A party seeking mandamus must demonstrate that it has "no other adequate means to attain the relief [it] desires." Cheney ,
The mandamus petition in this case is based on the denial of a motion to dismiss under Rule 12(b)(3) or, alternatively, to transfer under § 1406(a), for improper venue.
Unlike a defendant challenging the denial of a § 1404(a) transfer motion,
Although Petitioner argues that it should "not be forced to litigate this case in an improper venue through a final judgment before it can contest venue via appeal," Pet'r's Br. 6, the Supreme Court rejected this same argument in Bankers Life , explaining that "the extraordinary writs cannot be used as substitutes for appeals, even though hardship may result from delay and perhaps unnecessary trial." Bankers Life ,
To be sure, while an appeal will usually provide an adequate remedy for a defendant challenging the denial of an improper-venue motion, there may be circumstances in which it is inadequate. We need not articulate such circumstances here, as Petitioner's only argument is that it should be able to avoid the inconvenience of litigation by having this issue decided at the outset of its case. This is insufficient, and there is no other indication that Petitioner cannot be afforded adequate relief on appeal.
II
A party seeking issuance of a writ of mandamus must also demonstrate that the right to the writ is clear and indisputable. Cheney ,
The district court in this case relied on Brunette Machine Works, Ltd. v. Kockum Industries, Inc. ,
A
The issue of whether the venue laws protect alien defendants is colored by a long statutory and judicial history, including two cases in which the Supreme Court directly addressed this same question.
As explained in Brunette , the origins of the venue laws extend back to the Judiciary Act of 1789. Brunette ,
[N]o civil suit shall be brought before [district or circuit] courts against an inhabitant of the United States , by any original process in any other district than that whereof he is an inhabitant, or in which he shall be found at the time of serving the writ....
*1355Act of Sept. 24, 1789, ch. XX, § 11,
The Court addressed this background principle (referred to for convenience as the alien-venue rule) in In re Hohorst , which involved the Hamburg-American Packet Company, a German corporation, as defendant.
[N]o civil suit shall be brought before [district or circuit] courts against any person by any original process or proceeding in any other district than that whereof he is an inhabitant....
Act of Mar. 3, 1887, ch. 373, § 1,
In Brunette, the Supreme Court reaffirmed its reasoning in Hohorst , despite the intervening enactment of the Judicial Code of 1948, which included then-§ 1391(d) and § 1400(b) (the patent venue statute). Brunette ,
The Court upheld the alien-venue rule, despite the existence of § 1400(b), emphasizing the need to avoid a venue gap, where the federal courts have jurisdiction, but where no proper venue to exercise that jurisdiction exists. Brunette ,
Moreover, emphasizing its treatment of the alien-venue rule as a background principle in Hohorst , the Court noted that "in the 79 years since Hohorst was decided, Congress has never given the slightest indication that it is dissatisfied with the *1356longstanding judicial view that the 1789 language continues to color the venue statutes, with the result that suits against aliens are outside the scope of all the venue laws."
B
Despite the Court's having affirmed this overriding principle on two separate occasions, Petitioner now contends that § 1400(b) should apply to it because Congress abrogated Brunette -and the alien-venue rule-through the Federal Courts Jurisdiction and Venue Clarification Act of 2011 ("the 2011 amendments"). Pet'r's Br. 22.
In the 2011 amendments, Congress revised § 1391(a)-(d), among other subsections. As amended, § 1391(c) reads:
(c) Residency. -For all venue purposes-
(1) a natural person, including an alien lawfully admitted for permanent residence in the United States, shall be deemed to reside in the judicial district in which that person is domiciled;
(2) an entity with the capacity to sue and be sued in its common name under applicable law, whether or not incorporated, shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court's personal jurisdiction with respect to the civil action in question and, if a plaintiff, only in the judicial district in which it maintains its principal place of business; and
(3) a defendant not resident in the United States may be sued in any judicial district, and the joinder of such a defendant shall be disregarded in determining where the action may be brought with respect to other defendants.
As explained below, we believe Congress did not intend the 2011 amendments to upend the centuries-old understanding that the venue laws (as opposed to requirements of personal jurisdiction) do not restrict the location of suits against alien defendants, unless Congress has specifically provided otherwise. First, as the Court held in Brunette , § 1400(b) itself was not intended to apply to alien defendants. Second, nothing in the 2011 amendments to § 1391 changed this understanding of § 1400(b). Third, against the historical background leading up to and including Brunette , the 2011 amendments do not sufficiently indicate an intent to make venue protections applicable to alien defendants, with a limited exception not relevant here-applicable to natural persons who are aliens but have been lawfully admitted to the United States for permanent residence. Fourth, Petitioner's contrary view would make some foreign corporations that infringe a U.S. patent unamenable to domestic suit even though personal jurisdiction exists-a gap we cannot conclude Congress created.
At the outset, the patent venue statute was not intended to supplant the longstanding rule that the venue laws do not protect alien defendants. Brunette ,
In Brunette , the Court rejected the argument that Congress intended the patent venue statute to regulate venue in patent suits against aliens.
Since the general venue statutes did not reach suits against alien defendants, there is no reason to suppose the new substitute in patent cases was intended to do so. Indeed, the only glimmer of evidence of legislative intent points in the other direction.... [I]n 1948 [when Congress codified § 1391(d) ], Congress was apparently quite content to leave suits against alien defendants exempt from the venue statutes, in patent cases as in all others .
The Court's recent decision in TC Heartland does not alter this conclusion. See TC Heartland LLC v. Kraft Foods Grp. Brands LLC , --- U.S. ----,
[I]n § 1391(d) Congress was stating a principle of broad and overriding application, and not merely making an adjustment in the general venue statute, as this Court found Congress had done in Stonite and Fourco . The principle of § 1391(d) cannot be confined in its application to cases that would otherwise fall under the general venue statutes. For § 1391(d) is properly regarded, not as a venue restriction at all, but rather as a declaration of the long-established rule that suits against aliens are wholly outside the operation of all the federal venue laws, general and special.
Given that § 1400(b) itself does not provide an exception to the alien-venue rule, we next ask whether the 2011 amendments to the general venue statute somehow altered the meaning of § 1400(b) so as to change how the alien-venue rule applies in patent cases. As Petitioner concedes, "absent from the House Judiciary Committee report is any discussion or even mention of patent cases such as Fourco or Brunette and the interplay between those decisions and the amendments to the general venue statute." Pet'r's Br. 20.
3
Petitioner's final argument is that the reasoning underlying Brunette -that aliens fall outside the venue laws entirely-has been abrogated by the 2011 amendments. Pet'r's Br. 22. Therefore, the argument goes, because the set of venue laws, general and special, now apply to alien defendants, and because § 1400(b) is the sole and exclusive provision governing patent venue, HTC should be able to use § 1400(b) as a venue defense. In other words, HTC argues that Congress intended to discard the well-established alien-venue rule in favor of generally bringing alien defendants, including foreign corporations like the defendants in Hohorst and Brunette , within the protection of the venue laws. We find no such intent. The textual changes made to § 1391 in 2011 no more support an inference of the suggested radical displacement of the Hohorst / Brunette rule than did the textual changes TC Heartland held inadequate to displace the Fourco rule.
At the outset, it is important to note the broad implications of Petitioner's argument. A holding that the 2011 amendments altogether discarded the alien-venue rule would extend far beyond patent law and would impact other types of civil cases. Given that this would be a sea change in federal venue law, we expect Congress would make its intent clear, if indeed this was its intent.
Congress made only one clear change to the alien-venue rule in 2011. That was only a modest adjustment limited to natural persons. Congress did not clearly make-and did not otherwise express an intent to make-a change to the rule as it affects foreign corporations.
In light of certain inconsistencies in how the term "resides" had been interpreted, *1359Congress enacted the current versions of § 1391(c)(1)-(2) to include express definitions of residency for natural persons and for unincorporated entities (in addition to residency for corporations, which had previously been defined). See H.R. Rep. No. 112-10, at 20-21 (2011) ("House Report") (noting that some courts had extended the definition of a natural person's residence, for venue purposes, beyond the person's domicile to potentially include the location of a summer home; and noting a split of authority regarding venue for unincorporated associations). Congress also made two other specific changes regarding venue as to natural persons. First, Congress altered how permanent residents (who are, nonetheless, "aliens") should be treated for venue purposes. See id. at 23 ("[T]he proposed statute would grant a venue defense to permanent resident aliens who are domiciled in the United States."). Second, Congress removed venue protections for U.S. citizens domiciled abroad. See § 1391(c)(3) ; House Report at 22 ("This would mean that aliens and United States citizens domiciled abroad could not claim a venue defense to the location of litigation. Prohibiting United States citizens domiciled abroad from raising a venue defense would be a change in current law."). See generally 14D Charles A. Wright et al., Federal Practice & Procedure § 3810 (4th ed. Apr. 2018 update).
Congress thus slightly modified the well-established alien-venue rule in one respect. It granted venue protection to alien natural persons having permanent resident status. § 1391(c)(1).
There is no comparable change with respect to foreign corporations. Petitioner relies on § 1391(c)(2) and the fact that it does not expressly limit itself to domestic entities, and on that basis argues that a foreign corporation now is deemed a resident in the United States wherever it is subject to personal jurisdiction. We are not persuaded. The mere absence of an express foreign-corporation exclusion from § 1391(c)(2) is not enough to infer the sweeping repudiation of the Hohorst / Brunette rule that Petitioner's position produces. In fact, the conspicuous absence of any reference to aliens in § 1391(c)(2) is telling, since the immediately preceding paragraph, § 1391(c)(1), does expressly refer to aliens, extending venue protections to permanent resident aliens. At the same time, the immediately succeeding paragraph, § 1391(c)(3), uses broad language to deny venue protection to any "defendant *1360not resident in the United States," with no exclusion of foreign corporations. And the accompanying House Report makes no mention of alien defendants being included in § 1391(c)(2). Quite the contrary-the House Report emphasizes that aliens will remain without a venue defense. House Report at 22 (discussing the shift from alienage to residency and stating "[t]his would mean that aliens and United States citizens domiciled abroad could not claim a venue defense to the location of litigation");
Finally, Petitioner contends that former § 1391(d) was not merely recodified in § 1391(c)(3). In light of the changes Congress implemented through the 2011 amendments, however, it is evident why former § 1391(d) had to be reformulated. See House Report at 23 ("[T]he deletion of the current language of
4
Petitioner concedes that its interpretation of the venue laws could create a venue gap, where at least some alien defendants would be entirely exempt from patent infringement actions. Pet'r's Br. 9-10. It attempts to gloss over this problem, however, by arguing that no gap would exist in this case, as HTC Corporation's subsidiary, HTC America, is a resident of Washington, and venue for HTC Corporation could reasonably be based on where venue is proper for its subsidiary. Pet'r's Br. 10. But, even assuming we could completely disregard the corporate form in this case, there would still be cases, as Petitioner concedes, where a venue gap exists (because, under Petitioner's theory, § 1400(b) displaces § 1391(b), (c) ). While Petitioner contends that abiding by Brunette creates a "loophole" for a plaintiff to forum shop, see Pet'r's Br. 11, that has always been the case. Meanwhile, Petitioner's argument *1361creates a far more unsatisfactory loophole-a complete inability for a patent owner to bring its infringement claims against alien defendants that fall outside the non-residence-based clause of § 1400(b). See Brunette ,
With the Supreme Court having spoken on this issue twice, this court-without clear guidance from Congress-will not broadly upend the well-established rule that suits against alien defendants are outside the operation of the federal venue laws. Indeed, this longstanding rule has "continue[d] to color the venue statutes" since 1789. Brunette ,
III
The final requirement for mandamus to issue is that the issuing court, in its discretion, must be satisfied that the writ is appropriate under the circumstances. Cheney ,
CONCLUSION
Petitioner has not satisfied the high standard necessary for a writ of mandamus to issue.
IT IS ORDERED THAT :
The petition for writ of mandamus is denied.
On March 28, 2018, the petition was dismissed for failure to pay the docketing fee. The petition was reinstated on March 29, 2018, after Petitioner paid the docketing fee and moved to vacate the dismissal order.
Objections to improper venue are made through a Rule 12(b)(3) motion, and § 1406(a) provides for either dismissal or transfer if venue is found to be improper. See § 1406(a) ; Fed. R. Civ. P. 12(b)(3).
See, e.g. , In re Nintendo Co. ,
We need not decide whether to apply regional or Federal Circuit law in evaluating whether post-judgment appeal is adequate for review of a denial of a § 1406(a) motion. We agree with the Third Circuit on that issue.
Two reasons have been stated for the inadequacy of post-judgment appeals as a remedy for denials of § 1404(a) challenges, i.e., for why such cases "normally deal with an issue, the convenience of parties and witnesses, which in its nature must be reviewed before trial, if at all." Gulf Research & Dev. Co. v. Leahy ,
As explained in Section II.A of this order, at the time of the Brunette decision, § 1391(d) stated: "An alien may be sued in any district." § 1391(d) (1970).
While Petitioner argues that the House Report should be read as "clearly separating any application of the general venue provisions from the specialized venue statutes," see Pet'r's Br. 20, this argument misses the mark. This issue does not turn on whether § 1400(b) can be read in conjunction with a particular section of the general venue statute; instead the question is the same one posed in Brunette -namely, whether Congress intended to abrogate the centuries-old rule that all venue laws, both general and special, do not apply to suits against alien defendants, regardless of whether that longstanding rule has been codified in the general venue statute. See Brunette ,
Section 1391(c)(3) eliminated venue protections for certain non -aliens (specifically, U.S. citizens domiciled abroad). Adding to the group of persons denied venue protection does not curtail the denial of venue protection to aliens. Only adding to the group of persons provided venue protection, e.g. , § 1391(c)(1), does that.
For all of the reasons we have recited, including the TC Heartland decision, we do not think that the statute is properly read to adopt the view on this point expressed by the American Law Institute Federal Judicial Code Revision Project 146-47, 200-01 (2004), from which the 2011 legislation derived through a process that changed the ALI's proposal (which included repeal of § 1400) and produced a quite different congressional committee explanation. We also do not adopt the brief statement on the issue in Wright, Federal Practice & Procedure § 3810 ("Because nothing in the statute limits the application of Section 1391(c)(2) to entities formed in the United States, the provision governs venue in cases involving entities formed in foreign countries." (citing Poliseno v. Credit Suisse Secs. (USA), LLC ,
Further, that former § 1391(d) now falls under § 1391(c) under the heading "Residency" is also not dispositive. This merely reflects the general shift in focus from alienage to residency.