United States District Court, D. Colorado
ORDER RE: MOTIONS TO DISMISS OR TRANSFER
WILLIAM B. SHUBB UNITED STATES DISTRICT JUDGE.
Anza Technology, Inc. (“Anza”) brought this
patent infringement action against Mushkin, Inc.
(“Mushkin”) and Avant Technology, Inc.
(“Avant”) based on defendants' alleged use of
certain tools and techniques in the manufacture of integrated
circuit chips. Mushkin moves for dismissal for improper venue
under Federal Rule of Civil Procedure 12(b)(3) (“Rule
12(b)(3)”); dismissal for improper joinder under
Federal Rule of Civil Procedure 21 (“Rule 21”);
or severance and transfer under Rule 21, 28 U.S.C. §
1404(a), or 28 U.S.C. § 1406(a). (Docket No. 29.) Avant
moves for dismissal under Federal Rule of Civil Procedure
12(b)(6) (“Rule 12(b)(6)”); dismissal for
improper venue under Rule 12(b)(3); or transfer under 28
U.S.C. § 1404(a) or 28 U.S.C. § 1406(a). The court
held oral argument on the motions on December 18, 2018.
28 U.S.C. § 1406(a), if a case is filed in an improper
venue, the district court “shall dismiss, or if it be
in the interest of justice, transfer such case to any
district or division in which it could have been
brought.” On a motion for improper venue under Rule
12(b)(3), the court need not accept the pleadings as true and
may consider supplemental written materials and facts outside
the pleadings in deciding the motion. Munns v.
Clinton, 822 F.Supp.2d 1048, 1079 (E.D. Cal. 2011)
(England, J.) (citing, inter alia, Murphy v. Schneider
Nat'l, Inc., 362 F.3d 1133, 1137 (9th Cir. 2004)).
The decision to dismiss for improper venue or to transfer
venue to a proper court is a matter within the sound
discretion of the district court. Munns, 822 F.Supp.2d at
1079 (citing Cook v. Fox, 537 F.2d 370, 371 (9th
in patent cases is governed by 28 U.S.C. § 1400(b),
rather than the more permissive general venue statute, 28
U.S.C. § 1391. TC Heartland LLC v. Kraft Foods Grp.
Brands LLC, 137 S.Ct. 1514, 1518-19 (2017). Under §
1400(b), patent infringement actions may only be brought in
(1) “the judicial district where the defendant
resides” or (2) “where the defendant has
committed acts of infringement and has a regular and
established place of business.” 28 U.S.C. §
purposes of § 1400(b), “a domestic corporation
‘resides' only in its State of
incorporation.” TC Heartland, 137 S.Ct. at 1517.
“[T]he regular and established place of business
standard requires more than the minimum contacts necessary
for establishing personal jurisdiction or for satisfying the
doing business standard of the general venue
provision.” In re Cray Inc., 871 F.3d 1355, 1361 (Fed.
Cir. 2017). This standard requires that “(1) there must
be a physical place in the district; (2) it must be a regular
and established place of business; and (3) it must be the
place of the defendant.” Id. at 1361.
there is no dispute that both Mushkin, a Colorado
corporation, and Avant, a Nevada corporation with its
principal place of business in Texas, reside outside the
Eastern District of California, and therefore venue does not
lie under the first prong of § 1400(b). (See 1st Am.
Compl. ¶¶ 7, 9.) Nor is there any claim by
plaintiff that either Mushkin and Avant have a regular and
established place of business in the Eastern District of
California, and defendants' evidence shows that they do
not. (See Mushkin Mot. Dismiss Stathakis Decl. ¶ 11
(Docket No. 29-2) (stating that Mushkin has no physical place
of business, warehouse, inventory, employees or sales
representatives, or continual presence in the Eastern
District of California); Mushkin Peddecord Decl. ¶ 9
(Docket No. 29-3) (stating that Avant has no physical place
of business, warehouse, inventory, employees or sales
representatives, or continual presence in California or
Colorado).) Most importantly, plaintiff conceded at oral
argument that venue was not proper in the Eastern District of
California, and the court agrees.
determined that venue does not lie in the Eastern District of
California, the court must determine whether the appropriate
remedy is dismissal or transfer. The parties agree that the
court may sever the case and transfer plaintiff's claims
against Mushkin to the District of Colorado, where Mushkin
resides and has a regular and established place of business,
and transfer the claims against Avant to the Western District
of Texas, where Avant is headquartered. However, defendants
prefer that the case be dismissed, while plaintiff prefers
that the entire case should be transferred to the Western
District of Texas.
not apparent that venue was improper in the Eastern District
of California at the time this action was filed, before the
Supreme Court's decision in TC Heartland. Accordingly,
because all parties agree that plaintiff's claims may be
brought separately in the District of Colorado and the
Western District of Texas, and dismissal may reduce any
potential recovery by plaintiff due to statute of limitations
issues, the court does not find that maintaining this suit
after TC Heartland warrants dismissal under Rule 1406(a).
the court will sever and transfer plaintiff's claims
against Mushkin to the District of Colorado, and the claims
against Avant to the Western District of Texas. Transfer
under § 1406(a) is only permitted “to any district
or division in which it could have been brought” and
plaintiff has not shown that the case could have been brought
against both defendants in the Western District of Texas.
See, e.g., Wordtech Sys. Inc. v. Integrated Network
Sols., Corp., No. 2:04-cv-01971-TLN, 2014 WL 2987662, at
*4 (E.D. Cal. July 1, 2014) (citation omitted) (“When
there are multiple parties and/or multiple claims in an
action, the plaintiff must establish that venue is proper as
to each defendant and as to each claim.”).
has provided evidence establishing (1) it is incorporated in
and its headquarters and principal place of business are in
Colorado; (2) it sold its entire memory components business
to Avant in 2012 and is no longer involved in the design,
manufacture, assembly, or importation of integrated circuit
memory products, including any such products under the
Mushkin name, which it no longer uses; (3) it has no
co-branding relationship with Avant with respect to
Mushkin-branded memory products; and (4) it has never owned
or occupied any facility in Texas, including Avant's
facility in Pflugerville, and has no regular or continual
business presence in Texas. (Stathakis Decl.) Defendants have
also provided evidence that Avant operates under its trade
name as Mushkin Enhanced MFG and that since the 2012 asset
sale, Avant has been the sole assembler and seller of Mushkin
brand memory products under the Mushkin Enhanced MFG name.
(Peddecord Decl. ¶¶ 5-8.)
face of this evidence, any ambiguity on the mushkin.com
website and any ambiguity regarding the asset sale from
Mushkin to Avant are insufficient to show that Mushkin has a
regular and established place of business in the Western
District of Texas. Similarly, the fact that Mushkin has a
registered agent with the Texas comptroller does not show
that the corporation has a regular and established place of
business within Texas. Thus, venue in the Western District of
Texas is not proper as to Mushkin, and the court may not
transfer the claims against Mushkin to that district.
However, because the parties agree that venue is proper as to
plaintiff's claims against Mushkin in ...