The Recorder (via Law.Com) has an article today discussing the Fifth Circuit’s en banc decision In re Volkswagen of America Inc. and its ramifications for patent litigation.
The case involves the often-discussed (some would say notorious) Eastern District of Texas. The Rio Grande Valley and Gulf Coast of Texas are repeat offenders on the American Tort Reform Association’s “Judicial Hellholes” list. Both patent and product liability cases historically have made their way because of the plaintiff-friendly nature of this jurisdiction, and judges in the Eastern District often rejected venue challenges under the reasoning that if a product was available in the jurisdiction, that was enough for venue—even if no other connection linked the case to the Eastern District of Texas.
In Volkswagen, however, an en banc panel of the Fifth Circuit issued a writ of mandamus ordering a product liability matter transferred from the Marshall Division of the Eastern District of Texas to the Dallas Division of the Northern District of Texas, where the underlying accident took place.
The District Court had denied Volkswagen’s motion to transfer venue, and a panel of the Fifth Circuit denied its original petition for writ of mandamus, out of deference for plaintiff’s choice of forum. That plaintiff elected to file in the Eastern District was—literally—the only connection between the case and the Eastern District of Texas; “all other factors relevant to transfer of venue weigh overwhelmingly in favor of the Northern District of Texas.” After a rehearing by a second panel that resulted in the opposite conclusion and plaintiff’s en banc petition, the Fifth Circuit finally resolved the issue in a decision that should help corporate parties—whether patent plaintiffs, or patent or product liability defendants—navigate the appropriate venue rules.
As the case establishes, no longer is it sufficient for the Eastern District to keep a case because “because the product is available in Marshall, and that for this reason jury duty would be no burden.” This rationale for establishing venue “stretches logic in a manner that eviscerates the public interest” that considerations such as where the incident occurred and where the witnesses and evidence are located tries to protect. It also fairly “could apply virtually to any judicial district or division in the United States; it leaves no room for consideration of those actually affected—directly and indirectly—by the controversies and events giving rise to a case.” Although the dissenters believed the District Court did not abuse its discretion in denying the motion to transfer, the principles emphasized in Volkswagen are both reasonable and logical.