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Liqui-Box Corporation v. Scholle Corporation

United States District Court, Third Circuit

June 17, 2013

LIQUI-BOX CORPORATION and LIQUI-BOX, INC., Plaintiff,
v.
SCHOLLE CORPORATION, Defendant.

MEMORANDUM

GREGORY M. SLEET, Chief District Judge.

I. INTRODUCTION

On April 13, 2012, the plaintiff, Liqui-Box Corporation, filed this action against the defendant, Scholle Corporation ("Scholle"). (D.I. 1.) Liqui-Box Corporation and later-added plaintiff Liqui-Box Inc. (together, "Liqui-Box") seek a declaration of invalidity and noninfringement with respect to two patents owned by Scholle, U.S. Patent Nos. 6, 607, 097 (the "'097 patent") and 6, 851, 579 (the "'579 patent"). (D.I. 9 at ¶ 1.)

Presently before the court is Scholle's Renewed Motion to Dismiss or, Alternatively, Motion to Transfer Venue. (D.I. 10.) In arguing for dismissal, Scholle contends that it lacks sufficient contacts with Delaware for the court to exercise personal jurisdiction. ( Id. at 1.) Scholle alternatively requests that the court transfer this action to the United States District Court for the Northern District of Illinois pursuant to 28 U.S.C. § 1404(a), as an infringement action involving the two patents-in-suit is currently pending between the parties in that district. ( Id. ) For the reasons that follow, the court will grant Scholle's motion and dismiss this action for lack of personal jurisdiction.

II. BACKGROUND

Liqui-Box Corporation is an Ohio corporation with its principal place of business in Worthington, Ohio. (D.I. 9 at ¶ 2.) Liqui-Box Inc. is incorporated in Delaware and has its principal place of business in Houston, Texas. ( Id. at ¶ 3.) Scholle is a Nevada corporation with headquarters in Irvine, California. ( Id. at ¶ 4.) Scholle is a holding company that functions through operating entities, including Scholle Packaging, which accounts for a substantial portion of Scholle's business. (D.I. 16 at ¶ 8.) Scholle Packaging is also a Nevada corporation with the majority of its operations and its principal place of business in Illinois. ( Id. at ¶¶ 5, 9.) Scholle Packaging and Scholle share a corporate headquarters in Irvine, California. ( Id. at ¶ 7.)

This declaratory judgment action was prompted by the receipt of a letter sent from Scholle's counsel to Liqui-Box in Ohio. (D.I. 11 at 3.) The letter informed Liqui-Box of the patents-in-suit and noted the Liqui-Box products that allegedly infringe those patents. (D.I. 9 at ¶ 12.) Liqui-Box did not respond but instead filed the instant action. (D.I. 11 at 3.) Later that same day, Scholle filed a lawsuit against Liqui-Box in the Northern District of Illinois alleging infringement of the patents-in-suit. ( Id. )

III. STANDARD OF REVIEW

A. Motion to Dismiss for Lack of Personal Jurisdiction

Federal Rule of Civil Procedure 12(b)(2) directs the court to dismiss a case when it lacks personal jurisdiction over a defendant. Determining the existence of personal jurisdiction requires a two-part analysis. First, the court applies the long-arm statute of the state in which it is located. See Intel Corp. v. Broadcom Corp., 167 F.Supp.2d 692, 700 (D. Del. 2001). Next, the court must determine whether exercising jurisdiction over the defendant in this state comports with the Due Process Clause of the Fourteenth Amendment. See id. These constitutional requirements are satisfied when the court finds the existence of "minimum contacts" between the non-resident defendant and the forum state, "such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice." Int'l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945) (internal quotation marks omitted).

In resolving the jurisdictional question, the court must accept as true the allegations in the complaint. Altech Indus., Inc. v. Al Tech Specialty Steel Corp., 542 F.Supp. 53, 55 (D. Del. 1982). The plaintiff, however, bears the burden of alleging facts sufficient to make a prima facie showing of personal jurisdiction over the movant. ICT Pharms., Inc. v. Boehringer Ingelheim Pharms., Inc., 147 F.Supp.2d 268, 270-71 (D. Del. 2001). To meet this burden, the plaintiff must offer facts which "establish with reasonable particularity" that jurisdiction exists. Id

B. Motion to Transfer under 28 U.S.C. § 1404(a)

Pursuant to 28 U.S.C. § 1404(a), "[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." 28 U.S.C. § 1404(a). This provision vests the court with "broad discretion to determine, on an individualized, case-by-case basis, whether convenience and fairness considerations weigh in favor of transfer." Jumara v. State Farm Ins. Co., 55 F.3d 873, 883 (3d Cir.1995).

In addressing a motion to transfer under § 1404(a), the court engages in a two-step inquiry. It first determines whether the action could have been brought initially in the proposed transferee forum and then asks whether transfer would best serve the interests of convenience and justice. Smart Audio Techs., LLC v. Apple, Inc., No. 12-134-GMS, 2012 WL 5865742, at *1 (D. Del. Nov. 16, 2012). The defendant bears the burden at each step of the analysis, Jumara, 55 F.3d at 879-80, and, "unless the balance of convenience of the parties is ...


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