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VLSI Technology LLC v. Intel Corp.

United States District Court, D. Delaware

October 29, 2018

VLSI TECHNOLOGY LLC, Plaintiff,
v.
INTEL CORPORATION Defendant.

          Brian E. Farnan, Michael J. Farnan, FARNAN LLP, Wilmington, Delaware; Morgan Chu, Ben Hattenbach, Amy E. Proctor, Dominik Slusarczyk, Charlotte J. Wen, IRELL & MANELLA LLP, Boston, Massachusetts Counsel for Plaintiff

          Jack B. Blumenfeld, Jeremy A. Tigan, MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, Delaware; William F. Lee, Louis W. Tompros, WILMER, CUTLER, PICKERING, HALE AND DORR LLP, Boston, Massachusetts; Mark D. Selwyn, WILMER, CUTLER, PICKERING, HALE AND DORR LLP, Palo Alto, California; Amanda L. Major, WILMER, CUTLER, PICKERING, HALE AND DORR LLP, Washington, District of Columbia Counsel for Defendant

          MEMORANDUM OPINION

          CONNOLLY, UNITED STATES DISTRICT JUDGE

         Defendant Intel Corporation has moved pursuant to 28 U.S.C. § 1404(a) to transfer this patent case to the Northern District of California. D.I. 8. For the reasons discussed below, I will deny Intel's motion.

         Both Intel and the Plaintiff, VLSI Technology, Inc., are Delaware corporations. VLSI filed this action on June 28, 2018, alleging that Intel infringed five patents (the "Delaware patents"). VLSI has also sued Intel in the Northern District of California, alleging that Intel infringed eight other patents (the "California patents"). The parties dispute whether the subject matters of the Delaware patents and the California patents are the same. They also dispute the extent to which discovery, evidence, and legal arguments in the two actions will overlap.

         Section 1404(a) provides that "[f]or the convenience of the parties and witnesses, in the interests of justice, a district court may transfer any civil action to any other district or division where it might have been brought." 28 U.S.C. § 1404(a). It is undisputed that this action could have been brought in the Northern District of California, where Intel has its headquarters and principal place of business. Thus, the only issue before me is whether I should exercise my discretion under § 1404(a) to transfer the case to California.

         As the movant, Intel has the burden "to establish that a balancing of proper interests weigh[s] in favor of the transfer." Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970). This burden is heavy. "[U]nless the balance of convenience of the parties is strongly in favor of [the] defendant, the plaintiffs choice of forum should prevail." Id. (emphasis in original) (internal quotation marks and citation omitted).

         The proper interests to be weighed in deciding whether to transfer a case under § 1404(a) are not limited to the three factors recited in the statute (i.e., the convenience of the parties, the convenience of the witnesses, and the interests of justice). Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995). Although there is "no definitive formula or list of the factors to consider" in a transfer analysis, the court in Jumara identified 12 interests "protected by the language of § 1404(a)." Id. Six of those interests are private:

[1] plaintiffs forum preference as manifested in the original choice; [2] the defendant's preference; [3] whether the claim arose elsewhere; [4] the convenience of the parties as indicated by their relative physical and financial condition; [5] the convenience of the witnesses-but only to the extent that the witnesses may actually be unavailable for trial in one of the fora; and [6] the location of books and records (similarly limited to the extent that the files could not be produced in the alternative forum).

Id. (citations omitted). The other six interests are public in nature:

[7] the enforceability of the judgment; [8] practical considerations that could make the trial easy, expeditious, or inexpensive; [9] the relative administrative difficulty in the two fora resulting from court congestion; [10] the local interest in deciding local controversies at home; [11] the public policies of the fora; and [12] the familiarity of the trial judge with the applicable state law in diversity cases.

Id. at 879-80 (citations omitted). As the parties have not identified relevant factors beyond these 12 interests, I will balance the Jumara factors in deciding whether to exercise the discretion afforded me by § 1404(a).

         I. Plaintiff's Forum Preference

         This factor clearly weighs against transfer. The parties agree on that much. They disagree, however, about the amount of weight I should give this factor in conducting the balancing of interests called for by Jumara. Intel argues that VLSFs forum choice "deserves little weight," D.I. 9 at 11; VLSI contends that I should give its forum choice "paramount consideration." D.I. 23 at 3.

         In Shutte, the Third Circuit held that "[i]t is black letter law that a plaintiffs choice of a proper forum is a paramount consideration in any determination of a transfer request" brought pursuant to § 1404(a), and that this choice "should not be lightly disturbed." 431 F.2d at 25 (internal quotation marks and citation omitted). The parties have not cited and I am not aware of any Third Circuit or United States Supreme Court case that overruled Shutte. Jumara cited Shutte favorably and reiterated Shutte's admonition that "the plaintiffs choice of venue should not be lightly disturbed." Jumara, 55 F.3d at 879 (internal quotation marks and citation omitted). Thus, I agree with VLSI that binding Third Circuit law compels me to treat its forum choice as "a paramount consideration" in the § 1404(a) balancing analysis.

         Intel, however, asks me to ignore Shutters unambiguous language (and Jumara's endorsement of Shutte), and instead give VLSI's forum choice "little weight" because (1) VLSI allegedly had an "improper forum shopping motive" in filing suit in this district; (2) VLSI has no facilities, operations, or employees in Delaware; and (3) the facts underlying the parties' dispute did not occur in Delaware. D.I. 9 at 11-13.

         A. Improper Forum Shopping Motive

         Intel cites a line of cases in which district court and magistrate judges in the Third Circuit looked to "the reasons behind" a plaintiffs forum choice and gave reduced or even no weight to a plaintiffs forum selection if the plaintiff had an "improper forum shopping motive." See D.I. 9 at 11-12 (citations omitted). I find, however, that these cases are not consistent with Shutte, Jumara, or Supreme Court precedent.

         Neither Shutte nor Jumara hold or even intimate that a plaintiffs motive in selecting its forum choice is relevant for § 1404(a) purposes. Putting aside the practical difficulty of accurately discerning a plaintiffs motives, to my knowledge the Third Circuit has not held, and I do not believe, that a plaintiffs motive in selecting a forum is relevant to the transfer inquiry.

         The availability of multiple lawful venues is a fundamental feature of our federal system that invites competent counsel to advise their clients to select the litigation forum that best aligns with the clients' interests. When choosing among available venues, plaintiffs understandably-and legitimately-weigh a host of considerations, including, for example, the laws that would apply in the competing venues, the relative speed with which the venues move cases, the manner in which the venues handle discovery disputes, the scope of discovery allowed by the venues, and the plaintiffs' assessments of the venues' judges and the likelihood those judges would rule in the plaintiffs' favor. Every sophisticated plaintiff that can bring a lawsuit in multiple venues engages in forum shopping when it chooses a particular venue. The Court's concern is whether the venue choice is permitted by statute, not what motivated the plaintiff to select the venue.

         The principle that a plaintiff can lawfully engage in forum shopping is sufficiently fundamental to our federal system that the Supreme Court has called the plaintiffs choice of forum a "venue privilege." SeeAtl Marine Constr. Co. v. U.S. Dist. Court for the W. Dist. of Texas, 571 U.S. 49, 63 (2013) ("Because plaintiffs are ordinarily allowed to select whatever forum they consider most advantageous (consistent with jurisdictional and venue limitations), we have termed their selection the 'plaintiffs venue privilege.'"). And twice in the context of a § 1404(a) transfer motion, the Court has recognized the legitimacy of forum shopping by a plaintiff.

         In Van Dusen v. Barrack, 376 U.S. 612 (1964), the Court held that when a diversity suit is transferred under § 1404(a) at the request of the defendant, the transferee court is required to follow the choice-of-state-law rules that would have existed in the transferor court. Id. at 639. The Court reasoned that § 1404(a) should not deprive the plaintiff of state-law advantages it would have enjoyed in the transferor court. Id. at 633-34. The Court explained that "[section] 1404(a) was not designed to narrow the plaintiffs venue privilege ... but rather the provision was simply to counteract the inconveniences that flowed from the venue statutes by permitting transfer to a convenient federal court." Id. at 635.

         In Ferens v. John Deere Co., 494 U.S. 516 (1990), the Court extended Van Dusen's holding to § 1404(a) transfers made at a plaintiffs request. Id. at 519. Ferens, who had been injured in a Pennsylvania farm accident, failed to file a tort action in Pennsylvania within the applicable two-year statute of limitations. Id. In the third year after the accident, Ferens and his wife filed a diversity contract case against John Deere in the Western District of Pennsylvania and then filed a second diversity tort action against John Deere in the Southern District of Mississippi, where, under Mississippi choice-of law rules, a six-year statute of limitations applied. Id. at 519-20. At this point, to use the Supreme Court's words, "the Ferenses took their forum shopping a step further," as they requested and obtained a § 1404(a) transfer of the Mississippi action to the Western District of Pennsylvania. Id. at 520. The Pennsylvania district court consolidated the actions but held that because the Ferenses had moved for the transfer as plaintiffs, the Van Dusen rule did not apply and therefore Pennsylvania's two-year statute of limitations barred the Ferenses' tort claims. Id. at 520-21. The Third Circuit affirmed the district court's holding. Id. at 521.

         In reversing the Third Circuit's decision, the Supreme Court explained in relevant part:

The text of ยง 1404(a) may not say anything about choice of law, but we think it not the purpose of the section to protect a party's ability to use inconvenience as a shield to discourage or hinder litigation otherwise proper. The section exists to eliminate ...

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