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Rosebud LMS, Inc. v., Inc.

United States District Court, D. Delaware

November 20, 2018

ROSEBUD LMS, INC., Plaintiff,

          Richard C. Weinblatt, STAMOULIS & WEINBLATT LLC, Wilmington, Delaware; Cecil E. Key, DIMUROGINSBERG, P.C., Alexandria, Virginia Counsel for Plaintiff

          Jack B. Blumenfeld, Stephen J. Kraftschik, MORRIS, NICHOLS, ARSHT & TUNNELL LLP, Wilmington, Delaware Counsel for Defendant



         Defendant, Inc. ("Salesforce") has moved pursuant to 28 U.S.C. § 1404(a) to transfer this patent case to the Northern District of California. D.I. 18. For the reasons discussed below, I will deny Salesforce's motion.

         Both Salesforce and the Plaintiff Rosebud LMS, Inc. ("Rosebud") are Delaware corporations. Rosebud filed this action on November 28, 2017, alleging that Salesforce's online platform "Quip" infringes two patents (the "Rosebud patents"). D.I. 1 at ¶ 16. After Salesforce moved to dismiss (D.I. 8), Rosebud filed a first amended complaint on February 9, 2018 (D.I. 12). The amended complaint added a joint infringement allegation, accusing Salesforce of "partnering] with third parties ... including ... Atlassian, Facebook[], Google, Lucid Software, Smartsheet, and Docusign" to infringe one of the Rosebud patents. Id. at ¶ 37. Salesforce moved to dismiss Rosebud's amended complaint on February 23, 2018 (D.I. 14), and filed its motion to transfer on April 3, 2018.

         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 Salesforce has its headquarters and principal place of business. D.I. 25 at 5. Thus, the only issue before me is whether I should exercise my discretion under § 1404(a) to transfer the case to the Northern District of California.

         As the movant, Salesforce 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).


         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, Salesforce argues that Rosebud's forum choice deserves "little weight" (D.I. 19 at 6); Rosebud contends that I should give its forum choice "paramount consideration" (D.I. 25 at 6).

         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 Rosebud that binding Third Circuit law compels me to treat its forum choice as "a paramount consideration" in the § 1404(a) balancing analysis.

         Salesforce, however, asks me to ignore Shutte's unambiguous language (and Jumara's endorsement of Shutte), and instead give Rosebud's forum choice "little weight" because Rosebud's only connection to Delaware is the fact that Rosebud is a Delaware corporation. D.I. 19 at 6. Salesforce cites in support of its position certain opinions issued by district court judges in the Third Circuit that appear to assign less weight to a plaintiffs forum choice when the forum is not the plaintiffs "home turf - that is, if the plaintiff has limited or no facilities, operations, or employees in the forum - and/or when the facts giving rising to the lawsuit did not occur in the plaintiffs selected forum. See Id. at 6; D.I. 26 at 1. I am not, however, persuaded that these opinions are consistent with Shutte. I will instead follow Judge Stapleton's lead in Burroughs Wellcome Co. v. Giant Food, Inc., 392 F.Supp. 761 (D.Del. 1975).

         Like Judge Stapleton, I read Shutte 's "statement of 'black letter law' as an across-the-board rule favoring plaintiffs choice of forum." Id. at 763. As Judge Stapleton explained in rejecting the ...

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