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Venue Roundup #2 - TiVo v. AT&T - motion to transfer to California denied

By Michael C. Smith

TiVo v. AT&T, 2:09cv259 (9/17/10)

Judge: David Folsom

Holding: Motion to Transfer Venue DENIED

Next up is the motion by Microsoft and AT&T in this case to sever and stay the claims against them and transfer them to California (leaving claims against a related AT&T company pending in Texas).

Judge Folsom found TiVo's arguments that it was unclear whether the AT&T entity seeking severance was sufficiently unrelated to the other AT&T entity in terms of the accused activities that the claims against one could be said to be "peripheral" to the other.  Such a determination would require a more fully developed record, the Court observed, and accordingly it denied the requested severance.

Moving on to transfer, Judge Folsom noted that the factual record before him indicated that the relevant evidence existed in both California and Texas, distinguishing the case from Genentech and In re Nintendo, where there was no evidence located within the State of Texas, and bringing it closer to Vtech, where there was.  (In doing so, the Court was careful to note that it did not take into consideration the presence of the 4 court files from the related Echostar
case, "which would have remained in California but for that litigation" citing In re Hoffmann-La Roche Inc., 587 F.3d 1333,1337 (Fed. Cir. 2009) (?But, if not for this litigation, it appears that the documents would have remained a source of proof in California.?).

The same basic story applied to the witnesses as well - both California and Texas had some witnesses, and unlike In re Volkswagen, neither district would have "absolute" subpoena power.  And as a result of In re Genetech, the Court was not permitted to examine which of the identified witnesses were truly "key".  So, again, the case was distinguishable from Genentech and In re Nintendo, where there were no witnesses located within the State of Texas.  But, since the California court had more "usable" subpoena power, the factor weighed in favor of transfer nonetheless.

Judge Folsom's analysis of the "cost of attendance of witnesses" factor sets out in sharp relief the conflict in recent Federal Circuit caselaw on the convenience of foreign witnesses. 

In light of recent case law, the focus of the inquiry appears to be the U.S. witnesses, as foreign witnesses will be required to travel a significant distance no matter where they testify. Genentech, 566 F.3d at 1344; see also Novartis Vaccines and Diagnostics, Inc. v. Wyeth, No. 2:08-cv-067, 2010 WL 1374806, at *2 (E.D. Tex. Mar. 31, 2010) (?When applying the 100-mile rule, a court should not place too much weight to the relative inconvenience for overseas parties and witnesses.?); but see Nintendo, 589 F.3d at 1199 (discussing that the Japanese witnesses would have to travel an additional 1,756 miles or 7 hours by plane to Texas than to Washington state).

Fortunately, there were no foreign witnesses to address, it appears, so the Court did not have to decide which opinion to follow.  But as the witnesses again split between California and Texas, the Court could not say that a transfer would be a net benefit.  The same thing happened with the "local interest" factor - it was split between Texas and California.  Next up was judicial economy, which the Court agreed weighed against transfer because of the prior, related litigation - although not as heavily as the plaintiff contended.

In the end, following a 20-page opinion consisting almost completely of discussion and analysis of the hotly contested facts as to each of these elements, Judge Folsom concluded that it could not be said that the Northern District of California was a clearly more convenient forum, and therefore the motion was denied.

Full post as published by Eastern District of Texas Federal Court Practice on October 18, 2010 (boomark / email).