"Good Cause" Not Shown for Transfer to Michigan

MHL TEK, LLC v. Nissan Motor Co. et al (2-07-cv-00289) (E.D. Tex. Feb. 23, 2009)
Judge: T. John Ward
In this case Judge Ward was asked to reconsider his decision of September 10, 2008 (pre VW Tech) denying the defendants' motion to transfer the case to Michigan.  This patent case has one plaintiff and ten defendants.  Plaintiff is a Texas corporation with offices in Michigan.  Defendants are various foreign auto companies and subsidiaries with their principal offices ranging from Virginia, Michigan, Alabama, Tennessee, Georgia, New Jersey, South Carolina, and California in the U.S.  to Germany, Japan, and Korea overseas.
Judge Ward detailed the recent caselaw in this area, setting forth the framework with the addition of VW Tech, and proceeded to discussion of the factors, concluding that "the defendants have not shown that the Eastern District of Michigan is clearly more convenient than the plaintiff’s chosen forum" and therefore denied the motion to reconsider.
Parties & Witnesses
With regard to defendants, Judge Ward noted that four defendants reside in Germany, three in California, two in Japan, two in South Korea, two in New Jersey, one each in Michigan, Tennessee, Alabama, Georgia, South Carolina, Indiana, and Virginia, and found that this district would, in the least, be just as convenient or inconvenient to most of the defendants as the desired transferee District.  Judge Ward also noted that two of the defendants, Audi of America and Volkswagen Group of America relocated away from Michigan to Virginia since the original motion and order - yet the defendants  "blatantly continue to insist that Audi’s and Volkswagen’s facilities are located in Michigan."  Air travel is often an issue in these motions, and Judge Ward analyzes the relative convenience of air travel to Detroit and Shreveport (the nearest airports to the respective fora and found that Detroit might be slightly closer for the parties in Germany  - but Shreveport was closer for the parties flying from the Asia.  Which airport was more convenient for the domestic entities was similarly a split.  Based on his travel calculations, Judge Ward found that under the 100-mile rule, the Texas court, rather than the Michigan one, was more centrally located to the scattered distribution of party witnesses.
With regard to the nonparty witnesses, Judge Ward noted that the crux of the defendants' argument is that the plaintiff's witnesses were located in Michigan - it identified no others by name that were located in Michigan.   Judge Ward observed that he could not limit his consideration simply to these witnesses, but instead must consider all of the witnesses on all of the claims (citing VW I).  In this case, the relevant witnesses were spread across the globe, with none (other than the inventors) actually identified by name in Michigan - while defendants identified numerous witnesses elsewhere.  "This is not a case where all of the witnesses are concentrated in one part of the country, close to the forum where transfer is sought to," Judge Ward wrote, citing TS Tech.  Accordingly, he found that the convenience of the witnesses and cost of attendance factor was neutral.
Sources of Proof
Judge Ward made clear that he was not reading the sources of proof factor out of the analysis, but given that the plaintiff's documents were being produced in Marshall, only one defendant was from Michigan (and it had two related companies in the litigation, so the question of where its documents actually were was an open one), and the vast majority of the other documents were located elsewhere - plus that this case did not involve physical evidence - this factor did not support transfer.  The Court specifically contrasted this case from TS Tech and VW II, where all of the documents and physical evidence was either located in the transferee forum, or much more convenient to it.
Compulsory Process
Judge Ward also distinguished this case from VW, in which the court found that the transferee court enjoyed absolute subpoena power over all possible witnesses.  In this case, he wrote there was no proper venue that enjoys “absolute subpoena power for both depositions and trial” over all of the witnesses in this case, as was the case in VW - in fact it appeared that no forum appeared to have subpoena power over a significant percentage of the case's witnesses at all.  Thus this factor was neutral as well.
Judicial Economy
Judge Ward's anakysis on this point disclosed an interesting set of facts.  Following the filing of this case by MHL, Volkswagen filed a declaratory judgment lawsuit against MHL, involving the same three patents, in the Eastern District of Michigan.  On June 30, 2008 - three months before Judge Ward ruled on the original motion to transfer in this case - the Michigan judge transferred Volkswagen’s second-filed lawsuit to Judge Ward, citing the risk of inconsistent rulings as well as the waste of judicial resources.  Volkswagen (no, seriously - here too) petitioned the Federal Circuit for a writ of mandamus directing Judge O’Meara to vacate his transfer order, making essentially the same arguments asserted in this motion for reconsideration regarding the inconvenience resulting from a trial in Marshall. The Federal Circuit denied Volkswagen’s petition, finding that Volkswagen arguments were “only general assertions regarding convenience.” In re Volkswagen of America, Inc., 296 Fed. Appx. 11, 14 (Fed. Cir. 2008). "In the light of this guidance from the Federal Circuit," Judge Ward wrote, "this Court is inclined to deny defendants’ motion."
But there's more.  Judge Ward noted that there was a previously filed case by this plaintiff against different defendants but involving the same patent filed in his court.  "With two other cases involving the exact same patents before this Court, granting defendants’ motion for transfer in the present case would cut against principles of judicial economy and increase the risk of inconsistent adjudication."  As authority for this proposition, Judge Ward cited Judge Love's assertion to this effect earlier this month when transferring a case to where previous litigation had pended (is that a word?  Maybe not).  See Invitrogen Corp. v. General Elec. Co., No. 6:08-CV-112, 2009 WL 331891, at *4 (E.D. Tex. Feb. 09, 2009).
(Ed. note - this opinion, released Feb. 23, note that the cert. denied date for In re VW II was ... Feb. 23.  Now that's some up to the minute Shepardizing (for those of you that even remember what that means) ).