Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_06-cv-04693/USCOURTS-cand-3_06-cv-04693-12/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:271 Patent Infringement

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United States District Court

For the Northern District of California

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UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

REID-ASHMAN MANUFACTURING, INC.,

Plaintiff,

v.

SWANSON SEMICONDUCTOR SERVICE,

L.L.C.,

Defendant.

_____________________________________/

Case No. C-06-04693 JCS

ORDER GRANTING RENEWED

MOTION TO TRANSFER VENUE TO

THE NORTHERN DISTRICT OF TEXAS,

FORT WORTH DIVISION [Docket No.

103]

I. INTRODUCTION

Plaintiff Reid-Ashman Manufacturing, Inc. (“Reid-Ashman”) filed this patent infringement

action on August 2, 2006. Defendant Swanson Semiconductor Service, LLC (“Swanson”) moved to

dismiss or transfer the action to the Northern District of Texas under 28 U.S.C. § 1404(a). The

Court denied that motion on November 13, 2006. On July 9, 2007, Swanson filed a petition for

Chapter 11 bankruptcy in the United States Bankruptcy Court for the Northern District of Texas,

Fort Worth Division. Swanson now brings a Renewed Motion to Transfer Venue to the Northern

District of Texas, Fort Worth Division (the “Motion”), asking the Court to transfer this action

pursuant to 28 U.S.C. § 1412, which applies specifically to proceedings related to bankruptcy

proceedings. The Court finds that the Motion is suitable for determination without oral argument,

pursuant to Civil Local Rule 7-1(b). Accordingly, the hearing scheduled for February 29, 2008,

is vacated. For the reasons stated below, the Motion is GRANTED.

Case 3:06-cv-04693-JCS Document 109 Filed 02/14/08 Page 1 of 4
United States District Court

For the Northern District of California

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II. ANALYSIS

A. Whether § 1404 or § 1412 Applies

As a preliminary matter, the Court must determine whether Swanson’s transfer request falls

under 28 U.S.C. § 1404(a), as Reid-Ashman asserts, or under 28 U.S.C. § 1412, as Swanson argues. 

Section 1404(a) provides that “[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.” Section 1412 provides that “[a] district court may transfer a case or proceeding

under title 11 to a district court for another district, in the interest of justice or for the convenience of

the parties.” While the language of the two provisions is very similar, the former provision affords

deference to the plaintiff’s choice of forum whereas the latter provision carries a presumption in

favor of the court in which the debtor’s bankruptcy case is pending. See SenoRx v. Coudert Bros.,

LLP, 2007 WL 2470125 * 1 (N.D. Cal. August 27, 2007).

While it is clear that § 1412 applies to claims asserted directly against an estate, courts have

struggled where claims are merely “related.” The test for whether a proceeding is related has been

articulated as follows:

The usual articulation of the test for determining whether a civil

proceeding is related to bankruptcy is whether the outcome of that

proceeding could conceivably have any effect on the estate being

administered in bankruptcy. Thus, the proceeding need not necessarily

be against the debtor or against the debtor's property. An action is

related to bankruptcy if the outcome could alter the debtor's rights,

liabilities, options, or freedom of action (either positively or

negatively) and which in any way impacts upon the handling and

administration of the bankrupt estate.

Hohl v. Bastian, 279 B.R. 165, 173 & n.6 (W.D. Pa. 2002) (articulating test for bankruptcy

jurisdiction under 28 U.S.C. § 1334 and noting that test has been adopted by Ninth Circuit as well as

other circuit courts). Although some courts have held that § 1404 applies to related proceedings, the

majority of courts, including courts in this district, have held that § 1412 applies to such

proceedings. See id. This Court agrees. Further, because Reid-Ashman seeks to enjoin Swanson

from selling its only product, test-head manipulators, this action is undoubtedly related to the

administration of the estate.

Case 3:06-cv-04693-JCS Document 109 Filed 02/14/08 Page 2 of 4
United States District Court

For the Northern District of California

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B. Factors Considered in Determining Whether § 1412 Transfer is Appropriate

In SenoRx, the court set forth the following factors that are considered in determining 

whether to grant a § 1412 transfer on the basis that it is “in the interest of justice”:

The variety of factors considered include the economics of estate

administration, the presumption in favor of the “home court”, judicial

efficiency, the ability to receive a fair trial, the state's interest in

having local controversies decided within its borders by those familiar

with its laws, the enforceability of the judgment, and plaintiff's

original choice of forum. See In re Bruno's, Inc., 227 B.R. at 324-25.

“[T]he most important consideration is whether the requested transfer

would promote the economic and efficient administration of the

estate.” In re Commonwealth Oil Refining Co ., Inc., 596 F.2s 1239,

1247 (5th Cir.1979). The “home court” is the bankruptcy court in

which the debtor's case is pending. See Irwin v. Beloit Corp. (In re

Harnischfeger Indus.), 246 B.R. 421, 440 (Bankr.N.D.Ala.2000).

2007 WL 2470125 at *1. In addition, the convenience of the parties is considered, even where

transfer is sought in the interest of justice. In re Bruno, 227 B.R. 311, 325 (S.D. Ala. 1998). Among

the factors court may consider in this respect are: 1) location of the plaintiff and the defendant;

2) ease of access to necessary proof; 3) convenience of witnesses; 3) availability of subpoena power

for the unwilling witnesses; and 4) expenses related to obtaining witnesses. Id. Here, the Court

finds that while the convenience factors do not point strongly in favor of or against transfer – as the

Court discussed in its prior order addressing Swanson’s request for a transfer under § 1404(a) – the

factors listed above, relating to the “interest of justice” prong of § 1412, favor transfer of this action

to the Northern District of Texas.

First, resolution of Reid-Ashman’s claims will have a significant impact on the estate

because the accused product is Swanson’s main source of revenue and therefore Reid-Ashman’s

claims, if successful, will likely deprive Swanson of the ability to pay its creditors. Second, the

“home court” is the Northern District of Texas. Third, judicial efficiency favors transfer so that all

of the claims can be administered in the same district. Finally, although § 1412 requires

consideration of the plaintiff’s choice of forum, the Court finds that in this case, where ReidAshman no longer has its principal place of business in California, that choice is entitled to minimal

deference and is not sufficient to override the considerations listed above. See Unisys Corp. v.

Access Co., Ltd., 2005 WL 3157457 (N.D. Cal. November 23, 2005). Therefore, the Court

Case 3:06-cv-04693-JCS Document 109 Filed 02/14/08 Page 3 of 4
United States District Court

For the Northern District of California

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concludes that transfer is in the interest of justice.

III. CONCLUSION

For the reasons stated above, the Motion is GRANTED. The Clerk is instructed to forward

the file in this case to the Northern District of Texas, Fort Worth Division.

IT IS SO ORDERED.

Dated: February 14, 2008

 

JOSEPH C. SPERO

United States Magistrate Judge

Case 3:06-cv-04693-JCS Document 109 Filed 02/14/08 Page 4 of 4