United States Court of Appeals 

for the Federal Circuit ______________________ 

IN RE: VOLKSWAGEN GROUP OF AMERICA, INC.,

Petitioner

______________________ 

2022-108

______________________ 

On Petition for Writ of Mandamus to the United States 

District Court for the Western District of Texas in No. 6:20-

cv-01131-ADA, Judge Alan D. Albright.

-------------------------------------------------

IN RE: HYUNDAI MOTOR AMERICA,

Petitioner

______________________ 

2022-109

______________________ 

On Petition for Writ of Mandamus to the United States 

District Court for the Western District of Texas in No. 6:20-

cv-01125-ADA, Judge Alan D. Albright.

______________________ 

ON PETITION

______________________ 

MARK A. HANNEMANN, Shearman & Sterling LLP, New 

York, NY, for petitioner Volkswagen Group of America, Inc. 

Also represented by AHMED ELDESSOUKI, ERIC SEBASTIAN 

LUCAS, THOMAS R. MAKIN. 

RYAN KEN YAGURA, O'Melveny & Myers LLP, Los 

Case: 22-108 Document: 22 Page: 1 Filed: 03/09/2022
2 IN RE: VOLKSWAGEN GROUP OF AMERICA, INC. 

Angeles, CA, for petitioner Hyundai Motor America. Also 

represented by CLARENCE ROWLAND, NICHOLAS 

WHILT. 

 MICHAEL SONGER, White & Case LLP, Washington, 

DC, for respondent StratosAudio, Inc. Also represented by 

HENRY HUANG, HALLIE ELIZABETH KIERNAN, JONATHAN J.

LAMBERSON, Palo Alto, CA; DANIEL STERNBERG, Boston, 

MA. 

 MARK S. DAVIES, Orrick, Herrington & Sutcliffe LLP, 

Washington, DC, for amicus curiae Alliance for Automotive 

Innovation. Also represented by ALEXANDRA BURSAK, New 

York, NY.

Before DYK, REYNA, and CHEN, Circuit Judges. 

PER CURIAM. 

O R D E R

Volkswagen Group of America, Inc. (Volkswagen or 

VW) and Hyundai Motor America (Hyundai or HMA) (collectively, the “Petitioners”) both seek a writ of mandamus 

to vacate the United States District Court for the Western 

District of Texas’s denial of their motions to dismiss or 

transfer for improper venue. The district court held venue 

was proper over each car distributor under 28 U.S.C. 

§ 1400(b). The court based that conclusion on the presence 

of independently owned and operated Volkswagen or 

Hyundai car dealerships in the Western District of Texas, 

determining those independent dealerships constituted “a 

regular and established place of business” of the Petitioners. § 1400(b). Because there has been disagreement on 

this issue in the district courts, we deem it appropriate to

now take up the issue. We conclude that the district court

clearly abused its discretion in failing to properly apply established agency law and reaching a patently erroneous result. We therefore grant both petitions. 

Case: 22-108 Document: 22 Page: 2 Filed: 03/09/2022
IN RE: VOLKSWAGEN GROUP OF AMERICA, INC. 3

I.

In December 2020, StratosAudio, Inc. (Stratos) filed

these patent infringement complaints in the United States 

District Court for the Western District of Texas, Waco Division, against Volkswagen and Hyundai, car distributors 

that are incorporated in New Jersey and California, respectively, and hence do not “reside[]” for venue purposes in the 

Western District. 28 U.S.C. § 1400(b); TC Heartland LLC 

v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017). 

Volkswagen and Hyundai moved to dismiss or transfer the 

cases under 28 U.S.C. § 1406(a) and Federal Rule of Civil 

Procedure 12(b)(3). 

The district court denied the motions, concluding that 

venue in the Western District over Volkswagen and Hyundai was proper. It reached that conclusion based on independent car dealerships located in the Western District 

that sell and service cars after purchasing them from the 

Petitioners under franchise agreements imposing, inter 

alia, transfer restrictions, staffing and reporting requirements, minimum inventory levels, employee training, and 

equipment requirements on the dealerships. The district 

court concluded those agreements gave the Petitioners sufficient control over the dealership locations to establish a 

regular and established place of business of the Petitioners 

despite the fact that Texas law prohibits auto manufacturers and distributors from directly or indirectly “operat[ing] 

or control[ling] a franchised dealer or dealership.” Tex. 

Occ. Code (TOC) § 2301.476(c)(2)(A). 

In so doing, the district court found that the agreements give Petitioners sufficient control over dealership 

operations such that the dealerships are agents of the distributors. See 2022-108 Appx (VW Appx) 8–10; 2022-109 

Appx (HMA Appx) 397–99. Based on similar facts, the district court found that Petitioners had ratified the dealerships as their own places of business. See VW Appx 4–8; 

HMA Appx 391–97. Additionally, the district court determined that the dealerships are conducting Petitioners’ 

business because Volkswagen and Hyundai are “in the 

business of manufacturing and distributing vehicles to 

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4 IN RE: VOLKSWAGEN GROUP OF AMERICA, INC. 

consumers” and “the only way that [Volkswagen and Hyundai] can distribute [their] vehicles to consumers in this District is through [their] authorized dealerships in this 

District.” VW Appx 10; HMA Appx 399. It similarly found 

the dealerships conducted Petitioners’ business of providing “new purchase warranties and services to the consumers through [their] dealerships,” VW Appx 10; HMA Appx 

399, and in the case of Volkswagen, “establish[ing] the procedures for processing warranty claims and returning and 

disposing of defective parts,” “requir[ing] its dealers to comply with such procedures,” and “determin[ing] the rate or 

price at which a . . . dealer will be reimbursed for services,” 

VW Appx 10. 

Volkswagen and Hyundai each petitioned this court for 

a writ of mandamus. The two cases are now consolidated 

in this court. Both present similar challenges to the district court’s conclusions that the dealerships are Petitioners’ agents, that Petitioners ratified the dealerships as 

their own places of business, and that Petitioners’ business 

is conducted from the dealership locations. Volkswagen 

asks us to vacate the denial of its motion and instruct the 

district court to dismiss or transfer the action to the United 

States District Court for the Eastern District of Michigan. 

Hyundai asks the court to direct dismissal of its case. 

II. 

A.

Pursuant to the All Writs Act, this court “may issue all 

writs necessary or appropriate in aid of [our] respective jurisdiction[] and agreeable to the usages and principles of 

law.” 28 U.S.C. § 1651(a). Before a court may issue a writ, 

three conditions must be satisfied: (1) the petitioner must 

have “no other adequate means to attain the relief he desires”; (2) the petitioner must show that the right to the 

writ is “clear and indisputable”; and (3) the court “in the 

exercise of its discretion, must be satisfied that the writ is 

appropriate under the circumstances.” Cheney v. U.S. Dist. 

Ct. for D.C., 542 U.S. 367, 380–81 (2004) (citation and internal quotation marks omitted). 

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IN RE: VOLKSWAGEN GROUP OF AMERICA, INC. 5

Ordinarily, mandamus relief is not available for rulings on motions under 28 U.S.C. § 1406(a). See In re HTC 

Corp., 889 F.3d 1349, 1352–53 (Fed. Cir. 2018) (“Unlike a 

defendant challenging the denial of a § 1404(a) transfer 

motion, a defendant aggrieved by the denial of an improper-venue motion has an adequate remedy on appeal 

from a final judgment.”). However, “[m]andamus may be 

used in narrow circumstances where doing so is important 

to ‘proper judicial administration,’” In re Micron Tech., 

Inc., 875 F.3d 1091, 1095 (Fed. Cir. 2017) (quoting La Buy 

v. Howes Leather Co., 352 U.S. 249, 259–60 (1957)), such 

as when there are “a significant number of district court 

decisions that adopt conflicting views on the basic legal issues presented in th[e] case” at hand, In re Google LLC, 949 

F.3d 1338, 1342 (Fed. Cir. 2020) (Google II). Here, given 

the disagreement among district courts on the recurring issue of whether independent car dealerships are sufficient 

to establish venue over car distributors, compare Omega 

Pats., LLC v. Bayerische Motoren Weke AG, 508 F. Supp. 

3d 1336 (N.D. Ga. 2020) (finding venue improper); W. View 

Rsch., LLC v. BMW of N. Am., LLC, Case No. 16-cv-2590, 

2018 WL 4367378 (S.D. Cal. Feb. 5, 2018) (same), with 

Arigna Tech. Ltd. v. Volkswagen AG, Case No. 2:21-cv00054-JRG, Dkt. Nos. 415 & 424 (E.D. Tex. Jan. 18 & 20, 

2022) (report and recommendations finding venue 

proper)1; Blitzsafe Tex., LLC v. Bayerische Motoren Werke 

AG, Case No. 2:17-cv-00418-JRG, 2018 WL 4849345 (E.D. 

Tex. Sept. 6, 2018), vacated, 2019 WL 3494359 (E.D. Tex. 

Aug. 1, 2019) (same)), we determine that these cases 

1 In a related case involving similar venue considerations, the same district court has stayed the proceeding to 

“gain the benefit of [the] guidance” provided herein. 

Arigna Tech. Ltd. v. Bayerische Motoren Werke AG, Case 

No. 2:21-cv-00172, Dkt. No. 179 at 2 (E.D. Tex. Feb. 1, 

2022) [hereinafter Arigna ’172]. 

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6 IN RE: VOLKSWAGEN GROUP OF AMERICA, INC. 

involve exceptional circumstances warranting immediate 

review.2

B.

The burden to establish venue in patent infringement 

cases rests with the plaintiff. See Westech Aerosol Corp. v. 

3M Co., 927 F.3d 1378, 1382 (Fed. Cir. 2019). Whether 

venue is appropriate in a patent infringement action is 

unique to patent law and therefore Federal Circuit law applies. See Celgene Corp. v. Mylan Pharms. Inc., 17 F.4th 

1111, 1119 n.4 (Fed. Cir. 2021); In re Cray Inc., 871 F.3d 

1355, 1360 (Fed. Cir. 2017). 

 Section 1400(b) provides, in relevant part, that “[a]ny 

civil action for patent infringement may be brought in the 

judicial district where . . . the defendant has committed 

acts of infringement and has a regular and established 

place of business.” The regular and established place of 

business inquiry has three general requirements: 

2 The at least four disparate inter-district determinations on the specific issue presented here, in combination 

with a district court staying another case “until the Federal 

Circuit issues further guidance on the[se] venue issues,” 

Arigna ’172, distinguishes the instant case from In re 

Google LLC, No. 2018-152, 2018 WL 5536478, at *3 (Fed. 

Cir. Oct. 29, 2018) (Google I). Google I declined to entertain 

a venue challenge where there were only a “paucity of district court cases that ha[d] so far addressed the issue,” such 

that there was not, at the time, “almost-even disagreement 

among a large number of district courts” warranting the 

extraordinary remedy of mandamus. Id. The circumstances present here are more akin to Google II, where the 

court exercised its discretion to provide guidance on the 

same issue present in Google I, based on the intervening 

two years producing “a significant number of district court 

decisions that adopt conflicting views” that “crystallized 

and brought clarity to the issues.” Google II, 949 F.3d at 

1342–43. The inter- and intra-district uncertainty on this 

issue thus warrants mandamus review in this case. 

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IN RE: VOLKSWAGEN GROUP OF AMERICA, INC. 7

“(1) there must be a physical place in the district; (2) it 

must be a regular and established place of business; and 

(3) it must be the place of the defendant.” Cray, 871 F.3d 

at 1360. The second Cray factor requires “the regular, 

physical presence of an employee or other agent of the defendant conducting the defendant’s business at the alleged 

‘place of business.’” Google II, 949 F.3d at 1345. We consider whether these requirements are met with the understanding that the Supreme Court has repeatedly cautioned

against a broad reading of the patent venue statute. 

See Schnell v. Peter Eckrich & Sons, Inc., 365 U.S. 260, 264 

(1961); Stonite Prods. Co. v. Melvin Lloyd Co., 315 U.S. 561, 

566 (1942). 

Petitioners do not challenge that Stratos has adequately alleged infringement within the Western District 

for venue purposes. And Petitioners do not dispute that 

the dealership locations are physical places within the 

Western District. Nor do they dispute that those physical 

places are regular and established places of business for 

the dealerships. The dispute thus boils down to three issues: (1) whether the dealerships are the agents of Petitioners; (2) whether the dealerships conduct Petitioners’ 

business; and (3) whether Petitioners have ratified the 

dealerships as Petitioners’ places of business. “If any [of 

these] statutory requirement[s] [are] not satisfied, venue is 

improper under § 1400(b).” Cray, 871 F.3d at 1360.

C.

 We hold that the dealerships located in the Western 

District do not constitute regular and established places of 

business of Volkswagen and Hyundai under § 1400(b) because Stratos has failed to carry its burden to show that 

the dealerships are agents of Volkswagen or Hyundai under a proper application of established agency law.3 

3 Because Stratos has failed to show that an agent or 

employee of the Petitioners conducts business at the dealerships we need not address whether the dealerships 

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8 IN RE: VOLKSWAGEN GROUP OF AMERICA, INC. 

Per Google II, “a ‘regular and established place of business’ requires the regular, physical presence of an employee or other agent of the defendant conducting the 

defendant’s business at the alleged ‘place of business.’” 949 

F.3d at 1345. Stratos does not argue that Petitioners’ employees work out of the individual dealerships or that the 

individual dealership employees are agents of Petitioners. 

See Stratos VW Br. 9; Stratos HMA Br. 9. Rather, Stratos 

argues, and must therefore prove, that the dealership entities themselves are Petitioners’ agents. See Pac. Gas & 

Elec. Co. v. United States, 838 F.3d 1341, 1359 (Fed. Cir. 

2016) (PG&E) (“The party asserting that a relationship of 

agency exists generally has the burden in litigation of establishing its existence.” (quoting Restatement (Third) of 

Agency (Restatement) § 1.02(d))). 

As we noted in Google II: 

An agency relationship is a fiduciary relationship 

that arises when one person (a principal) manifests 

assent to another person (an agent) that the agent 

shall act on the principal’s behalf and subject to the 

principal’s control, and the agent manifests assent 

or otherwise consents to act. Restatement (Third) 

of Agency § 1.01. The essential elements of agency 

are (1) the principal’s right to direct or control the 

agent’s actions, (2) the manifestation of consent by 

the principal to the agent that the agent shall act 

on his behalf, and (3) the consent by the agent to 

act. Meyer v. Holley, 537 U.S. 280, 286, 123 S. Ct. 

824, 154 L.Ed.2d 753 (2003).

949 F.3d at 1345 (internal quotation marks and alteration 

brackets omitted). Google II emphasized that the control 

required in an agency relationship is one of “interim 

conduct Petitioners’ business by selling cars to consumers 

or providing warranty services or whether the dealership 

locations can be considered the places of business of Petitioners. Google II, 949 F.3d at 1346; Cray, 871 F.3d at 

1360.

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IN RE: VOLKSWAGEN GROUP OF AMERICA, INC. 9

control.” Id. at 1345–46 (“The power to give interim instructions distinguishes principals in agency relationships 

from those who contract to receive services by persons who 

are not agents.” (citing Restatement § 1.01(f)(1))). Google 

II further recognized that agency relationships are narrow 

in scope. Id. at 1346. That is, just because a party may be 

a principal’s agent for a particular purpose does not mean 

that the party is the principal’s agent for another. See Restatement § 1.01(c) (“Only interactions are within the scope 

of an agency relationship affect the principal’s legal position.”). 

Google II’s analysis is instructive for each of these 

points. In Google II, the plaintiff alleged that Internet Service Providers (ISPs) who hosted Google’s servers were 

Google’s agents because the ISPs were contractually required to install and maintain the servers in addition to 

providing them with network access. See 949 F.3d at 1345–

46.

As to providing network access, Google II determined 

that the ISPs were merely “provid[ing] Google with a service, and Google has no right of interim control over the 

ISP’s provision of network access beyond requiring that the

ISP maintain network access to the . . . servers and allow 

the . . . servers to use certain ports for inbound and outbound network traffic.” Id. at 1345. The lack of interim 

control over how the ISPs performed this contractual duty 

meant “[i]n this respect, the ISPs are not the agents of 

Google.” Id. (citation omitted).

In contrast, the installation and maintenance provisions of the contract between Google and the ISPs required 

the ISPs to perform certain discrete tasks “based on information and instructions provided from Google,” or “only 

with specific and direct step-by-step instructions by 

Google.” Id. at 1346 (citations omitted). Although the additional, specific control by Google may have been “suggestive of an agency relationship” with respect to those tasks, 

id., the court did not need to decide that question because 

the one-off installations could not be considered “regular 

and established,” see id. And the “maintenance activities 

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10 IN RE: VOLKSWAGEN GROUP OF AMERICA, INC. 

cannot, standing alone, be considered the conduct of 

Google’s business.” Id. The ISPs, therefore, were not 

Google’s agents for venue purposes for these activities either.

Google II thus distinguishes between contractual provisions potentially evidencing interim control (step-by-step 

directions for maintenance and installation) and those that 

merely provide constraints on how a service is provided 

(e.g., network access). Stated differently, Google II recognizes that an agency relationship requires the “principal 

ha[ve] the right throughout the duration of the relationship 

to control the agent’s acts.” PG&E, 838 F.3d at 1360 (quoting Restatement § 1.01(c)). And the “fact that such an 

agreement imposes constraints on the service provider 

does not mean that the service recipient has an interim 

right to give instructions to the provider. Thus, setting 

standards in an agreement for acceptable service quality 

does not of itself create a right of control.” Restatement 

§ 1.01(f)(1). 

Questions of control often arise in the context of franchise agreements, and courts long have recognized that

“[s]ome degree of control by the franchisor over the franchisee would appear to be inherent in the franchise relationship,” but “the mere existence of a franchise relationship 

does not necessarily trigger a master-servant relationship.” 

See Drexel v. Union Prescription Ctrs., Inc., 582 F.2d 781, 

786 (3d Cir. 1978). What matters is “the nature and extent 

of such control as defined in the franchise agreement or by

the actual practice of the parties.” Id. (collecting cases);

2 Franch. & Distr. Law & Prac. § 9:42 (“Where a contract 

establishes an independent contractor relationship rather 

than an agency relationship and does not grant the principal control over the details of the contractor’s work, then 

evidence must be produced to show that despite the contract terms, a true relationship between the parties gave 

the principal a right of control.”). 

Google II also stands for the proposition that the control analysis must account for the scope of the alleged 

agency. In other words, control over one aspect of a party’s

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IN RE: VOLKSWAGEN GROUP OF AMERICA, INC. 11

or agent’s activities does not affect the analysis of whether 

that party is an agent for a different activity. See Restatement § 1.01(c) (“Only interactions that are within the scope 

of an agency relationship affect the principal’s legal position.”). For example, when assessing agency based on a 

contractual relationship, “an agent’s duties of performance 

to the principal are subject to the terms of any contract between them.” Nat’l Plan Adm’rs v. Nat’l Health Ins. Co., 

235 S.W.3d 695, 702 (Tex. 2007) (quoting Restatement 

§ 8.07(a)). An agreement to act on behalf of another “only 

for specific purposes” does not give rise to a general duty or 

agency for other purposes. See id. at 703. In the franchise 

context, for example, “the most significant factor to consider is the degree of control that the franchisor maintains 

over the daily operations of the franchisee or more specifically, the ‘manner of performing the very work in the 

course of which the accident occurred.’” Kerl v. Rasmussen, 

267 Wis. 2d 827, 839 (Wis. Ct. App. 2003) (quoting Hart v. 

Marriot Int’l, Inc., 304 A.D.2d 1057, 758 N.Y.S.2d 435, 438 

(2003)).

Here, Stratos argues that the dealerships are Hyundai’s and Volkswagen’s agents for conducting Petitioners’ 

business of (i) selling cars to consumers and (ii) providing 

warranty services to consumers. Assuming that is a proper 

characterization of the Petitioners’ business in the Western 

District,4 Stratos still must show that the Petitioners have 

4 Petitioners argue that their business is to sell cars 

to dealerships, not consumers. See VW Pet. 26 (“VWGoA is 

in the business of selling vehicles to dealers, not to consumers”); HMA Pet. 25 (“HMA is in the business of selling 

Hyundai-branded vehicles to independent dealerships 

across the country.”). And while Petitioners appear to concede that part of their business is reimbursing dealers for 

providing warranty services to consumers, they argue they 

are not in the business of providing warranty services at 

the dealership locations. See VW Pet. 20–21 (“Reimbursing Texas dealers for warranty service charges, although it 

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12 IN RE: VOLKSWAGEN GROUP OF AMERICA, INC. 

the requisite control over the dealerships with respect to 

those activities, including the right to provide “interim instructions.” Google II, 949 F.3d at 1345–46. 

 Stratos argues that similar contractual provisions in 

both the Volkswagen and Hyundai dealership agreements 

give Petitioners the control required for agency. These contractual provisions generally require the dealerships to: 

(1) employ certain types of employees, such as a general 

manager, and service and sales staff; (2) maintain a minimum amount of inventory; (3) perform warranty work on 

consumer vehicles; (4) use specified tools when performing 

warranty and maintenance work; (5) use distributor-approved computer hardware and software; (6) comply with 

the distributors’ standards regarding dealership appearance and use of signs and brand logos; (7) comply with the 

distributors’ working capital requirements; and (8) attend 

mandatory training sessions (Hyundai) or require staff to 

have certain training certifications (Volkswagen).5 Stratos 

further argues that the Petitioners’ conditional ability to 

terminate the agreements demonstrates the requisite control for agency. 

 Petitioners contend that they do not have the right to 

control the day-to-day operations of the dealerships, see 

HMA Pet. 1, 20, and that the provisions cited above are 

basic “quality controls” insufficient to find agency, see 

VW Pet. 22. They liken whatever requirements and standards may exist in this case to Andra Group, LP v. Victoria’s 

may be considered doing business in the state of Texas, . . 

. is not doing business at the dealerships for purposes of 

venue.”); HMA Pet. 26 (“There is no evidence suggesting 

that HMA conducts any warranty or service business at a 

physical place of business in this district. . . .”).

5 Stratos also cites Volkswagen-specific contract provisions requiring dealerships to use Volkswagen-approved 

stationery and business forms, and to keep brochures on 

hand and display them as dictated by Volkswagen. 

See, e.g., VW Appx 66. These Volkswagen-specific provisions do not alter our analysis in this case. 

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IN RE: VOLKSWAGEN GROUP OF AMERICA, INC. 13

Secret Stores, L.L.C., 6 F.4th 1283, 1289 (Fed. Cir. 2021), 

where we found allegations of control by several parent 

companies over the operations of a retail subsidiary insufficient to create an agency relationship. Petitioners further 

point to contractual provisions in each franchise agreement 

with the dealers disclaiming an agency relationship, 

VW Appx 88; HMA Appx 168, and that state the dealerships have complete authority over their own operations, 

VW Appx 88; HMA Appx 133. Petitioners also point to TEX.

OCC. CODE ANN. § 2301.476(c)(2), which prohibits distributors from “operat[ing] or control[ling]” car dealerships in 

Texas. Furthermore, TEX. OCC. CODE ANN. § 2301.003(b) 

states that any contractual provision that violates chapter 

2301 is “unenforceable.” Thus, according to Petitioners, 

any interpretation of the agreements to give Petitioners 

control over the dealerships would make those agreements 

void and unenforceable as a matter of law. 

We need not reach whether the Volkswagen and Hyundai dealership agreements violate Texas law, however, as 

we determine that the cited contractual provisions fail to 

give Petitioners “interim control” over either the dealerships’ car sales or warranty work. Stratos has not cited 

any evidence that Volkswagen or Hyundai maintain influence over the sales process once they have sold a car to a 

dealership. Once the cars leave Petitioners’ possession, Petitioners “retain[] no authority over the manner in—or 

price for—which the [car] will be [sold].” See Johnson v. 

Priceline.com, Inc., 711 F.3d 271, 278 (2d Cir. 2013); see 

also id. at 279 (finding no agency relationship between consumers and website operator because the consumer “retains no right to instruct Priceline as to how it procures 

hotel reservations beyond the initial specifications”). At 

best, Stratos cites various constraints placed on the dealerships that are arguably related to sales (minimum inventory, sales staff, displaying the parent company’s logo, 

providing sales reports, etc.), but none of these provisions 

evidence any control over the sales process itself. These 

provisions are akin to the constraints placed on the 

Google II ISPs (use of certain ports and maintaining network access) that failed to make the ISPs agents of Google. 

Case: 22-108 Document: 22 Page: 13 Filed: 03/09/2022
14 IN RE: VOLKSWAGEN GROUP OF AMERICA, INC. 

949 F.3d at 1345–46; see also Johnson, 711 F.3d at 279 (“After the customer . . . delimits the choices that the service 

provider has the right to make . . . he cedes all other control 

over the reservation process to Priceline.”) (internal citation, quotation marks, and alteration brackets omitted); 

Kerl, 267 Wis. 2d at 839 (“[T]he most significant factor to 

consider is the degree of control that the franchisor maintains over the . . . manner of performing the very work in 

the course of which the accident occurred.”). 

And, unlike Google II’s maintenance and installation 

provisions, there are no “step-by-step” instructions from 

Petitioners that dealerships must follow when selling a car 

to a consumer. See 949 F.3d at 1346; Andra, 6 F.4th at 

1289 (taking actions which benefit a separate company 

does not create an agency relationship unless the alleged 

principal “controls this process”). Indeed, Stratos has cited 

no evidence that undermines the franchise agreements’ 

provisions giving the dealerships full control over their 

day-to-day operations, such as sales. VW Appx 88; 

HMA Appx 133. Thus, the terms and conditions set forth 

in the franchise agreements fail to give rise to an agency 

relationship between the Petitioners and dealerships when 

it comes to selling cars to consumers. See Arguello v. 

Conoco, Inc., 207 F.3d 803, 808 (5th Cir. 2000) (finding lack 

of day-to-day control by franchisor of franchisee’s operations and hiring decisions precluded agency finding for alleged customer-service-based harms); Schear v. Motel 

Mgmt. Corp. of Am., 61 Md. App. 670, 688 (Md. Ct. Spec.

App. 1985) (holding that a franchisor’s lack of control over 

the “day-to-day operation” of the franchisee’s hotel precluded agency finding with respect to harm caused through 

allegedly negligent security). 

Our holding is further bolstered by the relevant—

though not dispositive—consideration that the parties to 

the franchise agreements disclaim an agency relationship. 

VW Appx 88; HMA Appx 168; see also PG&E, 838 F.3d at 

1359 (“[I]t is well established that parties’ statements in a 

contract are not dispositive as to the existence of an agency 

relationship.”); Restatement § 1.02(b) (“Although such 

statements are relevant to determining whether the 

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IN RE: VOLKSWAGEN GROUP OF AMERICA, INC. 15

parties consent to a relationship of agency, their presence 

in an agreement is not determinative and does not preclude 

the relevance of other indicia of consent.”). 

This result is further in accord with a near uniform 

body of case law finding that similar contractual provisions 

or allegations of control fail to show that independent dealerships are agents of vehicle manufacturers or distributors. 

See Causey v. Sewell Cadillac-Chevrolet, Inc., 394 F.3d 285, 

290 (5th Cir. 2004) (finding no agency relationship between 

General Motors and independent local dealership where 

General Motors did “not control [the dealership’s] daily operations”); Leon v. Caterpillar Indus., Inc., 69 F.3d 1326, 

1334, 1335–36 (7th Cir. 1995) (finding no agency relationship between manufacturer and dealer due to an “express[] 

disavow[al of] an agency relationship” in a sales agreement 

and where dealer “manage[d] its operations completely independent of supplier” and “ma[de] all of [its] day to day 

decisions”); Arnson v. Gen. Motors Corp., 377 F. Supp. 209, 

212 (N.D. Ohio 1974) (“[T]he weight of authority, including 

decisions reviewing similar dealer agreements and dealership operations, support the view that a franchised automobile dealer, with regard to the sale of new vehicles, is an 

independent merchant and not an agent of the manufacturer.” (collecting cases)); Poynor v. BMW of N. Am., LLC, 

441 S.W.3d 315, 322 (Tex. App.–Dallas 2013, no pet.) (finding no agency between a distributor and dealership employee concerning accident that occurred during a test 

drive, as plaintiff failed to present evidence that distributor 

“had the right to control [salesperson] or [dealership] during the act resulting in appellants’ injuries”).

The same is true as to the dealerships’ performance of 

warranty services. The contractual provisions require the 

dealerships to perform warranty services, which are reimbursed by Petitioners,6 or require the dealerships to keep 

6 Stratos argues the HMA agreement additionally 

requires “dealers [to] explain and provide a copy of warranties to customers at the time of sale.” Stratos HMA Br. 11 

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16 IN RE: VOLKSWAGEN GROUP OF AMERICA, INC. 

certain parts on hand and use certain tools when performing repairs. But Stratos fails to cite any language giving 

the Petitioners control over how the dealerships perform 

warranty services once those parameters are set. Petitioners’ lack of “interim control” over how the dealerships perform warranty work again precludes a finding that the 

dealerships are Petitioners’ agents for warranty services. 

Google II, 949 F.3d at 1345–46; Leon, 69 F.3d at 1330, 1336 

(reimbursement for warranty work insufficient to create 

agency relationship); Theos & Sons, Inc. v. Mack Trucks, 

Inc., 431 Mass. 736, 744 (2000) (requirements that repairs 

are to “be done in a prompt and efficient manner, in accordance with Mack’s policies and standards, and . . . will utilize only parts manufactured or recommended by Mack[,]

. . . are merely reflective of the ordinary desire of manufacturers to set sufficient minimum performance and quality

standards to protect the good name of their trademark that 

they are allowing another to display” and “do not establish, 

without more, the kind of close control . . . that would indicate that Vigor was serving as Mack’s agent for the work” 

(cleaned up)). 

In contrast, the cases cited by the district court and 

Stratos are distinguishable procedurally and factually. In 

Morano v. BMW of N. Am., LLC, 928 F. Supp. 2d 826 

(D.N.J. 2013), the court denied BMWNA’s motion to dismiss because it found the plaintiff’s allegations of agency 

(citing HMA Appx 147). But the provision Stratos cites 

does not require dealerships to provide and explain HMA 

warranties. Rather, “DEALER agrees that, if it sells or installs any part or accessory that is not a Hyundai Genuine 

Part or Accessory, . . . Dealer will clearly explain to the 

Customer the extent of any [third-party] warranty covering 

the equipment, part or accessory involved and will deliver 

a copy of such warranty to the Customer at the time of 

sale.” HMA Appx 147 (emphasis added). As Stratos does 

not allege that HMA’s business includes providing consumers third-party parts or warranty service, this provision 

does not bear on the instant analysis. 

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IN RE: VOLKSWAGEN GROUP OF AMERICA, INC. 17

plausible. Id. at 838 (“If BMWNA is the entity that made 

the decision whether to cover certain losses—conveying 

that decision through the local dealer—it stands to reason 

that the dealer acted as BMWNA’s agent, or at least that 

the two acted together.”). Accordingly, we do not read Morano as finding “that the dealer acted as BMWNA’s agent,” 

as the district court did. See VW Appx 9–10; HMA Appx 

398. Further, the specific allegation in Morano—that 

BMWNA itself made the decision to decline Mr. Morano’s 

requested warranty service and instructed the dealership

accordingly—is an allegation that BMWNA exerted interim control over the warranty process in that instance.

Stevens v. Ford Motor Co., Case No. 2:18-CV-456, 2020 

WL 12573279 (S.D. Tex. Nov. 2, 2020), and Kent v. CelozziEttleson Chevrolet, Inc., Case No. 99 C 2868, 1999 WL 

1021044 (N.D. Ill. Nov. 3, 1999), have both also been invoked for the unremarkable proposition that independent 

dealerships may, in some circumstances, be considered 

agents of distributors or manufacturers. See VW Appx 9–

10; HMA Appx 397–98; Stratos HMA Br. 29. We can 

hardly disagree that when a distributor or manufacturer 

exercises the requisite level of control over a dealership for 

certain activities—control not present here for sales or 

warranty service—that an agency relationship can exist. 

That is why the district court in Morano allowed the plaintiffs to take discovery as to whether BMWNA controlled the 

specific warranty rejections at issue. And why Stevens, 

which similarly involved allegations of a defective part, declined to dismiss a case where Ford was alleged to have 

“multiple controls over advertising and warranty and repair work.” 2020 WL 12573279, at *6. Unsurprisingly, 

Kent also declined to dismiss a claim against General Motors because, “[t]hough it may be unlikely that Kent will be 

able to establish that General Motors made Celozzi-Ettleson its agent with respect to the sale of extended warranties, . . . it is not out of the question that she will be able to 

do so.” 1999 WL 1021044, at *4.

In light of the above, we conclude that Stratos has 

failed to carry its burden to show that the dealerships with 

the Western District are agents of either Volkswagen or 

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18 IN RE: VOLKSWAGEN GROUP OF AMERICA, INC. 

Hyundai under a proper application of established agency 

law. 

* * * 

For these reasons, we conclude the district court’s 

venue conclusions were a clear abuse of discretion for erroneously interpreting governing law and reaching a patently erroneous result. The district court declined to 

dismiss or transfer based entirely on its determination that 

the independent car dealerships in the Western District of 

Texas constituted regular and established places of business of Volkswagen and Hyundai. Because we reverse the 

only basis for the district court’s decisions to keep these 

cases in the Western District of Texas, we remand for the 

district court to now address whether to dismiss or transfer 

these two cases. 

Accordingly,

 IT IS ORDERED THAT: 

The petitions for a writ of mandamus are granted, the 

district court orders denying the motions to dismiss or 

transfer are vacated, and the case is remanded for further

proceedings consistent with this order.

March 9, 2022

 Date

FOR THE COURT

/s/ Peter R. Marksteiner

Peter R. Marksteiner

Clerk of Court

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