Court Opinion

ID: 9326218
Source: CourtListenerOpinion
Date Created: 2022-12-15 16:00:50.40001+00
Date Added: 2024-06-11T17:15:03.840341
License: Public Domain

Case: 22-157    Document: 20     Page: 1    Filed: 12/15/2022

           NOTE: This order is nonprecedential.

   United States Court of Appeals
       for the Federal Circuit
                  ______________________

               In re: AMAZON.COM, INC.,
                         Petitioner
                  ______________________

                         2022-157
                  ______________________

    On Petition for Writ of Mandamus to the United States
District Court for the Western District of Texas in No. 6:21-
cv-01081-ADA, Judge Alan D. Albright.
                  ______________________

                      ON PETITION
                  ______________________

   Before HUGHES, WALLACH, and STOLL, Circuit Judges.
PER CURIAM.
                        ORDER
    Amazon.com, Inc. petitions for a writ of mandamus di-
recting the United States District Court for the Western
District of Texas to sever the claims against Coghlan Fam-
ily Enterprises LLC and to transfer the remaining claims
against Amazon to the United States District Court for the
District of Colorado. 1 Because we find the district court

    1  Amazon also moves for leave to submit a supple-
mental appendix, which we grant.
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2                                    IN RE: AMAZON.COM, INC.

clearly abused its discretion in evaluating the motions to
sever and transfer, we grant the petition and direct the dis-
trict court to grant Amazon’s motions to sever and transfer.
                              I
     In October 2021, Plaintiff Flygrip Inc. (Flygrip) filed
suit against Amazon.com, Inc. (Amazon) alleging direct
and indirect patent infringement based on resale, on Ama-
zon’s website, of certain handheld-device cases manufac-
tured by PopSockets LLC (PopSockets), Otter Products
LLC (Otter), and Quest USA Corp. PopSockets and Otter
are both incorporated and headquartered in the District of
Colorado. Amazon moved to transfer the case under 28
U.S.C. § 1404(a) to the United States District Court for the
District of Colorado, noting that PopSockets and Otter had
filed related actions in that district seeking declaratory
judgment of noninfringement for their accused devices.
Following venue discovery, Flygrip amended its complaint
to add a small business residing in the Western District of
Texas, Coghlan Family Enterprises LLC (CFE), as a co-de-
fendant, alleging infringement based on CFE’s sales and
offers to sell PopSockets products on Amazon’s website. 2
    Shortly after Flygrip filed its amended complaint, Am-
azon filed the two motions that form the basis of this peti-
tion. Amazon first moved to sever the claims against it from

    2    Flygrip also added ATX Overstock LLC but then
dismissed all claims against ATX. Flygrip later added Mr.
Benjamin Tillinghast, a college sophomore at Purdue Uni-
versity who went to high school in Waco, who also allegedly
resells accused products on Amazon’s website. Pet. at 3-4.
Because Mr. Tillinghast was only added after the district
court’s order, and neither party addresses his relevance to
our analysis, we will not consider whether his addition
weighs against transfer.
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IN RE: AMAZON.COM, INC.                                     3

the claims against CFE, and then filed a revised motion to
transfer the claims against it to the District of Colorado.
Alternatively, Amazon sought to stay the entirety of the ac-
tion pending the District of Colorado’s resolution of Pop-
Sockets’ and Otter’s declaratory judgment actions in
parallel proceedings.
    The district court denied Amazon’s motions. The court
concluded that CFE was not a peripheral party to the case
and therefore the claims against CFE could not be severed.
The court then summarily denied Amazon’s motion to
transfer based solely on the ground that the entirety of the
action could not have been brought originally in the trans-
feree forum because of lack of patent venue over CFE. The
court also denied Amazon’s request to stay the entire pro-
ceeding because the present case involves accused products
that are not at issue in the declaratory judgment actions.
                              II
    Motions to sever are governed by Federal Circuit law,
and we can turn to our sister circuits for guidance. In re
Nintendo Corp., Ltd., 544 F. App’x 934, 938 (Fed. Cir.
2013). A “court may [] sever any claim against a party” to
facilitate transfer. In re Nintendo of Am., Inc., 756 F.3d
1363, 1366 (Fed. Cir. 2014); In re Nintendo Co., Ltd., 544
F. App’x 934, 941 (Fed. Cir. 2013); Wyndham Assocs. v.
Bintliff, 398 F.2d 614, 618 (2d Cir. 1968).
    Motions to transfer are governed by the law of the re-
gional circuit, in this case the Fifth Circuit. In re Juniper
Networks, Inc., 14 F.4th 1313 (Fed. Cir. 2021). We review
transfer determinations in cases arising on mandamus
from district courts in the Fifth Circuit for “clear abuses of
discretion that produce patently erroneous results.” In re
Planned Parenthood Fed. Am. et al, 52 F.4th 625 (5th Cir.
2022) (quoting In re Volkswagen of Am., Inc., 545 F.3d 304,
312 (5th Cir. 2008) (en banc)). In the case of a motion to
transfer, “[t]he ultimate inquiry is whether the destination
venue is ‘clearly more convenient than the venue chosen by
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4                                      IN RE: AMAZON.COM, INC.

the plaintiff.’” In re Planned Parenthood, 52 F.4th at 629.
Accordingly, on appeal we review whether Amazon has
shown a clear and indisputable right to issuance of the writ
by analyzing the factors that traditionally govern transfer
determinations. 3
                              III
                              A
    We consider Amazon’s arguments in support of sever-
ance and transfer in light of several established back-
ground principles.
     First, as our sister circuits have long recognized, a dis-
trict court “must weigh carefully the comparative incon-
venience of splitting the suit versus the advantages to be
gained from a partial transfer” when considering sever-
and-transfer requests. Def. Distributed v. Bruck, 30 F.4th
414, 428 (5th Cir. 2022) (internal quotation marks and ci-
tation omitted); see White v. ABCO Eng’g Corp., 199 F.3d
140, 144 (3d Cir. 1999) (“Before effecting such a severance,

    3    The public interest factors are: “(1) the administra-
tive difficulties flowing from court congestion; (2) the local
interest in having disputes regarding activities occurring
principally within a particular district decided in that fo-
rum; (3) the familiarity of the forum with the law that will
govern the case; and (4) the avoidance of unnecessary prob-
lems of conflict of laws or in the application of foreign
law.” In re Juniper Networks, Inc., 14 F.4th at 1317.
     The private interest factors are: “(1) the relative ease
of access to sources of proof; (2) the availability of compul-
sory process to secure the attendance of non-party wit-
nesses whose attendance may need to be compelled by
court order; (3) the relative convenience of the two forums
for potential witnesses; and (4) all other practical problems
that make the trial of a case easy, expeditious, and inex-
pensive.” Id. at 1316–17.
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IN RE: AMAZON.COM, INC.                                      5

a judge should weigh the convenience to the parties re-
questing transfer against the potential inefficiency of liti-
gating the same facts in two separate forums.”); see also
EMC Corp., 677 F.3d at 1354 (“[I]n developing our own law,
we frequently look to the law of our sister circuits for guid-
ance.”).
     Second, like other courts, we have recognized that the
inclusion of a defendant only peripherally involved in, or
indirectly connected to, the alleged wrongdoing should not
preclude severance and partial transfer to a more conven-
ient forum. See Nintendo, 756 F.3d at 1366. “Otherwise, a
plaintiff could preclude the court from considering whether
transfer would serve the interest of justice by including a
defendant, not subject to suit in the more convenient dis-
trict, who was in some manner peripherally involved in the
alleged wrongdoing.” Wyndham, 398 F.2d at 619.
    Finally, under Fifth Circuit law, transfer “should be
granted if the movant demonstrates that the transferee [fo-
rum] is clearly more convenient” based on an assessment
of the private and public interest factors. In re Radmax,
Ltd., 720 F.3d 285, 288 (5th Cir. 2013) (quoting In re
Volkswagen of Am., Inc., 545 F.3d 304, 315 (5th Cir. 2008)
(en banc) (internal quotation marks omitted)).
                              B
    Applying these principles, we conclude that the district
court abused its discretion by denying Amazon’s motion to
sever and motion to transfer.
     First, the district court erred in its analysis because it
failed to properly recognize that Flygrip’s decision to add
CFE as a defendant only after Amazon filed its first motion
to transfer suggests that it was intended to affect the trans-
fer analysis. We have previously cautioned that, “to the ex-
tent that post-motion events may ever be considered in a
section 1404(a) analysis, we must guard against manipula-
tive measures designed to defeat transfer to a more
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6                                     IN RE: AMAZON.COM, INC.

convenient venue.” In re NetScout Sys., Inc., No. 2021-173,
2021 WL 4771756, at *5 (Fed. Cir. Oct. 13, 2021). In
NetScout, we held that the plaintiff’s filing of additional ac-
tions in the Western District of Texas after a motion to
transfer was filed was an impermissible attempt at venue
manipulation and disregarded those actions. Id. Here, the
addition of CFE—who happens to be the only Western Dis-
trict of Texas-based online reseller out of a list of approxi-
mately 150 identified online resellers—after Amazon filed
its first motion to transfer is suspect. This is only further
compounded by Flygrip’s decision to add yet another co-de-
fendant, Mr. Tillinghast, once Amazon filed its mandamus
petition, as discussed supra n.2. Furthermore, because
“venue is determined at the date of filing,” we “need not
analyze the propriety of venue as to these late-added par-
ties.” Hoover Group, Inc. v. Custom Metalcraft, Inc., 84 F.3d
1408, 1409 (Fed. Cir. 1996).
    Even if Flygrip’s actions had not amounted to venue
manipulation, severance is still appropriate here to facili-
tate transfer. CFE is a small locally owned retailer whose
sales of the allegedly infringing products “amount[] to just
over $3,000.” SAppx2. These claims are peripheral to the
claims against Amazon, and “severance is particularly ap-
propriate in peripheral claim cases to facilitate transfer.”
In re WMS Gaming Inc., 564 F. App’x 579, 582 (Fed. Cir.
2014). Here, the district court further erred by not giving
any, let alone due, consideration to the advantages to be
gained from having the claims against Amazon proceed in
the District of Colorado. Instead, it only considered
whether the claims against CFE and Amazon should be
severed, and having concluded that the claims should re-
main together, the district court determined that it did not
need to assess any of the transfer factors. The court there-
fore skipped the remainder of the analysis: it failed to as-
sess the advantages to be gained from a partial transfer
(based on the transfer factors) and to then determine
whether those benefits are “outweighed by the judicial
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IN RE: AMAZON.COM, INC.                                    7

economy considerations of having all claims determined in
a single lawsuit.” In re Rolls Royce Corp., 775 F.3d 671, 681
(5th Cir. 2014). Once the claims against CFE are severed
from the claims against Amazon, the transfer factors weigh
heavily in favor of transferring the claims against Amazon
to the District of Colorado.
     Here, the factor that weighs most heavily in favor of
transfer to the District of Colorado is that the sources of
proof for the claims against Amazon are almost exclusively
found in Colorado. In patent infringement cases, “the bulk
of the relevant evidence usually comes from the accused in-
fringer. Consequently, the place where the defendant’s doc-
uments are kept weighs in favor of transfer to that
location.” In re Genentech, Inc., 566 F.3d 1338, 1345 (Fed.
Cir. 2009) (citation omitted). Amazon is an online retailer
but not the manufacturer of the accused products, so the
bulk of evidence will need to come from PopSockets and Ot-
ter, who are both located in Colorado. In contrast, Flygrip
admitted during venue discovery that it had no documents
in the Western District of Texas. Pet. at 20. In addition,
Amazon argues that “[t]he witnesses with knowledge of
the” accused products “are in Colorado, and thus the Dis-
trict of Colorado would require far less travel time for
them.” Pet. at 22. On the other hand, Flygrip does not have
any witnesses in Texas. Flygrip’s witnesses are primarily
located in New York (where it is headquartered), and travel
to Texas is not significantly easier than travel to Colorado.
When, as here, “there are numerous witnesses in the trans-
feree venue and the only other witnesses are far outside the
plaintiff’s chosen forum, the witness-convenience factor fa-
vors transfer.” In re Google LLC, 2021-170, 2021 WL
4427899, at *4 (Fed. Cir. Sept. 27, 2021). Thus, the over-
whelming presence of documents and witnesses in the
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8                                    IN RE: AMAZON.COM, INC.

District of Colorado weighs heavily in favor of granting
Amazon’s motion to transfer. 4
    The district court’s numerous errors in its analysis of
the motions to sever and transfer amount to a clear abuse
of discretion. See Munoz–Pacheco v. Holder, 673 F.3d 741,
745 (7th Cir. 2012) (“Failure to exercise discretion is not
exercising discretion; it is making a legal mistake.”) We
therefore vacate the court’s order and direct the district
court to grant Amazon’s motion to sever the claims against
CFE from the claims against Amazon, and to grant Ama-
zon’s partial motion to transfer the claims against it to the
United States District Court for the District of Colorado.
    Accordingly,
    IT IS ORDERED THAT:
   (1) Amazon’s motion for leave to file a supplemental
appendix is granted.
    (2) The petition for a writ of mandamus is granted to
the extent described in this order. The district court is di-
rected to grant Amazon’s motion to sever the claims involv-
ing CFE. Furthermore, the district court is directed to
transfer the claims against Amazon to the United States
District Court for the District of Colorado.

                                   FOR THE COURT

December 15, 2022                  /s/ Peter R. Marksteiner
     Date                          Peter R. Marksteiner
                                   Clerk of Court

    4  The remaining public and private interest factors
are generally neutral in this analysis.