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Judge Albright to Apple: Yes, You Can Be Sued Outside Northern California

Judge Albright of the Western District of Texas (“WDTX”) recently rejected yet another attempt by Apple to transfer a patent case to the Northern District of California (“NDCA”). Judge Albright’s June 19, 2020 order describes how Apple—not plaintiff Uniloc—was attempting to forum shop by seeking to move essentially all of its cases filed in Texas to NDCA.  Concluding that venue jurisprudence and considerations of judicial efficiency do not support the notion that a large corporation like Apple can only be sued where its headquarters is located, Judge Albright refused to transfer this case from the WDTX, even though other cases filed by Uniloc in Texas were transferred to California.  Instead, Judge Albright concluded that Apple’s large presence in WDTX, which Apple plans to grow even larger, makes it unlikely for Apple to clearly show that NDCA is always a more appropriate venue.

Noting that Apple has moved to transfer venue to NDCA in numerous cases filed in WDTX and other jurisdictions, Judge Albright found that it is doubtful that NDCA is “clearly more convenient” in each of those cases considering Apple’s large presence in WDTX:

Based on the fact that Apple has thousands of employees working in WDTX (with thousands more projected to be added) and has its second largest physical campus here, and given that, in the Fifth Circuit, the transferee venue must be “clearly more convenient,” the Court doubts that it is likely that NDCA would actually be the “clearly more convenient” in each and every one of the cases in which Apple has filed a motion to transfer venue.

Judge Albright also cited Apple’s engineering and manufacturing activities, continued and growing presence in the district (including an on-campus 192-room hotel for employees), and numerous suppliers with significant presences in the district. Of particular significance was Apple’s receipt of tax subsidies and its status as one of the largest private employers in WDTX, employing 8,000 people with space to accommodate 15,000.

Judge Albright also noted that Apple seemed to rely heavily on the notion that other cases had been transferred to NDCA in support of its argument to transfer this case.  But he emphasized that each case requires its own factual analysis because in the Fifth Circuit the transferee district must be “clearly more convenient” than the transferor district, and “not just a little more convenient.” Being “clearly more convenient” is not established just because some other case was transferred. 

Given Apple’s heavy burden to show transfer is warranted and its significant presence in WDTX, Judge Albright reasoned that another district is unlikely to frequently be “clearly more convenient.” Judge Albright further noted that Apple appears to refuse to accept the premise that the transferee district must be “clearly more convenient:”

Apple is attempting to essentially change the venue laws such that it cannot be sued in Texas, but rather that it can only be sued in NDCA. In other words, if district courts or the Federal Circuit consistently find that a particular transferee forum is consistently ‘clearly more convenient’ than the transferor forum for a corporation like Apple, then the only place where that corporation can be sued is the transferee forum where its primary headquarters is located. Not only is this not the law in the Fifth Circuit, it effectively—but incorrectly—transmutes plaintiff’s choice of forum into defendant’s choice of forum.

After further concluding that “[n]othing would be more restrictive than limiting the number of available forums to solely where a defendant’s primary headquarter is located,” Judge Albright denied Apple’s motion to transfer. Apple’s significant presence in both districts helped to neutralize a number of factors, leaving just one factor favoring transfer. Accordingly, Apple failed to demonstrate that NDCA was “clearly more convenient” than WDTX.

Judge Albright’s message is clear: large corporations such as Apple with significant presences in WDTX will have a hard time challenging venue in WDTX.  Judge Albright’s order contains further guidance to litigants in WDTX, including that plaintiffs should continue to emphasize the “clearly more convenient” standard, while highlighting large corporations’ presences in WDTX. Conversely, repeat defendants should strategically file transfer motions in cases where the facts truly demonstrate significantly more connections to transferee venues rather than attempting to transfer every case to a single district. In addition, merely having a headquarters in a transferee venue is insufficient to show that the venue is “clearly more convenient,” and, in fact, serial motions to transfer can be viewed as forum shopping.

As Apple has already filed a writ of mandamus challenging Judge Albright’s refusal to transfer (which it filed even before the written order issued), the Federal Circuit will have the chance to provide further guidance to district courts and litigants.  We will provide further updates as this issue plays out at the appellate level.

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Daniel Weinger