Docket No. 2017-138
TARANTO, CHEN, HUGHES
November 15, 2017
Brief summary: DC denial of Micron’s TC Heartland-based venue objection under FCRP 12(h)(1)(A) vacated and remanded for consideration under the “less bright-line more discretionary framework” of Dietz (US 2016).
Summary: Micron petitioned for a writ of mandamus to set aside the DC’s denial of its § 1406(a) motion to dismiss or transfer the case due to improper venue under TC Heartland (US 2017). The DC decision was based on FCRP 12(h)(1)(A) which “provides for waiver, based on the incorporated erms of Rule 12(g)(2), when a defendant omits an available venue defense from an initial motion to dismiss” and its conclusion that TC Heartland “was not a change of law that would make” those rules inapplicable. This petition arose from a patent-infringement case filed against Micron by Harvard in the District of Massachusettes (D Mass) which Harvard alleged is a proper venue under 28 USC § 1391(b) and 1400. In August 2016, before SCOTUS agreed to review TC Heartland in December 2016, Micron moved to dismiss under 12(b)(6) for failure to state a claim but “did not include an objection to venue under Rule 12(b)(3).” In May 2017, SCOTUS “held that, under § 1400(b), ‘a domestic corporation ‘resides’ only in its State of incorporation for purposes of the patent venue statute.” Micron’s motion to dismiss or transfer, alleging D Mass is not a proper venue, was then denied. The FC panel first noted that since SCOTUS’ TC Heartland decision, “many pending patent caes newly presented venue objections” and the DCs “have deeply split on” whether the decision was a change of law, as concluded by the DC in this case. It concluded that the venue defense was not “available” to Micron in August 2016 and “would have been improper” before TC Heartland, “a common sense interpretation of Rule 12(g)(2)” (a “straightforward, relatively bright-line reading”) supported by FRCP Rule 1, and to which “[n]o decision of the Supreme Court or a circuit court to which we have been pointed runs counter”. And under, e.g., Blonder-Tongue (US 1971), “a sufficiently sharp change of law sometimes is a ground for permitting a party to advance a position that it did not advance earlier in the proceeding when the law at the time was strongly enough against that position.” Further,, the DC was “precluded…from adopting an objection to venue before the Supreme Court decided TC Heartland” and “[t]he Supreme Court changed the controlling law when it decided TC Heartland in May 2017”, which only then made the venue objection available to Micron. Thus, it disagreed with the DC’s conclusion regarding Rule 12(h)(1)(A) but did not agree it “should order dismissal or transfer for lack of venue” on this point since that “is not the sole basis” for a DC to “rule that a defendant can no longer present a venue defense that might have succeeded on the merits”. “This authority”, it concluded, “is properly exercised within the framework of Dietz” (US 2016) which explains “that a [DC] possesses inherent powers that are ‘governed not by rule or statute but by the control necessarily vested in courts to manage their own affairs so as to achieve the orderly and expeditious disposition of cases’” (“[a] less bright-line more discretionary framework”; “[a]ny legal conclusions about the boundaries of discretion must await particular [DC] explanations under the Dietz framework of how discretion is being exercised”). FN4 points to several cases (e.g., In re Nintendo, FC 2017) in which no clear abuse of discretion was found where venue objections “were presented close to trial.” It is under this Dietz reasoning that the decision was vacated and remanded.