Magistrate Judge Thynge recommends against transfer of case to Northern District of California where both parties are multi-national Delaware corporations.
Magistrate Judge Mary Pat Thynge recently issued a report recommending the denial of a motion to transfer a case to the Northern District of California based on an evaluation of the considerations outlined by the Third Circuit in Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995). Trueposition, Inc. v. Polaris Wireless, Inc., C.A. No. 12-646-RGA-MPT (D. Del. Oct. 25, 2012). Judge Thynge recognized that the Federal Circuit’s decision in In re Link_A_Media Devices Corp., 662 F.3d 1221 (Fed. Cir. 2011) (previously discussed here) provided guidance for the Court’s consideration of the Jumara factors, but added that “the decision has not altered the fundamental fact that ‘Section 1404(a) is intended to place discretion in the district court to adjudicate motions to transfer . . . .’” Id. at 3 (quoting Intellectual Ventures I LLC v. Altera Corp., 842 F. Supp. 2d 744, 754 (D. Del. 2012) (previously discussed here)).
With regard to the Jumara factors, the defendant emphasized that the plaintiff’s choice of forum should be given little weight because the plaintiff lacked any meaningful connection to Delaware—having no offices or employees in the state. The Court disagreed, explaining, “even if Delaware is not considered [the plaintiff’s] home turf, ‘[n]onetheless [its] incorporation in Delaware represents a rational and legitimate reason to choose to litigate in the state,’ by opting ‘to avail [itself] of the rights, benefits, and obligations that Delaware law affords.’” Id. at 6-7 (footnotes omitted). As a result, the Court explained that the plaintiff’s “choice of Delaware as its preferred forum is entitled to, at minimum, significant deference.” Id. at 7 (quoting Intellectual Ventures, 842 F. Supp. 2d at 754). Although the defendant provided legitimate reasons it preferred to litigate in the Northern District of California—which was the location of its headquarters, product development, almost all employees, all documents, and potential third party witnesses—the Court explained, “Defendant’s choice weighs in favor of transfer, however this factor is not provided the same weight as plaintiff’s preference.” Id.
The Court also explained, with regard to whether the Northern District of California was more convenient for the parties than the District of Delaware, that “[u]nless the defendant is truly regional in character – that is, it operates essentially exclusively in a region that does not include Delaware – transfer is often inappropriate.” Id. at 9 (internal quotation marks omitted). Here, the Court noted that both parties were multi-national corporations with worldwide business activities and interests. Id. at 10. Because neither party convincingly made the case that it would be inconvenienced in either the District of Delaware or the Northern District of California, the Court explained that “incorporation in Delaware tips the balance under this part of the convenience analysis. Given that both parties were incorporated in Delaware, they had both willingly submitted to suit there, which weighs in favor of keeping the litigation in Delaware.” Id. (internal quotation marks omitted).
As for the convenience of potential witnesses, including third party witnesses, the Court noted that only the defendant made a case that its preferred forum was more convenient, as the plaintiff failed to identify any witness who might be unavailable in the Northern District of California. Id. at 12. However, the Court noted that “[t]his factor … warrants limited weight since unavailability and lack of cooperation by non-party witnesses are not presumed.” Id. at 12-13 (citing Ivoclar Vivident AG v. 3M Co., No. 11-1183-GMS-SRF (D. Del. June 22, 2012) (“The practical impact of this factor is limited by the fact that few civil cases proceed to trial, and at trial, few fact witnesses testify live.”)). The Court viewed similarly the location of relevant books and records, explaining that although they were mostly located in the Northern District of California, there was no indication that it would be unduly burdensome to bring them to the District of Delaware, if needed, in light of technological advances. Id. at 14.
Finally, the Court explained that none of the public interest factors weighed in favor of transfer, and one factor especially weighed in favor of keeping the case in the District of Delaware. Citing a Federal Circuit decision, the Court explained that the public policy of the fora weighed in favor of keeping the litigation in the District of Delaware “[g]iven that both parties were incorporated in Delaware, [and] they had both willingly submitted to suit” in Delaware. Id. at 17 (quoting Micron Technology, Inc. v. Rambus, Inc. 645 F.3d 1311, 1332 (Fed. Cir. 2011). On balance, Magistrate Judge Thynge found that transfer was not appropriate in this case, and recommended that the Court deny the defendant’s motion because the “defendant has failed to satisfy its burden of showing that the Jumara factors weigh strongly in favor of transfer.” Id. at 18 (citing Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (Fed. Cir. 1970) (“[U]nless the balance of convenience of the parties is strongly in favor of defendant, the plaintiff’s choice of forum should prevail.”)).