Judge Andrews Grants Motion to Transfer Where Plaintiff is the “Equivalent of a Non-Delaware Corporation” and Balance of Convenience Favors Transfer
In Signal Tech, LLC v. Analog Devices, Inc., C.A. No. 11-1073-RGA, Judge Andrews recently granted defendant’s motion to transfer concluding that the “balance of convenience” factors favored transfer. Id. at 8. Plaintiff in this case is a Delaware limited liability company, which was formed less than two months before filing suit for patent infringement against defendant. Id. at 4. Defendant, on the other hand, is a Massachusetts corporation with its principal place of business in Massachusetts. Id. at 2. After filing its answer to the complaint denying plaintiff’s allegations of infringement, defendant filed a motion to transfer this case to the District of Massachusetts. Id. at 2. Following full briefing and oral argument on the motion to transfer, the Court concluded that the balance of convenience tipped in defendant’s favor and that transfer to the District of Massachusetts was warranted. Id. at 8. The Court found that there was “no connection at all to Delaware” but that there was “a substantial connection to Massachusetts.” Id. at 8.
In its analysis of the Third Circuit’s Jumara factors, the Court noted that plaintiff, in large part because it had just recently been formed as a Delaware entity, had “no principal place of business” and “no claim on Delaware as venue based on its incorporation.” Id. at 4. The Court also noted that plaintiff had “no employees,” with the exception of a “lawyer owner in North Carolina” and two other “owners/investors” in Washington, D.C. Id. at 5. The Court pointed out that, for purposes of its analysis, plaintiff was the “equivalent of not being a Delaware corporation.” Id. at 7. Thus, plaintiff’s choice of Delaware as the forum in this case was not entitled to as strong a weight as it would have been if plaintiff had its principal place of business (or any business) in Delaware. Id. at 4. After considering the applicable Jumara factors and the Fed. Cir.’s recent decision in In re Link_A_Media Devices Corp., the Court ultimately concluded that on these facts the “only connection to Delaware in this case is that it is the plaintiff’s choice of forum – which since plaintiff is (the equivalent of) a non-Delaware corporation with no connection of any kind to Delaware, is not entitled to ‘paramount’ consideration.” Id. at 9. In contrast, the Court noted that defendant had 3,200 U.S. employees and two-thirds of those employees worked in Massachusetts. Id. at 4. In considering the location of witnesses, the Court further noted that the bulk of the fact witnesses (i.e., defendant’s current and ex-employees) would likely be located in Massachusetts and that it was unlikely that there would be any witnesses from Delaware or the surrounding states. Id. at 5. The Court also found that there were no records identified as only being available in one of the two fora. Id. at 6.