Federal Circuit Rules That Supreme Court Decision in TC Heartland Was a Change of Law
In good news for those awaiting decisions on pending motions to transfer, or those contemplating a challenge to a recent denial of their motion – especially in the ED Texas, ND California, CD California and Delaware – on November 15 the Federal Circuit issued its decision In re Micron Technology, Inc. The Court determined that the Supreme Court’s decision in TC Heartland did change the patent venue law, but emphasized that it was only deciding the narrow question of waiver, not disturbing the inherent powers of the district courts to find that a party has forfeited the right to challenge venue by untimeliness or consent.
Harvard filed suit in the District of Massachusetts in June of 2016. Micron moved to dismiss pursuant to Federal Rule 12(b)(6) in August, but did not include an objection to venue under Rule 12(b)(3). Shortly after the Supreme Court’s TC Heartland decision, Micron – a Delaware corporation having its principal place of business in Idaho – filed its motion to dismiss or transfer venue. The District Court denied the motion, concluding that, under Rules 12(g)(2) and 12(h)(1)(A), Micron had waived its venue defense by not objecting to venue in its first motion. In so doing, the District Court rejected Micron’s argument that TC Heartland was a change in the patent venue law, concluding that a venue defense had been “available” to Micron when it originally moved to dismiss. Micron petitioned for a writ of mandamus, asking the Federal Circuit to set aside the District Court’s denial of its motion.
Noting “widespread disagreement [among the district courts] over the change-of-law question relevant to waiver” the Federal Circuit granted mandamus review. And on the substantive question presented, the Federal Circuit determined that TC Heartland had, in fact, changed the controlling law in the “relevant sense,” i.e. it would have been improper for the District Court to dismiss or transfer the case for lack of venue had Micron brought its motion before TC Heartland was decided.
Therefore, by omitting a venue challenge from a motion to dismiss filed before TC Heartland, a defendant has not waived its ability to challenge venue later. However, the Federal Circuit was careful to note that the district courts possess inherent powers that might provide an independent basis for a finding that a defendant has forfeited its ability to challenge venue. For example, the decision cites the Court’s denial of mandamus petitions where venue objections were presented close to the time of trial, and observes that a district court could be justified in finding that a defendant has forfeited a venue challenge by making the “tactical” decision to delay raising the issue.
Thus, while good news to litigants with venue issues, the decision should not be viewed as a blank check for those wishing to transfer their cases in the post-TC Heartland world. Other factors – and substantial discretion on the part of district judges who may have shown reluctance to transfer cases in the past – may keep your case in the court where it was filed.