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Should I Stay or Can I Go: Recent Developments Regarding Venue Transfer in the Western District of Texas

Client Updates

Judge Alan D. Albright took the bench in September 2018, creating a surge in the number of patent infringement cases filed in the Waco Division of the United States District Court for the Western District of Texas. Prior to taking the bench, Judge Albright was a Magistrate Judge and practiced as a patent trial lawyer for over 20 years. Judge Albright leveraged this experience to develop a patent-savvy environment, with standing orders that support a speedy litigation process.  In particular, Judge Albright’s Order Governing Proceedings for Patent Cases generally provides for trial within 18-24 months of the initial case management conference.  That same order additionally stays all discovery other than what is necessary for claim construction until after the claim construction hearing.  Parties on both sides might find aspects of these practices favorable to them—while plaintiffs might appreciate the expedited trial schedule, defendants would likely find the reduced discovery demands favorable as they minimize early expenses prior to obtaining a claim construction order.  Having the claim construction order before opening of fact discovery allows for more focused and cost-efficient discovery, particularly so with a shorter discovery period and trial schedule looming.  Plaintiffs also appreciate that Judge Albright favors jury trials over staying cases pending a validity challenge before the PTAB, noting that he believes he can reach a case resolution before the PTAB in many instances. 

Defendants might prefer a venue closer to their place of business with greater average timespans between case filing and trial. Thus, many defendants sued in the Western District of Texas have filed Motions to Transfer Venue for Convenience under 28 U.S.C. § 1404(a) outside of Waco. Judge Albright typically allows discovery on transfer motions and because of the compressed schedules, occasionally reaches the claim construction hearing prior to ruling on transfer.  Based on the rulings to date, Judge Albright has found that the § 1404(a) convenience factors have disfavored transfer out of the Western District of Texas.  Up until recently, Judge Albright had been more willing to grant transfers to Austin. However, that practice has changed due to the pandemic’s closure of the Austin Courthouse.  Recent litigants have pushed the appellate courts to step in to address both the timing and substantive issues.  This article provides an update on a couple of recent developments with respect to transfer motions in Judge Albright’s court.

I. Timely Ruling on Motions to Transfer

The Court of Appeals for the Federal Circuit recently addressed two petitions regarding timeliness of ruling on transfer motions pending in Judge Albright’s court.  In the first petition in In re SK hynix Inc., 835 F. App’x 600 (Fed. Cir. 2021), the Federal Circuit addressed a request to transfer to the United States District Court for the Central District of California, or alternatively, requesting to stay the proceedings pending a ruling by Judge Albright on the motion to transfer.  Plaintiffs filed the underlying case in March 2020, with Defendants immediately moving to transfer and having all accompanying briefing completed by the end of May 2020.  Id.  Judge Albright had not ruled on the motion as of January 2021, but the Federal Circuit noted that he did schedule a hearing on the motion once the Defendants filed the petition for writ of mandamus.  Id.  The Court noted the delay as “egregious,” but ultimately refused to reach the merits because “the district court has now scheduled a hearing on the motion and is presumably proceeding toward a resolution of the transfer issue.”  Id. at 600-01.  The Federal Circuit granted the request to stay the proceedings until Judge Albright could rule on the transfer issue.  Id. at 601.  Judge Albright ruled on that transfer motion on the merits the next day denying the request.  See Order at 17, Netlist, Inc. v. SK hynix Inc. et al., 6-20-cv-00194 (Dkt. No. 87) (W.D. Tex. Feb. 2, 2021).  The Federal Circuit subsequently denied defendants’ further petition for writ of mandamus requesting reversal of Judge Albright’s ruling.  In re SK hynix Inc., No. 2021-114, 2021 WL 733390, at *6 (Fed. Cir. Feb. 25, 2021).

A month later, three other Judges on the Federal Circuit addressed a nearly identical petition for writ of mandamus concerning delay in ruling on the transfer motion in In re TracFone Wireless, Inc., No. 2021-118, 2021 WL 865353, at *1 (Fed. Cir. Mar. 8, 2021).  The Judges on the panel noted the overlap with the earlier In re SK hynix case, explaining that “[t]here, as here, the petitioners sought mandamus relief from this court after waiting nearly eight months for a ruling on a motion to transfer that was fully briefed.”  Id.  The Court explained that it was well-established Fifth Circuit law “[t]hat district courts must give promptly filed transfer motions ‘top priority’ before resolving the substantive issues in the case.”  Id. at *2 (citing In re Horseshoe Entm’t, 337 F.3d 429, 433 (5th Cir. 2003); In re Apple, Inc., 979 F.3d 1332, 1337 (Fed. Cir. 2020); In re Nintendo Co., Ltd., 544 F. App'x 934, 941 (Fed. Cir. 2013)).  Thus, the Court “order[ed] the district court to stay all proceedings until such time that it issues a ruling on the motion to transfer that provides a basis for its decision that is capable of meaningful appellate review.”  Id.  Judge Albright ruled on that motion within three days of that order denying the transfer motion.  See Order at 17, Precis Group, LLC v. Tracfone Wireless, Inc., 6-20-cv-00303 (Dkt. No. 48) (W.D. Tex. Mar. 11, 2021). 

On March 23, Judge Albright entered a new standing order on procedures for transfer motions. See here.  Among other things, the order requires the moving party to provide the court with a status report once the parties have fully briefed the motion and the motion is ready for resolution no later than six weeks prior to the Markman hearing.  Id.  If the parties do so, the court will either enter an order resolving the motion prior to the Markman hearing or postpone the hearing.  Id.  However, the order also explains that a motion to transfer may only be filed within eight weeks of the scheduled date for the Markman hearing with a showing of good cause for any delay and leave of court.  Id.  Despite this limitation, the order represents an effort to fast-track hearing and rulings on motions to transfer.

II. Seeking Review of the Federal Circuit’s Grant of a Mandamus Petition on Transfer

In July 2020, the Federal Circuit granted the first petition overruling Judge Albright’s decision denying venue and granting mandamus relief.  In Adobe Inc.’s petition, Adobe requested the Federal Circuit for a writ of mandamus to direct Judge Albright to transfer the case brought by SynKloud Technologies, LLC in the Western District of Texas to the United States District Court for the Northern District of California.  In re Adobe Inc., 823 F. App’x 929, 932 (Fed. Cir. 2020).  Judge Albright had denied transfer because of his ability to more quickly schedule a trial.  Id. at 931.

The Federal Circuit noted that the lower court made three errors: (1) “fail[ure] to accord proper weight to the convenience of the transferee venue”; (2) “fail[ure] to weigh the cost of attendance for willing witnesses factor in its discussion”; and (3) “denying transfer based solely on its perceived ability to more quickly schedule a trial.”  Adobe, 823 F. App’x at 932.  The Federal Circuit pointed out that although “docket congestion” is a consideration when evaluating a motion to transfer, “[n]othing about the court’s general ability to set a schedule directly speaks to that issue.”  Id.  In other words, the Federal Circuit reasoned that just because one court sets a faster schedule than another does not make it inappropriate to transfer a case if other factors weigh in favor of doing so. 

SynKloud disagreed with the Federal Circuit’s opinion, filing a petition for writ of cert to the Supreme Court in February 2021.  The main question presented in the petition was:

1. Whether the Federal Circuit wrongly overruled a district court judge’s discretionary 1404(a) transfer decision when rational basis exists for all of the transfer factors and the “extraordinary error” standard was not met when multiple factors favored plaintiff’s chosen venue including the completion of third-party discovery in the current forum, the court congestion factor and the only evidence supporting transfer was set forth in self-serving declarations from defendant.

See Petition for Writ of Certiorari at i, SynKloud Techs., LLC v. Adobe, Inc. (2021) (No. 20-1211).  SynKloud argued that “the facts and circumstances here are rationally capable of providing reasons for the weight accorded by the district court and its sound exercise of discretion in denying the transfer motion.”  Id. at 7.  SynKloud also presented the question of whether, even if the Federal Circuit’s analysis were correct, the proper remedy would have been to remand the case back to Judge Albright so that he could make a more detailed analysis.  Id. at ii.  Regardless, on April 5, 2021, the Supreme Court denied SynKloud’s petition, leaving open the door for future defendants to pursue motions to transfer based on similar facts in the Western District of Texas.  SynKloud Techs., LLC v. Adobe, Inc., No. 20-1211, 2021 WL 1240949, at *1 (U.S. Apr. 5, 2021). 

 

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