Convenience Transferes in the Waco Division Then and Now

Perhaps it’s counter-intuitive to start this blog that’s about practicing in the Waco Division with a discussion about getting one’s case out of the Waco Division—but there’s no question how significant that issue has been to practicing in front of this Court. Motions to transfer for convenience under 28 USC § 1404 have become such a routine part of practicing in front of Judge Albright that the Court’s most recently updated Order Governing Proceedings (OGP) for patent cases promulgated standardized procedures regarding when such motions must be brought.

Specifically, transfer motions must be brought early in the case, no more than two weeks following the initial Case Management Conference—which itself generally follows service of a responsive pleading (answer or Rule 12 motion) by approximately one month. (On request of the parties, the Court has been known to adjust its default transfer motion timeline for special circumstances, such as when a motion to dismiss for lack of standing—which, if successful, would divest the Court of subject matter jurisdiction to rule on any issue—takes precedence.) Judge Albright’s OGP also sets a 15-page limit for transfer motions, an increase from the W.D. Tex. L.R. CV-7(d)(3) default of 10 pages for non-dispositive motions. 

In addition—and beyond the scope of this post—the Court’s rulings on transfer motions have been the subject of numerous mandamus petitions to the Federal Circuit. But that’s a topic for another day. Instead, we’ll briefly examine two recent rulings from Judge Albright’s Court—one denying a convenience transfer motion in March, and one granting a transfer motion in August.

A degree of familiarity with the Fifth Circuit’s test for Section 1404 convenience transfers is presumed—but for background, the case In re Volkswagen of America, Inc., 545 F. 3d 304, 316 (5th Cir. 2008) sets out the four private-interest and four public-interest factors considered on such motions. (Legal trivia: The firm of Herzfeld & Rubin that argued this case has represented Volkswagen for literally decades—see, (subscription required)—including in the seminal World Wide Volkswagen Supreme Court case that all 1Ls study in Civ Pro. May we all form successful client relationships with such longevity.)

So with all that as background, let’s look at those two exemplary Waco decisions:

First, we have the Court’s March decision in CLOUDofCHANGE, LLC v. NCR Corp., No. 6:19-cv-00153, ECF No. 28 (W.D. Tex. Mar. 17, 2020), in which the defendant NCR sought transfer to the Northern District of Georgia. There the Court determined that “the access to proof and localized interests factors weigh in favor of transfer while court congestion weighs against transfer with the other factors being neutral.” On the basis of that balancing of factors, the Court concluded NCR had shown that “the Northern District of Georgia is more convenient—but it is not clearly more convenient—than the Western District of Texas. Accordingly NCR has not met its ‘heavy burden’…” (emphasis in original). (Although also beyond the scope of this post, note that this decision is a representative example of the Court’s common practice of granting motions to transfer in the alternative from the Waco Division to the Austin Division. In all such instances, Judge Albright keeps the case on his docket.)

Second, we have last month’s decision in Parus Holdings Inc. v. LG Electronics Inc., No. 6:19-cv-00432, ECF No. 161 (W.D. Tex. Aug. 20, 2020). There, defendant LG moved to transfer to the Northern District of California. The Court’s ruling again walks through each of the private- and public-interest factors individually, before determining that “(1) access to proof, cost of attendance of witnesses, and local interests [weigh] slightly or very slightly in favor of transfer; (2) court congestion weighs against transfer; and (3) all other factors [are] neutral.” Based on this balance of factors, the Court concludes that “LG has met its burden to demonstrate that NDCA is ‘clearly more convenient.’”

As for similarities and differences between the two orders: In each decision the Court concluded that relative court congestion was the sole factor weighing against transfer. That factor standing alone was sufficient basis to deny transfer in CLOUDofCHANGE, but insufficient to outweigh the other factors in Parus.

The sole factor found to weigh in favor of LG (in Parus) but not NCR (in CLOUDofCHANGE) was cost of attendance of witnesses, which the Court observed in both cases “is the most important factor in a § 1404(a) analysis” (citing In re Genentech, Inc., 566 F.3d 1338, 1342 (Fed. Cir. 2009)). Specifically, the Court in the Parus decision effectively disregarded both prior art and party witnesses—but agreed with LG that “it would be more convenient for [third-party] Google engineers to testify in NDCA.” In contrast, the Court in the CLOUDofCHANGE decision observed that “both parties have identified potential non-party witnesses in both districts.”

So: Is the location of third-party witnesses effectively dispositive? It is yet early to say, but this is clearly an important issue that it would do well for plaintiffs to consider before bringing suit in the Waco Division, and for defendants to consider before moving for a convenience-based transfer under Section 1404(a).

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