Motions to Transfer Litigation from Delaware, Forum Non Conveniens
Steven D. Goldberg, Esq. Wilmington, DE
sgoldberg@stevendgoldberg.com
http://www.stevendgoldberg.com
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The Delaware General Corporation Law and the Delaware Limited Liability Company Act have become the de-facto national corporation and LLC laws. As such the State of Delaware is and has been the favored jurisdiction to form business entities. As the favored jurisdiction it also the jurisdiction where many companies choose to litigate as a company’s jurisdiction of formation or incorporation is one of the jurisdictions where personal service may be had against a company without having to rely on a “long arm” statute.
The Judges of the United States District Court for the District of Delaware, the Delaware Superior Court and the Delaware Court of Chancery have an enviable national reputation for fairness and thoughtful jurisprudence which has caused an arm of the US Chamber of Commerce to rank Delaware number 1 in the nation as the best jurisdiction to litigate business disputes. Sometimes, however, one of the parties to such litigation seeks to transfer the litigation to another jurisdiction, often referred to as a montion Forum Non Conveniens. They seek transfer for a variety of reasons, the convenience of the parties, a witness may not be available in Delaware, a similar case is pending in the other jurisdiction or the interests of justice. Recently the USDC handed down a decision in the case of Ethicon Endo-Surgery, Inc., v. Hologic, Inc., and Suros Surgical Systems, Inc., CA 09-580-JJF. Ethicon v Hologic Both corporations are incorporated in Delaware.
In October, 2007, Hologic had commenced a patent infringement action against Ethicon in the USDC ED Ohio. That matter was scheduled for trial on November 16, 2009. On April 30, 2009, Ethicon commenced the Delaware Action which is scheduled for trial in September 2010. The Delaware Action involved additional patents and an affiliated party. Hologic filed a motion to transfer the action to Ohio where it contends that related patents are being litigated, that the parties to the actions are the same and that the “public interest factors” weigh in favor of transfer.
The Court began its analysis under 28 U.S.C. § 1404(a) “for the convenience of the parties and witnesses, in the interest of justice, a district court may transfer a civil action to any other district of division where it might have been brought.” The leading case in the 3rd Circuit is Jumara v. State Farm Ins. Co., 55 F.3d 873 (3d Cir. 1995) where in the court set out 6 tests to consider the private interests of the litigants: “(1) the plaintiff’s choice of forum; (2) the defendant’s preferred forum; (3) where the claim arose; (4) the convenience of the parties; (5) the convenience of the witnesses, but only to the extent that the witnesses may be unavailable for trial in one of the fora; and (6) the location of books and records, again, only to the extent that they may not be available in one of the fora.” Id. at 879. In addition the Jumara court laid out 6 additional test when considering the “public” interests of the litigants; “(1) the enforcability of the judgment; (2) practical considerations that could make the trial easier, quicker or less expensive; (3) court congestion; (4) local interest in the controversy; (5) public policies of the fora; and (6) the trial judge’s familiarity with the applicable state law.” Id. at 879-80.
“Generally, a plaintiff’s choice of forum is entitled ‘paramount consideration,’ and should not lightly be disturbed. Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (3d Cir. 1970). The weight assigned to this factor is somewhat attenuated here because the movant’s burden is lessened when a plaintiff does not bring suit in its ‘home turf.’ Waste Distillation Tech., Inc., v. Pan Am. Res., Inc.,775 F.Supp. 759, 764 (D. Del. 1991). Even given this lesser burden, the Court concludes this Motion should be denied because the private and public interest do not strongly enough favor transfer, and because Ethicon’s choice of forum does relate to its legitimate, rational concerns. See Dish Network Corp. v. TiVo, Inc., C.A. No. 08-327-JJF, 2009 WL 1529836, at 2 (noting that a defendant’s incorporation in Delaware provides a plaintiff with a rational, legitimate reason to bring suit in Delaware.)”
The Court acknowledged that “[t]he public interest factor only slightly weighs in favor of transfer,” stating that the Ohio Court is more familiar with 2 of the patents than this Court. However the Court stated that “due to the Delaware Action, this Court must also become familiar with the technology”. “Because this action involves a different accused product and two patents not asserted in the Ohio Action, the Ohio Court would likely have to conduct further discovery and perform additional claim construction at the same time this Court would be conducting discovery with similar technologies in the Delaware Action.”
“Although the Court recognizes that the deference given to Ethicon’s choice of forum is somewhat lessened by virtue of the fact that Ethicon has not filed in its home turf, the public and private interest factors do not weigh strongly enough in favor of transfer”.
This is a well reasoned opinion by a well respected jurist. Transfer decisions never are black and white, they often turn on the facts and circumstances of the case and often how interested the judge himself or herself is in the subject matter of the case.
I have an active Delaware business practice as well as a practice in Delaware’s State and Federal courts. If you or your client have a business matter or a matter which you wish to litigate in Delaware or has a matter pending in Delaware, we would appreciate the opportunity to consult with you regarding our representation. Please remember that we do not accept representation without a written engagement letter.
