Divided Federal Circuit Reverses Another Convenience Transfer Denial by Judge Albright

November 13, 2020

The Federal Circuit has again overturned the denial of a convenience transfer motion by District Judge Alan D. Albright of the Western District of Texas. On November 9, a majority of the court granted a petition for writ of mandamus filed by Apple in litigation brought by Fortress Investment Group LLC subsidiary Uniloc 2017 LLC, ruling that Judge Albright erred in concluding that a variety of the applicable factors weighed against transfer to the Northern District of California (2020-0135). However, Circuit Judge Kimberly A. Moore dissented, arguing that the majority’s analysis exceeded the permissible bounds of mandamus review and improperly disturbed the district court’s factual findings and conclusions.

As previously reported by RPX, Apple filed its mandamus petition on June 16, 2020, more than a month after Judge Albright denied its request to transfer the underlying litigation at a hearing—at which point he had yet to issue an order explaining his reasoning. In that petition, the company argued that the manner in which Judge Albright balances the applicable factors make convenience transfers “[e]ffectively [u]navailable” in the Western District. This case, Apple asserts, is “part of a trend”, as “[i]n his nearly two years on the bench, Judge Albright has never granted” a transfer out of his district on convenience grounds. Moreover, the company asserted that Judge Albright’s posture on the issue, coupled with permissive divisional rules in the Western District that allowed plaintiffs to specifically file before Judge Albright, contributed to judge-shopping.

On June 22, over 40 days after denying the motion at the hearing, Judge Albright issued an order outlining his reasoning, stating that he would not “follow the crowd” by “blindly” adopting related factual findings and rulings from other judges. See here for details on that ruling.


The Majority’s Opinion

Ruling on Apple’s petition on November 9, a Federal Circuit majority began by rejecting Uniloc’s argument that Apple have waived its right to appeal by raising certain issues in a reply brief filed after Judge Albright issued his written transfer order. The majority exercised its “discretion to not apply waiver because doing so would be unfair under the circumstances”, explaining that Judge Albright should have considered the Apple’s transfer motion a “top priority” as required by precedent—whereas he instead “barreled ahead” to address other substantive issues related to claim construction and discovery.

Turning next to the merits of Apple’s petition, the majority addressed Judge Albright’s application of the applicable private and public interest factors for granting a convenience transfer. The court first took issue with Judge Albright’s treatment of the private interest factor concerning the location of sources of proof, holding that he had erred in several respects. In part, the majority held that Judge Albright was wrong to consider witnesses as sources of proof for this factor, which it explained “relates to the ease of access to non-witness evidence, such as documents and other physical evidence”—whereas it is the third factor, concerning “the cost of attendance for willing witnesses”, in which the relative convenience to witnesses should be addressed. To the extent that witness convenience is considered under both factors, it “will be inappropriately counted twice”.

Additionally, the majority ruled that the “district court . . . misapplied the law to the facts in analyzing the location of relevant documents” in finding this factor neutral. On this issue, the majority held that Judge Albright had erroneously conflated Apple’s burden to show that this factor favored transfer with its overall burden to show that the transferee venue was more convenient—and that in any event, he erred by “overemphasizing the sources of proof in or nearer to WDTX and failing to meaningfully consider the sources of proof in NDCA”.

Despite these errors, the majority declined to reweigh the evidence or otherwise overturn Judge Albright’s conclusion as to that factor because those that remained collectively weighed toward transfer, ruling “that the court clearly abused its discretion in concluding otherwise”.

Those factors weighing toward transfer include the “convenience for and cost of attendance of witnesses”, for which the majority held that Judge Albright incorrectly applied the Fifth Circuit’s “100-mile rule”. Here, the majority explained that under the Federal Circuit’s 2009 In re: Genentech decision, this rule “‘should not be rigidly applied’ where ‘witnesses . . . will be required to travel a significant distance no matter where they testify’”. Accordingly, the majority found that Judge Albright erred by overweighing the fact that the asserted patent’s inventors and patent prosecutor lived closer to the Western District of Texas than to the Northern District of California, given that travel will be required for them to reach either district and that under Genentech, any differences in convenience would be slight. Between this holding and the fact that both parties have relevant witnesses in the Northern District of California, the court concluded that this factor weighed “at least slightly in favor of transfer”.

Additionally, the majority held that Judge Albright had misapplied the fourth private interest factor, which concerns “all other practical problems that make trial of a case easy, expeditious, and inexpensive”. In particular, the majority objected to Judge Albright’s argument that the “significant steps” already taken by the court weighed against transfer, noting that those steps had all been taken after Apple filed its motion—including a Markman hearing and order, and a discovery hearing and order, respectively held and issued after the hearing on the transfer motion. “A district court’s decision to give undue priority to the merits of a case over a party’s transfer motion should not be counted against that party in the venue transfer analysis”, the majority held.

Moreover, the majority asserted that Judge Albright had erred by deciding that the greater number of cases pending in the Northern District of California weighted against transfer, explaining instead that “what is important is the speed with which a case can come to trial and be resolved” (citations omitted). On that front, the majority noted that the two districts had comparable times to trial for civil cases overall—notably, also underscoring that the Northern District of California “has historically had a shorter time to trial for patent cases” (emphasis in original) than the Western District of Texas. As a result, the majority found no other reasons weighing against transfer under this factor, while finding that the presence of numerous related cases with “some overlapping issues” already transferred to the Northern District offered judicial economy benefits weighing toward transfer.

Furthermore, the majority rejected Judge Albright’s ruling that the first public interest factor, addressing “administrative difficulties flowing from court congestion”, weighed against transfer due to his district’s quick time to trial. Citing its In re: Adobe decision, the majority observed that “a court’s general ability to set a fast-paced schedule is not particularly relevant to this factor” and noted that the often-speculative nature of this factor means that it cannot alone serve as the basis for transfer. As a result of the above, the majority found this factor to be neutral.

The majority also came to a different conclusion for the public interest factor concerning a district’s “local interest in having localized interests decided at home”, which Judge Albright found to be neutral given Apple’s overall significant presence in both districts, including its Austin campus in the Western District of Texas. In this respect the district court “misapplied the law to the facts”, the majority held, explaining that “[t]his factor most notably regards not merely the parties’ significant connections to each forum writ large, but rather the ‘significant connections between a particular venue and the events that gave rise to a suit’”. To that end, the majority faulted Judge Albright for “so heavily weighing Apple’s general contacts with the forum that are untethered to the lawsuit”. For that reason, and given other facts establishing the Northern District’s local interest, the majority ruled that this factor weighed toward transfer.

The majority then concluded by granting Apple’s petition, also allowing Uniloc 2017 to file a sur-reply and supplement the record.


Judge Moore’s Dissent

Circuit Judge Kimberly A. Moore dissented, arguing that the majority had exceeded the permissible scope of mandamus review and had improperly “exercise[d] de novo dominion” over factual findings and balancing that should be left to the district court’s discretion. “Rather than conducting this limited review, the majority usurps the district court’s role in the transfer process, disregards our standard of review and substitutes its judgment for that of the district court”, asserted Judge Moore.

By granting transfer for Apple, continued the dissent, the majority was inviting additional “ad hominem attacks on esteemed jurists similar to those” allegedly raised in the company’s mandamus petition. The majority pushed back on this characterization, arguing that “[i]f anything”, the fact that its decision explicitly omitted such statements “will discourage future litigants from wasting precious briefing space on” them.

The dissent then raised objections to the majority’s treatment of multiple transfer factors. These objections included the majority’s holding that the “cost of attendance for willing witnesses” factor weighed slightly in favor of transfer, rather than being neutral. Judge Moore dismissed this conclusion as a “mere disagreement with the district court” that was inconsistent with the required “clear abuse of discretion” standard: “Try as it may to cast this as a ‘misapplication of the law to facts’”, argued the dissent, “the majority’s criticism of the district court merely amounts to a belief that the district court ‘gave too much significance’ to the inconvenience of the third-party witnesses”. Moreover, Judge Moore argued that the majority had misapplied Fifth Circuit precedent on the 100-mile rule, “strain[ing] to identify a legal error in the district court’s application of” that principle.

For its part, the majority responded that it was “puzzled” by Judge Moore’s assertion that this conclusion was a “mere disagreement”, rejecting the dissent’s assertion that this holding “disregards our standard of review”. Judge Moore, in turn, accused the majority of “feign[ing] confusion” with that statement.

The dissent then turned to the “practical problems” factor. Here, Judge Moore agreed with the majority that the district court erred by considering events after Apple filed its transfer motion but disagreed that this flipped the factor to weigh toward transfer. Rather, Judge Moore argued that the majority erred by not independently considering the remainder of Judge Albright’s analysis pertaining to judicial economy.

In particular, the dissent highlighted the district court’s finding that the other Uniloc cases pending in Northern California were “significantly different and widely dispersed”. “The majority barely mentions these careful, thoughtful, thoroughly analyzed fact findings en route to its conclusion that it will grant transfer”, Judge Moore asserted. With respect to court congestion, furthermore, Judge Moore argued that the majority had erred by relying on the Federal Circuit’s Adobe decision, distinguishing that ruling as addressing a decision that turned solely on the scheduled trial date—and asserting that this was not the case here. Rather than refuting Judge Albright’s “thoughtful, thorough fact findings” on the relative amount of congestion between the venues at issue, the majority was improperly engaging in de novo review, Judge Moore argued.

Lastly, Judge Moore raised a variety of issues with the majority’s conclusion on the “local interest” factor, arguing that its analysis was “overblown”. The dissent then proceeded to highlight a variety of Judge Albright’s factual findings related to “Apple’s and its manufacturer’s significant presence in the district” that the majority had allegedly dismissed. Judge Moore again argued that the majority was improperly reweighing the facts, further asserting that it was wrong to discount evidence regarding a party’s general presence in a district: “Neither this court nor the Fifth Circuit has held that an accused infringer’s general presence in a district is irrelevant to the district’s local interest in resolving the case”.

Judge Moore ended by returning to her criticism that the majority had exceeded the permissible bounds of mandamus review, and that it “simply substituted its judgment that transfer should be ordered for that of the district court”: “Under the proper standard of review, I believe the only patently erroneous result here is the one reached by the majority. I dissent from that result”.


West Texas Remained the Top Patent District in Q3

The spotlight has continued to shine on Judge Albright as a result of the Western District of Texas’s dramatic rise in popularity as a patent venue since his confirmation to the bench in late 2018. As detailed in RPX’s latest quarterly review, the Western District became the top overall venue for patent litigation and for litigation filed by NPEs in the third quarter of 2020, outpacing the District of Delaware—previously the top district after the Supreme Court’s TC Heartland decision—for both rankings.

See the full third-quarter report for more on this and other trends affecting patent litigation and the patent marketplace.