In late September, a Federal Circuit panel declined to disturb a ruling from Western District of Texas Judge Alan D. Albright that a plaintiff can establish venue through an in-district property not leased until after the case was filed, based on facts that were not pleaded until an amended complaint. That decision by Judge Albright, in litigation filed by plaintiff Marble VOIP Partners LLC, appeared to stretch a prior Federal Circuit opinion that concerned an amended complaint grounding venue in newly pleaded facts, but where those facts predated the original complaint. Now, defendant RingCentral has asked the full Federal Circuit to reconsider the denial of its mandamus petition, asserting that the panel’s decision would “effectively shield[] improper venue rulings from appellate review” by allowing parties to retroactively fix venue defects through amended complaints, a “concept” that is “anathema” to the patent venue statutes.

Marble VOIP sued RingCentral, together with Mitel Networks, in March 2022. That May, RingCentral filed a motion to dismiss for improper venue, noting that it does not “reside” in West Texas under TC Heartland (as it is a Delaware corporation) and lacked a “regular and established place of business” there as required to establish venue under the other prong of the venue statue, 28 USC §1400(b) (as it “neither own[ed] nor rent[ed] any physical space” there when the original complaint was filed). (In the alternative, RingCentral sought transfer to the Northern District of California on convenience grounds.) In August 2022, RingCentral then signed a lease for office space in Austin, Texas, later characterizing this as a “temporary lease at a shared office space for meeting rooms”. The following month, the plaintiff filed an amended complaint, alleging for the first time that RingCentral maintains a regular and established place of business in West Texas based on the August 2022 lease, also filing a new original complaint in the same district (which was voluntarily dismissed by early December, around the time that Mitel settled out from the first case). RingCentral filed a second motion to dismiss, arguing that proper venue must be established based on facts that exist at the time of the original complaint.

Yet Judge Albright denied the motion in June 2023, stretching to cover the current situation a Federal Circuit ruling (in In re Samsung) that facts pleaded in an amended complaint, albeit facts that existed on the date of the original complaint, could be considered when assessing a convenience transfer. Judge Albright conceded that Samsung “admittedly differs” in that it only addresses the impact of whether facts were alleged in the original or amended complaint, not whether facts that were “alleged in an amended complaint and occurred after the filing of original complaint should be considered in the venue analysis under § 1400(b)” (emphasis added). Nonetheless, Judge Albright read Samsung as rejecting the argument that the 1404(a) threshold inquiry “should be determined by facts alleged in the original complaints, not the amended complaints”, and ruled that the decision “does not suggest that facts relevant to the venue inquiry alleged in the amended complaint must have taken place before the filing of the original complaint”. Having thus interpreted the Samsung case as holding that the facts “alleged in an amended complaint apply to determine whether a case ‘might have been brought’ in the transferee forum under § 1404(a)”—and because, Judge Albright further ruled, this part of the 1404(a) analysis should reflect the threshold inquiry under 1400(b) (establishing where a patent suit “may be brought”) because the two are “analogous”—he stated that he “believes that facts alleged in an amended complaint should apply to determine whether venue is proper under § 1400(b)”.

RingCentral sought the Federal Circuit’s help later that month through a petition for writ of mandamus, asking the appeals court to confirm instead that proper venue is to be determined by facts as they exist on the date of the original complaint. The company underscored that this circumstance did not involve a plaintiff that had alleged facts in its amended complaint that actually existed as of the date of the original complaint, facts that it had simply not pleaded in the earlier document. Rather, Marble VOIP pleaded in its amended complaint facts that did not even exist as of the date of the original complaint.

However, a Federal Circuit panel refused to reverse Judge Albright’s ruling, first by laying out the standard that a petitioner for a writ, dubbed an “extraordinary remedy”, must meet. Such a petitioner must show (1) it has “no other adequate means to attain the relief [it] desires”; (2) the right to the writ is “clear and indisputable”; and (3) “the writ is appropriate under the circumstances”.

The panel determined that RingCentral has another adequate means to remedy Judge Albright’s ruling—namely, an appeal after final judgment, noting that the appellant had not pointed to any irreparable harm, or “some important need for judicial administration”, that would warrant earlier mandamus intervention. (Yet, as RPX has often covered, the Federal Circuit has taken a much different tack with respect to reversing Judge Albright on the issue of convenience transfers, spending little time considering whether each petitioner has “another adequate means” to remedy the denial of such motions.) What may have really carried the day, though, was the panel’s determination that RingCentral had not shown a “clear and indisputable” right to dismissal—finding that since a series of its own decisions (including Samsung), and appellate rulings from other courts, either contemplate the consideration of amended complaints or take a permissive approach to curing defects with respect to venue or jurisdiction, RingCentral had not shown an abuse of discretion by Judge Albright. The panel also rejected the primary case relied upon by RingCentral, the Supreme Court’s 1960 opinion in Hoffman v. Blaski, distinguishing that ruling because it “concerned forum manipulation from a defendant’s unilateral, post-suit consent to suit elsewhere” and did not address amended complaints.’

RingCentral Seeks En Banc Rehearing; Argues That Post-Filing Facts Cannot Determine Venue Challenges

RingCentral’s rehearing petition asserts that the Federal Circuit panel was wrong to deny mandamus review—both as to whether the threshold for a writ of mandamus has been met and, for related reasons, on the underlying legal issues. In particular, it argues that this case falls within the “narrow and exceptional circumstances that would justify mandamus relief” for the denial of an improper venue motion that the Federal Circuit would otherwise review after final judgment, a scenario discussed by the appeals court in its January 2023 In re: Stingray IP Solutions decision. Per RingCentral, mandamus review of an improper venue motion is warranted under Stingray IP if a petition presents an issue “important to ‘proper judicial administration’”, including where necessary to correct a lower court’s errors on certain “‘basic, undecided’ legal questions”.

The panel decision presents such a basic, undecided legal question, argues RingCentral, because it “indicates for the first time—and inconsistent with U.S. Supreme Court precedent—that proper venue under § 1400(b) may be based on facts that come into existence only after suit was brought, as long as an amended complaint (no matter when it’s filed) asserts the new venue facts”. This allegedly incorrect reading of the law, RingCentral explains, stems in part from a misreading of Hoffman, which it claims is not confined to cases involving certain “unilateral, post-suit consent to suit” in a transferee venue. Rather, the company asserts, the Court in Hoffman more broadly held “that a defendant’s post-suit conduct could not be used to control venue because where suit ‘might have been brought’ under a § 1404(a) transfer motion is governed by ‘the situation which existed when suit was instituted’”. While RingCentral echoed Judge Albright’s ruling that the 1400(b) “may be brought” inquiry should reflect the 1404(a) “might have been brought” determination, it indicates that he took this concept in the wrong direction: rather, “[i]n both instances, proper venue must be based on facts that exist when the initial complaint is filed because that is when suit is ‘brought’” (emphasis added), as opposed to a more permissive approach to amended complaints under 1404(a) also governing the approach to improper venue motions (as Judge Albright had determined).

To the contrary, RingCentral contends based on the Supreme Court’s 1964 decision in Van Dusen v. Barrack—which held that “where a case ‘might have been brought’ under § 1404(a) reflects federal venue statutes, including § 1400(b)”—that “[a] patent suit can only have been brought in a different venue under § 1404(a) if § 1400(b) would have allowed it to be brought there in the first instance” (emphasis in original). RingCentral argues that this reading is further supported by the grammatical tense of the patent venue statute, which defines the relevant threshold facts as those existing at the time of suit by stating those requirements in the present tense: “Under § 1400(b), suit may only ‘be brought’ (present tense) where the defendant . . . ‘has committed acts of infringement’ (past tense) and “has a regular and established place of business’ (present tense)” (emphasis added).

Moreover, RingCentral claims that the cases cited by the panel as weighing in Judge Albright’s favor (and, thus, as indicating that he did not abuse his discretion) are inapposite because they deal with “vastly different inquiries than determining where a patent suit ‘may be brought’ under the venue statutes”: The company characterizes three of those opinions (the Federal Circuit’s 2008 decision in Prasco v. Medicis Pharmaceutical, the Supreme Court’s 1976 decision in Mathews v. Diaz, and the First Circuit’s 2020 decision in Cortés-Ramos v. Martin-Morales) as addressing “whether a supplemental or amended complaint filed under Federal Rule of Civil Procedure 15 can cure a jurisdictional defect by alleging facts that establish jurisdiction”, and a fourth (the Seventh Circuit’s 1993 decision in Woods v. Indiana University-Purdue University at Indianapolis) as concerning “whether an amended complaint naming new defendants relates back for purposes of the statute of limitations” under Rule 15.

Perhaps even more significantly, RingCentral asserts that both the Federal Circuit panel and Judge Albright had misinterpreted Samsung, countering that that case does not deal with the present issue of post-filing facts being asserted to defeat a transfer motion. Rather, the defendant interprets the case more narrowly, as holding “that a plaintiff cannot manipulate venue by a pre-suit assignment of claims”. (For RPX coverage of the Samsung decision, including the court’s finding that the plaintiffs’ corporate and ownership structure was designed to “manipulate venue” in order to keep the cases in their chosen district, see here.) Venue manipulation, RingCentral claims, is the only instance where a court may disregard the proper construction of Section 1400(b): that “facts supporting venue must exist when suit is brought”. This case is not an example of venue manipulation, argues RingCentral, nor is it an example of a party merely seeking to plead existing facts for the first time via amended complaint.

As noted above, RingCentral asserts that this case presents “an important and basic legal question concerning judicial administration” because the Federal Circuit does not appear to have previously addressed the key issue presented: “whether later-arising facts can support venue in a forum that was not proper when suit was brought”. Not only is this an “important question of law”, RingCentral underscores, en banc review is also “critical for proper judicial administration” because the panel decision “conflicts with district courts throughout the country holding that post-suit facts cannot affect venue”. In particular, the company cites a long line of cases, some more than 50 years old, that reflect this “bright line rule”—cases that the panel ruling “implicitly overrules, or at least casts into doubt”.

“Proper construction and uniform application of the patent venue statues is critical to the administration of justice and to ensuring efficient expenditure of judicial and party resources”, RingCentral underscores. Not only would the panel’s decision, allowing later-arising facts to “make improper venue” suddenly proper, insulate venue rulings from appellate review and “eviscerat[e] the intent of the venue statutes”, RingCentral argues—it would also “provide opportunities for mischief”, encouraging parties to “maliciously influence business decisions, such as opening or closing an office in a particular district, based on how that choice might affect venue in an existing lawsuit rather than legitimate operational concerns” (as explained earlier in the opinion).

For these reasons, RingCentral requests that the Federal Circuit grant en banc rehearing, vacate the panel decision, “and enforce § 1400(b) as it is written by ordering the District Court to grant RingCentral’s motion to dismiss for improper venue”.