Last week, the District of Nevada granted defendants’ motion to transfer for improper venue in CG Tech. Dev., LLC v. FanDuel, Inc. et al., 2:16-cv-00801 (D. Nev. July 27, 2017) (Order, Judge Robert C. Jones, Dkt. 219). Notably, the district court found that defendants had not waived the improper venue defense, even though they omitted to raise the defense at the outset of the case, because the defense was not available until the Supreme Court issued its TC Heartland1 decision.
Rather than concentrating its analysis on whether or not the Supreme Court’s TC Heartland decision was an intervening change in the law that qualifies as an exception to waiver, the court instead focused on the “availability” of the improper venue defense. The court noted that most courts of appeal “have held that a defense is not ‘available’ where circuit precedent forecloses it simply because the Supreme Court later issues a ruling to the contrary.”
The court reasoned here that the Federal Circuit’s VE Holding2 “precedent clearly foreclosed the venue defense,” especially when “the Supreme Court had already denied certiorari on the exact question in VE Holding itself.” Moreover, the Federal Circuit is the only circuit court with jurisdiction over the issue, so “even the possibility of a future circuit split does not exist.” The court explained that it would be unfair to simply hold that the Supreme Court merely reaffirmed FourCo Glass3 and did not change venue law for the purposes of waiver. Therefore, the court held that the improper venue defense was not available during the post-VE Holding and pre-TC Heartland period and that defendants could now raise the defense.
The District of Nevada court’s decision joins a growing minority of cases4 that have held no waiver of the improper venue defense. Sooner or later, the Federal Circuit will have to weigh in to provide guidance to the district courts. We will continue to monitor the waiver issue and all other related TC Heartland issues.