Following the Supreme Court's decision in TC Heartland, courts have faced a steady stream of motions to dismiss for improper venue. In resolving those motions, courts have routinely addressed the issue of waiver. In particular, under Rule 12(h) of the Federal Rules of Civil Procedure, the defense of improper venue is waived if a defendant fails to raise the defense in its initial responsive pleading. The waiver doctrine, however, does not apply when a defense is based on an intervening change in the law. As such, numerous courts have now considered whether TC Heartland is the sort of intervening change in law that would permit a litigant to raise a venue objection despite the provisions of Rule 12(h). Several recent decisions have reported that the "majority" position is that TC Heartland did not change the law of venue. As noted below, however, the majority of the courts to address the issue have actually held that TC Heartland changed the law and, as such, gives rise to an exception to the waiver doctrine.
To determine whether TC Heartland changed the law of venue, it is necessary to start with the Supreme Court’s holding in Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957). In Fourco, the Court held that for the purposes of venue in patent cases under 28 U.S.C § 1400(b), a domestic corporation ‘resides’ only in its state of incorporation. At the same time, the Court rejected the argument that § 1400(b) incorporates the broader definition of corporate “residence” contained in the general venue statute, 28 U.S.C. § 1391. Then, in 1988, Congress amended § 1391, adding the words “[f]or purposes of venue under this chapter” as a preamble to the general definition of corporate “residency.” Thereafter, the Federal Circuit held in VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990) that the 1988 amendments made the general definition of corporate residence applicable to the patent-specific venue provision in § 1400(b), effectively abrogating the decision in Fourco. Following VE Holding, venue was proper in patent cases “in any judicial district in which it is subject to personal jurisdiction.”
In light of this history, several courts have held that TC Heartland was not an intervening change in the law because the rule announced in Fourco has always controlled the interpretation of § 1400(b). These courts have noted that the Federal Circuit did not have authority to reverse Fourco and, even after VE Holding, litigants were free to challenge the Federal Circuit’s decision on the basis of Fourco (as TC Heartland did). Other courts, however, have noted that it would have been futile to challenge venue based on Fourco following the Federal Circuit’s decision in VE Holding. These courts have stressed that, from a practical perspective, TC Heartland certainly changed the controlling law of venue.
Courts have now issued 43 opinions addressing whether TC Heartland constitutes an intervening change in law. In 25 cases, courts have found no change in the law that would justify an exception to the waiver doctrine. By contrast, the remaining 18 cases found that defendants did not waive their venue defense because, prior to TC Heartland, there was no meaningful opportunity to raise the defense. Links to these cases can be found on our Resource Center, here.
A number of courts have characterized the cases finding no intervening change in law as the “majority” position. This assertion, however, is somewhat misleading. As reflected in the table below, a majority of the courts to address the issue (as opposed to the majority of the opinions issued) have found that TC Heartland was a change in the law.
Notably, there are also a few courts, like the District of Delaware, that issued inconsistent decisions on whether TC Heartland creates an exception to the waiver doctrine. But, as the above chart shows, while the majority of opinions have held that TC Heartland did not change the law, jurisdictions are more closely split on the issue.