District courts are issuing new orders every day that address different venue-related issues in the wake of the Supreme Court’s TC Heartland decision. We highlight two such cases below.
Last week, the Eastern District of Virginia granted Defendants’ motion to dismiss for improper venue in Glasser v. Barboza et al., 1-17-cv-00322 (E.D. Va. Aug. 11, 2017) (Order, Judge Claude M. Hilton, Dkt. 38). The court determined that online sales are not enough to support venue.
Four of the defendants are individual residing in Texas who operate Defendant Cinelinx Media, a sole proprietorship also based in Texas. According to the Order, Cinelinx Media “has made its product available online through Amazon.com [but that] is not sufficient to create a regular and established place of business for the purposes” of meeting the venue test under the second prong of 28 U.S.C. § 1400(b). The court therefore held that venue is improper in the Eastern District of Virginia.
In another case, the Eastern District of Tennessee granted Plastic Development Group’s (“PDG”) motion to transfer for improper venue in Maxchief Investments Limited v. Plastic Development Group, LLC (TWP2), 3:16-cv-00063 (E.D. Tenn. Aug. 14, 2017) (Order, Judge Thomas W. Phillips, Dkt. 57). In so doing, the court determined that the Supreme Court’s TC Heartland decision applies to unincorporated entities. The Supreme Court explicitly did not reach the issue of venue for unincorporated entities in its decision1 , and so this a further extension of the law on this issue.
PDG is a limited liability company headquartered in Michigan. Maxchief sued it in the Eastern District of Tennessee. After the TC Heartland decision issued, PDG moved to dismiss or transfer the E.D. Tenn. case for improper venue, arguing that it is not incorporated and does not have a “regular and established place of business” in Tennessee. Maxchief, on the other hand, argued that TC Heartland only applies to domestic corporations, and that its narrow interpretation of “residence” does not apply to unincorporated entities. Judge Phillips disagreed, however, finding that the Supreme Court’s holding is applicable to unincorporated entities, which have traditionally been treated like corporations for venue purposes. The district court therefore held that venue is improper, and granted the motion to transfer.