On November 14, 2017, the Western District of Wisconsin held that the decision in In re Cray, 871 F.3d 1355 (Fed. Cir. 2017), was an intervening change in the law of venue. See Rotex Global, LLC v. Gerard Daniel Worldwide, Inc., No. 16-cv-523-wmc (W.D. Wis. Nov. 14, 2017). The court's decision opens the door for defendants to raise venue objections that would have otherwise have been waived under Rule 12(h) of the Federal Rules of Civil Procedure.
Rotex filed suit against Gerard Daniel Worldwide (“GDW”) in Wisconsin in July 2016. The court noted that GDW was not incorporated in Wisconsin and did not have any property or sales people in the state. Nonetheless, when TC Heartland issued in May 2017, GDW did not move to transfer venue. Instead, GDW waited until September 27, 2017, six days after the Federal Circuit’s decision in Cray, to request a transfer to the Middle District of Pennsylvania, arguing that venue was improper in Wisconsin. At the time of the transfer motion, the parties had already taken discovery and GDW had filed a motion for summary judgment. Rotex opposed the motion on the ground that GDW had “waived its venue objection through participation in this case, which both implicitly and explicitly amounted to consent to venue.” Slip Op. at 5. Rotex also argued that GDW filed the motion to transfer in hopes of finding a forum that would be more receptive to the pending summary judgment motion.
The court granted GDW’s motion to transfer, noting that there was no basis for venue in Wisconsin under the test articulated in Cray since GDW did not have a physical place of business in the district. The court also rejected Rotex’s waiver argument. The court noted that while Rotex “[n]ormally . . . would have a good argument,” the waiver doctrine did not apply because Cray was “certainly” an intervening change in the law of venue. Specifically, the court found that Cray “changed the standard for ‘regular and established place of business,’ and GDW acted promptly in filing the present motion.” Slip Op. at 6. Therefore, “it was not unreasonable for [GDW] to object when it did.” Id. Interestingly, the court held that Cray was an intervening change in the law of venue regardless of whether TC Heartland changed the law. Id. at 6 n.5. Of course, the Federal Circuit has now held in In re Micron Tech., Inc., No. 17-138 (Fed. Cir. Nov. 15, 2017), that TC Heartland was also a change in the law excusing waiver (see our analysis here).
In rejecting Rotex’s waiver argument, the court also determined that the “plaintiff [had] not identified any ground for prejudice,” because “the discovery already taken [was] likely to be every bit as useful in Pennsylvania as it [was] in Wisconsin.” The court also dismissed Rotex’s concern that GDW was shopping for a more receptive forum for its summary judgment motion, noting that the status of this motion had “little relevance” to the venue analysis. Slip Op. 5-7, n. 6.
Time will tell whether the Western District of Wisconsin’s decision in Rotex will provide defendants yet another basis to overcome the potential waiver of their venue arguments. With the Federal Circuit’s subsequent decision in Micron, defendants may not need to rely on Rotex or the argument that In re Cray is an additional intervening change.