Practically all out-of-state defendants prefer not to have to litigate in the plaintiff's "home" court, even if the venue is Hawai`i. It is commonly assumed that "home" courts, out of deference (many have argued excessive deference) to the plaintiff's choice of forum, are reluctant to grant motions to transfer, especially when the home court is in the middle of the Pacific like Hawai`i. Two recent opinions in cases in which our firm was involved contradict the notion that Hawai`i judges will defer to a plaintiff's choice of Hawai`i as forum. In WeR1 World Network v. CyberLynk Network Inc., 11-CV-00195 (DAE-RLP) (Dkt #20), and GPNE Corp. v. Amazon.com, Inc., et al., 11-CV-00426 (SOM-RLP) (Dkt #246), the federal district court granted motions to transfer the cases out of the District of Hawai`i. Although unpublished opinions, they illustrate the fact-intensive approach often taken by courts on venue transfer motions.
In recent years, venue has become a hotly disputed issue in cases where large defendant companies with economic ties to virtually every state moved to transfer cases to more convenient forums. These venue issues are especially prevalent in litigation involving technology companies, where the parties, conduct, and issues are geographically diffuse, often with limited ties to the plaintiff's chosen venue. Indeed, in the area of patent litigation, the U.S. Court of Appeals for the Federal Circuit took the rare step of granting a writ of mandamus, holding that the U.S. Dist. Ct. for the Eastern District of Texas, a preferred venue for patent litigation plaintiffs, "clearly abused its discretion in denying transfer of venue to the Northern District of California. " In re Genentech, 566 F.3d 1338, 1348 (Fed. Cir. 2009).
In both the GPNE and WeR1 opinions, the judges considered the following factors in deciding whether the defendant(s) had met its burden to prove that an alternative forum was more appropriate and that a transfer was warranted under 28 U.S.C. § 1404(a):
(1) the location where the relevant agreement was negotiated and executed, or where the conduct at issue occurred; (2) the state that is most familiar with the governing law; (3) the plaintiff's choice of forum; (4) the respective parties' contacts with the forum; (5) the contacts relating to the plaintiff's cause of action in the chosen forum; (6) the differences in the costs of litigation in the two forums; (7) the availability of compulsory process to compel attendance of unwilling non-party witnesses; and (8) the ease of access to sources of proof.
In WeR1 World Network, Plaintiff WeR1, a Hawai`i-based company that creates and distributes children's television entertainment and other multimedia products, sued Wisconsin defendants, including CyberLynk, an internet service provider. After WeR1 used CyberLynk's file transfer protocol ("FTP") services it was discovered that almost 300 gigabytes of WeR1's electronic data was missing from the servers maintained by CyberLink.
Judge David Alan Ezra granted CyberLynk's motion to transfer after considering the following factors: (1) the agreement between WeR1 and CyberLynk was not signed in Hawai`i; (2) CyberLynk's contacts with Hawai`i were limited primarily to its FTP Agreement with WeR1; (3) the events giving rise to plaintiffs' claims indisputably occurred in Wisconsin; (4) litigating the action in Wisconsin may require less expense; and (5) most of the relevant evidence is located in Wisconsin.
In GPNE Corp. v. Amazon.com Inc., GPNE asserted infringement claims of three patents against sixteen technology and/or telecommunications companies, including Research In Motion (RIM), Apple Inc., and Barnes & Noble, Inc. Arguably the only characteristic common to all sixteen defendants in this lawsuit is that they allegedly manufacture and sell devices that employ a particular wireless telecommunications standard which GPNE claims infringed its patents. On March 9, 2012, Magistrate Judge Richard L. Puglisi entered an order that (1) held that GPNE's claims against all of the various defendant companies were misjoined and should be severed; and, more importantly, (2) granted motions to transfer by Defendants RIM, Apple, and Barnes & Noble.
Magistrate Judge Puglisi noted that although "the plaintiff's choice of forum is usually entitled to deference, it is entitled to less deference when the forum lacks a significant connection to the allegations in the complaint." [Dkt #246 at 12.] GPNE is headquartered in Hawai`i and the vast majority of its main witnesses reside in Hawai`i. However, the products accused of infringing the patents were researched, designed, and manufactured in Texas and California. Defendants' witnesses all reside outside of Hawai`i. In addition, the only connection that RIM, Apple, and Barnes & Noble have to Hawai`i is the fact that their products are sold here. After considering various § 1404 factors, Magistrate Judge Puglisi ordered that the action against RIM be transferred to the Northern District of Texas, and that the actions against Apple and Barnes & Noble be transferred to the Northern District of California.
GPNE subsequently appealed Magistrate Judge Puglisi's order, and on May 9, 2012, it was affirmed by Judge Susan Mollway. GPNE Corp. v. Amazon.com, Inc. (Dkt #287). Since that ruling, GPNE withdrew its oppositions to motions to transfer filed by defendants Amazon and Nokia and filed a joint motion with defendant Pantech to transfer that case to the Northern District of California
Both the WeR1 and GPNE venue orders are a reminder that one should not automatically assume that Hawai`i plaintiffs will have a "homefield advantage." In addition, in the case of technology companies, the mere presence of a defendant's products or services in Hawai`i, will not assure that the case will stay in Hawai`i.
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