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Green Fitness Equipment Co., LLC v. Precor Inc.

United States District Court, W.D. Washington

June 29, 2018

GREEN FITNESS EQUIPMENT COMPANY, LLC, Plaintiff,
v.
PRECOR INC., et al., Defendants.

          ORDER GRANTING MOTION TO TRANSFER RE: ECF NO. 46

          JON S. TIGAR, UNITED STATES DISTRICT JUDGE.

         Before the Court is a joint motion to transfer or dismiss due to improper venue filed by Defendants Precor Incorporated (“Precor”) and 24 Hour Fitness USA, Incorporated (“24 Hour Fitness”). ECF No. 46. For the reasons below, the Court grants the motion and transfers this case to the Western District of Washington.

         I. BACKGROUND

         Green Fitness Equipment Company, LLC (“GFE”) filed this action on February 8, 2017 in the Southern District of California. ECF No. 1 ¶ 2. Precor is a Delaware corporation with a principal place of business in Woodinville, Washington. Id. ¶ 3. 24 Hour Fitness is a California corporation with a principal place of business in San Ramon, California. Id. ¶ 4. GFE brought claims against Defendants for patent infringement; correction of inventorship; false advertising; and related state and common law claims. Id. ¶ 1.

         On June 26, 2017, Precor filed a motion for leave to file a motion to dismiss or transfer in light of the Supreme Court's then-recent ruling in TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S.Ct. 1514 (2017). ECF No. 18 at 2. In response, GFE argued that venue was proper because Precor has a regular and established place of business in California, including seven Precor Home Fitness (“PHF”) locations. ECF No. 19 at 3. GFE's allegations regarding Precor's activities were not made under penalty of perjury, and were supported only by screen shots from the websites of PHF and the Beverly Hilton Hotel (which uses the Precor name in connection with its fitness facility). ECF No. 19-1. On January 30, 2018, the Southern District granted Precor's motion for leave, and in the same order ruled on the merits of the motion. It accepted GFE's representations regarding Precor's California contacts and transferred the case to this district, in part because some of the PHF stores are located here. ECF No. 23-1 at 6.

         On May 16, 2018, Defendants filed the instant motion to dismiss or transfer to the Western District of Washington pursuant with 28 U.S.C. § 1406(a). ECF No. 46. GFE opposes the motion and in the alternative requests that the Court defer ruling on the motion until GFE is permitted time to conduct venue-related discovery. ECF No. 54 at 17.

         II. LEGAL STANDARD

         “The district court of a district in which is filed a case laying venue in the wrong division or district shall dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.” 28 U.S.C. § 1406(a). Venue is proper under the patent venue statute if the action is “brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.” 28 U.S.C. § 1400(b). “Whether venue is proper under [section] 1400(b) is an issue unique to patent law and is governed by Federal Circuit law.” In re ZTE (USA) Inc., 890 F.3d 1008, 1012 (Fed. Cir. 2018). Section 1400(b) “is intended to be restrictive of venue in patent cases compared with the broad general venue provision.” Id. at 1014. “[U]pon motion by the [d]efendant challenging venue in a patent case, the [p]laintiff bears the burden of establishing proper venue.” Id. at 1013.

         “As applied to domestic corporations, ‘reside[nce]' in [section] 1400(b) refers only to the State of incorporation.” TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S.Ct. 1514, 1521 (2017). When determining whether a defendant has a regular and established place of business in the district, three general requirements are relevant: “(1) there must be a physical place in the district; (2) it must be a regular and established place of business; and (3) it must be the place of the defendant. If any statutory requirement is not satisfied, venue is improper under [section] 1400(b).” In re Cray Inc., 871 F.3d 1355, 1360 (Fed. Cir. 2017).

         III. DISCUSSION

         GFE argues that Defendants waived their right to challenge venue at the district court level and that regardless of wavier, venue is proper because Precor has a regular and established place of business in this district. ECF No. 54 at 5, 11.

         A. Waiver

         GFE first argues that Defendants waived their appeal rights when Precor failed to appeal to the Federal Circuit. ECF No. 54 at 5 (“At that time, if Precor wanted to contest venue Precor was required to have appealed the transfer order to the Federal Circuit within 30 days”[1]), 10. GFE cites no case on point, and the Court concludes that Defendants have not waived the issue.

         As an initial matter, an order transferring a case from an improper venue is a collateral order which an aggrieved party cannot appeal. See In re HTC Corp., 889 F.3d 1349, 1353-54 (Fed. Cir. 2018). And “mandamus review of an improper venue decision under [section] 1406(a) is rarely granted in the absence of exceptional circumstances.” In re BigCommerce, Inc., 890 F.3d 978, 981 (Fed. Cir. 2018) (citing Bankers Life & Cas. Co. v. Holland, 346 U.S. 379, 382-84 (1953)); see also HTC, 889 F.3d at 1353 ...


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