United States District Court, E.D. Texas, Marshall Division
ORDER ADOPTING REPORT AND RECOMMENDATION OF UNITED
STATES MAGISTRATE JUDGE
W. SCHROEDER III UNITED STATES DISTRICT JUDGE.
above-entitled and numbered civil action was referred to
United States Magistrate Judge Roy S. Payne pursuant to 28
U.S.C. § 636. Now before the Court is Judge Payne's
Report and Recommendation (Docket No. 34), which recommends
the Court grant-in-part and deny-in-part Defendants AT&T
Inc. and AT&T Services, Inc.'s Motion to Dismiss for
Improper Venue Under Rule 12(b)(3) (Docket No. 18).
Specifically, the Magistrate Judge recommends that AT&T
Inc. be dismissed for improper venue, and that the motion be
denied as to AT&T Services, Inc. Soverain IP, LLC
(“Soverain”) filed objections (Docket No. 35) and
AT&T, Inc. filed a response (Docket No.
Having considered the parties' arguments and having made
a de novo review of the Report and Recommendation,
the Court concludes that the findings and conclusions of the
Magistrate Judge are correct. See Fed. R. Civ. P.
72(b)(3); 28 U.S.C. § 636(b)(1)(C).
objections, Soverain argues that the Magistrate Judge should
have disregarded corporate form when considering whether
AT&T Services' physical place of business in the
District should be imputed to AT&T Inc. and that,
instead, the Court should find venue is proper for AT&T
Inc. under an agency-relationship theory. Docket No. 35 at
Court disagrees. As the Report and Recommendation explains, a
subsidiary's presence in a venue cannot be imputed to a
parent unless the corporations disregard their separateness
and act as a single enterprise. Docket No. 34 at 1-2 (citing
Federal Practice & Procedure § 3823 & nn.24-26;
Cannon Manufacturing Co. v. Cudahy Packing Co., 267
U.S. 333, 334-35 (1925)). Soverain objects to the Magistrate
Judge's reliance on Cannon, citing to a number
of post-Cannon district court opinions,
infra, to argue that the formal separation inquiry
has since been abandoned. Docket No. 35 at 3-4. These cases,
however, are inapposite because they address corporate
separation as it relates to the “minimum
contacts” standard for personal jurisdiction (In re
Telectronics Pacing Sys., 953 F.Supp. 909, 916-17 (S.D.
Ohio 1997); Fin. Co. of Am. v. Bankamerica Corp.,
493 F.Supp. 895, 903-07 (D. Md. 1980); Meredith v. Health
Care Products, Inc., 777 F.Supp. 923, 926 (D. Wyo.
1991); Superior Coal Co. v. Ruhrkohle, 83 F.R.D.
414, 421 (E.D. Pa. 1979); Avery Dennison Corp. v. UCB
SA, No. 95 C 6351, 1997 WL 441313, at *1 (N.D. Ill. Mar.
11, 1997)), or the “doing business” standard for
general venue (Echeverry v. Kellogg Switchboard &
Supply Co., 175 F.2d 900, 902-03 (2d Cir. 1949)).
See Docket No. 35 at 3-4. Soverain does not point to
any cases where courts have imputed the “regular and
established place of business” of a subsidiary to a
corporate affiliate under an “agency” theory,
much less point to any authority to support its contention
that “[a] proper analysis of imputing venue proceeds on
an agency or blending of identities theory.”
Id. at 4.
contrary, as one court has recognized after TC
Heartland and In re Cray, for a “regular
and established place of business” of a subsidiary to
be imputed to a corporate relative, there must be a lack of
formal corporate separateness. See Symbology
Innovations, LLC, v. Lego Systems, Inc., No.
2:17-CV-86, 2017 WL 4324841 (E.D. Va. Sept. 28, 2017).
Soverain points to nothing in the record to indicate a
specific or unusual circumstance that justifies ignoring the
corporate separateness of AT&T Inc. and AT&T
Services. See Docket No. 34 at 2. Nor is the Court
persuaded that Soverain should be permitted to conduct
venue-related discovery, especially in the face of AT&T
Services, Inc.'s uncontroverted declaration that AT&T
Inc. is a “legally and factually separate corporate
entity” and that each AT&T Inc. subsidiary
“maintains its own independent corporate, partnership,
or limited liability company status, identity, and
structure.” Long Decl. ¶ 2, Docket No. 18-1.
made a de novo review of the written objections
filed by Soverain in response to the Report and
Recommendation, the Court concludes that the findings and
conclusions of the Magistrate Judge are correct. Accordingly,
It is ORDERED that Soverain's objections
(Docket No. 35) are OVERRULED. The Court
ADOPTS the Magistrate Judge's Report and
Recommendation (Docket No. 34) in its entirety.
further ORDERED that AT&T
Defendants' motion to dismiss (Docket No. 18) is
GRANTED-IN-PART as to AT&T Inc., and
DENIED-IN-PART as to AT&T Services, and
that AT&T Inc. is accordingly DISMISSED WITHOUT
 Soverain filed a reply to
AT&T's response on December 5, 2017. AT&T, Inc.
filed a surreply on December 12, 2017. The Court will not
consider these additional briefings because the parties did
not comply with the local rules of this District before
filing. See E.D. Tex. Local R. 72(c)
(“Objections to reports and recommendations and any
response hereto shall not ...