United States District Court, E.D. Texas, Sherman Division
MEMORANDUM ADOPTING IN PART REPORT AND RECOMMENDATION
OF UNITED STATES MAGISTRATE JUDGE
L. MAZZANT, UNITED STATES DISTRICT JUDGE
for consideration the report of the United States Magistrate
Judge in this action, this matter having been heretofore
referred to the United States Magistrate Judge pursuant to 28
U.S.C. § 636. On March 7, 2018, the report of the
Magistrate Judge was entered containing proposed findings of
fact and recommendations (“the Report”) (Dkt.
#316) that Defendants St. Jude Medical S.C., Inc., St. Jude
Medical, Cardiology Division, Inc., and St. Jude Medical,
LLC's (collectively, “St. Jude” or
“Defendants”) Motion for Summary Judgment of
Improper Venue (Dkt. #178) be granted and the case be
dismissed for improper venue. Snyders Heart Valve, LLC's
(“Snyders” or “Plaintiff”) filed
objections to the Report (Dkt. #319), to which Defendants
filed a response (Dkt. #321). The Court held a hearing on the
objections on May 30, 2018.
Court has made a de novo review of the objections
raised by Plaintiff and is of the opinion that the Magistrate
Judge's ultimate conclusion that venue is improper in the
Eastern District of Texas is correct and the objections are
without merit as to the Magistrate Judge's ultimate
conclusion. The Court hereby adopts the conclusions of the
Magistrate Judge to the extent explained below and
supplements the Report with the following findings and
of the procedural posture of this case, the Court first
discusses the relevant background. Defendants made their
first challenge to improper venue, asserting a challenge
based on the safe harbor provision, on January 17, 2017 (Dkt.
#20); however, the motion was withdrawn (Dkt. #29) pursuant
to the parties' Joint Motion Re: Discovery and Briefing
Schedule for the St. Jude Medical Defendants'
Jurisdiction/Venue/Transfer Motion (Dkt. #27). In this joint
motion, the parties agreed to a schedule for preliminary
discovery on jurisdiction and venue, allowing for Defendants
to file preliminary motions on jurisdiction, venue, and
transfer after completion of discovery (Dkt. #27).
February 13, 2017, after the parties completed discovery,
Defendants filed their Opposed Motion to Dismiss Under
Fed.R.Civ.P. 12(b)(3) and Plaintiff's and Defendants'
Joint Motion to Hold Defendants' Opposed Motion to
Dismiss in Abeyance (Dkt. #33). In that motion, Defendants
contended that venue was improper under both prongs of §
1400(b), and the parties jointly requested the Court to hold
the motion in abeyance pending the Supreme Court's ruling
in TC Heartland (Dkt. #33). The Court denied the
parties' request to hold the motion in abeyance (Dkt.
#42); accordingly, briefing on the motion to dismiss
proceeded as prescribed by the Eastern District of Texas
Local Rules and the Federal Rules of Civil Procedure. In
Defendants' Brief in Support of its Opposed Motion to
Dismiss Under Fed.R.Civ.P. 12(b)(3), Defendants raised their
challenge to venue based on the safe harbor provision (Dkt.
#44). However, on May 12, 2017, the Court denied the motion
to dismiss explaining that even though the Supreme Court of
the United States had granted certiorari in In re TC
Heartland, the Federal Circuit had determined venue in
cases alleging patent infringement was proper in
“‘any district where there would be personal
jurisdiction over the corporate defendant at the time the
action is commenced.'” (Dkt. #98 at p. 2 (quoting
VE Holding Corp. v. Johnson Gas Appliance Co., 917
F.2d 1574, 1583 (Fed. Cir. 1990); In re TC Heartland
LLC, 821 F.3d 1338, 1342-43 (Fed. Cir. 2016)).
22, 2017, the United States Supreme Court decided TC
Heartland LLC v. Kraft Foods Group Brands LLC, 137 S.Ct.
1514 (2017). In TC Heartland, the Supreme Court
decided that “[a] domestic corporation
‘resides' only in its State of incorporation for
purposes of the venue statute.” 137 S.Ct. at 1517. In
light of the new decision, St. Jude filed their Motion to
Reconsider the Court's May 12, 2017 Order Denying St.
Jude's Motion to Dismiss for Improper Venue (Dkt. No.
98), and St. Jude's Renewal of the Same (Dkt. #110). In
the motion for reconsideration, St. Jude again argued that
venue was not proper under either prong of § 1400(b),
asserting a challenge based on the safe harbor provision
(Dkt. #110). Instead of contesting the facts surrounding the
safe harbor, Snyders argued that the safe harbor was
irrelevant to the venue consideration and that St. Jude
stipulated to the fact that it sold accused products
in the district (Dkt. #125).
considering the arguments, the Magistrate Judge recommended
that, pursuant to TC Heartland, Defendants did not
reside in this District, but used Defendants' stipulation
to determine that there were alleged acts of infringement in
this District (Dkt. #165). The Magistrate Judge further
recommended that because the safe harbor provision was an
affirmative defense raised by Defendants, Plaintiff was not
required to negate the same to establish venue (Dkt. #165).
Both Snyders and St. Jude filed objections to this conclusion
(Dkt. #170; Dkt. #171). The Court overruled the objections
and adopted the findings and conclusions of the Magistrate
Judge as those of the Court (Dkt. #188).
on September 27, 2017, Defendants filed their Motion for
Summary Judgment of Improper Venue, again arguing that based
on the safe harbor provision, there were no acts of
infringement committed in this District and venue was
improper (Dkt. #178). Snyders maintained that the safe harbor
provision was irrelevant to venue, while not contesting the
alleged facts surrounding the venue challenge (Dkt. #184).
This time, the Magistrate Judge recommended that the safe
harbor provision, in this case, is relevant to the venue
inquiry and recommended granting Defendants' motion for
summary judgment (Dkt. #316).
delving into the arguments of the parties, the Court finds
that Defendants' motion for summary judgment should be
treated as a motion for reconsideration of the Court's
previous venue rulings. The Court is permitted to maintain its
own docket and reconsider rulings when justice so requires.
Fed.R.Civ.P. 60(a). In this case, the Court finds that
justice requires the Court to re-examine Defendants'
venue challenge at this time. Even though the Court treats
this as a motion for reconsideration, as opposed to a motion
for summary judgment, the Court still addresses
Plaintiff's objections. Plaintiff filed objections to the
Report on both procedural and substantive grounds. St. Jude
responds that all of Plaintiff's objections are without
merit and the Report is correct and well-reasoned. The Court
addresses Plaintiff's objections and St. Jude's
responses thereto in turn.
to Plaintiff, “[t]he Report rejects Snyders'
procedural challenges to [St. Jude's] motion. But it does
not address two of those challenges at all, and errs in
rejecting the third.” (Dkt. #319 at p. 1). The Court
considers each of Snyders' procedural challenges in turn.
Preclusive Effect of the Court's Rulings on St.
Jude's 12(b)(3) Motion
argues that Defendants were already fully heard on their
venue challenge. Plaintiff correctly identifies that
Defendants are permitted to submit any evidence available in
support of a motion to dismiss for improper venue, and that,
in this case, Defendants did submit evidence. Plaintiff
maintains that the Court already ruled on Defendants'
arguments regarding venue and that Defendants should not be
allowed to make their same arguments again before the Court.
Court is not persuaded. In a case where a defendant had the
“full opportunity to develop his case for lack of
venue, following which the court found facts on conflicting
evidence to support venue”, then that court is
“not obliged to retrace its steps and examine the
identical contention in the light of new evidence belatedly
offered.'” Ryan v. Glenn, 336 F.Supp. 555,
556- 57 (N.D. Miss. 1971). Although not binding on the Court,
the Court finds Ryan persuasive because of the
unique procedural grounds of this case.
permits the Court to review Defendants' venue challenge
at this stage in the litigation. Here, the Court had not yet
made factual findings on any of the evidence submitted in
support of Defendants' venue challenge prior to
Defendants filing the present venue challenge. As opposed to
making a factual determination on the evidence submitted by
the parties on Defendants' motion to dismiss, the
Magistrate Judge recommended, and the Court adopted, a
holding that Plaintiff did not need to overcome an
affirmative defense on a motion to dismiss, i.e. the Court
denied the Defendants' Rule 12(b)(3) motion on procedural
grounds without addressing the substantive nature of the
motion. Accordingly, this case is factually distinguishable
from Ryan because the Court has never considered the
evidence submitted in support of Defendants' venue
challenge. See Id. Moreover, although a court
“is not obliged to retrace its steps”, it is not
prevented from doing so. See Id. at 557. Indeed, as
previously stated, the Court is permitted to maintain its own
docket and reconsider rulings when justice so requires.
Fed.R.Civ.P. 60(a). The Court finds that justice requires the
Court to “retrace its steps and examine”
Defendants' venue challenge despite its previous
procedural rulings on Defendants' venue challenge.
Timeliness of St. Jude's Venue Challenge Under Federal