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CXT Systems, Inc. v. The Container Store Group, Inc.

United States District Court, E.D. Texas, Marshall Division

April 5, 2019

CXT SYSTEMS, INC., Plaintiff,
v.
THE CONTAINER STORE, INC., Defendant.

          MEMORANDUM OPINION AND ORDER

          ROY S. PAYNE UNITED STATES MAGISTRATE JUDGE.

         Plaintiff CXT Systems, Inc. is a Texas corporation with its principal place of business in Marshall, Texas. CXT has initiated eight lawsuits in the Eastern District of Texas (“EDTX”) asserting patent infringement against a total of nine retail companies. In each of these co-pending suits, CXT alleges infringement of all or some of the following U.S. Patents: 6, 412, 012; 6, 493, 703; 6, 571, 234; 7, 016, 875; 7, 257, 581; 8, 260, 806; and RE45, 661. The co-pending suits were consolidated for all pretrial issues, excepting venue. See Consolidation Order, [Dkt. No. 22].

         In its suit against Defendant The Container Store, Inc., CXT alleges that all of the patents-in-suit are infringed through The Container Store's website and related systems. [Dkt. No. 16]. The Container Store moves the Court to transfer this case to the Northern District of Texas (“NDTX”) under 28 U.S.C. § 1404(a), contending that the NDTX is a more convenient venue because The Container Store's corporate headquarters is in Coppell, Texas (which straddles the boundary between the NDTX and the EDTX), and all likely trial witnesses for The Container Store, as well as the accused website and related systems, are located there on the NDTX side of Coppell. [Dkt. No, . 22]. CXT opposes the transfer, and argues that The Container Store has not identified (1) any specific sources of proof that cannot be easily accessed and transported to either district, and (2) any key non-party witnesses that could not travel to either district with comparable convenience. [Dkt. No. 25]. There are no other pending transfer motions in the co-pending suits.

         DISCUSSION

         I. Proper Venue

         The venue statute permits a district court to transfer a case to another district or division within the district “[f]or the convenience of parties and witnesses” and “in the interests of justice.” 28 U.S.C. § 1404(a). The preliminary question under § 1404(a) is whether the case “might have been brought” in the destination venue. In re Volkswagen of Am., Inc., 545 F.3d 304, 312 (5th Cir. 2008) (“Volkswagen II”); In re Volkswagen AG, 371 F.3d 201, 203 (5th Cir. 2004) (“Volkswagen I”). The parties do not dispute that the case could have been brought in either the EDTX or the NDTX.

         II. The Container Store's Good Cause Burden

         Once the court resolves the preliminary jurisdiction question, the movant must meet its “good cause” burden. Volkswagen II, 545 F.3d at 315 (emphasis added). The movant meets its good cause burden by demonstrating that the transferee venue is clearly more convenient than the venue chosen by the plaintiff. Id. “[W]hen the transferee venue is not clearly more convenient than the venue chosen by the plaintiff, the plaintiff's choice should be respected.” Id. The good cause burden “reflects the appropriate deference to which the plaintiff's choice of venue is entitled.” Id.

         “[T]he determination of ‘convenience' turns on a number of private and public interest factors, none of which are given dispositive weight.” Volkswagen I, 371 F.3d at 203 (quoting § 1404(a)). Although these factors “are appropriate for most transfer cases, they are not necessarily exhaustive or exclusive.” Volkswagen II, 545 F.3d at 315. Unless the balance of factors is strongly in favor of the defendant, the plaintiff's choice in forum should be respected. Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508 (1947). Ultimately it is within a district court's sound discretion to transfer venue under § 1404(a), but the court must exercise its discretion in light of the particular circumstances of the case. Hanby v. Shell Oil Co., 144 F.Supp.2d 673, 676 (E.D. Tex. 2001). “Additionally, when deciding a motion to transfer venue under § 1404(a), the court may consider undisputed facts outside of the pleadings such as affidavits or declarations but it must draw all reasonable inferences and resolve factual conflicts in favor of the non-moving party.” AGIS Software Dev. LLC v. Apple, Inc., No. 2:17-CV-00516-JRG, 2018 WL 2721826, at *2 (E.D. Tex. June 6, 2018).

         A. Private Interest Factors

         The private factors include: “(1) the relative ease of access to sources of proof; (2) the availability of compulsory process to secure the attendance of witnesses; (3) the cost of attendance for willing witnesses; and (4) all other practical problems that make trial of a case easy, expeditious and inexpensive.” Volkswagen II, 545 F.3d at 315 (citing Piper Aircraft Co. v. Reyno, 454 U.S. 235, 241 n.6 (1981)). The Container Store contends, and CXT apparently does not disagree, that the availability of compulsory process is a neutral factor, as the relevant witnesses are subject to the subpoena power of either court. See [Dkt. No. 22], 7; [Dkt. No. 25], 16.

         i. Sources of Proof

         For this factor to weigh in favor of transfer, the movant must demonstrate that transfer will result in more convenient access to sources of proof. Remmers v. United States, No. CIV. A. 1:09-CV-345, 2009 WL 3617597, at *4 (E.D. Tex. Oct. 28, 2009). Courts analyze this factor in light of the distance that documents, or other evidence, must be transported from their existing location to the trial venue. Uniloc USA, Inc. v. Activision Blizzard, Inc., No. 6:13-CV-256, 2014 WL 11609813, at *2 (E.D. Tex. July 16, 2014) (citing Volkswagen II, 545 F.3d at 316) (noting that this factor is still relevant even if documents are stored electronically). This factor turns upon which party “most probably [has] the greater volume of documents relevant to the litigation and their presumed location in relation to the transferee and transferor venues.” Id. (citing In re Nintendo Co., 589 F.3d 1194, 1199 (Fed. Cir. 2009); In re Genentech, Inc., 566 F.3d 1338, 1345 (Fed. Cir. 2009); and Volkswagen II, 545 F.3d at 314-15). “In patent infringement cases, the bulk of the relevant evidence usually comes from the accused infringer. Consequently, the place where the defendant's documents are kept weighs in favor of transfer to that location.” In re Genentech, 566 F.3d at 1345 (citation omitted). “That access to some sources of proof presents a lesser inconvenience now than it might have absent recent developments does not render this factor superfluous.” Volkswagen II, 545 F.3d at 316.

         The Container Store asserts that its documentary and physical evidence is located at its Coppell facility in the NDTX. [Dkt. No. 22], 6. The Container Store contends that the Coppell facility is the location for (1) the accused website's design, development, maintenance, and operating testing activities, (2) four employees who will most likely offer testimony about the accused products, and (3) the source and design documents for the accused website. Id. In contrast, The Container Store argues, CXT is unlikely to have any documentary or ...


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