Wednesday, April 14, 2010

In Determining Proper Venue, Court "Declines to Scrutinize Litigants’ Business Decisions" to Locate Office in the Eastern District of Texas

In denying defendant's motion to transfer venue, the court rejected the argument that plaintiff's decision to locate its office in the Eastern District of Texas was an attempt "to manipulate venue in anticipation of litigation," as prohibited by In re Hoffmann-La Roche, 587 F.3d 1333, 1337 (Fed. Cir. 2009). "The Court is not persuaded that a corporation’s decision where to locate its offices is the type of 'prohibited activity' that the Federal Circuit had in mind. Unlike transporting 75,000 pages of documents, a business opens its doors in a particular location for a number of considerations, including the cost of rent, market profitability, cost of doing business, and tax benefits. The Court declines to scrutinize litigants’ business decisions in order to determine whether opening an office in a particular location has a legitimate business purpose or is merely a 'tactic . . . to manipulate venue.' Moving a business to a particular location is not the type of activity that, on its face, serves no purpose but to manipulate venue."

MedIdea, LLC v. Smith & Nephew, Inc., 2-09-cv-00378 (TXED April 12, 2010, Memorandum Opinion & Order) (Ward, J.)

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