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United States of America, Ex Rel. v. Mtd Products

August 9, 2011

UNITED STATES OF AMERICA, EX REL. BENTLEY A. HOLLANDER
v.
MTD PRODUCTS, INC. ET AL.



The opinion of the court was delivered by: Surrick, J.

MEMORANDUM

Presently before the Court are Defendant MTD Products Inc.'s Motion to Stay*fn1 (ECF No. 20) and MTD's Motion to Transfer Venue to the District of Arizona (ECF No. 19). For the following reasons, the Motion to Transfer will be granted.

I. BACKGROUND

Plaintiff Dr. Bentley A. Hollander filed this lawsuit as a qui tam relator on behalf of the United States pursuant to 35 U.S.C. § 292(b), alleging the false patent marking of U.S. Patent Number 4,651,422 ("'422 patent"). Plaintiff alleges false patent marking on 214 separate products, as well as the unlawful use of the '422 patent marking in Defendants' advertising. Plaintiff contends that the '422 patent expired on March 24, 2004, and that despite this, Defendants continued to affix the expired patent number to their products, in violation of 35 U.S.C. § 292(a).

Plaintiff is a resident of Philadelphia, Pennsylvania. (Compl. ¶ 4, ECF No. 1.) Defendant MTD Products, Inc., is a Delaware corporation with its principal place of business in Valley City, Ohio. (Clouse Decl. ¶ 3, ECF No. 19, Ex. 1.) Defendant MTD Southwest, Inc. ("SW"), is a Delaware corporation with its principal place of business in Tempe, Arizona. (Id. at ¶ 2.) SW is a wholly-owned, indirect subsidiary of MTD. (Id. at ¶ 3.) SW was joined as a Defendant by stipulation of the parties. (ECF No. 31.) SW is the manufacturer that marked the accused products with the '422 patent number. (Clouse Decl. ¶ 7.) SW manufactured and marked the accused products in the Phoenix, Arizona area until October of 2008, at which time the work was transferred to Nogales, Mexico. (Id.)

II. LEGAL STANDARD

Section 1404(a) of Title 28 governs the transfer of a case where both the original and the requested venue are proper. Section 1404(a) states that "[f]or the convenience of parties and witnesses, in the interest of justice, a district court may transfer any civil action to any other district or division where it might have been brought." Id.; see also Lafferty v. St. Riel, 495 F.3d 72, 76 (3d Cir. 2007) (noting that § 1404(a) transfers are discretionary and are based on the convenience of the parties). Once it is determined that venue is proper in another district, the court must consider "all relevant factors to determine whether on balance the litigation would more conveniently proceed and the interests of justice be better served by transfer to a different forum." Jumara v. State Farm Ins. Co., 55 F.3d 873, 879 (3d Cir. 1995) (quoting 15 Charles Alan Wright et al., Fed. Practice & Procedure § 3847 (3d ed. 2011) (internal quotation marks omitted)).

In Jumara, the Third Circuit outlined six private factors and six public factors that courts should consider in determining whether the interests of justice are best served by transfer. The private factors include: (1) plaintiff's choice of forum; (2) defendant's choice of forum; (3) where the claim arose; (4) convenience of the parties as indicated by their relative physical and financial condition; (5) convenience of the witnesses, but only to the extent that the witnesses may actually be unavailable for trial in one of the fora; and (6) location of books and records, similarly limited to the extent that the files could not be produced in the alternate forum. Jumara, 55 F.3d at 879. The public factors include: (1) enforceability of the judgment; (2) practical considerations that could make trial easier, more expeditious, or less expensive; (3) relative court congestion of the two fora; (4) any local interest in deciding local controversies at home; (5) any public policies of the fora; and (6) the judge's familiarity with the applicable state law. Id. at 879-80.

III. ANALYSIS

A. Private Factors

1. Plaintiff's Choice of Forum

Plaintiff contends that a plaintiff's choice of forum is entitled to "paramount consideration" and should rarely be disturbed. (Pl.'s Resp. 5, ECF No. 22 (quoting Jumara, 55 F.3d at 879).) Ordinarily, in a § 1404(a) analysis, the plaintiff's choice of forum is afforded substantial weight. Jumara, 55 F.3d at 879. However, when the forum has little connection with the operative facts of the lawsuit, it receives significantly less deference. Wallace v. Mercantile Cnty. Bank,No. 06-3974, 2006 WL 3302490, at *5 (E.D. Pa. Nov. 9, 2006). In this case, the alleged false patent marking occurred in Arizona until 2008, when it was transferred to Mexico. The witnesses and documents related to the patent and patent-marking procedure are located in Arizona and Ohio. The products were distributed throughout the United States.

The only connection to this district appears to be Hollander. Hollander resides in Philadelphia and chose to file suit here.*fn2 It is important to note here that Hollander is a qui tam relator in this action and that the real party in interest is the United States. See Vt. Agency of Natural Res. v. United States ex rel. Stevens, 529 U.S. 765, 773-74 (2000) (a qui tam relator has standing as assignee of the interests of the United States). This action could have been brought on behalf of the United States in any forum where MTD conducts business. Given the fact that the real party in interest is the United States, and Hollander is seeking to enforce the interests of the federal government, the deference normally granted to Plaintiff's choice of forum is diminished. See, e.g., United States v. Ohio Art Co., No. 10-0230, 2010 WL 3155160, at *2 (W.D. Pa. July 30, 2010); United States ex rel. Kairos Scientia, Inc. v. Zinsser, Co., No 10-0383, 2011 WL 127852, at *3 (N.D. Ohio Jan. 14, 2011); United States ex rel. ...


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