IN RE: HOWMEDICA OSTEONICS CORP, a New Jersey corporation and subsidiary of STRYKER CORPORATION, Petitioner
Argued: January 25, 2017
Petition for Writ of Mandamus from the United States District
Court for the District of New Jersey (D.N.J. No.
2:14-cv-03449) Honorable Claire C. Cecchi, U.S. District
J. Carty, Jr. (Argued) Seyfarth Shaw Michael D. Wexler
Seyfarth Shaw Attorneys for Plaintiff-Petitioner Howmedica
Marcus (Argued) Bressler Amery & Ross Attorney for
Defendant-Respondents Brett Sarkisian, Keegan Freeman,
Michael Nordyke, Taylor Smith, and Bryan Wyatt
Ann Buziak Anthony B. Haller (Argued) Rosemary McKenna Blank
Rome, David C. Kistler Stephen M. Orlofsky Blank Rome
Attorneys for Defendant-Respondent DePuy Orthopaedics Inc.
Jeffery K. Brown (Argued) Erik M. Andersen Payne & Fears,
Robert B. Rosen Hellring Lindeman Goldstein & Siegal One
Gateway Center, Attorneys for Defendant-Respondent Golden
State Orthopaedics Inc.
Before: KRAUSE, SCIRICA, and FUENTES, Circuit Judges
KRAUSE, Circuit Judge.
absence of a forum-selection clause, a defendant in federal
court may move under 28 U.S.C. § 1404(a) for a transfer
to another district for "convenience" and "in
the interest of justice." But where contracting parties
have specified the forum in which they will litigate disputes
arising from their contract, federal courts must honor the
forum-selection clause "[i]n all but the most unusual
cases, " following the Supreme Court's instructions
in Atlantic Marine Construction Co. v. U.S. District
Court, 134 S.Ct. 568, 583 (2013). This mandamus
proceeding requires us to determine how district courts
should apply Atlantic Marine where all defendants
seek a transfer to one district under § 1404(a) and
where some, but not all, of those defendants are parties to
forum-selection clauses that designate different districts.
Because we conclude the District Court erred in its
application of Atlantic Marine by declining to honor
the forum-selection clauses applicable to some of the
litigants and by transferring the action in its entirety, we
will issue a writ of mandamus and, applying the test we
announce today, direct the District Court to transfer claims
against only the two corporate defendants who did not agree
to any forum-selection clause.
natives Keegan Freeman, Michael Nordyke, Brett Sarkisian,
Taylor Smith, and Bryan Wyatt (collectively, "Sales
Representatives") are former California sales
representatives for Howmedica Osteonics Corp., a New Jersey
corporation, and its parent company, Stryker Corp.
(collectively, "Howmedica"). The Sales
Representatives began their employment with Howmedica when
they signed employment agreements with confidentiality and
non-compete clauses. The agreements also contained
forum-selection clauses, which designated New Jersey (or, in
Nordyke's case, Michigan) as the forum for any litigation
arising out of the agreements.
clashes with Howmedica over its management and their
compensation, the Sales Representatives resigned and became
independent contractors representing Howmedica's
competitor, DePuy Orthopaedics, Inc., and DePuy's
regional distributor, Golden State Orthopaedics, Inc. Some of
Howmedica's customers, who were previously assigned to
the Sales Representatives, followed them, leading Howmedica
to suspect that the Sales Representatives, DePuy, and Golden
State had conspired to convert those customers even in
advance of the Sales Representatives' resignation dates.
Howmedica therefore brought suit in the District of New
Jersey, charging DePuy and the Sales Representatives with
breach of contract and related claims under state law, and
joining Golden State to the suit as a "necessary
the convenience to themselves and to the witnesses in
California, the defendants promptly moved to transfer the
case to the Northern District of California pursuant to 28
U.S.C. § 1404(a), which, for "the convenience of
parties and witnesses" and "in the interest of
justice, " allows transfer to a district where the case
"might have been brought." See Howmedica
Osteonics Corp. v. Sarkisian (Howmedica I), No.
14-3449, 2015 WL 1780941, at *2 (D.N.J. Apr. 20, 2015). After
balancing the relevant public and private interests, the
District Court agreed and ordered the transfer. See
Howmedica Osteonics Corp. v. Sarkisian (Howmedica II),
No. 14-3449, 2016 WL 8677214, at *2-6 (D.N.J. Aug. 26,
2016). The District Court did not address Golden
State's separate argument asserting that the District of
New Jersey lacked personal jurisdiction as to that defendant.
See Howmedica II, 2016 WL 8677214, at
those New Jersey proceedings were pending, Golden State filed
its own suit for declaratory relief against Howmedica in the
Northern District of California, alleging that the
non-compete clauses in Howmedica's employment agreements
violated California law. That district court issued an order
deeming Golden State's suit related to the transferred
New Jersey case and also issued two preliminary scheduling
orders in the transferred case, but it then stayed both cases
after Howmedica petitioned this Court for a writ of mandamus.
Howmedica now asks us to vacate the District Court's
transfer order on the ground that it contravenes the Supreme
Court's decision in Atlantic Marine Construction Co.
v. U.S. District Court, which held that, except in
"the most unusual cases, " a district court should
give effect to a valid forum-selection clause. 134 S.Ct. 568,
we first confirm our jurisdiction to entertain
Howmedica's mandamus petition. Second, we consider the
applicable standard of review. Third, we address the crux of
this case: how district courts should apply Atlantic
Marine when all defendants seek a transfer to one
district under § 1404(a), but only some of those
defendants agreed to forum-selection clauses that designate a
defendants have challenged our jurisdiction, contending that
review of a § 1404(a) transfer order is permissible only
to remedy a procedural defect and that, regardless, the
Northern District of California's post-transfer orders in
this case preclude our review. We, however, perceive no
Writs Act, 28 U.S.C. § 1651, grants us jurisdiction to
adjudicate a mandamus petition challenging an interlocutory
order over which, pursuant to another jurisdictional statute,
we could exercise jurisdiction at a later point. See
United States v. Wright, 776 F.3d 134, 145 (3d Cir.
2015); Council Tree Commc'ns, Inc. v. FCC, 503
F.3d 284, 292-93 (3d Cir. 2007). Here, because 28 U.S.C.
§ 1291 affords us jurisdiction to review district
courts' § 1404(a) transfer orders after entry of
final judgment, those transfer orders are reviewable on a
mandamus petition. See In re United States, 273 F.3d
380, 382-85 & n.4 (3d Cir. 2001); Nascone v.
Spudnuts, Inc., 735 F.2d 763, 772-74 (3d Cir. 1984).
Moreover, under our case law, our mandamus jurisdiction over
transfer orders encompasses both procedural and legal issues.
See In re United States, 273 F.3d at 384 (procedural
issues); id. at 389-90 (legal issue). The District
Court's § 1404 transfer order therefore falls within
a class of orders reviewable on mandamus.
that does not end our jurisdictional inquiry, for we do not
"indefinitely" possess mandamus jurisdiction, and,
"once the transferee court proceeds with the transferred
case, the decision as to the propriety of transfer is to be
made in the transferee court, " whether by appeal or by
mandamus petition to the court of appeals for the transferee
circuit. Id. at 384. The question, then, is at what
point the transferee court "proceeds" with a
transferred case, and whether the transferee court in this
case, by issuing two scheduling orders and an order deeming
the case related to Golden State's previously filed case,
has crossed that threshold.
conclude this case has not proceeded in the Northern District
of California in a manner that would deprive us of
jurisdiction. In In re United States, even after the
transferee court had received the record from the Eastern
District of Pennsylvania and had "scheduled the case for
prompt trial, " we held that we retained mandamus
jurisdiction over the Eastern District of Pennsylvania's
transfer order. Id. at 382-84. And although we
declined to indicate "the specific length of time needed
to allow the party resisting transfer to seek review"
before our Court, we held that the Government, contesting the
transfer order by mandamus petition, had "acted with
sufficient dispatch"-even though the Government had
filed its mandamus petition thirty-three days after the
Eastern District of Pennsylvania had denied the
Government's request for reconsideration of the transfer
order and twelve days after the transferee court had issued a
trial scheduling order. See id. at 382, 384; Order,
United States v. Streeval, No. 01-0084-1 (M.D. Tenn.
June 6, 2001), ECF No. 12.
reach the same conclusion here. Howmedica filed its mandamus
petition only twenty-seven days after the District
Court's transfer order, as compared to the thirty-three
day delay in In re United States. And although the
transferee court in the Northern District of California
issued two case management scheduling orders and an order
relating the transferred case to Golden State's
previously filed case, those orders do not show that the
transferee court here proceeded any further with the case
than the transferee court did in In re United States
by issuing a trial scheduling order. Because we have held
that case management orders in the transferee court are not
sufficient to divest us of jurisdiction, we conclude that the
Northern District of California did not proceed with this
case and that Howmedica acted with "sufficient
dispatch" in filing its mandamus petition, which we have
jurisdiction to consider. In re United States, 273
F.3d at 382-84.
Standard of Review
of mandamus is, of course, an "extraordinary"
remedy. United States v. Wright, 776 F.3d 134,
145-46 (3d Cir. 2015). It may issue only if the petitioner
shows (1) a clear and indisputable "abuse of discretion
or . . . error of law, " (2) "a lack of an
alternate avenue for adequate relief, " and (3) "a
likelihood of irreparable injury." Id.; see
also Cheney v. U.S. Dist. Court, 542 U.S. 367,
381 (2004); Sunbelt Corp. v. Noble, Denton & Assocs.,
Inc., 5 F.3d 28, 30 (3d Cir. 1993). Even when these
requirements are met, we may, in the exercise of our
discretion, decline to issue a writ of mandamus when it is
not "appropriate under the circumstances."
Cheney, 542 U.S. at 381.
circumstances are more readily present where, as here, a
petitioner challenges a transfer order. Transfer orders as a
class meet the second requirement for a writ of mandamus,
"a lack of an alternate avenue for adequate relief,
" Wright, 776 F.3d at 146, because "the
possibility of an appeal in the transferee forum following a
final judgment there is not an adequate alternative to obtain
the relief sought, " Sunbelt Corp., 5 F.3d at
30. Transfer orders likewise meet the third requirement,
"a likelihood of irreparable injury, "
Wright, 776 F.3d at 146, because an erroneous
transfer may result in "judicially sanctioned
irreparable procedural injury, " Chi., R.I. &
P.R. Co. v. Igoe, 212 F.2d 378, 381 (7th Cir. 1954);
accord In re United States, 273 F.3d at 385. Thus,
our inquiry here collapses to the first requirement: Was the
District Court's transfer order a clear and indisputable
"abuse of discretion or . . . error of law" for
which mandamus relief is appropriate? Wright, 776
F.3d at 146; see In re
United States, 273 F.3d at 385-90;
Carteret Sav. Bank, FA v. Shushan, 919 F.2d 225,
230-33 (3d Cir. 1990). We will apply this standard of review,
turning now to the merits of the parties' dispute.
Application of Atlantic Marine
Supreme Court made clear in Atlantic Marine that, in
most cases, district courts must enforce valid
forum-selection clauses when adjudicating § 1404(a)
transfer motions, but the Court did not have occasion to
address how that general rule should apply where
non-contracting parties are present, much less how it should
apply where, as here, there are other complications such as
competing forum-selection clauses, personal jurisdiction
challenges, and allegations of necessary party status. That
is the quandary we confront today, and we resolve it by (1)
reviewing the legal principles relevant both in the absence
of a forum-selection clause and where one is present; (2)
developing from those principles a framework for applying
Atlantic Marine to cases involving both contracting
and non-contracting parties; and (3) applying that framework
to the facts of this case.