United States District Court, D. Massachusetts
R. Hornak, United States District Judge
a patent case. The Defendant has moved to dismiss the case on
the basis that venue is not proper in this District pursuant
to 28 U.S.C. § 1400(b). The Plaintiff has opposed that
Motion. The matter has been briefed and orally argued, and is
ripe for disposition. The Motion will be granted, but rather
than dismissing the case, it will be transferred forthwith to
the District of Massachusetts.
is no dispute that the Defendant is a corporation
incorporated under Indiana law, with its headquarters in
Massachusetts. ECF Nos. 42-7, 39-1. It is undisputed that the
Defendant is a subsidiary of another corporation, Hill-Rom,
Inc. which itself is a subsidiary of a holding company,
Hill-Rom Holdings, Inc. ECF No. 42-3. Both Hill-Rom entities are
also incorporated under Indiana law. ECF No. 42-8. The
Defendant corporation does not have any physical presence in
and of itself in Pennsylvania. ECF No. 39-1. The Plain;iff
argues that applying any number of theories, the Defendant
corporation should be treated as one and the same/part and
parcel of the Hill-Rom entity that has a physical building in
Monroeville, Pennsylvania, which is in this District. ECF No.
42-4. Thus, says the Plaintiff, the Defendant
"really" does have a physical presence in this
District for purposes of § 1400(b), and venue in this
Court is proper. The Court concludes that the Plaintiff has
not met its obligation to demonstrate that the Defendant has
such a presence in this District, that venue does not lie in
this District, and that the case must proceed elsewhere.
Circuit and applicable Third Circuit law is settled at least
as to the following points. Venue under § 1400(b) is to
be treated in a restrictive fashion, and is to be tightly
construed. See In re: ZTE (USA) Inc., No. 2018-113,
2018 WL 2187782, at *4 (Fed. Cir. May 14, 2018). The burden
is on the Plaintiff to demonstrate that venue lies in the
District in which the patent lawsuit is filed. Id.
Venue must lie not only in the state where the lawsuit is
brought, but specifically in the judicial district in which
the case is filed. In re: BIGCOMMERCE, Inc., No.
2018-122, 2018 WL 2207265, at *6 (Fed. Cir. May 15, 2018).
Where, as here, the Plaintiff asks the Court to look
past/through the corporate form of the Defendant, the
Plaintiff has the burden of proving that such is proper by a
preponderance of the evidence. Plasticpak Packaging, Inc.
v. DePasquale, 75 F. App'x. 86, 88 (3d Cir. 2003);
see also Wordtech Sys., Inc. v. Integrated Networks
Sols., Inc., 609 F.3d 1308, 1314 (Fed. Cir. 2010) (law
of regional circuit applies).
Plaintiff argues that this Court should apply some
theory to conclude that the physical presence of
an "upstream" Hill-Rom corporate entity in this
District should be treated as the physical presence of this
Defendant. Otherwise, it is plain that there is no venue
here. In re: Cray, Inc., 871 F.3d 1355, 1360 (Fed.
Cir. 2017). That is a heavy burden, as ordinarily a
court does not disregard or otherwise look past/through the
corporate structure of a corporate entity, unless strong
equitable considerations compel it to do so.
Plastipak, 75 Fed.Appx. at 88 (applying Pennsylvania
law). There is no single factor that the Court
is to consider in such an analysis, but it must look at a
number of considerations, including adherence to corporate
formalities, capitalization, financial records and
operations, the mode/method of business operations, and the
like. No. one factor is conclusive. See Unity Opto Tech.
Co., Ltd. v. Lowe's Home Ctrs., LLC, No. 18-cv-27,
2018 WL 208725, at *2, 3 (W.D. Wis. May 4, 2018).
there is no doubt that the Defendant is a currently existing,
registered Indiana corporation. It has officers, and does
business in its own name. It sells its products. The record
does not reflect that it owns, leases, or has any stores,
offices, or buildings in its own name in this District. The
record does not reflect that it has any employees here, nor
any distribution centers in this District, and it has not
registered to do business in Pennsylvania.
Plaintiff says that based on the following, the
"physical place" of Hill-Rom, Inc., which is in
Monroeville, PA (in this District), ECF No. 42 at 6, should
be treated as a "physical place" of the Defendant
for purposes of 28 U.S.C. § 1400(b). We'll take its
contentions one at a time.
a corporate representative of the Defendant testified in a
deposition that at least at the time of his
deposition, the Defendant had no members on its Board of
Directors. But, the Plaintiff has advanced no facts or law as
to whether, and if so why, that actually impairs the
Defendant's corporate existence under Indiana law.
at least some of the Defendant's legal expenses,
including for this litigation, may ultimately be paid by a
Hill-Rom entity. But, the Plaintiff has advanced no evidence
as to why that is impermissible, or is a fact that is
inconsistent with the Defendant having a distinct and valid
the Plaintiff has placed in the record the Fiscal Year 2017
SEC form 10-K for Hill-Rom Holdings, Inc., Exhibit PX 1(H),
which appears to show that that entity consolidates revenue
in its financial presentations, including the revenue from
the Defendant and other subsidiaries, but then offers no
testimony or evidence that doing so is impermissible,
irregular, is contrary to Generally Accepted Accounting
Principles ("GAAP"), or would impair the distinct
corporate existence of the Defendant (or any other
subsidiary) under Indiana law.
the Plaintiff says that the Hill-Rom, Inc., Monroeville (PA)
facility acts as a contracted service location as to one of
the Defendant's large products, ECF No. 42 at 7, but then
advances no evidentiary or legal basis to conclude that one
business performing contracted service work for another
business somehow impairs the independent corporate existence
of that second business, here the Defendant. Further, there
is no record evidence that the Defendant exercises possession
or control over that facility. See Javelin, 2017 WL
5953296, at *5.
the Plaintiff says that there is a complete overlap of the
listed and registered corporate officers of the Defendant and
of Hill-Rom, Inc., but points to no legal principle that
stands for the proposition that such in and of itself
destroys or impairs corporate separateness. See Miller v.
EME Homer City Generation, LP, No. 13-cv-352,
2013 WL 5972382, at * 10-12 (W.D. Pa. Nov. 8, 2013);
Clemens v. Gerber Sci, Inc., No. 87-cv-5949, 1989
WL3480, at *2 (E.D. Pa. Jan. 13, 1989).
apparently the Defendant needs to get approval from its
Hill-Rom parent before it can lease or purchase interests in
real estate, and before it can promote an employee to its
"leadership team." Again, if even true, the
Plaintiff advances no factual or legal basis to conclude that
a corporate parent retaining that level of control of
high-level structural decisions permits a court to disregard
the corporate distinction between those corporations.
Croyle v. Tex. E. Corp., 464 F.Supp. 377, 379 (W.D.
the employees of the Defendant use e-mail address ending in
"hill-rom.com, " Hill-Rom provides "IT
services" to Defendant, and Hill-Rom, Inc., advertises
the Defendant's products for sale in its sales
literature. ECF No. 42 at 9. This, says the Plaintiff, makes
the Defendant a mere operating division of Hill-Rom, Inc. The
Court disagrees. Whether considered on its own, or in
conjunction with any or all of the other factors noted, these
points of intersection may demonstrate a close ...