Caterpillar, Inc. v. Esco Corp.

• Decision Date: 18 December 2012
• Docket Number: Case No. 12–cv–1017.
• Parties: CATERPILLAR, INC., Plaintiff, v. ESCO CORPORATION, Defendant.
• Court: U.S. District Court — Central District of Illinois

909 F.Supp.2d 1026

CATERPILLAR, INC., Plaintiff,

v.ESCO CORPORATION, Defendant.

Case No. 12–cv–1017.

United States District Court, C.D. Illinois.

Dec. 18, 2012.

Edward H. Williams, John M. Touhy, Gillian Lindsay Whittlesey, Baker & Hostetler LLP, Chicago, IL, Gregory James Commins, Jr., Robert G. Abrams, Baker & Hostetler LLP, Washington, DC, Timothy L. Bertschy, John P. Heil, Jr., Heyl Royster Voelker & Allen, Peoria, IL, for Plaintiff.

Charles W. Shifley, Binal J. Patel, Louis DiSanto, Timothy J. Rechtien, Banner & Witcoff, Chicago, IL, David G. Lubben, Davis & Campbell LLC, Peoria, IL, for Defendant.

ORDER & OPINION

JOE BILLY McDADE, Senior District Judge.

This matter is before the Court on Defendant's Motion for Transfer of Venue, filed November 21, 2012. (Doc. 60). Plaintiff has responded in opposition, and the Motion is now ready for disposition. For the reasons stated below, the Motion to Transfer is granted.

Plaintiff has also filed a Motion for Status Conference and Hearing on the Pending Motions. (Doc. 64). The Court has reviewed the parties' briefs on all the pending motions, and has determined that a hearing would not assist in clarifying any of the issues they raise. The Court has had no difficulty in understanding the parties' written arguments, which are clearly set forth, and believes that oral argument would only serve to confuse matters. Moreover, the Court had already determined that it would be most efficient to decide the Motion to Transfer prior to the Motion for Leave to Amend or the Motion to Intervene, and stands by that decision. As explained further below, transfer promotes judicial efficiency and the interests of justice in part because it obviates the need to address those motions, or the legal questions that would likely follow from them. Plaintiff's Motion for Status Conference and Hearing on the Pending Motions is therefore denied.

Finally, Defendant filed a Motion for Leave to File a Reply in support of its Motion for Transfer of Venue; for the same reasons the Court does not believe a hearing is necessary, the Court also finds that a Reply is unnecessary, and so denies this Motion. (Doc. 66).

Background

In 2002, Plaintiff and Defendant entered into a contract in which Defendant agreed to provide Plaintiff with products known as the K Series. At the same time, they also executed a license agreement providing Plaintiff with the option of producing certain quantities of certain K Series products. In the midst of a dispute over the terms and fulfillment of their contract obligations, Defendant sent a letter dated July 22, 2011 to Plaintiff, stating that Plaintiff's CapSure products might infringe three of Defendant's patents.

Plaintiff filed its three-count Complaint against Defendant on January 12, 2012. The first count alleged breach of contract and the second sought related injunctive relief, while the third sought a judgment declaring that Plaintiff had not infringed Defendant's three patents. Following the Court's denial of Plaintiff's request for a Temporary Restraining Order, the parties settled and dismissed the first two counts, leaving only the third. (Docs. 25 & 27). Plaintiff filed its First Amended Complaint, containing only the declaratory judgment count. (Doc. 28). The Court then determined on July 24, 2012 that it had jurisdiction over the declaratory judgment count. (Doc. 43).

On August 29, 2012, Defendant, along with ESCO Canada, Ltd., filed a Complaint against Plaintiff, Cashman EquipmentCompany, Caterpillar Global Mining, LLC, Raptor Mining Products (USA), Inc., and Raptor Mining Products in the District of Nevada. In that suit, Defendant alleged the infringement of the three patents at issue in the instant suit, as well as three other patents. ¹ Cashman is a distributor of Plaintiff's accused products, located in Nevada, and the two Raptor manufactures and sells components containing the CapSure system to Plaintiff's dealers.

In response to Defendant's suit in Nevada, Plaintiff filed a Motion for Leave to File a Second Amended Complaint on October 26, 2012, incorporating the additional three patents in its request for declaratory relief, and naming Caterpillar Global and Cashman as co-plaintiffs and ESCO Canada as a defendant. (Doc. 55). On the same day, the Raptor parties filed a Motion to Intervene in this suit, and seeking the same declaratory relief as Plaintiff. (Doc. 57). Magistrate Judge Gorman set both of these Motions for hearing on December 4, 2012, but continued the hearing until after this Court had ruled on the November 21, 2012 Motion for Transfer of Venue. (10/30/12 Text Order; 11/27/12 Text Order). Defendant opposes both Motions. If the Court were to grant these two Motions, assuming no problems of personal jurisdiction over the additional defendant, the amendment and intervention would make this suit a mirror image of the Nevada action.²

Legal Standard

In considering a motion to transfer pursuant to 28 U.S.C. § 1404(a), the Court must apply the law of the Seventh Circuit, even in patent cases. In re Link–A–Media Devices Corp., 662 F.3d 1221, 1222–23 (Fed.Cir.2011) (citing Storage Tech. Corp. v. Cisco Sys., Inc., 329 F.3d 823, 836 (Fed.Cir.2003)); Winner Intern. Royalty Corp. v. Wang, 202 F.3d 1340, 1352 (Fed.Cir.2000) (citing Stewart Org., Inc. v. Ricoh Corp., 487 U.S. 22, 32, 108 S.Ct. 2239, 101 L.Ed.2d 22 (1988); Regents of the Univ. of Cal. v. Eli Lilly and Co., 119 F.3d 1559, 1565 (Fed.Cir.1997)). The Court also considers Federal Circuit cases insofar as they illuminate issues unique to patent litigation, as well as relevant district court cases where helpful.

Under 28 U.S.C. § 1404(a), “[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.” ³ This determination is left primarily to the district court's sound discretion. Research Automation, Inc. v. Schrader–Bridgeport Intern., Inc., 626 F.3d 973, 977 (7th Cir.2010) (citing Coffey v. Van Dorn Iron Works, 796 F.2d 217, 219–20 (7th Cir.1986)). The Seventh Circuit “does not rigidly adhere to a first-to-file rule,” so the Court “evaluat[es] the order of filing as part of the section 1404(a) transfer analysis.” Id. at 980–81 (citations omitted).

Discussion

Defendant argues that both the convenience of the parties and the interests of justice weigh in favor of a transfer to the District of Nevada. Plaintiff, on the other hand opposes transfer, relying heavily on the first-to-file rule, and arguing, in addition, that both the convenience of the parties and the interests of justice weigh against transfer. Plaintiff erroneously asserts, relying entirely on authority from Circuits other than the Seventh, that the first-to-file rule creates a kind of presumption in favor of the earlier suit, but, as noted above and explained more fully below, the order of filing is not dispositive in this case. (Doc. 63 at 8, 12).

I. Convenience of parties and witnesses

Defendant claims that Nevada is more convenient because many of the third-party witnesses and other important non-parties are located in Nevada and in the Western portion of the country, and that it is easier for out-of-town witnesses to travel to Las Vegas than to Peoria; that both parties have ties to Nevada, though ESCO is located primarily in Portland, Oregon, and Caterpillar is headquartered in Peoria, Illinois; that the accused products are sold in Nevada (and elsewhere); that the material events relating to research, design, and development of the accused products took place in western Canada, where Raptor is located; and that the manufacture of the accused products took place in Mexico. Plaintiff argues that Nevada is not more convenient than Illinois, because only one party, Cashman, is located there; because neither ESCO, ESCO Canada, Caterpillar, Caterpillar Global Mining, nor the Raptor parties, have witnesses or documents there; and because the one Nevada party's evidence can be obtained through Caterpillar.

In considering the convenience question, “courts generally consider the availability of and access to witnesses, and each party's access to and distance from resources in each forum. Other related factors include the location of material events and the relative ease of access to sources of proof.” Research Automation, 626 F.3d at 978 (citing Schumacher v. Principal Life Insurance Co., 665 F.Supp.2d 970, 977 (N.D.Ind.2009); Jaramillo v. DineEquity, Inc., 664 F.Supp.2d 908, 913–15 (N.D.Ill.2009); Sassy, Inc. v. Berry, 406 F.Supp.2d 874, 876–77 (N.D.Ill.2005); Brandon Apparel Group, Inc. v. Quitman Manufacturing Co., 42 F.Supp.2d 821, 833–34 (N.D.Ill.1999)). The importance of each of these factors varies for each case and by type of case.

Several courts have observed that the convenience of non-party witnesses, as compared to the convenience of witnesses who are in the employ of the parties, is perhaps the most important of the convenience factors. Compression Technology Solutions LLC v. EMC Corp., No. 4:11cv1579 TCM, 2012 WL 1188576, *5 (E.D.Mo. Apr. 6, 2012) (citing In re Acer Am. Corp., 626 F.3d 1252, 1255 (Fed.Cir.2010)); Fluid Control Products, Inc. v. Aeromotive, Inc., 4:09–CV–1667 CAS, 2011 WL 620115, *2 (E.D.Mo. Feb. 11, 2011); Anheuser–Busch, Inc. v. City Merchandise, 176 F.Supp.2d 951, 959 (E.D.Mo.2001); Pitney Bowes, Inc. v. Data–Pac Mailing Systems Corp., No. 07–cv–470–jcs, 2007 WL 5614076, *3 (W.D.Wis. Dec. 4, 2007) (citing Adams v. Newell Rubbermaid Inc., No. 07–C–313–S, 2007 WL 5613420, *2, 2007 U.S. Dist. LEXIS 62512, *5 (W.D.Wis. Aug. 21, 2007)); Milwaukee Elec. Tool Corp. v. Black & Decker (N.A.) Inc., 392 F.Supp.2d 1062, 1064 (W.D.Wis.2005). Here, Defendant points to the fact that most of the non-party witnesses it would rely on reside in the western portion of the country, and that it would be easier for them to travel to Las Vegas than to Peoria. It appears that...