Datatreasury Corp. v. First Data Corp.

• Decision Date: 07 February 2003
• Docket Number: No. 3-02-CV-2429-K.,3-02-CV-2429-K.
• Citation: 243 F.Supp.2d 591
• Parties: DATATREASURY CORPORATION Plaintiff, v. FIRST DATA CORPORATION, et al. Defendants.
• Court: U.S. District Court — Northern District of Texas

243 F.Supp.2d 591

DATATREASURY CORPORATION Plaintiff, v. FIRST DATA CORPORATION, et al. Defendants.

No. 3-02-CV-2429-K.

United States District Court, N.D. Texas, Dallas Division.

February 7, 2003.

Michael W. Shore, Esq., Alfonso G. Chan, Esq., Kenneth Shore, Esq., Shore Deary, Joe Kendall, Esq., Provost Umphrey Law Firm, Dallas, for Plaintiff.

James P. Bradley, Esq., Li Chen, Esq., Sidley Austin Brown & Wood, Dallas, for Defendants.

MEMORANDUM OPINION AND ORDER

KAPLAN, United States Magistrate Judge.

Defendants First Data Corporation, First Data Merchant Services Corporation, and TeleCheck Services, Inc. d/b/a Tele-Check International, Inc. ("First Data Defendants") have filed a motion to transfer this patent infringement action to the Texarkana Division of the Eastern District of Texas. For the reasons stated herein, the motion is granted.

I.

Plaintiff DataTreasury Corporation is the assignee of two utility patents for a system of remote data acquisition and centralized processing and storage known as the "DataTreasury.TM.System." (Plf. First Am. Compl. at 2-3, ¶¶ 9 & 10). Simply stated, these inventions process paper and electronic receipts from a variety of sources, including credit card sales, automated teller transactions, consumer purchases, and business expense reports. The data is retrieved at remote locations, encrypted, and transmitted to a central location in a secure manner where it is transformed to a usable form. See generally, U.S. Patent No. 5,910,988 (issued Jun. 8, 1999) ("the '988 Patent") and U.S. Patent No. 6,032,137 (issued Feb. 29, 2000) ("the '137 Patent").

On May 2, 2002, plaintiff filed separate lawsuits in the Texarkana Division of the Eastern District of Texas against Ingenico S.A. d/b/a Groupe Ingenico and the First Data Defendants alleging infringement of the '988 and '137 Patents. DataTreasury Corp. v. First Data Corp., et al, No. 5-02-CV-094; DataTreasury Corp. v. Ingenico S.A. d/b/a Groupe Ingenico, et al, No. 5-02-CV-095. Another infringement action involving the same patents was filed in Texarkana federal court against J.P. Morgan Chase & Co. and others on June 5 2002 DataTreasury Corp. v. J.P. Morgan Chase & Co., et al, No. 5-02-CV-124. The defendants in Ingenico and J.P. Morgan answered plaintiffs complaint and those cases are progressing toward trial. The First Data Defendants chose to file a motion to dismiss or, in the alternative, for a more definite statement. In an amended response to this motion filed on November 6, 2002, plaintiff agreed to dismiss the action without prejudice and "re-plead its case with the specificity requested by the First Data Defendants" within one week of dismissal. (Def.App. at 3). The next day, plaintiff filed a Rule 41(a) notice of dismissal in the Texarkana court and sued the First Data Defendants, as well as a new defendant, MicroBuilt Corporation, in the Dallas Division of the Northern District of Texas.¹

The First Data Defendants now move to transfer this case to the Texarkana Division of the Eastern District of Texas pursuant to 28 U.S.C. § 1404(a). The motion has been fully briefed and argued by the parties and is ripe for determination.

II.

Section 1404(a) provides that "[f]or the convenience of the 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." 28 U.S.C. § 1404(a). The purpose of this statute is "to prevent the waste of time, energy, and money and to protect litigants, witnesses, and the public against unnecessary inconvenience and expense." Andrade v. Chojnacki 934 F.Supp. 817, 832 (S.D.Tex. 1996), quoting State Street Capital Corp. v. Dente, 855 F.Supp. 192, 197 (S.D.Tex. 1994). In ruling on a motion to transfer venue under section 1404(a), the court should consider various private interest factors, such as: (1) the availability and convenience of the witnesses and parties; (2) the availability of process to compel the attendance of unwilling witnesses; (3) the cost of obtaining attendance of witnesses; (4) the relative ease of access to sources of proof; (5) the place of the alleged wrong; (6) the possibility of delay and prejudice if the case is transferred; and (7) the plaintiffs right to choose its forum. Nokia Corp. v. Buca, Inc., 2002 WL 1461913 at *1 (N.D.Tex. Jul.2, 2002), citing Dupre v. Spanier Marine Corp., 810 F.Supp. 823, 825 (S.D.Tex.1993). The movant must demonstrate that the balance of convenience and justice weighs heavily in favor of transfer. Id.

Although the letter of section 1404(a) might suggest otherwise, it is well established that "the interest of justice" is an important factor in the transfer analysis.² See In re Medrad, Inc., 1999 WL 507359 at *2 (Fed.Cir. Jun.25, 1999), citing 15 C. WRIGHT, A. MILLER & E. COOPER, FEDERAL PRACTICE AND PROCEDURE § 3854 at 439-41 (2d ed.1986). Transfer is particularly appropriate where related cases involving the same issues are pending in another court. In Continental Grain Co. v. Barge FBL-585, 364 U.S. 19, 80 S.Ct. 1470, 4 L.Ed.2d 1540 (1960), the Supreme Court observed:

To permit a situation in which two cases involving precisely the same issues are simultaneously pending in different District Courts leads to the wastefulness of time, energy and money that § 1404(a) was designed to prevent. Moreover, such a situation is conductive to a race of diligence among litigants for a trial in the District Court each prefers.

Id., 80 S.Ct. at 1474. Since Continental Grain, a number of courts, including the Fifth Circuit, have held that the existence of related litigation in a transferee court is a factor that weighs strongly in favor of transfer. See Jarvis Christian College v. Exxon Corp., 845 F.2d 523, 528-29 (5the Cir.1988); Coffey v. Van Dorn Iron Works, 796 F.2d 217, 221 (7th Cir. 1986). Piecemeal litigation in the complex and technical area of patent and trademark law is especially undesirable. See Smiths Industries Medical Systems, Inc. v. Ballard Medical Products, Inc., 728 F.Supp. 6, 7 (D.D.C.1989). In such cases, the "interest of justice" may dictate transfer even if the convenience of the parties and witnesses calls for a different result. The Black & Decker Corp. v. Amirra, Inc. 909 F.Supp. 633, 639 (W.D.Ark.1995). See also Hunter Engineering Co. v. ACCU Industries, Inc., 2002 WL 31356392 at * 13 (E.D.Va. Oct.10, 2002) (judicial economy favored transfer to another court more familiar with patent issues involved in suit); Haworth, Inc. v. Herman Miller, Inc., 821 F.Supp. 1476, 1479 & n.3 (N.D.Ga.1992) (same); Ricoh Co., Ltd. v. Honeywell, Inc., 817 F.Supp. 473, 487-88 & n. 27 (D.N.J.1993) (transfer of patent case to court where related action was pending promoted judicial economy and eliminated possibility of inconsistent rulings); Pall Corporation v. Bentley Laboratories, Inc., 523 F.Supp. 450, 453 (D.Del.1981) (same).

A.

Plaintiff tacitly concedes that this action could have been brought in the Eastern District of Texas. Indeed, plaintiff would be hard-pressed to argue otherwise since it originally sued the First Data Defendants in Texarkana. Notwithstanding its original decision to file suit in the Eastern District of Texas, plaintiff now claims that "Dallas is the best, most convenient forum to litigate this dispute." (Plf. Resp. Br. at 1).

Ordinarily, a plaintiffs choice of forum is "highly esteemed." N2 Consulting, LLC v. Engineered Fastener Co., 2002 WL 31246770 at *2 (N.D.Tex. Oct.2, 2002), quoting Aguero v. Christopher, 481 F.Supp. 1272, 1275 (S.D.Tex.1980). However, this factor becomes less significant where, as here, the plaintiff originally filed suit in another district. "It is one thing to give weight to plaintiffs initial choice of forum, but it seems odd that a plaintiff who has chosen an improper forum should have great weight given to [its] second choice." FPC Corp. v. Uniplast, Inc., 994 F.Supp. 945, 946 (N.D.Ill.1998), quoting 15 C. WRIGHT, A. MILLER & E. COOPER, FEDERAL PRACTICE AND PROCEDURE § 3848 at 394 (2d ed.1986). Consequently, this factor does not weigh in favor of or against transfer.

Nor do the other private interest factors inform the court's decision on the transfer issue. Neither plaintiff nor the First Data Defendants maintains an office in the Northern or Eastern District of Texas.³ The availability of party witnesses, the cost of obtaining the attendance of unwilling witnesses, and the relative ease of access to sources of proof will be substantially the same whether the case remains in Dallas or is transferred to Texarkana. In fact, the First Data Defendants had already produced more than 35,000 pages of documents before plaintiff dismissed the Texarkana action and re-filed in Dallas. The alleged infringing activity occurred in both districts. Although lead counsel for plaintiff and the First Data Defendants are located in Dallas, both parties have local counsel in the Eastern District of Texas.

The most persuasive argument made by plaintiff for keeping this case in Dallas is that "[transportation in and out of DFW International Airport is [ ] much easier than flying into the Texarkana airport, which only offers flights from DFW airport." (Plf. Resp. Br. at 9) (emphasis in original). While this may be true, it does not tip the balance in favor of retaining venue in the Northern District of Texas. As the Fifth Circuit once noted, "this case is not being consigned to the wastelands of Siberia or some remote, distant area of the Continental United States." Jarvis, 845 F.2d at 528. The minor inconvenience plaintiff may suffer in having to litigate this action in Texarkana, less than 200 miles away, rather than in Dallas, does not in itself preclude transfer to the Eastern District of Texas. Id. (trial judge did not abuse discretion in transferring case from Houston to Tyler, "only 203 miles distant," where related litigation was pending); see also Reiffin v. Microsoft Corp., 104 F.Supp.2d 48,...