Scovill Manufacturing Co. v. Sunbeam Corporation

• Decision Date: 24 April 1973
• Docket Number: Civ. A. No. 4533.
• Citation: 357 F. Supp. 943
• Parties: SCOVILL MANUFACTURING COMPANY, Plaintiff, v. SUNBEAM CORPORATION, Defendant.
• Court: U.S. District Court — District of Delaware

357 F. Supp. 943

SCOVILL MANUFACTURING COMPANY, Plaintiff, v. SUNBEAM CORPORATION, Defendant.

Civ. A. No. 4533.

United States District Court, D. Delaware, Wilmington, Delaware.

April 24, 1973.

Hugh L. Corroon of Potter, Anderson & Corroon, Wilmington, Del., and Bruce B. Krost of Woodling, Krost, Granger & Rust, Cleveland, Ohio and Dallett Hoopes, Scovill Mfg. Co., Waterbury, Conn., of counsel, for plaintiff.

James M. Tunnell, Jr. and Douglas E. Whitney of Morris, Nichols, Arsht & Tunnell, Wilmington, Del., and William E. Schuyler, Jr. and Dale H. Hoscheit of Schuyler, Birch, Swindler, McKie & Beckett, Washington, D. C. and George R. Clark, Sunbeam Corp., Chicago, Ill., of counsel, for defendant.

OPINION AND ORDER

LATCHUM, District Judge.

The matters presently before the Court are the defendant's motion to transfer this action to the United States District Court for the Northern District of Illinois and the plaintiff's motion to compel answers to certain interrogatories propounded to the defendant.

The background facts are as follows. The defendant Sunbeam Corporation ("Sunbeam"), a Delaware corporation accused Scovill Manufacturing Company ("Scovill"), the plaintiff, of infringing five Sunbeam patents by its manufacture of a spray and steam iron. After a period of time during which correspondence was exchanged, Scovill filed a declaratory judgment action in this Court seeking to have Sunbeam's asserted patents declared invalid and not infringed.¹ Sunbeam counterclaimed, charging Scovill with infringement of Sunbeam's five iron patents. Scovill propounded a set of 50 interrogatories to Sunbeam relating to the five patents. As to 24 of the interrogatories, Scovill charges that Sunbeam either wrongfully refused to answer or gave unresponsive answers. Scovill has made a motion under Rule 37, F.R.Civ.P., to compel Sunbeam to file responsive answers to the interrogatories. Sunbeam, of course, opposes the motion. Sunbeam asserts that the answers given were responsive and the refusals to answer were justifiable because the answers sought would be speculative in nature. For its part, Sunbeam has filed a motion to transfer this action to the United States District Court for the Northern District of Illinois pursuant to 28 U.S.C. § 1404(a). Scovill opposes the transfer and, in the alternative, argues that the only proper transfer would be to the United States District Court for the District of Connecticut.

The Court will deal first with the motion to transfer. Scovill argues first that this Court lacks power to transfer the action to Illinois. The argument runs as follows. Under the patent venue statute, 28 U.S.C. § 1400(b), an action for patent infringement may only be brought where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business. Although Scovill initiated suit by filing a declaratory judgment action, wherein venue is governed by the general venue statute, 28 U.S.C. § 1391(c), it argues that Sunbeam's counterclaim converted the action to one for patent infringement so that venue is governed by 28 U.S.C. § 1400(b). Under 28 U.S.C. § 1400(b), if Sunbeam had chosen to initiate the suit, it could only have brought an action in Connecticut, where Scovill is incorporated, or in Ohio, where the allegedly infringing spray and steam irons were manufactured. Scovill argues that by its initiating suit via the declaratory judgment action in Delaware where Sunbeam is incorporated, it waived its right to be sued for patent infringement only in Connecticut or Ohio, but that the waiver was a limited one confined solely to this Court. Since, Scovill argues, 28 U.S.C. § 1404(a) only permits transfers to districts where the action might have been brought, the only transfers permissible under the statute would be to Connecticut or Ohio.

The Court rejects Scovill's argument. The fatal flaw, as far as this Court is concerned, is the assumption that Sunbeam's counterclaim converts this action from one for declaratory judgment to one for patent infringement for the purpose of determining where the suit might have been brought. This contention was rejected by the Supreme Court in Hoffman v. Blaski, 363 U.S. 335, 343, 80 S.Ct. 1084, 1089, 4 L.Ed.2d 1254 (1960). In that case the Court stated:

"`But we do not see how the conduct of a defendant after suit has been instituted can add to the forums where it "might have been brought." In the normal meaning of words this language of § 1404(a) directs the attention of the judge who is considering a transfer to the situation which existed when suit was instituted.'"

Therefore, for purposes of 28 U.S.C. § 1404(a), the effect of a counterclaim is ignored in determining where the declaratory judgment action could have been brought originally.

Venue in a declaratory judgment action based on patent infringement is not covered by 28 U.S.C. § 1400(b), but rather is governed by the general venue statute 28 U.S.C. § 1391(c), which provides that a corporation may be sued in any district where it does business. Barber-Greene Co. v. Blaw-Knox Co., 239 F.2d 774, 776 (C.A.6 1957); Minnesota Automotive, Inc. v. Stromberg Hydraulic Brake & Coupling Co., 309 F. Supp. 614, 616 (D.Minn.1970); Metropolitan Staple Corp. v. Samuel Moore & Co., 278 F.Supp. 85, 86 (S.D.N.Y.1967). Since Sunbeam, the defendant in the declaratory judgment complaint, has its corporate headquarters and main place of business in Chicago and nearby suburbs, the suit might have been instituted by Scovill in the United States District Court for the Northern District of Illinois. That being the case, the Court has power under 28 U.S.C. § 1404(a) to transfer the action to that district.

However, the Court must also consider the propriety of such a transfer. 28 U. S.C. § 1404(a) sets forth three criteria for a court to consider in ordering transfer: convenience of the parties, convenience of witnesses, and the interests of justice.

The burden of showing that transfer is warranted under these criteria is on the moving party. Kaiser Industries Corp. v. Wheeling-Pittsburgh Steel Corp., 328 F.Supp. 365, 368 (D. Del.1971); Kewanee Oil Co. v. M & T Chemicals, Inc., 315 F.Supp. 652, 654 (D.Del.1970). The mere desire of a defendant to transfer to a different forum is not sufficient to warrant a transfer. Kaiser Industries Corp., supra, 328 F.Supp. at 368. Brown v. Insurograph, Inc., 85 F.Supp. 328, 330 (D.Del.1949).

The plaintiff's choice of forum is entitled to substantial weight, Shutte v. Armco Steel Corp., 431 F.2d 22, 25 (C.A.3, 1970), cert. den. 401 U.S. 910, 91 S.Ct. 871, 27 L.Ed.2d 808 (1971), and transfer should be denied where the factors to be considered are evenly balanced or only slightly favor a transfer, Aetna Casualty & Surety Co. v. Singer-General Precision, Inc., 323 F.Supp. 1141, 1143 (D.Del.1971), so that the moving party's reasons should be fairly substantial, Kaiser Industries Corp., supra, 328 F. Supp. at 369; Nocona Leather Goods Co. v. A. G. Spalding & Bros., Inc., 159 F.Supp. 269, 279 (D.Del.1957).

The record indicates that while Sunbeam is a Delaware corporation, its headquarters and its Research and Engineering Department where the patents in suit were developed are located in the greater Chicago area. It also appears that the potential witnesses who were involved in developing the patents in suit are located near Chicago. On the other hand, Scovill's corporate headquarters are in Connecticut and its steam iron manufacturing facilities are in Byesville, Ohio. The record indicates that most of Scovill's potential witnesses are located in Connecticut.

From the above it appears that a transfer to the United States District Court for the Northern District of Illinois would be more convenient for Sunbeam and Sunbeam's witnesses. Since Scovill and its witnesses would be required to travel and to encounter out-of-town living expenses regardless of whether trial is held in Delaware or Illinois, the transfer would at most only be slightly more inconvenient to them. Therefore, the convenience of parties and witnesses weighs in favor of transfer.

However of the three statutory standards which must be considered on a motion for transfer under 28 U.S.C. § 1404(a), the interest of justice is the factor entitled to the greatest weight, Kaiser Industries Corp., supra, 328 F. Supp. at 370; Lank v. Federal Insurance Co., 309 F.Supp. 349, 352-353 (D.Del. 1970), and it is on the basis of this factor that the Court declines to transfer. Scovill was subject to charges of infringement from Sunbeam which hindered Scovill's business relations with its retail outlets. Rather than remain in a state of uncertainty and insecurity while Sunbeam decided whether and when to bring suit, Scovill brought the instant action for declaratory relief. It was for this very type of situation that the Declaratory Judgment Act was passed. Borchard, Declaratory Judgments 299 (2d Ed., 1941). Had Sunbeam promptly filed a complaint for patent infringement instead of leaving Scovill in a position of uncertainty, venue would have been governed by 28 U.S.C. § 1400(b) so that the complaint could only have been filed in Connecticut or Ohio. Now, however, Sunbeam claims to have a wider choice of fora because venue in a declaratory judgment is governed by 28 U.S.C. § 1391(c), and it seeks to have the instant action transferred to the United States District Court for the Northern District of Illinois, (a district in which it could not have instituted an infringement suit against Scovill), because it would be more convenient for it to litigate literally in its own backyard. To permit a transfer under these circumstances would be tantamount to rewarding Sunbeam for engaging in the dilatory tactics which forced Scovill to seek declaratory relief. For that reason the Court concludes that it would not be in the interest of justice to transfer. In light of the foregoing, the Court...