AVS sued Toyota and Gulf States—a Texas-based Toyota dealer—for patent infringement in the Eastern District of Texas. Toyota and Gulf States filed a motion (1) to sever the claims against Gulf States; (2) to transfer the claims against Toyota to a more convenient forum under 28 U.S.C. § 1404(a); and (3) to stay the claims against Gulf States pending resolution of the transferred case. The Federal Circuit has now granted Toyota’s request for a writ of mandamus after the district court denied the motion. In re Toyota Motor Corp., No. 2014-113 (Fed. Cir. April 3, 2014).
In denying the transfer motion, the district court concluded that the convenience factors did not indicate that the transferee forum would be “clearly more convenient.” And, based on the transfer denial, the court also denied the severance-and-stay requests, indicating there was little reason to grant them.
Toyota petitioned for writ of mandamus, asking the Federal Circuit, to order the district court to transfer the case under 28 U.S.C. § 1404(a).
On review, the Federal Circuit noted that in balancing the convenience factors, the district court found that several favored transfer, two were neutral, but none favored retaining the claims against Toyota in Texas. While the district court’s analysis did not show the transferee forum is “far” more convenient, that is not what was required. Rather, all that need be shown was transfer was “clearly more convenient.” The Federal Circuit thus ruled that district court’s no-transfer conclusion was a clear abuse of discretion.
As a result, the Federal Circuit granted the writ of mandamus. Per the Court, the district court’s decision not to sever and stay the case against Gulf States was based entirely on its decision denying Toyota’s motion to transfer. Because that decision was reversed, the Federal Circuit directed the district court to newly address the severance-and-stay motion on remand, with the premise that Toyota has a clear right to transfer. Finally, if the district court severed the claims against Gulf States, the Federal Circuit instructed that the remainder of the case must be transferred.