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Federal Circuit Denies Petition For Writ Of Mandamus On Venue Issues Based On Location Of Remote Employees’ Homes
10/11/2022On September 30, 2022, the United States Court of Appeals for the Federal Circuit (CAFC) denied a petition for writ of mandamus challenging, inter alia, the denial of a motion to dismiss for improper venue under 28 U.S.C. § 1400(b) by the United States District Court for the Western District of Texas (W.D. Tex.). In re Monolithic Power Systems, Inc., No. 2022-153, -- F.4th -- (Fed. Cir. Sept. 30, 2022). Noting that mandamus review is not ordinarily available for rulings on improper venue motions, a panel majority found that the district court’s fact-specific ruling does not involve the type of broad, fundamental and recurring legal question or usurpation of judicial power that warrants the extraordinary remedy of mandamus.
On June 23, 2021, Bel Power Solutions Inc. (Respondent) filed suit against Monolithic Power Systems, Inc. (Petitioner) in the Western District of Texas for infringement of six patents relating to power modules. Petitioner moved to dismiss under Fed. R. Civ. P 12(b)(3) and 28 U.S.C. § 1406(a), arguing that venue in the Western District of Texas was improper under 28 U.S.C. § 1400(b) because Petitioner is incorporated in Delaware, Petitioner does not own or lease any property in the Western District of Texas, and the homes of its four full-time remote employees in the Western District of Texas do not constitute Petitioner’s regular and established places of business. The district court denied the motion. It found that Petitioner’s history of soliciting employees in Austin, Texas to support local customers showed that maintaining a business presence in the district was important to Petitioner. Further, the district court found it significant that Petitioner provided certain of its employees in the district with lab equipment or products to be used in, or distributed from, their homes to support Petitioner’s local customers. Monolithic Power Systems, Inc., petitioned for a writ of mandamus.
A panel majority of the CAFC denied the petition. The majority noted that the district court applied the factors from In re Cray Inc., 871 F.3d 1355 (Fed. Cir. 2017), to the specific facts of the case, including Petitioner’s history of soliciting employees to support its customers in the Western District of Texas and the extent and type of laboratory equipment and product maintained in Petitioner’s remote employees’ homes. The majority further noted that, in particular, one employee had a “fair amount” of lab equipment and samples for demonstration to local customers. The majority then found that Petitioner had not shown that the district court’s venue ruling involves the type of broad, fundamental and recurring legal question or usurpation of judicial power that would warrant being “drawn into such [a] fact-laden dispute[].” Therefore, the CAFC refused to reach the merits of the challenge and denied the petition.
Judge Lourie dissented, arguing that venue here is clearly improper because the employees’ homes are merely places where employees carry out work for the Petitioner, and do not constitute a regular and established place of business ratified by the Petitioner, as is required to establish proper venue under 28 U.S.C. § 1400(b). Judge Lourie also highlighted that the district court’s decision could be increasingly problematic given the increased prevalence of remote work.
The panel majority specifically noted Judge’s Lourie’s dissent and suggested that his analysis may be correct as to the merits, even if his position is insufficient as to require the CAFC to grant mandamus.
