Venue Options Get Smaller in BigCommerce
On May 15, 2018, the Federal Circuit granted BigCommerce, Inc.’s petition for a writ of mandamus and held that — for purposes of determining venue under 28 U.S.C. § 1400(b) — a domestic corporation incorporated in a state having multiple judicial districts “resides” in the judicial district where it maintains its principal place of business. In re BigCommerce, Inc., 2018-120, 122, at *13 (May 15, 2018). Accordingly, for BigCommerce, a Texas corporation, venue is proper under the first prong of § 1400(b) only in the Western District of Texas, because its headquarters are located in Austin.
BigCommerce is the latest in a series of mandamus actions addressing the effects of the Supreme Court’s decision in TC Heartland, which reaffirmed that a domestic defendant corporation “resides” under § 1400(b) only in its state of incorporation. See In re Cray Inc., 871 F.3d 1355 (Fed. Cir. 2017); In re Micron Tech., Inc., 875 F.3d 1091 (Fed. Cir. 2017). District courts have been divided with regard to the meaning of “resides” in the patent-specific venue statute for a multi-district state. The Federal Circuit settled this issue by concluding that a plain reading of the statutory language of § 1400(b) (“in the judicial district where the defendant resides”) connotes only one particular judicial district in the state and observed that Congress knew how to authorize venue in all judicial districts by saying “any judicial district.” This view is supported by the Supreme Court’s decision in Stonite Products Co. v. Melvin Lloyd Co., 315 U.S. 561 (1942), which stands for the proposition that “a corporation incorporated in a multi-district state is not a resident of every district in the state.”
The Federal Circuit further clarified that, when a corporation has facilities in more than one district in the state, venue is proper in the judicial district where the principal place of business is located as determined in accordance with the Supreme Court’s diversity jurisdiction precedents: a corporation’s principal place of business is its headquarters, the nerve center, and where a corporation’s officers direct, control, and coordinate the corporation’s activities. Where a corporation’s principal place of business is located outside of the state in which it is incorporated, for venue purposes, the corporate defendant will be deemed “to reside in the district in which its registered office, as recorded in its corporate filings, is located.”
What This Means for You
BigCommerce shows that the contours of venue after TC Heartland are still being defined. While corporations incorporated in a state with a single judicial district (e.g., Delaware) are not likely to be affected by this decision, BigCommerce allows corporations that are incorporated in multi-district states (e.g., Texas, California) to have more control over where venue can be laid under the first prong of § 1400(b).
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.