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TC Heartland LLC v. Kraft Foods Group Brands LLC

United States Supreme Court

May 22, 2017

TC HEARTLAND LLC, PETITIONER
v.
KRAFT FOODS GROUP BRANDS LLC

          Argued March 27, 2017

         ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT

         The patent venue statute, 28 U.S.C. §1400(b), provides that "[a]ny civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business." In Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222, 226, this Court concluded that for purposes of §1400(b) a domestic corporation "resides" only in its State of incorporation, rejecting the argument that § 1400(b) incorporates the broader definition of corporate "residence" contained in the general venue statute, 28 U.S.C. §1391(c). Congress has not amended §1400(b) since Fourco, but it has twice amended §1391, which now provides that, "[e]xcept as otherwise provided by law" and "[f]or all venue purposes, " a corporation "shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court's personal jurisdiction with respect to the civil action in question." §§1391(a), (c).

         Respondent filed a patent infringement suit in the District Court for the District of Delaware against petitioner, a competitor that is organized under Indiana law and headquartered in Indiana but ships the allegedly infringing products into Delaware. Petitioner moved to transfer venue to a District Court in Indiana, claiming that venue was improper in Delaware. Citing Fourco, petitioner argued that it did not "resid[e]" in Delaware and had no "regular and established place of business" in Delaware under §1400(b). The District Court rejected these arguments. The Federal Circuit denied a petition for a writ of mandamus, concluding that §1391(c) supplies the definition of "resides" in § 1400(b). The Federal Circuit reasoned that because petitioner resided in Delaware under §1391(c), it also resided there under § 1400(b).

         Held:

As applied to domestic corporations, "reside [nee]" in §1400(b) refers only to the State of incorporation. The amendments to §1391 did not modify the meaning of §1400(b) as interpreted by Fourco. Pp. 3- 10.

         (a)The venue provision of the Judiciary Act of 1789 covered patent cases as well as other civil suits. Stonite Products Co. v. Melvin Lloyd Co., 315 U.S. 561, 563. In 1897, Congress enacted a patent specific venue statute. This new statute (§1400(b)'s predecessor) permitted suit in the district of which the defendant was an "inhabitant" or in which the defendant both maintained a "regular and established place of business" and committed an act of infringement. 29 Stat. 695. A corporation at that time was understood to "inhabit" only the State of incorporation. This Court addressed the scope of §1400(b)'s predecessor in Stonite, concluding that it constituted "the exclusive provision controlling venue in patent infringement proceedings" and thus was not supplemented or modified by the general venue provisions. 315 U.S., at 563.

         In 1948, Congress recodified the patent venue statute as § 1400(b). That provision, which remains unaltered today, uses "resides" instead of "inhabit[s]." At the same time, Congress also enacted the general venue statute, §1391, which defined "residence" for corporate defendants. In Fourco, this Court reaffirmed Stonite's holding, observing that Congress enacted § 1400(b) as a standalone venue statute and that nothing in the 1948 recodification evidenced an intent to alter that status, even the fact that §1391(c) by "its terms" embraced "all actions, " 353 U.S., at 228. The Court also concluded that "resides" in the recodified version bore the same meaning as "inhabit[s]" in the pre-1948 version. See id., at 226.

         This landscape remained effectively unchanged until 1988, when Congress amended the general venue statute, §1391(c). The revised provision stated that it applied "[f]or purposes of venue under this chapter." In VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574, 1578, the Federal Circuit held that, in light of this amendment, §1391(c) established the definition for all other venue statutes under the same "chapter, " including §1400(b). In 2011, Congress adopted the current version of §1391, which provides that its general definition applies "[f]or all venue purposes." The Federal Circuit reaffirmed VE Holding in the case below. Pp. 3-7.

         (b) In Fourco, this Court definitively and unambiguously held that the word "reside[nce]" in §1400(b), as applied to domestic corporations, refers only to the State of incorporation. Because Congress has not amended § 1400(b) since Fourco, and neither party asks the Court to reconsider that decision, the only question here is whether Congress changed §1400(b)'s meaning when it amended §1391. When Congress intends to effect a change of that kind, it ordinarily provides a relatively clear indication of its intent in the amended provision's text. No such indication appears in the current version of §1391.

         Respondent points out that the current §1391(c) provides a default rule that, on its face, applies without exception "[f]or all venue purposes." But the version at issue in Fourco similarly provided a default rule that applied "'for venue purposes, '" 353 U.S., at 223, and those phrasings are not materially different in this context. The addition of the word "all" to the already comprehensive provision does not suggest that Congress intended the Court to reconsider its decision in Fourco. Any argument based on this language is even weaker now than it was when the Court rejected it in Fourco. Fourco held that § 1400(b) retained a meaning distinct from the default definition contained in §1391(c), even though the latter, by its terms, included no exceptions. The current version of §1391 includes a saving clause, which expressly states that the provision does not apply when "otherwise provided by law, " thus making explicit the qualification that the Fourco Court found implicit in the statute. Finally, there is no indication that Congress in 2011 ratified the Federal Circuit's decision in VE Holding. Pp. 7-10. 821 F.3d 1338, reversed and remanded.

          THOMAS, J., delivered the opinion of the Court, in which all other Members joined, except GORSUCH, J., who took no part in the consideration or decision of the case.

          OPINION

          Thomas Justice.

         The question presented in this case is where proper venue lies for a patent infringement lawsuit brought against a domestic corporation. The patent venue statute, 28 U.S.C. § 1400(b), provides that "[a]ny civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business." In Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222, 226 (1957), this Court concluded that for purposes of § 1400(b) a domestic corporation "resides" only in its State of incorporation.

         In reaching that conclusion, the Court rejected the argument that § 1400(b) incorporates the broader definition of corporate "residence" contained in the general venue statute, 28 U.S.C. §1391(c). 353 U.S., at 228. Congress has not amended § 1400(b) since this Court construed it in Fourco, but it has amended §1391 twice. Section 1391 now provides that, "[e]xcept as otherwise provided by law" and "[f]or all venue purposes, " a corporation "shall be deemed to reside, if a defendant, in any judicial district in which such defendant is subject to the court's personal jurisdiction with respect to the civil action in question." §§1391(a), (c). The issue in this case is whether that definition supplants the definition announced in Fourco and allows a plaintiff to bring a patent infringement lawsuit against a corporation in any district in which the corporation is subject to personal jurisdiction. We conclude that the amendments to §1391 did not modify the meaning of § 1400(b) as interpreted by Fourco. We therefore hold that a domestic corporation "resides" only in its State of incorporation for purposes of the patent venue statute.

         I

         Petitioner, which is organized under Indiana law and headquartered in Indiana, manufactures flavored drink mixes.[1] Respondent, which is organized under Delaware law and has its principal place of business in Illinois, is a competitor in the same market. As relevant here, respondent sued petitioner in the District Court for the District of Delaware, alleging that petitioner's products infringed one of respondent's patents. Although petitioner is not registered to conduct business in Delaware and has no meaningful local presence there, it does ship the allegedly infringing products into the State.

         Petitioner moved to dismiss the case or transfer venue to the District Court for the Southern District of Indiana, arguing that venue was improper in Delaware. See 28 U.S.C. §1406. Citing Fourco's holding that a corporation resides only in its State of incorporation for patent infringement suits, petitioner argued that it did not "resid[e]" in Delaware under the first clause of § 1400(b). It further argued that it had no "regular and established place of business" in Delaware under the second clause of § 1400(b). Relying on Circuit precedent, the District Court rejected these arguments, 2015 WL 5613160 (D Del., Sept. 24, 2015), and the Federal Circuit denied a petition for a writ of mandamus, In re TC Heartland LLC, 821 F.3d 1338 (2016). The Federal Circuit concluded that subsequent statutory amendments had effectively amended § 1400(b) as construed in Fourco, with the result that §1391(c) now supplies the definition of "resides" in §1400(b). 821 F.3d, at 1341-1343. Under this logic, because the District of Delaware could exercise personal jurisdiction over petitioner, petitioner resided in Delaware under §1391(c) and, therefore, under §1400(b). We granted certiorari, 580 U.S. ___ (2016), and now reverse.

         II

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