Certiorari Denied by Supreme Court December 13, 1976.
WEICK, Circuit Judge.
This is an interlocutory appeal from an order of the United States District Court for the Northern District of Ohio denying a motion by Skil Corporation (Skil) to remand a patent infringement action to the District Court in Northern Illinois, which had previously transferred the case to the Ohio Court under the provisions of 28 U.S.C. § 1404(a).
The transferred case is one of several which have been filed during protracted litigation between Skil and Lucerne Products, Inc. (Lucerne), who are the patentees and manufacturers of competing switches used on portable electric tools. This litigation has been pending in various courts since 1968, with cases filed not only in Ohio and Illinois, but also in the Southern District of New York and the District of Connecticut.
Over the years cases have shuttled between the District Courts of Northern Ohio and Illinois by transfer and retransfer in a controversy over choice of forum, with the result that there has been no trial on the merits of the litigation. Various phases of the transfer litigation have been considered by District Judges Green and Lambros of Ohio, and by Judges Will and Hoffman of Illinois. This is the fourth appeal which our court has entertained.
The history of the litigation is detailed in Judge Hoffman's transfer order, a copy of which is appended hereto as Exhibit "A".
Upon the entry of the transfer order Skil filed an Emergency Petition for a Writ of Mandamus and Prohibition in the Court of Appeals for the Seventh Circuit, seeking to vacate Judge Hoffman's order. The basis of the attack was that the record did not show that the transferee court had proper venue as to each defendant, that one of the defendants did not have a principal place of business in Northern Ohio, and that therefore Judge Hoffman was without power to order the transfer under § 1404(a). The petition with a brief and attachments thereto consisted of 123 pages, and a supplemental appendix was filed. Lucerne filed an 80-page response.
Circuit Judges Kiley, Stevens and Sprecher considered the merits of the case, as evidenced by the following order entered on December 26, 1973:
The Seventh Circuit denied Skil's petition for rehearing and another petition for rehearing en banc; it denied Skil's motion for a stay pending certiorari to the Supreme Court. Mr. Justice Rehnquist denied a similar motion for a stay.
Following the entry of the transfer order of Judge Hoffman and the decision of the Seventh Circuit, District Judge Lambros of Northern Ohio entered an order vacating his own previous remand order in Skil v. Lucerne, No. C 69-461, and consolidated that case with the case being transferred from Northern Illinois, No. C 74-121, for all pretrial proceedings. A copy of the Order is appended hereto as Exhibit "B".
Skil then moved to remand Case No. C 74-121 again to Illinois, which motion was denied. Judge Lambros certified the case for an interlocutory appeal, which was granted by a panel of this Court.
Skil contends that Judge Lambros erred in failing to remand this case to the Northern District of Illinois, since the Illinois District Court lacked the power to transfer the case to the Northern District of Ohio. Skil relies upon the case of Hoffman v. Blaski, 363 U.S. 335, 80 S.Ct. 1084, 4 L.Ed.2d 1254 (1960), a decision by a divided court, which held that a § 1404(a) transfer can only be made to a District Court in which the plaintiff could have originally brought the action while complying with the venue and service of process statutes. Skil argues that the record does not show that the Northern District of Ohio is a proper venue as to all defendants, and therefore the Illinois District Court lacked the power under § 1404(a) to transfer the case to the Northern District of Ohio.
This is precisely the very same issue that the Seventh Circuit considered and decided against Skil in the mandamus and prohibition action brought in that Court by Skil to set aside this transfer. It is thus clear that the decision of the Seventh Circuit against Skil is res judicata on the issue of the validity of Judge Hoffman's order of transfer, and we are bound by the decision. In denying the writ, the Seventh Circuit did not base its decision on the ground that
Skil argues that we must apply the rule of Blaski in spite of the Seventh Circuit's decision, because in that case the Supreme Court affirmed a remand order of the Seventh Circuit in spite of the fact that a mandamus action to prevent the transfer had been unsuccessful in the Fifth Circuit. In Blaski, the Fifth Circuit's action was held not res judicata as to the merits of the transfer because the Fifth Circuit never reached the merits. The party opposing the transfer had merely moved for leave to file a petition for a writ of mandamus, and the Fifth Circuit denied the motion.
A further contention of Skil is that the Seventh Circuit's denial of a writ of mandamus and prohibition is not binding on this Court because the standard of review in a mandamus action differs from the standard of review in an interlocutory appeal. This distinction does not change the result in this case. Skil argued in the Seventh Circuit that Judge Hoffman lacked power to transfer the case because of Blaski. Had Skil been correct, the Seventh Circuit would have been required to issue the writ. By denying the writ, the Seventh Circuit must necessarily have decided that Judge Hoffman had power to transfer the case because the District Court in Ohio could properly exercise jurisdiction over the action. The standard for testing jurisdiction does not differ in a mandamus action from the standard used in an appeal.
While it would be improper for us to question the applicability of those reasons to the facts in Blaski, we must conclude that those reasons are inapplicable to the facts before us. A proceeding upon a petition for a writ of mandamus is a separate action, not an appeal in Skil's lawsuit. Therefore, the Seventh Circuit's order was not interlocutory, but a final disposition, challengeable only by writ of certiorari in the Supreme Court, which Skil did not seek. Furthermore, the Seventh Circuit must necessarily have decided the power-of-transfer issue on the merits, as explained above. Finally, the Seventh Circuit's order was not issued in the case before us, but was issued in a separate action, Skil Corp. v. Hoffman, No. 73-1697. Thus none of the reasons for denying the effect of res judicata in Blaski are present here.
Alternatively, the order of the Seventh Circuit in refusing to set aside by mandamus the transfer order had the effect of establishing the validity of the transfer order as the law of the case.
Under the law-of-the-case analysis, we need not find that reconsideration of the Seventh Circuit's decision is beyond our power, but we need only consider whether it "would . . . [be] wise to apply the law-of-the-case doctrine as a sound rule of practice." Id. at 534.
When three federal courts, one having coordinate jurisdiction with this Court, have considered and rejected the same objection to transfer raised by Skil, we see no reason to avoid applying law-of-the-case doctrine as a sound rule of practice. While we might be willing to depart from applying law-of-the-case if one of the defendants was objecting to transfer because there exists no proper venue as to him in the transferee district, we do not have such a case before us. Skil was already before the Court in Northern Ohio as a party in another case raising the same issues of patent validity, which case has been consolidated with the transferred case. Lucerne had agreed to indemnify its customers who were the original defendants in the transferred action. Thus Lucerne is in reality the sole target of Skil's attack on the patent in both lawsuits. We see no reason to avoid applying the law-of-the-case doctrine, thereby allowing Skil to litigate the validity
The aim of our system of jurisprudence is to settle the merits of a dispute with reasonable dispatch. The doctrine of the law-of-the-case has developed to achieve that end.
The legislative history of § 1404(a), found in the Reviser's Notes, states that the section "was drafted in accordance with the doctrine of forum non conveniens." It was never intended to afford a vehicle in patent litigation to shuttle cases involving the same patents between District Courts in different Circuits, resulting in a battle over the choice of forum, and delaying indefinitely a trial on the merits. The present litigation has resulted in unreasonable delay in reaching the merits of the patent dispute. The two cases which have been consolidated by District Judge Lambros, and remain ripe for resolution, were filed originally in Illinois on (respectively) July 11, 1968 (No. 68-C-1290) and November 16, 1970 (No. 70-C-2858). Judge Lambros was correct in describing the situation as "chaotic"; and the time has certainly come to bring order to this situation by adjudicating issues which have shuffled between the Illinois and Ohio District Courts for eight years. We should put a stop to forum-shopping and bring to a close this protracted litigation over the forum.
The order of the District Court is affirmed.
The above matter came before the Court on July 30, 1973 on the "Motion of Skil Corporation under Rule 21, Federal Rules of Civil Procedure, to add Mr. Benjamin H. Matthews as a Party-Defendant" and upon the briefs and memoranda filed by the parties in connection therewith and it further appearing to the Court that the following facts and circumstances, constituting a matter of record before this Court, are of significance to the determination of such Motion:
On June 6, 1969, Judge Hubert L. Will ordered that Civil Action 68 C 1290, in its entirety, be transferred to the U.S. District Court for the Northern District of Ohio (Eastern Division), which transfer was made by the Clerk of the Court on June 11, 1969 and the cause was subsequently docketed by the Ohio Court as No. C 69-461.
Shortly after the Order of Transfer was entered, the U.S. Supreme Court handed down its Decision in Lear, Inc. v. Adkins, 395 U.S. 653, 89 S.Ct. 1902, 23 L.Ed.2d 610 (1969).
On April 23, 1970, the Ohio District Court by Judge Ben C. Green ordered that Civil Action C 69-461 be transferred to the Northern District of Illinois to afford Judge Will a basis to reconsider the propriety of the assertion by the defendant, Lucerne, of the defense of patent invalidity as to the Gawron Patent, U.S. Patent 3,209,228.
On September 24, 1970, pursuant to a Memorandum Opinion, Judge Hubert L. Will again ordered that the entire action, Civil Action 68 C 1290 be transferred to the District Court for the Northern District of Ohio, Eastern Division.
In that Memorandum Opinion this Court, speaking through Judge Will, discussed the transfer matter at pages 5, 6, 17 and 18 and specifically stated as follows as page 17:
The entire action, Civil Action 68 C 1290 was re-transferred by the Clerk on October 6, 1970.
On November 16, 1970, Skil filed Civil Action No. 70 C 2858 naming as defendants Rockwell Manufacturing Company and Wen Products, Inc., two indemnified customers of Lucerne, in the United States District Court for the Northern District of Illinois, Eastern Division. That action was assigned to Julius J. Hoffman, United States District Judge. Lucerne moved for leave to intervene under the provisions of Rule 24 F.R.C.P. and such leave was granted on February 7, 1971. That action also related to the Gawron Patent, U.S. Patent No. 3,209,228 issued September 28, 1965.
On February 29, 1972, District Judge Thomas D. Lambros in Civil Action No. C
The cause in Civil Action No. 70 C 2858 came on for trial on Monday, November 13, 1972 before this Court, but counsel for the plaintiff having represented to the Court that the plaintiff was unable to proceed by reason of the restraining order issued on February 29, 1972 by the United States District Court for the Northern District of Ohio, Eastern Division, in the case of Skil Corporation v. Lucerne Products, Inc. et al., C 69-461, the Amended Complaint in Civil Action No. 70 C 2858 was dismissed without prejudice, each party to bear its own costs on November 14, 1972.
On November 13, 1972, Skil Corporation as plaintiff, filed a civil action in the United States District Court for the Northern District of Illinois, Eastern Division, against Millers Falls Company, Rockwell Manufacturing Company, Thor Power Tool Company and Wen Products, Inc., Civil Action 72 C 2854. Thor Power Tool Company was subsequently dismissed by agreement. Millers Falls Company was an indemnified customer of Lucerne and on Motion of Lucerne, Lucerne Products, Inc. was granted leave to intervene under Rule 24 F.R.C.P. on February 7, 1973.
On February 13, 1973 Judge Lambros issued a Memorandum Opinion and Order amending the February 29, 1972 Restraining Order so as to enjoin Skil, its officers, agents, employees, attorneys or any other persons acting on its behalf from proceeding in the case of Skil Corporation v. Millers Falls Co., Case No. 72 C 2854 in the Northern District of Illinois.
With respect to the original Restraining Order of February 29, 1972, Skil took an appeal to the Court of Appeals for the Sixth Circuit and the Restraining Order was upheld by the Court of Appeals for the Sixth Circuit:
Skil petitioned for certiorari to the United States Supreme Court, however, certiorari was denied on October 10, 1972.
With respect to the Amended Restraining Order dated February 13, 1973, Skil filed an appeal to the Court of Appeals for the Sixth Circuit, which appeal the District Court later dismissed on Skil's own Motion.
On June 28, 1973, Judge Lambros entered an Order dissolving the Amended Restraining Order dated February 13, 1973 against Skil from proceeding in this action, Civil
Lucerne has taken an appeal from such action by the Ohio District Court, which appeal was docketed July 19, 1973 in the Court of Appeals for the Sixth Circuit as Appeal No. 73-1738.
There should be no obstacle to the exercise of this Court's discretion under 28 U.S.C. § 1404 insofar as venue and jurisdiction is concerned since Lucerne is manufacturer of the accused structures and is indemnifier of the other defendants and is the real party in interest and has exercised full control of the litigation in both 70 C 2858 and 72 C 2854 with the full consent and approval of the other defendants, Millers Falls Company, Rockwell Manufacturing Company and Wen Products, Inc.
The matters placed at issue by virtue of the plaintiff's Motion, and considering the potential role of Benjamin H. Matthews as a party-defendant, if he should be added as a party, this Court pursuant to the spirit of 28 U.S.C. § 1404, for the convenience of the parties, witnesses, and in the interest of justice, would then be clearly obligated to consider the propriety of transferring this cause to the Northern District of Ohio.
Therefore, to give effect to the initial determination and transfer orders of Judge Will, and taking notice of the past actions of the Northern District of Ohio and the Sixth Circuit Court of Appeals relative to this series of litigation involving the Gawron Patent U.S. Patent No. 3,209,228, together with this Court's personal experience with two related suits, causes Nos. Civil Action 70 C 2858 and Civil Action 72 C 2854, both filed subsequent to the initial action, 68 C 1290, and considering the relative interests of each party in the Gawron patent litigation, and recognizing the propriety but consequence of granting the Motion pending in the action at bar:
It is Ordered and Adjudged
That the present action 72 C 2854 be transferred in its entirety to the United States District Court for the Northern District of Ohio, Eastern Division.
That the plaintiff's pending Motion under Rule 21 of the Federal Rules of Civil Procedure for Leave to Add Benjamin H. Matthews as a party-defendant, is referred to the Northern District of Ohio, Eastern Division, for such action as that Court might in its discretion see fit to enter.
That the Clerk of the Court is hereby ordered and directed to transfer forthwith the entire file in this case 72 C 2854, including all pleadings, motions, discovery transcripts, and related documents to the Clerk of the United States District Court for the Northern District of Ohio, Eastern Division.
Dated at Chicago, Illinois, this 31st day of July, 1973.
LAMBROS, DISTRICT JUDGE
Upon motion of the defendant and in view of the transfer to this Court of Skil Corporation, Inc. v. Lucerne Products, Inc., No. C 74-121, (formerly designated Case No. 72 C 2854, Northern District of Illinois), the Court's order of June 28, 1973 transfering this case to the Northern District of Illinois is vacated. With the arrival of the Chicago litigation in this Court, and in view of the fact that the above-styled case was initiated prior to the transfered case, retention
IT IS SO ORDERED.
ADAMS, Circuit Judge (dissenting).
Two questions confront us today: first, whether, because of the doctrines of res judicata and law of the case, the Court is foreclosed from conducting an independent determination of the issue presented by the appellant; and, second, whether the Ohio district court properly assumed subject-matter jurisdiction over the lawsuit that is the foundation of the present interlocutory appeal.
This particular action was initiated by Skil Corporation (Skil) in 1972, but it is part of a complex patent infringement litigation, involving the activities of the intervenor Lucerne Products (Lucerne), that has shuffled between the Northern District of Illinois and the Northern District of Ohio for the last eight years. In July, 1973, on his own motion, Judge Hoffman ordered the case transferred from Illinois to Ohio, so that it could be consolidated with the related patent infringement cases. Skil petitioned the Court of Appeals for the Seventh Circuit for a writ of prohibition and mandamus
Once in Ohio, Skil moved that the cases be remanded to Illinois. Judge Lambros denied that motion, but the question of his denial of remand to Illinois was certified by him and another panel of this Court, pursuant to 28 U.S.C. § 1292(b), and is now before us on an interlocutory appeal.
The arguments addressed to this Court involve what may appear, superficially, to be the same issue that was addressed to the Seventh Circuit. As a result, my colleagues would decide this troublesome case by application of the doctrines of res judicata (or, more specifically, collateral estoppel) and law of the case.
I am unable to agree with such a formulation of the problem. Underlying either doctrine, res judicata or law of the case, is the assumption that the Seventh Circuit has already decided the same issue that is now before us.
Judge Hoffman's transfer of these cases to Ohio was before the Seventh Circuit, but the question was posed to the Seventh Circuit on a petition for a writ of mandamus. In contrast, the question is presented to this Court by way of an interlocutory appeal. Consequently, the legal standards which governed the decision in the Seventh Circuit are significantly different from the standards which are to control our determination.
Before this Court the issue is one of error of law: Did the Ohio district court make an error of law in denying the motion to remand these cases to Illinois, thereby upholding the transfer of venue to Ohio? The issue before the Seventh Circuit was whether there existed "exceptional circumstances amounting to a judicial `usurpation of power'"
The majority decision is constructed upon the proposition that when the Seventh Circuit denied the petition for a writ of mandamus, it necessarily reached the merits of the transfer-of-venue question and determined that the district to which the action had been transferred was one in which it could have been brought originally. Thus, according to the majority, mandamus would have issued if the transferee district had not been a proper one for venue, and under that view, an incorrect transfer by the Illinois district court would have amounted to a usurpation of judicial power. This reasoning does not, however, withstand close analysis.
It has not been suggested that Judge Hoffman exceeded the bounds of his judicial authority in transferring the law suit. No one disputes that he had an in personam and an in rem base for jurisdiction. Such bases existed regardless of whether the transfer was properly granted. The statutory requirement of section 1404(a) concerns the jurisdiction of the court to which the action is transferred and not, as the majority asserts, the jurisdiction of the court ordering the transfer. Therefore, if Judge Hoffman transferred the case to a district in which there was no venue as to one of the parties, he committed an error of law—but he did not exceed his jurisdiction.
Necessarily implicit in the majority's reasoning are two assumptions, and in my view the validity of either one is doubtful. The first assumption is that the Seventh Circuit has adopted a standard of review which requires a consideration of the merits where the appellate court denies a motion for mandamus in a transfer-of-venue case. The second is that the Seventh Circuit in fact employed such a standard in denying Skil's petition for mandamus.
It is true that the Seventh Circuit has occasionally reached the merits in deciding whether to issue a writ of mandamus in transfer-of-venue situations.
It must also be remembered that the summary denial of mandamus by the Seventh Circuit in this case came at a time when what the rule appeared to be in that circuit was summarized by the following statement from Sypert v. Miner:
Thus, it would appear that while it is conceivable that the Seventh Circuit may have reached the merits of the transfer question, it is far more likely that it followed the precept it had adumbrated in Sypert v. Miner, supra, determining only that Judge Hoffman did not abuse his discretion by transferring the case to Ohio, and did not reach the question whether the place of transfer was a correct one. But whatever the court may have decided, we are not in a position to know what it did decide by its brief denial.
Two decisions based upon the same facts, but made according to different standards of adjudication, cannot without more be regarded as decisions of identical issues.
If, as I believe, there has not been a prior binding determination of the transferability issue now pressed by the appellant, it is necessary for us to consider the basis in the record for establishing venue in the Northern District of Ohio.
Judge Weick has related the complicated background of this "chaotic" case with admirable clarity. The critical fact is that, since Judge Hoffman transferred these cases sua sponte and not at the request of the defendants, there is no record to demonstrate that Skil could have brought this suit originally in Ohio. Yet, under § 1404(a), as interpreted in Hoffman v. Blaski, such a showing is an essential predicate for transfer. What is important to our current inquiry is the capacity of the plaintiff to have "brought" the suit in the transferee district in the first instance. Absent this necessary element, the denial of Skil's motion to remand the cause to Illinois would appear unwarranted, unless Hoffman v. Blaski is distinguishable.
The defendants attempt to differentiate Hoffman v. Blaski by drawing an analogy between the instant case and Continental Grain Co. v. Barge FBL-585, where a transfer was permitted although jurisdiction over the barge could not have been obtained in the transferee forum.
The disregard of the limitations on venue imposed by the in rem proceeding in Continental Grain was, however, founded on the fictitious nature of the in rem law suit. There, in rem jurisdiction depended upon the legal fiction that the barge had an independent personality. Hence, suit could be brought against the barge even where its owner could not be reached. It was possible in Continental Grain to ignore this legal fiction because it did not serve any legitimate purpose for the plaintiff in that case; it had not been necessary to employ the legal fiction in order to bring suit, since in personam jurisdiction over the owners of the barge had been obtained.
Here, the defendants are quite different from Barge FBL-585, since each has a real and independent legal personality. Were it not for a private agreement to indemnify, each defendant could be sued without immediately touching the interest of Lucerne. The claims against each defendant manufacturer are distinct from the claims against Lucerne, although they may arise from the same factual configuration.
The opinion of the Supreme Court in Van Dusen v. Barrack
Consequently, I believe that the principle of Continental Grain does not apply in the present situation, and that the Court should adhere to the interpretation of section 1404(a) set forth in Hoffman v. Blaski. Under such interpretation, it is necessary for the district court to determine whether this is an action that could have been brought in the Northern District of Ohio.
It is disturbing when a lawsuit degenerates into maneuvering over the appropriate forum; it is particularly troubling here where the litigation has worn on for eight years without coming to a trial on the merits. But a court cannot act beyond its powers, and the authority of the Ohio district court to assume jurisdiction over this action is not apparent on the record before us. I would remand the case to that court for proceedings which would establish the basis of jurisdiction or, if there is no basis, for remand of the suit to Illinois. Further, I would suggest that the trial court expedite the matter and admonish the parties to cooperate fully in such efforts to complete this litigation as promptly as possible.
Although the power of a court to transfer a case under § 1404(a) hinges upon venue statutes, we do not consider the problem to be one of venue, but rather one of jurisdiction of the transferee court to hear the transferred case. As stated in Blaski: "The transferee courts could have acquired jurisdiction over these actions only if properly brought in those courts, or if validly transferred thereto under § 1404(a)." (363 U.S. at 343, 80 S.Ct. at 1089.) The Seventh Circuit was required, in ruling on the mandamus petition, to consider whether the transferor court usurped its power and whether the transferee court could properly acquire jurisdiction.
On the other hand, the judge of the transferee district might be acting outside his power in retaining a case where it is an open question whether the suit originally could have been brought in his court, as required by section 1404(a). Hence, mandamus may issue more readily with respect to the decision of a transferee judge to accept a case than with respect to the decision of the judge in the original jurisdiction to transfer the case. Compare Ackert v. Pelt Bryan, 299 F.2d 65, 68 (2d Cir. 1962) with Blaski v. Hoffman, 260 F.2d 317 (7th Cir. 1958). But see, e. g., Relf v. Gasch, 167 U.S.App.D.C. 230, 511 F.2d 804 (1975); Shutte v. Armco Steel Corp., 431 F.2d 22 (3d Cir. 1970), cert. denied 401 U.S. 910, 91 S.Ct. 871, 27 L.Ed.2d 808 (1971); Behimer v. Sullivan, 261 F.2d 467 (7th Cir. 1958), aff'd sub nom. Hoffman v. Blaski, 363 U.S. 335, 80 S.Ct. 1084, 4 L.Ed.2d 1254 (1960).
The majority seeks to infer from this language that the court addressed the merits of the transfer. This language would appear to provide a weak foundation for such a conclusion.