Yahoo Asks Federal Circuit to Determine Whether TC Heartland Changed, or Merely Clarified, Venue Rules

In an interesting development in the post-TC Heartland world, it appears that the Federal Circuit will soon answer the question whether the Supreme Court’s venue decision was a change in the law, or merely a course-correction to honor preexisting law. Here, in a case arising out of the Eastern District of New York, the Federal Circuit ordered AlmondNet, Inc., Datonics, LLC, and Intent IQ, LLC to respond to a petition for a writ of mandamus submitted by Yahoo Holdings, Inc.  In its petition, Yahoo argued that the District Court erred in denying its motion to transfer, and specifically that it waived the right to challenge venue on the basis that TC Heartland did not change the law of venue.

In its petition, Yahoo stated that it conditionally admitted that venue was proper in its answer under VE Holding Corp. v. Johnson Gas Appliance Co., which stood for the proposition that venue is appropriate wherever a defendant is subject to personal jurisdiction.  However, in its answer to the complaint, Yahoo claimed to reserve the right to challenge venue in the event that the then-pending TC Heartland changed the standard. Following the Supreme Court decision, Yahoo attempted to leverage this reservation of rights and moved to transfer based on the purported change in the law. The District Court denied the motion, concluding that TC Heartland merely clarified existing law.

We would be surprised if the Federal Circuit declines to resolve the question whether the Supreme Court changed the controlling law on venue. Yahoo’s petition argues that the Supreme Court’s reversal of VE Holding changed the meaning of “resides” from “personal jurisdiction” to “state of incorporation,” a question we have written about here. We will continue to monitor this case as it evolves.

Subscribe To Viewpoints