Opinion
6:20-cv-00876-ADA
03-25-2022
MONOLITHIC POWER SYSTEMS, INC. and CHENGDU MONOLITHIC POWER SYSTEMS CO., LTD., Plaintiffs, v. MERAKI INTEGRATED CIRCUIT SHENZHEN TECHNOLOGY, LTD. and PROMATE ELECTRONIC CO., LTD., Defendants.
ORDER GRANTING MERAKI'S OPPOSED MOTION FOR RECONSIDERATION [ECF No. 89]
ALAN D ALBRIGHT, UNITED STATES DISTRICT JUDGE.
Came on for consideration this date is Defendant Meraki Integrated Circuit (Shenzhen) Technology, Ltd.'s (“Meraki's”) Opposed Motion for Reconsideration (the “Reconsideration Motion”). ECF No. 89. Monolithic Power Systems, Inc. (“MPS Inc.”) and Chengdu Monolithic Power Systems Co., Ltd. (“MPS Chengdu”) (collectively “MPS” or “Plaintiffs”) filed an opposition on November 23, 2021, ECF No. 93, to which Meraki Integrated Circuit (Shenzhen) Technology, Ltd. (“Meraki” or “Defendant”) filed a reply on November 30, 2021, ECF No. 97. The parties thereafter filed supplemental briefing requested by this Court. See ECF Nos. 100, 101, 106, 107, 110, 111, and 113. After careful consideration of the Motion, the Parties' briefs, and the applicable law, the Court GRANTS Meraki's Opposed Motion for Reconsideration.
I. BACKGROUND
Plaintiff Monolithic Power Systems, Inc. is a Delaware corporation with its headquarters in Washington state, while Plaintiff Chengdu Monolithic Power Systems Co., Ltd. is a Chinese corporation (together, “MPS”). ECF No. 21 ¶¶ 19-20. MPS filed this action against Defendant Meraki, a Chinese corporation, asserting claims of patent infringement (the “Patent Claims”) along with claims of trade secret misappropriation, tortious interference, and unfair competition (the “Non-Patent Claims”). Id. ¶¶ 88-164. Claims 1-3 in MPS's amended complaint (patent infringement and federal trade secret misappropriation) are governed under federal law, claim 4 is governed by Texas state law, and claims 5-6 are governed by common law. Id.
MPS separately filed a lawsuit in the Northern District of California (“NDCA”) against Meraki's founders, Mr. Dong and Ms. Sheng, in their individual capacity, alleging that they breached numerous clauses in their employment agreements with MPS, in addition to other actions that have caused injury to MPS. Monolithic Power Systems, Inc. v. Dong, No. 4:20-cv-06752-JSW (N.D. Cal. Sept. 28, 2020) (the “California Action”).
On December 29, 2020, Meraki moved to dismiss this Action for lack of personal jurisdiction. ECF No. 22. On February 26, 2021, Meraki moved to transfer this Action to the NDCA under 28 U.S.C. § 1404(a), yet reserved its right to challenge personal jurisdiction in the NDCA. See ECF No. 33. The Court denied Meraki's motion to transfer on August 13, 2021, finding that, while this Action could have been brought in the NDCA, the balance of convenience favored maintaining this suit in Waco. ECF No. 51 (the “Original Transfer Order”). On September 1, 2021, the Court denied Meraki's motion to dismiss, finding that this Court has specific personal jurisdiction over Meraki, due to either Meraki's direct contacts with Texas, or its contacts with Texas through the stream of commerce. ECF No. 54 (the “Jurisdictional Order”). On September 7, 2021, Meraki filed a petition for a writ of mandamus to the U.S. Court of Appeals for the Federal Circuit. See Petition, In re Meraki Integrated Circuit (Shenzhen) Technology, Ltd., No. 21-180 (Fed. Cir. Sept. 7, 2021).
On November 5, 2021, this Court issued an amended order denying Meraki's motion to transfer that vacated and superseded its original order denying transfer. ECF No. 87 (the “Amended Transfer Order”). The Court issued that order in view of intervening authority from the Federal Circuit as to how to weigh § 1404 convenience factors. Yet the Court denied transfer on the ground that Meraki had not shown that MPS could have brought this Action in the NDCA- even though the Court concluded the opposite in the Original Transfer Order. Compare Id. at 5-6 (finding the threshold question not satisfied), with ECF No. 51 at 3-4 (finding the threshold question satisfied). Meraki then notified the Federal Circuit that it “believes that mandamus relief is no longer necessary, ” and stating that it planned to file a motion for reconsideration before this Court. Citation of Supplemental Authority, In re Meraki, No. 21-180 at ECF No. 20 (Fed. Cir. Nov. 8, 2021). A few days later, the Federal Circuit issued an order dismissing Meraki's mandamus petition, to which Judge Hughes issued a concurrence. See Order, In re Meraki, No. 21-180 at ECF No. 21 (Fed. Cir. Nov. 15, 2021) (the “Concurrence”). On November 16, 2021, Meraki filed its motion for reconsideration of the Amended Transfer Order. ECF No. 89 (the “Reconsideration Motion”).
On November 29, 2021, the Court requested via email supplemental briefing from the Parties regarding personal jurisdiction over the Non-Patent Claims in this Court and the NDCA. The parties filed the requested briefing on December 8, 2021 and December 15, 2021. See ECF Nos. 100, 101, 106, and 107. Then, on December 11, 2021, the Court requested via email further supplemental briefing from the Parties regarding whether it was appropriate to sever MPS's claims against Meraki if Meraki established its right to transfer to the NDCA. The parties filed the requested briefing on January 10, 24, and 31 of 2022. See ECF Nos. 110, 111, and 113.
Meraki's Reconsideration Motion is now ripe for judgment.
II. LEGAL STANDARD
A. Reconsideration Under Rule 54(b)
Rule 54(b) of the Federal Rules of Civil Procedure “authorizes the district court to revise[] at any time any order or other decision . . . [that] does not end the action. Austin v. Kroger Texas, L.P., 864 F.3d 326, 336 (5th Cir. 2017) (quoting Fed.R.Civ.P. 54(b)) (internal quotation omitted, alterations in original). Rule 54(b) “reflect[s] the inherent power of the rendering district court to afford such relief from interlocutory judgments as justice requires.” Id. (internal quotation omitted). In accordance with this Rule, courts may reconsider and reverse prior decisions “even in the absence of new evidence or an intervening change in or clarification of the substantive law.” Id.
III. ANALYSIS
The Concurrence chastises this Court for: (1) reconsidering the threshold question in the § 1404(a) transfer analysis applied to Meraki's Transfer Motion; (2) declining, on reconsideration of that question, to find that Meraki met its burden of showing that the transferee court had jurisdiction; and (3) refusing to permit Meraki to allege that § 1404(a) was satisfied while reserving for itself a challenge to jurisdiction in the transferee court.
A. The Court's Authority to Revise Its Own Orders
The Court did not offend propriety by correcting the Original Transfer Order's holding as to the NDCA's jurisdiction over Meraki. The Concurrence cites to the Original Transfer Order, which found the threshold question satisfied, stating “to the extent that venue is appropriate over Meraki as a foreign corporation in the Western District of Texas, it is appropriate in any judicial district.” Concurrence at 2. In the Original Transfer Order, this Court concluded that “regardless of Meraki's reservation of the right to challenge the lack of personal jurisdiction in the NDCA, this case could have been brought in the NDCA.” Concurrence at 3.
Yet the Original Transfer Order did not state why jurisdiction was proper in the NDCA, Meraki's briefing did not articulate a theory for why jurisdiction was proper in the NDCA, and MPS affirmatively argued that Meraki did not satisfy its burden in showing that jurisdiction was proper in the NDCA.
Having had the opportunity to reconsider its Original Order in light of new guidance from the Federal Circuit on transfer under § 1404(a), the Court reconsidered the Original Order in toto. The Concurrence states that by amending the Original Order, this Court has “come[] to the correct conclusion that ‘Meraki has shown that NDCA is clearly more convenient than the Waco Division.'” Concurrence at 3. Yet the Concurrence takes this Court to task for correcting another aspect of its § 1404(a) analysis: the threshold issue of the transferee court's jurisdiction. Id. at 3, 4. “The preliminary question under § 1404(a) is whether a civil action ‘might have been brought' in the [transfer] destination venue.” In re Volkswagen, Inc., 545 F.3d 304, 312 (5th Cir. 2008) (“Volkswagen II”). And, as the Concurrence recognizes, “a defendant must demonstrate that jurisdiction would be proper in the transferee district.” Concurrence at 4.
The Fifth Circuit has held that “the trial court is free to reconsider and reverse its [interlocutory orders] for any reason it deems sufficient, even in the absence of new evidence or an intervening change in or clarification of the substantive law.” Lavespere v. Niagara Mach. & Tool Works, Inc., 910 F.2d 167, 185 (5th Cir. 1990) (first citing Fed.R.Civ.P. 54(b), and then citing Bon Air Hotel v. Time, Inc., 426 F.2d 858, 862 (5th Cir. 1970)). The Court did just that in issuing the Amended Transfer Order, correcting what the Court perceived as an error in the Original Transfer Order.
B. The Amended Transfer Order Is Not Inconsistent with the Jurisdictional Order
The Concurrence posits that the Amended Order is inconsistent with another order in this case in which this Court denied a motion to dismiss for lack of personal jurisdiction. ECF No. 54 (the “Jurisdictional Order”). In the Jurisdictional Order, this Court found that this Court could exercise personal jurisdiction over Meraki. According to the Concurrence, the Jurisdictional Order's “basis for personal jurisdiction” was the finding that, under a stream-of-commerce theory:
Meraki has entered into business with customers with “expansive and nationwide product distribution networks” for goods incorporating Meraki's accused products, “Meraki cannot suggest that it is unaware or should not have known [such] goods . . . are found in the nation's second largest state.”
Concurrence at 4.
Likewise, in its Reconsideration Motion, Meraki argues that it:
carried its burden of establishing the issue of personal jurisdiction in the NDCA-and indeed in Waco or anywhere else in the United States-in its Motion to Transfer, as this Court found in its [Amended Order] denying transfer and as it re-confirmed in denying Meraki's motion to dismiss and found Meraki to be subject to general jurisdiction in all United States federal district courts.ECF No. 89 at 3-4. Meraki “does not contest that in view of [the Jurisdictional Order], all district courts-including the NDCA-have general jurisdiction over Meraki as to this matter.” ECF No. 89 at 4. It argues that this Court's stream-of-commerce analysis permits “general” jurisdiction over Meraki “in any given state” because it is “foreseeable that products incorporating the Accused Products would be found” there. Id.
Meraki and the Concurrence misread the Jurisdictional Order.
For instance, Meraki incorrectly states that this Court determined that it has general personal jurisdiction over Meraki. The Supreme Court has described the difference between general and specific personal jurisdiction succinctly:
A court may assert general jurisdiction over foreign (sister-state or foreign-country) corporations to hear any and all claims against them when their affiliations with the State are so “continuous and systematic” as to render them essentially at home in the forum State. . . . Specific jurisdiction, on the other hand, depends on an “affiliatio[n] between the forum and the underlying controversy, ” principally, activity or an occurrence that takes place in the forum State and is therefore subject to the State's regulation.
Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011). Meraki's allegation is puzzling because the Goodyear opinion, which Meraki itself cites in support of reconsideration, holds as a matter of law that a stream-of-commerce theory cannot support the exercise of general personal jurisdiction. See Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 927 (2011), cited in ECF No. 89 at 4-5. Further, the Jurisdictional Order lacks hallmarks of a general personal jurisdiction analysis. It does not discuss whether Meraki is “essentially at home in” Texas. Goodyear, 564 U.S. at 924. It does not suggest that this was an “exceptional case” in which “a corporation's operations in a forum other than its formal place of incorporation or principal place of business may be so substantial and of such a nature as to render the corporation at home in that State.” Daimler AG v. Bauman, 571 U.S. 117, 139 n.19 (2014). The Court has no basis for making such findings.
Rather, the Jurisdictional Order explored whether MPS's claims “arise[] out of or relate[] to” those activities Meraki directed to “this forum.” ECF No. 54 at 7 (quoting Nuance Commc'ns, Inc. v. Abbyy Software House, 626 F.3d 1222, 1231 (Fed. Cir. 2010)). It determined that they do. See Id. (“Regarding if the infringement claim arises or relates to the importation of the Accused Products into this forum, it is clear the two are related. By importing its allegedly infringing products through the stream of commerce into this forum, Meraki has injured MPS in this forum.”). As Nuance Communications notes, these questions are part of the specific-jurisdiction inquiry. 626 F.3d at 1231. The Jurisdiction Order concludes that Meraki is subject to specific personal jurisdiction in Texas; not, as Meraki suggests, general personal jurisdiction.
Additionally, both Meraki and the Concurrence elide one critical premise supporting the Jurisdictional Order's finding that Meraki could foresee that its products could be found in Texas. Concurrence at 4; ECF No. 89 at 4. Namely, the Parties did not dispute that an Accused Product could actually be found in Texas. See ECF No. 54 at 7 (citing Meraki's concession that Promate, one of Meraki's distributors, shipped an Accused Product to Texas); id. (“Whether or not Meraki directly sold the product in this forum, or it arrived via the stream of commerce, this Court can properly assert jurisdiction over Meraki.”).
In the Jurisdictional Order, this Court stated:
By entering into business with [Lenovo and Delta], which have expansive and nationwide product distribution networks . . . Meraki cannot suggest that it is unaware or should not have known that goods incorporating its products are found in the nation's second largest state.ECF No. 54 at 6-7. Critically, the Jurisdictional Order continues, “Furthermore, Meraki in its Motion concedes that it places its product into the stream of commerce and that it knew [its product] reached the state of Texas.” Id. at 7 (emphasis added); ECF No. 22 at 6. The Concurrence states that this “basis for personal jurisdiction would . . . apply equally to California.” Concurrence at 4. That may have been true if this Court had evidence that an Accused Product actually reached California while still in the stream of commerce. But the Court had no such evidence when it issued the Original Transfer Order. Evidence of this ilk was material in Celgard, LLC v. SK Innovation Co., 792 F.3d 1373 (Fed. Cir. 2015), in which the Federal Circuit affirmed a determination that jurisdiction was lacking under a stream-of-commerce theory where the evidence failed to show that accused products, ceramic-coated battery separators, were actually found in the forum state. Id. at 1382.
The Celgard court reviewed a case in which the accused infringer, SK Innovation (“SKI”), moved to dismiss for lack of personal jurisdiction in North Carolina. Id. at 1376. The trial court granted jurisdictional discovery. Once completed, SKI renewed its motion to dismiss, which the trial court resolved without a jurisdictional hearing. Accordingly, the plaintiff, Celgard, needed only present a prima facie case that jurisdiction was proper in North Carolina. Id. at 1378 (citing Deprenyl Animal Health, Inc. v. Univ. of Toronto Innovations Found., 297 F.3d 1343, 1347 (Fed. Cir. 2002)).
Celgard proposed a stream-of-commerce theory and SKI opposed, arguing that “all of SKI's sales are to customers outside of the United States, ” that “SKI had no knowledge of any established sales channels in North Carolina for its separators, ” that “SKI had no control over where or to whom SKI's customers subsequently sold or distributed batteries incorporating SKI's separators.” Id. at 1376. Significantly, SKI noted how Celgard produced no evidence that any of SKI's accused products had been present in North Carolina. Id. at 1377. Celgard argued that, since SKI's “biggest customers” supplied batteries to Apple and Dell, both of which sell products in North Carolina, “the only reasonable inference is that SKI's accused products have made their way into North Carolina.” Id. at 1381.
The Federal Circuit affirmed the district court and rejected Celgard's stream-of-commerce theory, noting that “[t]here is no evidence establishing that SKI's products actually enter the forum state.” Id. at 1383. “Celgard's evidence fails to show that SKI's separators actually have been found in North Carolina, much less that SKI can foresee that its separators will make their way there.” Id.; see also Luv N' care, Ltd. v. Insta-Mix, Inc., 438 F.3d 465, 470 (5th Cir. 2006) (“[M]ere . . . awareness [is] a constitutionally sufficient basis for personal jurisdiction if the defendant's product made its way into the forum state while still in the stream of commerce.” (emphasis added)). Jurisdiction under a stream-of-commerce theory was, therefore, unfounded.
Under the same reasoning, Meraki failed to satisfy its burden of showing that jurisdiction is proper in California under a stream-of-commerce theory. Like SKI, Meraki represented that it sells its products only in China, and never purposefully to U.S. customers, and that it “generally” had no knowledge about where its customers sold the final products integrated the Accused Product. ECF No. 22 at 5; ECF No. 22-1 ¶ 17. And like Celgard-which bore the burden of presenting a prima facie showing of proper jurisdiction-Meraki did not present any evidence that the Accused Products had actually been found in California. Without that evidence, this Court will not presume that Meraki knew or should have known its Accused Products made it into California via the stream of commerce.
In lieu of evidence supporting jurisdiction in California, Meraki recited only conclusory and vague arguments that it was not subject to personal jurisdiction in any U.S. district court- but if it was, it was subject to personal jurisdiction in the NDCA. ECF No. 33 at 6 (“While Meraki denies that personal jurisdiction exists over it in any U.S. judicial district given that it operates solely in China, to the extent that any U.S. district has personal jurisdiction over foreign corporation Meraki, Meraki may be sued in any judicial district.”); ECF No. 37 at 1. Meraki did not provide a declaration that, at the time MPS filed this Action, Meraki was importing Accused Products into California or that Accused Products had entered California via the stream of commerce. Nor did it present attorney argument to that effect. Meraki's conclusory arguments amount merely to waiver of, or consent to, personal jurisdiction in the NDCA. The Supreme Court has deemed such representations incapable of satisfying § 1404(a)'s threshold inquiry. Hoffman v. Blaski, 363 U.S. 335, 343 (1960). Meraki, thus, did not show that the NDCA has jurisdiction over Meraki for the claims in this Action. Rather, Meraki attempted to reserve its ability to object to the NDCA's jurisdiction. This Court will not permit such a maneuver. See Japan Display Inc. v. Tianma Microelectronics Co., No. 2:20-CV-00283-JRG, 2021 U.S. Dist. LEXIS 160256, at *9 (E.D. Tex. Aug. 25, 2021) (denying transfer because the defendant, “apparently wanting to have its cake and eat it too, skirted the threshold § 1404 question while attempting to preserve a jurisdictional challenge”).
C. A Foreign Defendant's Ability to Preserve a Jurisdictional Defense
The Concurrence also states that if this Court's “Amended Order is correct, a foreign defendant who wants to preserve its right to assert lack of jurisdiction would never be able to avail itself of the right to transfer to a clearly more convenient venue.” Concurrence at 4. If that is true, that is a consequence of § 1404(a)'s text-not the caprice of this Court. Defendants, be they foreign or domestic, do not have what the Concurrence deems a “right to transfer to a clearly more convenient” judicial district. They have a “right to transfer to a clearly more convenient” judicial district where the action “might have been brought, ” that is, a clearly more convenient judicial district satisfying the relevant venue statute and possessing personal jurisdiction over the defendant and subject matter jurisdiction over the claims. Meraki cannot both (a) satisfy its burden of showing that it possesses that right while (b) maintaining that jurisdiction is legally improper in California and reserving its right to seek dismissal of this Action on those grounds in California.
It is not necessarily true. If all parties to an action consent to transfer to a clearly more convenient venue under § 1404(a), a foreign defendant may preserve its right to assert a lack of jurisdiction there. Here, MPS did not consent to transfer to the NDCA.
Meraki also now contends that it is “no longer challenging personal jurisdiction vis-à-vis this case.” ECF No. 89 at 4 n.1.
This, the Concurrence posits, cannot be right. Yet the Concurrence's logic permits defendants to twist jurisdiction “like a nose of wax”-in one way to meet movant's threshold burden under § 1404(a) and another to seek dismissal once in the transferee venue. Cf. Data Engine Techs. LLC v. Google LLC, 10 F.4th 1375, 1381 (Fed. Cir. 2021) (“Analogously, where, as here, a patentee relies on language found in the preamble to successfully argue that its claims are directed to eligible subject matter, it cannot later assert that the preamble term has no patentable weight for purposes of showing infringement.”).
This tactic also smacks of forum shopping-instead of litigating jurisdictional questions in the original forum, a defendant requests transfer to a forum in which the defendant perceives it can secure a more favorable jurisdictional ruling (even though establishing the transferee forum's jurisdiction is a prerequisite to transfer).
This logic would permit a party to convince a transferor court that the transferee court is more convenient; then, after finding the transferee court less-than-hospitable, to argue to the transferee court-on the same facts as before-that the transferor court was more convenient all along. How, under the letter of the law, could such an about-face be abided in view of, for example, the law-of-the-case doctrine or judicial estoppel? See Lockett v. Pinnacle Ent., Inc., No. 19-00358-CV-W-GAF, 2019 WL 4296492, at *5-*7 (W.D. Mo. Sept. 10, 2019) (discussing how the law of the case typically precludes objections to personal jurisdiction in the transferee forum); ECB USA, Inc. v. Savencia, S.A., No. CV 19-731-RGA-CJB, 2020 WL 11762200, at *11 n.13 (D. Del. July 10, 2020) (discussing how judicial estoppel or “implied consent” precludes objections to personal jurisdiction in the transferee forum), R&R adopted, No. CV 19-731-RGA, 2020 WL 5369076 (D. Del. Sept. 8, 2020). That logic, and the maneuvers it permits, offends principles underlying those doctrines like the conservation of judicial resources. This Court will not blot out § 1404(a)'s “might have been brought” language-or derogate its duty to scrutinize whether that limitation is satisfied-merely because a foreign defendant, in being granted transfer under § 1404(a), may preclude itself from challenging personal jurisdiction.
This is the tradeoff such defendants make.
D. Reconsidering Personal Jurisdiction in California
Meraki now asserts that “all district courts-including the NDCA-have general jurisdiction over Meraki as to this matter.” ECF No. 89 at 4. As explained above, “general jurisdiction” as to a particular matter is not a coherent concept. See supra Section III.B. Meraki argues that this is consistent with the Court's finding in the Jurisdictional Order. ECF No. 89 at 4. Critically, Meraki also recognizes in supplemental briefing that Shenzhen Times Innovation Technology Co. Ltd. (“Shenzhen Times”) and Baseus Accessories LLC (“Baseus US”) purchase Meraki products “from Meraki in China and incorporate them into final products that are ultimately distributed and sold in the United States, including in the Northern District of California.” ECF No. 101 at 2 (citing ECF No. 22-1 ¶¶ 13-14). Specifically, “after importing its Baseus GaN2 Fast Chargers into the United States, Baseus U.S. then sold 100 of these products that incorporate the accused power semiconductor products to Navitas Semiconductor in California.” ECF No. 101 at 3 (citing ECF No. 22-1 ¶ 17). This, Meraki suggests, brings it within the ambit of California's jurisdiction under the stream-of-commerce theory articulated in the Jurisdictional Order. ECF No. 101 at 3. (“Meraki, this Court held, ‘cannot suggest that it is unaware or should not have known that goods incorporating its products are found in the nation's second largest state.'” (quoting ECF No. 54 at 7)).
This evidence cures the deficiencies thwarting the personal-jurisdiction position Meraki set forth in its original transfer motion. An Accused Product can actually be found in California; Baseus made sales of product incorporating the Accused Product to Navitas Semiconductor in California. Accordingly, Meraki has made a prima facie case that jurisdiction is proper there under the stream-of-commerce theory articulated in the Original Transfer Order. Meraki has satisfied this aspect of § 1404(a)'s threshold question. As to convenience, this Order adopts the analysis put forward in the Amended Transfer Order, concluding that the NDCA is clearly more convenient than this District. See ECF No. 87 at 6-18.
The Court requested via email supplemental briefing on the NDCA's jurisdiction over Meraki for the Non-Patent Claims. It is the law of the Federal Circuit, not the law of the Ninth Circuit, that controls the jurisdictional inquiry for the Patent Claims. Meraki has made a prima facie case that the NDCA has personal jurisdiction over Meraki for the Patent Claims following the same stream-of-commerce theory establishing this Court's jurisdiction over Meraki for the same claims. As to the Non-Patent Claims, to the extent they are controlled by Ninth Circuit law, the Court is satisfied that the alleged theft of MPS trade secrets in California by Meraki's founders, see ECF No. 101 at 6, is sufficient to establish specific jurisdiction over Meraki for those claims, especially under the clarified standard articulated in Ford Motor Co. v. Mont. Eighth Judicial Dist. Court, 141 S.Ct. 1017 (2021) (clarifying the effect of the “relating to” language associated with the specific-jurisdiction inquiry). Failing that, the Court finds that the NDCA could exercise pendent personal jurisdiction over Meraki for the Non-Patent Claims (with the Patent Claims acting as anchor claims), using the same pendent-personal-jurisdiction theory MPS propounded in its supplemental briefing. See ECF No. 106 at 8-9.
E. The Availability of Severance
Plaintiffs Monolithic Power Systems, Inc. and Chengdu Monolithic Power Systems Co., Ltd. filed suit on September 25, 2020 against Meraki and Promate. ECF No. 1. On December 10, 2020, Plaintiffs and Promate filed a Joint Motion for Entry of Consent Judgement, which was granted by a text order on December 15, 2021, thereby dismissing Promate without prejudice. ECF No. 20.
On September 20, 2021, nearly seven months after Meraki requested transfer, Plaintiffs filed a Second Amended Complaint joining three additional defendants: QingMi (Beijing) Technology Co., Ltd., Shenzhen Times, and Baseus. ECF No. 63. MPS voluntarily dismissed Baseus, an Ohio company, on December 13, 2021. ECF No. 104. QingMi and Shenzhen Times, as foreign corporations organized and existing under the laws of the People's Republic of China, have not yet appeared or been served with the Complaint and Summons in this case. See ECF No. 84.
The Court requested supplemental briefing from the Parties on December 11, 2021 regarding whether the claims against Meraki must be severed from claims against the other defendants before this Court may transfer the claims against Meraki to the NDCA. Meraki filed a supplemental brief on January 10, 2022, ECF No. 110, to which MPS responded on January 24, 2022, ECF No. 111, and to which Meraki filed a reply in support on January 31, 2022, ECF No. 113.
Meraki takes no position as to whether Promate should be severed but represents that Promate “could have been sued in the NDCA.” ECF No. 110 at 4 n.1., 5-6. Likewise, Meraki argues that “there is no reason why Plaintiffs could not have joined QingMi and Shenzhen Times in the NDCA had this case been transferred in August 2020 when this Court originally ruled on Meraki's Motion to Transfer.” Id. at 5.
MPS argues that Meraki has not shown that transfer is proper for any of Meraki's co-defendants, so transfer of the entire action is inappropriate. ECF No. 111 at 8. MPS continues that if Meraki is severed and transfer, two courts will be litigating the same issues. Id. “The infringement cases against Meraki and its co-defendants are intertwined and in ways that would require duplicative litigation were the cases severed.” Id.
MPS asks this Court to weigh the presence of Meraki's co-defendants in this Court against transferring this Action under the practical problems factor. Yet district courts should not rely “on considerations of judicial economy arising after the filing of the lawsuit or the transfer motion.” In re Netscout Sys., No. 2021-173, 2021 U.S. App. LEXIS 30500, at *12 (Fed. Cir. Oct. 13, 2021). QingMi and Shenzhen Times were only added to this Action after Meraki filed its motion to transfer. (Moreover, QingMi and Shenzhen Times have not yet been served, which weighs even further against granting their presence any great weight.) The Court, therefore, accords their presence little to no weight in the transfer analysis. And, consistent with its earlier opinions, this Court will not allow the consent judgment against Promate to tether Meraki here so long as Meraki otherwise shows that the transferee forum is clearly more convenient. See ECF No. 87 at 14.
As the Fifth Circuit has recognized, a district court may sever and transfer claims against one co-defendant to a clearly more convenient venue where those claims may have been brought, while the district court retains claims against another co-defendant. Liaw Su Teng v. Skaarup Shipping Corp., 743 F.2d 1140, 1148 (5th Cir. 1984). This Court has found that the NDCA is a clearly more convenient forum. See ECF No. 87 at 6-18. The Court has found, on reconsideration, the claims against Meraki could have been brought in the NDCA. See supra Section III.D. Given that, it is proper to sever and transfer the claims against Meraki. The Court will not transfer the claims against QingMi and Shenzhen Times to the NDCA before those parties have even been served.
IV. CONCLUSION
Given the foregoing, the Court hereby GRANTS Meraki's Opposed Motion for Reconsideration, ECF No. 89. It is therefore ORDERED that the Amended Order Denying Meraki's Opposed Motion to Transfer, ECF No. 87, is hereby VACATED and SUPERSEDED.It is further ORDERED that the following be SEVERED from this Action:
The Order, however, adopts the § 1404(a) convenience analysis therein.
• All claims Plaintiffs Monolithic Power Systems, Inc. and Chengdu Monolithic Power Systems Co., Ltd. assert against Meraki Integrated Circuit (SHENZHEN) Technology, LTD.; and
• All counterclaims Counter-plaintiff Meraki Integrated Circuit (SHENZHEN) Technology, LTD. asserts against Counter-defendants Monolithic Power Systems, Inc. and Chengdu Monolithic Power Systems Co., Ltd..
Furthermore, it is ORDERED that the severed action be TRANSFERRED to the Northern District of California. All claims against Promate Electronic Co. Ltd., QingMi (Beijing) Technology Co., Ltd., and Shenzhen times Innovation Technology Co. Ltd. will remain with this Court in this Action.