United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
STEPHEN N. LIMBAUGH, JR. UNITED STATES DISTRICT JUDGE.
Post Consumer Brands, LLC, brought a patent infringement suit
against two defendants: General Mills, Inc.
(“GM”), and General Mills Sales, Inc.
(“GMSales”). Post claims that GM and GMSales are
infringing Post's design patent for a shelf divider for
bagged cereals. Post seeks a preliminary injunction to stop
defendants from using the shelf dividers in grocery stores.
That motion is still being briefed by the parties. In the
meantime, defendants filed a motion to dismiss for improper
venue or, in the alternative, to transfer venue (#21).
infringement cases like this one have their own venue
Any 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.
28 U.S.C. § 1400(b). That section is “the sole and
exclusive provision controlling venue in patent infringement
actions.” TC Heartland LLC v. Kraft Foods Group
Brands LLC, 137 S.Ct. 1514, 1519 (2017) (quoting
Fourco Glass Co. v. Transmirra Prods. Corp., 353
U.S. 222, 229 (1957). The Supreme Court has held that
“the judicial district where the defendant
resides” means only the state of incorporation for a
domestic corporate defendant. TC Heartland, 137
S.Ct. at 1520. Both defendants here are incorporated in
Delaware. Post thus bases its venue argument on the second
prong of § 1400(b), alleging that defendants committed
acts of infringement in this judicial district and that they
have at least one regular and established physical place of
business located in Hannibal, Missouri. Post also alleges
that defendants have employees and pay contractors and/or
agents in this district, including individuals who work with
the infringing products and who oversee and conduct
installation of the infringing merchandising systems in
grocery stores. (#1 at ¶11.) Defendants have moved to
dismiss for improper venue or to transfer venue because, they
say, neither defendant is incorporated in Missouri, and
neither defendant owns or operates the Hannibal, Missouri
Federal Rule of Civil Procedure 12(b)(3) motion to dismiss
for improper venue such as this, the Court may consider
matters outside the complaint. See Eaton Veterinary
Pharm., Inc v. Wedgewood Vill. Pharmacy, Inc.,
4:15-CV-687-SRB, 2015 WL 7871055, at *2 (W.D. Mo. Dec. 3,
2015); Hesterly v. Royal Caribbean Cruises, Ltd.,
No. 06-3206-CV-S-RED, 2006 WL 2948082, at *2 (W.D. Mo. Oct.
16, 2006). “The moving party has the burden of
establishing that venue is improper.” Bomkamp v.
Hilton Worldwide, Inc., 4:13-CV-1569 CAS, 2014
WL 897368, at *5 (E.D. Mo. Mar. 6, 2014).The parties agree
that, because this specific venue question is a matter unique
to patent law, the law of the Court of Appeals for the
Federal Circuit applies. See In re Cray Inc., 871
F.3d 1355, 1360 (Fed. Cir. 2017).
purposes of their motion to dismiss, the defendants do not
dispute that acts of infringement are alleged to have
occurred in this district. The question, rather, is whether
defendants have a “regular and established place of
business” in the district. The Federal Circuit has
established a three-part test for determining whether a
defendant has a “regular and established place of
business” in the district: “(1) there must be a
physical place in the district; (2) it must be a regular and
established place of business; and (3) it must be the place
of the defendant.” Id. “If any statutory
requirement is not satisfied, venue is improper under §
Post alleges that the Hannibal plant satisfies these
requirements even though the Hannibal plant is operated not
by either of the defendants, but by a different entity named
General Mills Operations, LLC (“GMOperations”).
Defendants concede that the Hannibal facility is a
“regular and established place of business” for
GMOperations, but they contend it cannot be imputed to
GMOperations's parent company GM or its affiliate
GMSales. Indeed, except where corporate formalities are
ignored and an alter ego relationship exists, the presence of
a corporate relative in the district does not establish
venue. Shapiro v. Ford Motor Co., 359 F.Supp. 350,
357 (D. Md. 1973); Symbology Innovations, LLC v. Lego
Sys., Inc., ___ F.Supp.3d ___, 2:17-CV-86, 2017 WL
4324841, at *10 (E.D. Va. Sept. 28, 2017).
advances numerous arguments for why this Court should hold
that GMOperations's plant should be imputed to GM and
GMSales for the purposes of establishing venue. It is the
largest General Mills plant in the nation, for example, and
is the largest employer in the Hannibal region. Post further
states that the Hannibal plant has a “General
Mills” sign on the plant --- not a GMOperations sign.
Further, certain documents on government websites --- such as
an Environmental Protection Agency record --- identify
“General Mills, Inc.” as the entity associated
with the address of the Hannibal plant. GM's Form 10-K
lists the Hannibal, Missouri location as one of “our
principal production facilities.” Further, Post
maintains that it is illogical to believe GMSales has no
interaction with the Hannibal plant, as GMSales sells the
products that the GMOperation plant produces. Both defendants
GM and GMSales appear to have employees who live and work
within the district, as well.
the fact that GM and/or GMSales have a handful of employees
and contractors in the district does not satisfy the
requirement that defendant have a “physical”
place of business in the district. Cray, 871 F.3d at
1362. Furthermore, as to the presence of the Hannibal
facility, neither GM nor GMSales owns the Hannibal plant nor
any other property in the district. No GM or GMSales
employees work at the Hannibal plant, which, again, is
operated by GMOperations. Furthermore, there is no real claim
that any alter ego relationship exists between GMOperations
and either of its corporate relatives. The government website
documents are hearsay, and they do not purport to identify
the owner of the Hannibal facility anyway. Ultimately,
“so long as a formal separation of the entities is
preserved, the courts ordinarily will not treat the place of
business of one corporation as the place of business of the
other” for the purpose of determining proper venue. 14D
Fed. Prac. & Proc. Juris. § 3823 (4th ed.)
(collecting cases). Moreover, because there is no suggestion
that formal separation of corporate entities has not been
preserved, this Court declines to grant Post's request
for discovery on this matter.
defendant in this case has a regular and established place of
business in the district. As a result, venue in this district
is improper under to 28 U.S.C. § 1400(b), and this Court
must dismiss or transfer the case. See 28 U.S.C.
§ 1406(a). In the interest of justice, in light of the
pending preliminary injunction motion, this Court will
transfer the case to the District of Minnesota, where
defendants are headquartered.
IT IS HEREBY ORDERED that defendants' motion to dismiss
for improper venue or, in the alternative, to transfer venue
(#21) is GRANTED.
FURTHER ORDERED that the Clerk shall TRANSFER this case to
the United States District Court ...