United States District Court, D. Arizona
REPORT AND RECOMMENDATION
Bernardo P. Velasco United States Magistrate Judge
before the Court is Defendant Tesla Incorporated's Motion
to Transfer Venue. (Doc. 44.) Plaintiff filed a response in
opposition (Doc. 50), and Defendant filed a reply (Doc. 52).
Tesla asks the Court to transfer this matter to the Northern
District of California. (Doc. 44 at 2.) Tesla states that the
Court may consider the transfer prior to consideration of the
pending Motion to Dismiss, and Plaintiff does not express its
opinion about which motion should be determined first.
Id. This Court recommends that the case be
transferred to the Northern District of California, and that
the District Judge deny the pending Motion to Dismiss as
filed a claim in the District of Arizona, alleging that
Tesla's prototype design for its semi-truck infringes
upon Nikola's patents. (Doc. 1 at 26-27.) At the time of
filing, Nikola was a Delaware corporation with its current
place of business in Salt Lake City, Utah. Id. at 5,
¶26. Tesla is a Delaware corporation with its principal
place of business in Palo Alto, California. Id. at
5, ¶ 27. At a glance, there is no reason for this case
to be heard in the District of Arizona. However, Nikola's
complaint contended that jurisdiction was proper because it
“announced that it is moving its headquarters to
Arizona in July” and would relocate its manufacturing
facility to either Buckeye or Coolidge, Arizona. (Doc. 1 at 5
¶ 26; Doc. 50 at 4.)
Tesla's Motion to Transfer Venue
argues that this matter is best suited in the Northern
District of California. First, it states that Nikola's
choice of forum should be given little weight because, at the
time of filing, Nikola merely had plans to relocate its
headquarters to Arizona, and had yet to actually relocate.
(Doc. 44 at 2.) In addition, Arizona has no connection to the
underlying allegations in this matter: the patent
infringement occurred in California and Utah, but not in
Arizona. (Doc. 52 at 2.)
the Northern District of California is more convenient
because all of Tesla's witnesses reside in California and
there are far more Tesla witnesses than Nikola witnesses.
(Doc. 44 at 3, 11.) Even though Tesla has employees and
showrooms in Arizona, the Arizona employees did not
participate in the creation of the semi-truck at issue and
the Arizona showrooms market passenger vehicles, not the
semi-truck. Id. at 10. Furthermore, Tesla employees
who live outside of Northern California regularly travel
there for work. Id. at 7-8. Because of this, it is
far less expensive to have the limited number of Nikola
witnesses travel to California than the numerous Tesla
witnesses to Arizona. Id. Moreover, some of
Tesla's witnesses are beyond this district's subpoena
power, but could be compelled to appear in Northern
California. Id. at 9.
transfer is appropriate because a majority of the evidence is
located in Northern California where the semi-truck was
developed. Id. at 11.
the Northern District of California has a greater interest in
the outcome of this case and greater experience with patent
litigation. Id. at 12.
responds that it does have connections with Arizona, and
Tesla has not met its burden of making a “strong
showing” that transferring this case to the Northern
District of California is prudent. (Doc. 50 at 1, 6.) At the
time of filing, Nikola: (1) said it was relocating to
Arizona; (2) was negotiating a possible incentive package in
Arizona; (3) had leased property in Arizona; and (4) was
approved to do business as a foreign for-profit business in
Arizona. Id. at 2. In addition, Nikola claims that
Tesla's two sales centers in Arizona demonstrate that it
has engaged in acts of patent infringement in Arizona by
offering the semi-truck to Arizona residents. Id. at
Nikola asserts that it has four named witnesses who are or
will be living in Arizona during the pending litigation, and
some Arizona employees who will be testifying as to damages.
Id. at 7-8. In addition, Nikola claims the lack of
subpoena power over Tesla's employees is a non-issue
because depositions may be taken and video conferencing
utilized. Id. at 9. It argues that changing venues
merely switches the inconvenience from one party to another.
Id. at 12.
Nikola contends that a majority of the evidence is not
located in Northern California because all of Nikola's
documents and its patented Nikola One semi-truck will be
moved to Phoenix by approximately October 2018. (Doc. 50 at
9; Doc. 50-1 at 12.) Nikola claims that since Tesla drives
its semi-truck from Utah to California, it can easily make a
pit stop in Arizona if necessary. (Doc. 50 at 10.) In the
alternate, Tesla can simply submit photos instead of having
the Court physically inspect the infringing material.
Nikola claims that Arizona has an interest in the matter at
issue. Id. at 2.
parties allege the other is engaging in forum shopping. (Doc.
44 at 6; Doc. 50 at 7.)
Standard of Review
court determines whether a transfer of venue is appropriate
based on the parties' circumstances at the time of
filing. See Ventriss, 486 F.3d at 1118; see also
In re EMC Corp., 501 Fed.Appx. 973, 976 (Fed. Cir.
2013). The District Court, in its discretion, may transfer
any civil action to any other district in which the case may
have been filed “[f]or the convenience of the parties
and witnesses” or “in the interest of
justice.” 28 U.S.C. § 1404(a); Stewart Org.,
Inc. v. Ricoh Corp., 487 U.S. 22, 29 (1988).
Plaintiff's choice of venue is given “substantial
weight, ” N. Acceptance Trust v. Commonwealth
Edison Co., 805 F.2d 834, 843 (9th Cir. 1970), and may
only be upset if defendant “make[s] a strong showing of