Motion to Stay Dismiss Granted in Part and Denied in Part, Motion to Transfer Venue Denied, Trend Micro Inc. v. RPost Holdings, Inc., et al., Case No. C 13-05227 (Judge William Orrick)

If you had any doubts about whether dodging service is a good idea, Judge Orrick's recent order in the Trend Micro v. RPost litigation should put those doubts to rest.  In an impressive act of chutzpah, Rpost moved to dismiss the complaint for improper service of process after one of its officers attempted to evade that very service.  Judge Orrick was unimpressed and denied the motion.  He further denied RPost's motion to transfer venue to the Eastern District of Texas, where several other RPost lawsuits are pending.

After Trend Micro received a cease and desist letter from RPost, it drafted a declaratory judgment complaint and sent a process server to the house of one of the officers of RPost.  According to Trend Micro, the process server saw a man through a window and asked if he was the officer.  The man nodded yes and opened the front door.  The process server then announced that he was there to serve the officer.  The man then denied being RPost's officer, closed the door, and did not return.  The process server left the papers on the doorstep.

RPost's officer submitted two declarations to support RPost's motion.  The first stated that he never saw or spoke to the process server.  But the second declaration, submitted in a reply, admitted that on the night in question he heard a knock on his door, answered the door, saw a strange man, then closed the door.  He also submitted photographs of his house and argued that it would have been impossible for the process server to see him.

In a sur-reply, however, Trend Micro submitted a photograph of the house from another angle, showing that there is in fact a large window next to the front door through which the process server could have seen the officer.

Judge Orrick noted that a process server need only make a good faith effort to comply with the requirements of Rule 4 and found that standard was easily satisfied here.  Judge Orrick found the process server's declaration more credible than RPost's declarations, which he found to be misleading and unconvincing.

RPost also moved to transfer the case to the Eastern District of Texas, where it had filed a complaint against Trend Micro one month after Trend Micro filed its declaratory judgment complaint in the Northern District of California.  Trend Micro argued that the first-to-file rule should apply, and Judge Orrick agreed.  Although the first-to-file rule may not apply in "race to the courthouse" cases, that was not the case here.  RPost waited nearly a month to file its Texas action.

Judge Orrick further analyzed the merits of the motion to transfer venue.  At the time of service RPost had eight lawsuits pending in the Eastern District of Texas.  But there are also two other RPost cases currently pending in the Northern District of California.

Judge Orrick found that Trend Micro's choice of forum was entitled to "substantial weight" because the Northern District is Trend Micro's home district.  The Northern District is also convenient for the parties and witnesses because hundreds of Trend Micro's employees work in this district.  While RPost did have an office in the Eastern District of Texas, it could identify only one potential witness who resided in Texas.  And that witness lived in Dallas, which is not even in the Eastern District.  The location of the evidence also favored transfer because not only were Trend Micro's documents mainly in the Northern District, RPost's source code was located in Los Angeles. Further, the Eastern Distict of Texas had not yet issued any claim construction rulings for the patents-in-suit.  Finally, there is a chance this case could be consolidated with the other RPost cases pending in the Northern District, also weighing against transfer.

Judge Orrick's Order provides a reminder that while television and the movies sometimes fictionalize victories for potential defendants who do not want to be haled into Court, service-dodging actually doesn't pay.

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