Commercial Litigation and Arbitration

Pendent Venue — Discretionary — Two Approaches

From Vivant Pharma., LLC v. Clinical Formula, LLC, 2011 U.S. Dist. LEXIS 37343 (S.D. Fla. Mar. 31, 2011):

Vivant's Amended Complaint alleges various causes of action for patent infringement, federal and common law trademark infringement, federal and common law unfair competition, misappropriation of trade secrets, breach of contract, breach of fiduciary duty, tortuous interference, conversion, fraudulent concealment, false designation, unjust enrichment, and deceptive and unfair practices. Vivant claims that venue is proper in the Southern District of Florida because this Court has general jurisdiction over the CarePlus Defendants and specific jurisdiction over the Clinical Formula Defendants. ***

***Where a complaint contains multiple claims, venue must be established for each individual claim and each defendant. See Hoover Group, Inc. v. Custom Metalcraft, Inc., 84 F.3d 1408, 1410 (Fed. Cir. 1996)). Where venue is proper for one claim, however, and all claims arise out of a common nucleus of operative facts, venue may be proper for the entire proceeding under the theory of pendent venue. See Rodriguez v. Chandler, 641 F. Supp. 1292, 1302 (S.D.N.Y. 1986) (pendent venue may be exercised when the claims are factually interrelated), aff'd 841 F.2d 1117 (2d Cir. 1988).

The decision to exercise pendent venue is a matter of judicial discretion that only follows the court's consideration of factors such as judicial economy, convenience to the parties and the court system, avoidance of piecemeal litigation and fairness to the litigants. See Hsin Ten Enter. USA, Inc. v. Clark Enters., 138 F. Supp. 2d 449, 462 (S.D.N.Y. 2000). Courts generally employ one of two approaches when exercising pendent venue. The first approach requires a case to be brought in a venue that satisfies a specific venue statute, if applicable.... The second approach requires a court to determine which claim is the primary claim and apply the venue statute applicable to that claim. ... For purposes of the venue analysis here, this Court adopts the primary claim approach.

[Footnote 2] The method used to analyze pendent venue claims is a matter of first impression in this jurisdiction. In this case, pendent venue in inappropriate under the first approach because it requires the Court to apply a specific venue provision for one claim to determine whether venue is proper for the remaining sixteen claims. Where an action of involves multiple claims and defendants, and where the venue analysis for each claim differs due to various factual or legal circumstances, the primary claim approach allows for the identification of the principal causes of action to ensure that venue is proper for all defendants.

Of the sixteen claims asserted in the Amended Complaint, at least eleven claims concern the unauthorized use of Vivant's patents and trademarks. Clearly, Vivant's patent and trademark infringement claims are the "primary claims" relevant to the venue analysis. Therefore, this Court must determine whether it may exercise jurisdiction over those claims in accordance with the applicable venue statutes.

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