Federal Circuit Says Bid to Dismiss Case for Improper Venue Doesn’t Meet Mandamus Standard

The U.S. Court of Appeals for the Federal Circuit (CAFC) issued an order on Tuesday denying Charter Communications Inc.’s petition for a writ of mandamus seeking to direct the district court to dismiss Entropic Communications’ patent infringement suit against it for improper venue.

Entropic sued Charter in the U.S. District Court for the Eastern District of Texas, alleging patent infringement, and Charter moved to dismiss for improper venue. The district court denied the motion, holding that Charter “committed acts of infringement and has a regular and established place of business” in the district.

Charter manages a large network of subsidiary corporations under the “Spectrum” brand name. Spectrum Gulf Coast, LLC provides services to customers in the Eastern District of Texas and Charter Communications, LLC (CCL) employs everyone who works for the subsidiaries, including Spectrum Gulf Coast.

Charter argued that its business was not being carried out from the in-district locations, but the district court rejected its arguments, finding that it was “actually operating the business” and “engaged in the challenged conduct” at the in-district stores; that the employees working for CCL were “acting as agents” of Charter under management agreements that gave Charter material control over the in-district stores; and that Charter had ratified the locations as its own via website advertisements of the store locations and services, as well as negotiating and signing the lease agreements for the stores.

The court also alternatively found that the in-district activities of CCL and Spectrum Gulf Coast “may be properly imputed to” Charter because Charter “unabashedly holds itself out to the world as a single enterprise” and because “the lines between the different corporations were simply ‘legal formalities.’”

On appeal to the CAFC, Charter challenged the order, arguing that the district court focused too much on whether Charter and its subsidiaries “function as essentially a single entity and not properly considering other factors relevant under applicable regional circuit law.” Charter said this led to the court “erroneously imput[ing] the locations and business of its subsidiaries.” But the CAFC was unpersuaded, explaining that Charter had failed to demonstrate a need for the “extraordinary remedy” of mandamus. The appellate court ultimately held:

“At most, CCI’s [Charter’s] arguments present a record-specific dispute: whether CCI exerts control sufficient to impute its subsidiaries’ in-district operations to CCI under Fifth Circuit law…. CCI’s petition does not raise ‘the type of broad, fundamental, and recurring legal question’ or other considerations that might warrant mandamus review.”