The opinion of the court was delivered by: Susan Webber Wright United States District Judge
Memorandum Opinion and Order
Before the Court are plaintiff's motion to re-transfer to which defendants responded and plaintiff replied, and defendants' motion to dismiss to which plaintiff responded. The Court heard oral arguments on the motions on July 16, 2007. The parties filed supplemental briefs on July 31, 2007. For the reasons stated below, the Court finds the motion to re-transfer to the California district court should be denied, and the motion to dismiss should be granted.
Plaintiff B & B Hardware, Inc. ("B&B") is a California corporation that designs, manufactures, and markets self-sealing fasteners under the mark of "Sealtight." In May 1990, B&B filed an application with the Patent and Trademark Office ("PTO") to register "Sealtight." On October 12, 1993, the PTO granted B&B's "Sealtight" trademark for threaded and unthreaded metal fasteners and related hardware including nuts, bolts, and washers.
Sealtite Building Fasteners ("SBF") is a division of defendant Hargis Industries, Inc. ("Hargis"), a Texas corporation. SBF manufactures a line of self-drilling and self-tapping screws and other fasteners that are frequently used to construct metal buildings. In 1996, SBF filed an application with the PTO to register the trademark, "Sealtite." The PTO refused to register "Sealtite" because of likely confusion with B&B's trademark "Sealtight." In 1997, SBF filed a petition with the Trademark Trial and Appeal Board ("TTAB") to cancel registration B&B's "Sealtight" trademark. In response, B&B filed a complaint against SBF in the Eastern District of Arkansas alleging common law trademark infringement, breach of contract, law fraud, deceptive trade practices, and trademark infringement under the Lanham Act, 15 U.S.C. § 1117. See B&B Hardware v. Hargis Industries, Inc., No. 4:98CV00372 (JWC).
The TTAB initially entered an order canceling B&B's trademark, but re-instated the trademark pending resolution of the Arkansas action. After the parties agreed to accept a verdict that was not unanimous, the jury found eleven to one that the term "Sealtight" was merely a descriptive term that had not acquired secondary meaning. The verdict was affirmed on appeal. B&B Hardware, Inc. v. Hargis Industries, Inc., 252 F.3d 1010, 1012-13 (8th Cir. 2001).
Subsequently, the TTAB resumed proceedings at SBF's request regarding cancellation of B&B's trademark. In July 2002, the TTAB granted SBF's motion for summary judgment and cancelled B&B's registration. In June 2003, the TTAB granted B&B's request for reconsideration and set aside the grant of summary judgment in favor of SBF. The TTAB dismissed SBF's petition to cancel and reinstated B&B's mark.
In the meantime, SBF's attempt to register its Sealtite mark was proceeding. In February 2003, B&B filed a notice of opposition, and on May 22, 2003, before the TTAB's reversal detailed above, SBF moved for summary judgment on the issue of likelihood of confusion, urging that the district court's determination in the Arkansas suit should be given preclusive effect. The TTAB denied Hargis's motion for summary judgment in August 2004. The matter remains pending before the TTAB.
B&B filed the current action on August 4, 2006, in the district court for the Central District of California, alleging that Hargis's continued use of the "Sealtite" mark in connection with its fasteners and other products constitutes trademark infringement, unfair competition, trademark dilution, and false designation of origin. The Honorable Percy Anderson, United States District Judge for the Central District of California, ordered the parties to show cause why the matter should not be transferred to the Eastern District of Arkansas. On November 30, 2006, Judge Anderson ordered the action be transferred to Arkansas for the convenience of parties and witnesses and in the interest of justice.
B&B moves the Court to retransfer the case back to the Central District of California. Hargis moves for dismissal pursuant to Fed.R.Civ.P. 12(b)(6), arguing the case is barred by the doctrine of res judicata.
B&B argues that in making his decision to transfer the case, Judge Anderson gave undue consideration to the fact that prior litigation between the parties took place in Arkansas. B&B further argues venue is not appropriate in the Eastern District of Arkansas. In response, Hargis asserts Judge Anderson's ruling is the law of the case, the parties were provided a full and fair opportunity to litigate the issue, and nothing has happened since the ruling to warrant retransfer.
Under the "law of the case" doctrine, "courts should be loathe to [revisit prior decisions of its own or of a coordinate court] . . . in the absence of extraordinary circumstances such as where the initial decision was 'clearly erroneous and would work a manifest injustice.'" Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 817 (1988)(quoting Arizona v. California, 460 U.S. 605, 618 n.8 (1983). The doctrine is applied to motions to retransfer in order to avoid "a perpetual game of jurisdictional ping-pong." Id. at 818. Several circuits have interpreted this doctrine to prevent the transferee court from challenging the jurisdictional and venue determinations made by the transferor court.*fn1 In Hatch v. Reliance Ins. Co., 758 F.2d 409, 412 (9th Cir. 1985 ), the Ninth Circuit adopted this approach, concluding that: "The better rule is to bar reconsideration of these matters [jurisdiction and venue issues already decided by the transferor court] unless there is some indication that appellants were not afforded a full and fair opportunity to litigate these matters before the transferor court."
The Eighth Circuit has not spoken as unequivocally. Although one district court seemed to endorse the view discussed above, see Ry. Labor Executives' Ass'n v. Chicago and N. W. Transp. Co., 692 F.Supp. 1066, 1067 (D.Minn. 1988), the Court of Appeals implicitly condoned at least indirect examination of the original transfer decision upon a motion for retransfer. See U.S. v. Copley, 25 F.3d 660 (8th Cir. 1994)(holding no jurisdiction to review North Carolina district court's decision to transfer, but remanding for retransfer because venue was improper in transferee Missouri district court, and court erred in implicitly denying motion to retransfer). Similarly, Koehler v. Green, 370 F. Supp. 2d 904 (E.D. Mo. 2005), suggests that review may be appropriate in some circumstances. In Koehler, the plaintiff brought suit in the Southern District of New York. Like the instant case, the action in Koehler was transferred sua sponte under § 1404(a) to the Eastern District of Missouri where related litigation had taken place. As here, the plaintiff urged the court to retransfer. After noting the prevailing disfavor of reviewing the transferor court's decision, "in an abundance of caution," the district court reviewed the grounds for the original transfer, ultimately concluding it was not in error. Id. at 906-07. On appeal, the Eighth Circuit held that the plaintiff did not properly raise the issue whether the district court erred in denying retransfer. See Koehler v. Brody, 483 F.3d 590, 599 (8th Cir. 2007). However, in dicta the court noted:
Even if we were to reach the issue, Koehler has not stated a sufficient basis for transferring the case or demonstrated that the Southern District of New York would be an appropriate venue for all the defendants in this case. Since the consolidated cases had been litigated in the Eastern District of Missouri and the district court there was familiar with the background of this case, it was not an inappropriate venue. The district court did not err by denying the motion to transfer.
Retaining authority to review Judge Anderson's decision and actually choosing to do so are different matters.*fn2 In light of the above precedent, this Court elects to review the transfer decision, which B&B challenges on the basis of inappropriate venue.
As discussed above, this Court applies the law of the case doctrine to the instant case and refuses to allow B&B to second guess the wisdom of the transfer for a second time before this Court. The only question that remains is whether a rare exception would justify retransfer. As previously referenced, "the transferee-district should accept the ruling on the transfer as the law of the case and should not re-transfer 'except under the most impelling and unusual circumstances' or if the transfer order is 'manifestly erroneous.'"*fn3 Such circumstances include "where the original purposes of the transfer have been frustrated by an unforeseen later event."*fn4
Retransfer may also be appropriate when new evidence becomes available that was not before the transferor court, or if there is a change in applicable law. See Hayman Cash Register, 669 F.2d at 169-70.
None of these exceptions properly apply here. B&B asserts that an unusual circumstance justifying retransfer is present. Specifically, B&B contends that Judge Anderson relied too heavily upon the previous Arkansas action in choosing to transfer to the Eastern District of Arkansas. Indeed, B&B argues that it was the "overarching reason." See Reply to Defendant's Response to Motion to Retransfer at 4.
It is clear that Judge Anderson took the prior Arkansas litigation into account when selecting the Eastern District of Arkansas. See Order Transferring Action at 8-11. Arguendo, it may have even been the factor that convinced Judge Anderson that the Eastern District of Arkansas was a better forum than Texas. However, what is most obvious is that the prior litigation was not the only factor that Judge Anderson weighed in concluding that the Central District of California was a less convenient forum. Judge Anderson explicitly considered a number of other factors, including the areas where Hargis's sales are concentrated, the convenience of the parties and likely witnesses, and the availability of the evidence. This Court would not presume to find that the specific weights that Judge Anderson attached in his careful consideration of the necessary factors justifying transfer produced a result that was "manifestly erroneous." Furthermore, B&B cites no authority indicating that any court has interpreted reliance upon prior litigation in another forum in granting a 1404(a) transfer as constituting a "most impelling and usual" circumstance. To the contrary, consideration of prior litigation in other forums in transfer determinations seems both natural and prudent. See, e.g., Koehler, 370 F. Supp. 2d at 905. As Judge Anderson notes, ...