Processing All Things Federal Circuit
August 09, 2021 - Last Week in the Federal Circuit

Last Week in the Federal Circuit (August 2-6): No Secret For Obtaining Venue

Last Week in the Federal Circuit (August 2-6): No Secret For Obtaining Venue

The Federal Circuit wrapped up another (perhaps final) week of telephone arguments last week. As of now, the Court is still set to restart in-person arguments next month. But we’ll have to see if those plans change. Below we provide our usual weekly statistics and our case of the week—our highly subjective selection based on whatever case piqued our interest.

Precedential opinions: 5

Non-precedential opinions: 6

Rule 36: 0

Longest pending case from argument: GlaxoSmithKline LLC v. Teva Pharmaceuticals USA, Inc., No. 18-1976 (163 days) (panel rehearing)

Shortest pending case from argument (non-Rule 36): Shell Oil Company v. United States, No. 20-2221 (54 days)

Case of the week: Andra Group, LP v. Victoria’s Secret Stores, L.L.C., No. 20-2009

Panel: Judges Reyna, Mayer, and Hughes, with Judge Hughes writing the opinion

You should read this case if: you have a case with a venue challenge

This week’s case of the week explores yet again what it takes to show a regular and established place of business for venue purposes under 28 U.S.C. § 1400(b) (we’ve discussed venue multiple times in past cases, for example, here, here, and here). In the latest case, a plaintiff sued several defendants related to the Victoria’s Secret brand in the Eastern District of Texas. It was undisputed that one defendant, Victoria’s Secret Stores, L.L.C., operated physical Victoria’s Secret stores in the District—like the Federal Circuit, we’ll call this defendant the Stores defendant. But none of the other defendants had their own physical stores in the District, defendants that included the entity that manages the website and mobile application, the entity that creates Victoria’s Secret branded apparel and products, and the corporate parent of these various Victoria’s Secret entities (like the Federal Circuit, we’ll call these the Non-Store defendants). Among other arguments, the plaintiff argued venue was still proper in the District for the Non-Store defendants because the Store defendant’s employees were agents of the Non-Store defendants. 

The Federal Circuit rejected that argument, agreeing with the district court that the plaintiff failed to prove its agent theory. The Court relied on general agency principles and its prior decision in In re Google to require three elements for a principal-agent relationship: (1) the principal has a right to direct or control the agent’s actions; (2) the principal manifests consent to have the agent act an on the principal’s behalf; and (3) the agent consents to act. 

The Court rejected the argument that documents from the corporate parent, such as a Code of Conduct for employees, sufficed to show direction and control over Store defendant’s employees. Testimony from a Store defendant manager explained that store managers hold employees accountable for following the Code of Conduct and make independent decisions about the hiring and firing of employees. Nor was the Court persuaded that Store defendant employees were agents because they accepted returns of items purchased through the mobile app or online. The Court compared that “one discrete task” to the installation and maintenance of servers in In re Google. Such a discrete task did not make Store defendant’s employees agents of the Non-Store defendants. In the end, plaintiffs failed to show “the Non-Store Defendants exercise the degree of control over Stores employees required to find an agency relationship.” 

That lack of principal-agent relationship ultimately led the Court to conclude the Non-Store defendants had no regular and established place of business in the District. Without such a place of business, plaintiffs could not show venue was proper in the District for those defendants.