Filed: May 19, 2014
Latest Update: May 19, 2014
Summary: MEMORANDUM OPINION MARY L. COOPER, District Judge. THE PLAINTIFF, Stanton Concepts, L.L.C. ("SCLLC"), brought this action ("SCLLC Action") to recover damages for patent infringement against two defendants: (1) Brookstone, Inc. ("BSI"); and (2) WordLock, Inc. ("WLI"). ( See dkt. entry no. 1, Compl.) BSI has filed an answer. ( See dkt. entry no. 13, BSI Answer.) The docket reveals no effort by SCLLC to either serve WLI or prosecute its claims against WLI, even though the action has been pendi
Summary: MEMORANDUM OPINION MARY L. COOPER, District Judge. THE PLAINTIFF, Stanton Concepts, L.L.C. ("SCLLC"), brought this action ("SCLLC Action") to recover damages for patent infringement against two defendants: (1) Brookstone, Inc. ("BSI"); and (2) WordLock, Inc. ("WLI"). ( See dkt. entry no. 1, Compl.) BSI has filed an answer. ( See dkt. entry no. 13, BSI Answer.) The docket reveals no effort by SCLLC to either serve WLI or prosecute its claims against WLI, even though the action has been pendin..
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MEMORANDUM OPINION
MARY L. COOPER, District Judge.
THE PLAINTIFF, Stanton Concepts, L.L.C. ("SCLLC"), brought this action ("SCLLC Action") to recover damages for patent infringement against two defendants: (1) Brookstone, Inc. ("BSI"); and (2) WordLock, Inc. ("WLI"). (See dkt. entry no. 1, Compl.) BSI has filed an answer. (See dkt. entry no. 13, BSI Answer.) The docket reveals no effort by SCLLC to either serve WLI or prosecute its claims against WLI, even though the action has been pending for eleven months.
BSI has filed a petition for relief in the United States Bankruptcy Court for the District of Delaware ("Delaware Bankruptcy Court"). (See dkt. entry no. 18, Suggestion of Bankr.) See Pet., In re Brookstone, Inc., No. 14-10753 (Bankr. D. Del. Apr. 3, 2014), ECF No. 1. BSI has listed the SCLLC Action therein. See Stmt. of Fin. Affairs, Attach. 4a (entitled "Suits, executions, garnishments, and attachments"), In re Brookstone, Inc., No. 14-10753 (Bankr. D. Del. May 2, 2014), ECF No. 6.
AN ACTION is "related to" bankruptcy if the outcome of the proceeding could conceivably have any effect on the estate being administered in bankruptcy. Nuveen Mun. Trust v. Withumsmith Brown, P.C., 692 F.3d 283, 293-94 (3d Cir. 2012); see In re Combustion Eng'g, 391 F.3d 190, 226 (3d Cir. 2004). Furthermore, an action is related to bankruptcy if the outcome could alter the debtor's rights, liabilities, options, or freedom of action — either positively or negatively — and in any way could impact the estate's handling and administration; the entire action need not be against the debtor or the debtor's property only. See In re Resorts Int'l, 372 F.3d 154, 164 (3d Cir. 2004).
A DISTRICT COURT "may transfer a case or proceeding under title 11 to a district court for another district, in the interest of justice or for the convenience of the parties". 28 U.S.C. § 1412; see 28 U.S.C. § 1409(a) (stating "proceeding arising under title 11 or arising in or related to a case under title 11 may be commenced in the district court in which such case is pending"); Maritime Elec. Co. v. United Jersey Bank, 959 F.2d 1194, 1212 (3d Cir. 1991) (stating proper way to transfer related action to bankruptcy court already hearing bankruptcy case is to change venue from non-bankruptcy forum to bankruptcy forum, and then refer related action to bankruptcy court). The forum where the bankruptcy case is pending is the proper venue for actions related to that bankruptcy case. See Hohl v. Bastian, 279 B.R. 165, 177 (W.D. Pa. 2002); Krystal Cadillac-Oldsmobile-GMC Truck, v. Gen. Motors Corp., 232 B.R. 622, 627 (E.D. Pa. 1999).
THE SCLLC ACTION is related to BSI's ongoing bankruptcy proceedings in the Delaware Bankruptcy Court. Furthermore, it appears that SCLLC has abandoned its claims against WLI. Thus, the interests of justice and the convenience of the parties favor a transfer of venue to Delaware, as the Delaware Bankruptcy Court is in a better position to determine how and to what extent SCLLC's claims will affect (1) the bankruptcy estate at issue, (2) the efficient administration of that estate, and (3) asset distribution. See 28 U.S.C. § 1412; Hohl, 279 B.R. at 178.
THE COURT will transfer the SCLLC Action to the District of Delaware immediately, as time is of the essence in view of the ongoing bankruptcy proceedings. For good cause appearing, the Court will issue an appropriate order.1