In re Space Expl. Techs.

99 F.4th 233

IN RE SPACE EXPLORATION TECHNOLOGIES, CORPORATION, Petitioner.

No. 24-40103

United States Court of Appeals, Fifth Circuit

FILED April 17, 2024

Petition for a Writ of Mandamus to the United States District Court for the Southern District of Texas, USDC No. 1:24-CV-1, Jose Rolando Olvera, U.S. District Judge

ON PETITION FOR REHEARING EN BANC

Michael E. Kenneally, Amanda Leigh Salz, Morgan, Lewis & Bockius, L.L.P., Washington, DC, Catherine Lynn Eschbach, Morgan, Lewis & Bockius, L.L.P., Houston, TX, Harry Isaac Johnson, III, Esq., Morgan, Lewis & Bockius, L.L.P., Los Angeles, CA, for Petitioner.

Paul A. Thomas, Trial Attorney, David Paul Boehm, National Labor Relations Board, Contempt, Compliance, & Special Litigation Branch, Washington, DC, Benjamin Storey Lyles, Assistant U.S. Attorney, U.S. Attorney's Office, Southern District of Texas, McAllen, TX, for Respondent National Labor Relations Board.

David Paul Boehm, National Labor Relations Board, Contempt, Compliance, & Special Litigation Branch, Washington, DC, Benjamin Storey Lyles, Assistant U.S. Attorney, U.S. Attorney's Office, Southern District of Texas, McAllen, TX, for Respondents Jennifer Abruzzo, Lauren M. McFerran, Marvin E. Kaplan, Gwynne A. Wilcox, David M. Prouty, Sharon Steckler.

Michael Rubin, Altshuler Berzon, L.L.P., San Francisco, CA, for Amici Curiae Adam Zimmerman, Benjamin I. Sachs, Brooke Coleman, Charlton C. Copeland, David Marcus, David C. Vladeck, Erwin Chemerinsky, Adam Steinman, Helen Hershkoff, Judith Resnik, Luke Norris, Maggie Gardner, Riley T. Keenan, Sharon Block, Stephen I. Vladeck.

Elizabeth Joan Cabraser, Lieff, Cabraser, Heimann & Bernstein, L.L.P., San Francisco, CA, for Amici Curiae Scott Beck, Deborah Lawrence, Tom Moline, Paige Holland-Thielen.

Before Elrod, Haynes, and Douglas, Circuit Judges.

PUBLISHED ORDER

Per Curiam:^*

Treating the petition for rehearing en banc as a motion for reconsideration (5TH CIR. R. 35 I.O.P.), the motion for reconsideration is DENIED. The petition for rehearing en banc is DENIED because, at the request of one of its members, the court was polled, and a majority did not vote in favor of rehearing (FED. R. APP. P. 35 and 5TH CIR. R. 35).

In the en banc poll, eight judges voted in favor of rehearing (Chief Judge Richman and Judges Jones, Smith, Elrod, Willett, Duncan, Engelhardt, and Oldham), and eight judges voted against rehearing (Judges Stewart, Southwick, Haynes, Graves, Higginson, Wilson, Douglas, and Ramirez).

By Edith Hollan Jones, Smith, Elrod, Duncan, Engelhardt, and Oldham, dissenting from denial of rehearing en banc:

It is hard to improve on Judge Elrod's dissent from the single-line panel order transferring this case to the Central District of California. For all the reasons stated therein, mandamus ought to have been granted by the panel. Therefore, I attach her opinion and add a few points.

I.

28 U.S.C. § 1391(b)(2) authorizes a plaintiff to sue in any federal judicial district where a "substantial part of the events or omissions giving rise to the claim occurred." Id. In identical language, 28 U.S.C. § 1391(e)(1)(B) authorizes a plaintiff to sue an agency of the federal government in any federal judicial district where "a substantial part of the events or omissions giving rise to the claim occurred." This language is identical for at least two reasons. First, it provides plaintiffs with a broad range of venue choices in federal court.¹ Second, it places suits against the federal government, a defendant with limitless litigating resources, on a par with those against private defendants.

Unfortunately, the district court's transfer order, based on the theory that venue in the Southern District of Texas was improper,² contravenes both rationales. First, it erroneously denied SpaceX as plaintiff its choice of forum to litigate about alleged unfair labor practices that, if sanctioned, will govern its relations with hundreds of Texas and thousands of nationwide employees. Second, it misapplied the term "substantial part," crafting a comparative test that no federal court would use were this a case against private defendants. A simple hypothetical suffices. If a California airline passenger claimed injury from a plane crash over Nevada and sued five defendants (the airline, the plane manufacturer, two component manufacturers, and a maintenance facility) in another venue distinguishable from all others solely because one of the defendants manufactured rivets in that venue, would any court find that allegedly defective rivets could not be "a substantial part" of the claim?

That is the problem with this case that justified the "extraordinary" writ of mandamus to overturn the district court's erroneous transfer decision. The decision's comparative approach to "substantiality" either grossly privileges federal defendants over civil defendants or, equally troubling, provides fodder for endless jockeying in cases where private defendants will try to use a comparative "substantial part" analysis to assert improper venue or just prolong the litigation.

Either way, "a substantial part" cannot be construed textually to mean "more" or "most substantial," as the district court's analysis repeatedly suggests. "Substantial" is a qualitative, not a comparative term. One dictionary definition uses the terms "of real importance," "of considerable amount," "having substance, not illusory." Substantial, LITTLE OXFORD DICTIONARY (6th ed. 1990). For further exegesis, antonyms for "substantial" include "insubstantial" (of course), "little," "minor," "slight," "negligible," "insignificant." Substantial, MERRIAM-WEBSTER THESAURUS, https://www.merriam-webster.com/thesaurus/substantial (last visited Apr. 11, 2024). Not to be "substantial," therefore, means to be a little, minor, slight, etc. part of "the events or omissions giving rise to the claim."

Based on the text of Sections 1391(b)(2) and 1391(e)(1)(B), the district court's comparative, even quantitative approach to venue was plainly incorrect.³ As Judge Elrod's dissent explains, SpaceX has large and important operations in the Southern District of Texas. The remedy sought by NLRB would regulate all SpaceX's Texas employees. The conduct forming the basis of NLRB's complaint intentionally included employees in this district. And the Charging Parties' Open Letter that generated the complaint was received by all and responded to by some 200 Texas employees, and it disrupted SpaceX's operations in the Southern District. These operative facts are "substantial" under the statute. Returning to the comparison with litigation against private defendants, what court would hold venue "improper" by finding the rivets to be "small" or "few in number" compared with the allegations that other components contributed to the crash, or "not enough on their own compared with other alleged factors"? A comparative analysis like that employed by the district court is at odds with the proposition that "[i]t has always been clear that there can be more than one district in which a substantial part of the events giving rise to the claim occurred." 14D C. Wright, A. Miller, & R. Freer, FEDERAL PRACTICE AND PROCEDURE § 3806 (4th ed. 2023).

This comparative interpretation will inevitably affect ordinary civil litigation by incentivizing otherwise unlikely 1406(a) motions and some erroneous transfer orders. However, its detriment in litigation against federal agencies is hard to underestimate. Where companies with geographically widespread operations seek to challenge regulations or agency actions, an agency may now compare the "substantiality" of the regulations' or actions' effect in the company's chosen venue against effects in other venues. In many cases, the default venue, from the agency's perspective, would be the District of Columbia. To the extent such maneuvers succeeded, they would wholly undercut the expansive text—and purpose—of Section 1391(e)(1)(B).⁴ That the government's litigation resources are virtually limitless compared with those of private citizens and entities adds to the problematic nature of a decision that facilitates government motions for changes of venue under this provision.

II.

That mandamus is warranted under this court's precedents is well demonstrated in Judge Elrod's dissent. Legally, this court is bound to correct manifest errors of law regarding venue transfers. See In re Clarke, 94 F.4th 502, 516 (5th Cir. 2024); In re Volkswagen of Am., Inc., 545 F.3d 304, 319 (5th Cir. 2008) (en banc). Indeed, our court has consistently held that mandamus relief in venue transfer cases is "particularly appropriate when the issues also have an importance beyond the immediate case." In re Volkswagen, 545 F.3d at 319; see also In re Clarke, 94 F.4th at 516 (same); In re TikTok, Inc., 85 F.4th 352, 367 (5th Cir. 2023) (same); Defense Distributed v. Bruck, 30 F.4th 414, 426 (5th Cir. 2022) (same). For instance, in Clarke, we exercised discretion to grant mandamus because venue transfer decisions "often have importance beyond the immediate case because [they] are rarely reviewed, and district courts have applied our tests with too little regard for consistency of outcomes." 94 F.4th at 516 (citation and quotations omitted).

The present controversy represents a scenario likely to have significant consequences in this circuit. The district court's decision, for instance, conflicts with cases in which courts in this circuit have held that venue is proper against a federal agency where (1) the plaintiff has a significant presence in the forum; and (2) the plaintiff is subject to an actual or imminent burden should the challenged action take effect. Career Colls. & Schs. of Tex. v. U.S. Dep't of Educ., No. 23-cv-206, 2023 WL 2975164, at *2 (N.D. Tex. Apr. 17, 2023); see also Texas v. United States, 95 F. Supp. 3d 965, 973 (N.D. Tex. 2015) (injunction terminated on other grounds). Because venue transfer decisions, and petitions for writs of mandamus based thereon, have...