It’s No Secret That A Related Company’s Physical Presence In A Jurisdiction May Not Be Enough For Proper Venue

Andra Group, LP v. Victoria’s Secret Stores, L.L.C.

Before Reyna, Mayer, and Hughes. Appeal from the District Court for the Eastern District of Texas.

Summary: An entity’s physical presence in a jurisdiction does not automatically confer venue on related corporate entities.

Andra Group, LP (“Andra”) sued Victoria’s Secret Stores, L.L.C., Victoria’s Secret Stores Brand Management, Inc., Victoria’s Secret Direct Brand Management, LLC, and L Brands, Inc. (collectively, “Victoria’s Secret”) for patent infringement in the District Court for the Eastern District of Texas. The Eastern District of Texas granted Victoria’s Secret Stores Brand Management, Inc., Victoria’s Secret Direct Brand Management, LLC, and L Brands, Inc. (collectively, the “Non-Store Defendants”) motion to dismiss for improper venue on the grounds that they lacked a regular and established place of business in the District. Andra appealed.

On appeal, Andra argued that the Non-Store Defendants had a regular and established place of business in the District by: (1) having an agency relationship with the Victoria’s Secret Stores’ employees in its retail locations in the District, and (2) ratifying Victoria’s Secret’ Stores’ locations as their own places of business. Upon review of the facts, the Court determined that the Non-Store Defendants did not have the right to direct or control the Victoria’s Secret Stores’ employees, and thus, an agency relationship was not established. Further, the Court determined that Andra could not prove that the Non-Store Defendants had “actually engage[d] in business from [the retail locations]”, and thus, the Court found that the Non-Store Defendants did not ratify the Victoria’s Secret Stores’ locations as their own.

Accordingly, the Court did not find either of Andra’s arguments persuasive and affirmed the lower court’s ruling.

Editor: Paul Stewart