The opinion
IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF TEXAS
MARSHALL DIVISION
AGIS SOFTWARE DEVELOPMENT LLC, §
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Plaintiff, §
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v. CIVIL ACTION NO. 2:19-CV-00361-JRG
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GOOGLE LLC,
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Defendant. §
MEMORANDUM OPINION AND ORDER
Before the Court is Defendant Google LLC’s (“Google”) Re-Filed Rule 12(b)(3) Motion
to Dismiss for Improper Venue (the “Motion”). (Dkt. No. 255). Having considered the Motion,
the related briefing, and the relevant authorities, the Court concludes that the Motion should be
DENIED.
I. BACKGROUND
On November 4, 2019, AGIS Software Development LLC (“AGIS”) filed a multi-patent
complaint against Google, alleging infringement of U.S. Patent Nos. 8,213,970; 9,408,055;
9,445,251; 9,467,838; 9,749,829; and 9,820,123 (collectively, the “Asserted Patents”).
(Dkt. No. 1). The same day, AGIS filed related lawsuits against Waze Mobile Limited (“Waze”)
(Case No. 2:19-cv-359) and Samsung Electronics Co., Ltd. and Samsung Electronics America,
Inc. (collectively, “Samsung”) (Case No. 2:19-cv-362).
Google initially filed its Motion to Dismiss for Improper Venue on February 18, 2020.
(Dkt. No. 25). On February 9, 2021, the Court stayed the above-captioned case, pending ex
parte reexaminations instituted as to all Asserted Patents. (Dkt. No. 219; Dkt. No. 251).
Following the ex parte reexaminations, the Court lifted the stay on January 28, 2022. (Dkt. No.
232). Given that facts relevant to the Motion were discovered during the pendency of the stay,
the Court found that additional briefing would be beneficial, denied without prejudice Google’s
Motion to Dismiss for Improper Venue, and granted Google leave to refile the same. (Dkt. No.
251 at 2). Google refiled the present Motion on February 25, 2022. (Dkt. No. 255). In the
Motion, Google contends that venue is improper in the Eastern District of Texas (the “EDTX”)
and requests the Court to either dismiss this action for improper venue or transfer it to the
Northern District of California. (Id. at 35).
Google is a Delaware corporation and maintains its principal place of business in
Mountain View, California. (Dkt. No. 1 at 1). AGIS is a limited liability company organized in
Texas and maintains its principal place of business in Marshall, Texas. (Id.).
II. LEGAL STANDARD
A party may move to dismiss an action for “improper venue.” FED. R. CIV. P. 12(b)(3).
“Once a defendant raises a 12(b)(3) motion to dismiss for improper venue, the burden of
sustaining venue lies with the plaintiff.” ATEN Int’l Co., Ltd. v. Emine Tech. Co., Ltd., 261
F.R.D. 112, 120–21 (E.D. Tex. 2009) (citation omitted). A plaintiff may carry its burden by
presenting facts, taken as true, that establish venue. Id. The Court “must accept as true all
allegations in the complaint and resolve all conflicts in favor of the plaintiff.” Mayfield v.
Sallyport Glob. Holdings, Inc., No. 6:13-cv-459, 2014 WL 978685, at *1 (E.D. Tex. Mar. 5,
2014) (citing Ambraco, Inc. v. Bossclip, B.V., 570 F.3d 233, 237–38 (5th Cir. 2009)).
“[V]enue facts are to be examined as of the date the suit is filed.” Personal Audio, LLC
v. Google, Inc., 280 F. Supp. 3d 922, 924 (E.D. Tex. 2017).1 The Federal Circuit has
1 AGIS filed suit against Google for patent infringement on November 4, 2019. The Inbound Services Agreement
(the “ISA”) and Statement of Work No. 463889 (the “SOW”) between Google and Communications Test Design
emphasized that “each case depends on its own facts” and “no one fact is controlling.” In re
Cray Inc., 871 F.3d 1355, 1362, 1366 (Fed. Cir. 2017). If venue is improper, the Court must
dismiss the case, “or if it be in the interest of justice, transfer such case to any district or division
in which it could have been brought.” 28 U.S.C. § 1406(a).
In an action for patent infringement, venue is controlled by 28 U.S.C. § 1400(b), the
patent venue statute. Pursuant to 28 U.S.C. § 1400(b), “[a]ny civil action for patent infringement
may be brought in the judicial district where the defendant resides, or where the defendant has
committed acts of infringement and has a regular and established place of business.” Under the
residency requirement, the Supreme Court held that “a domestic corporation ‘resides’ only in its
State of incorporation for purposes of the patent venue statute.” TC Heartland LLC v. Kraft
Foods Grp. Brands LLC, 137 S. Ct. 1514, 1517 (2017). AGIS does not attempt to argue that
venue is established under the residency requirements of 28 U.S.C. § 1400(b). Id. at 1521.
Therefore, to establish venue, AGIS must present facts that, if taken as true, show that Google
has a regular and established place of business in the EDTX. Under the patent venue statute, a
“regular and established place of business” must be (1) “a physical place in the district”; (2)
“regular and established”; and (3) “the place of the defendant.” In re Cray, 871 F.3d at 1360.
III. DISCUSSION
In its Motion, Google contends that venue is improper and that the Court’s previous
Order in Personalized Media Commc’n, LLC v. Google LLC, No. 2:19-cv-90, Dkt. No. 291 (E.D.
Tex. July 16, 2020) (“PMC”)2 should be revisited or abrogated in light of the Federal Circuit’s
Inc. (“CTDI”), discussed herein, became effective on August 15, 2017, and May 15, 2018, respectively. Both were
in effect at the time AGIS filed its complaint. (Dkt. No. 294-13 at 27; Dkt. No. 294-15 at 15; Dkt. No. 294-19 at 2,
6 (terminating the ISA and SOW on October 22, 2020)).
2 The Court notes that Google and CTDI terminated the ISA and SOW approximately three months after this Court’s
July 16, 2020 decision in PMC, which found venue proper over Google based on said agreements. The agreements
decision in In re Volkswagen, 28 F.4th 1203 (Fed. Cir. 2022).3 (Dkt. No. 255 at 9; Dkt. No. 320
at 4). In response, AGIS argues that Google has a regular and established place of business in
the EDTX based on (1) Google Global Cache servers; (2) CTDI’s facility at Flower Mound
within this District (the “Flower Mound Facility”); (3) the locations of fiber optic lines and in-
line amplifiers necessary for the function of Google Fiber; and (4) Google’s leased retail spaces
in Best Buy stores. (Dkt. No. 294 at 6).
For the reasons previously discussed in PMC, “[t]his Court finds that venue is proper in
the [EDTX] based on the Flower Mound Facility” and that the Federal Circuit’s decision in In re
Volkswagen bolsters this Court’s previous findings. Accordingly, the Court need not address
AGIS’s other arguments.
A. Physical Place in the District
Under the first Cray factor, “there must be a physical place in the district.” In re Cray,
871 F.3d at 1360. The place need only be a “physical, geographical location in the district from
which the business of the defendant is carried out.” Id.
The parties do not dispute the first Cray factor. (See Dkt. No. 255; Dkt. No. 294). The
Flower Mound Facility is located in the EDTX at 700 Lakeside Parkway, Flower Mound, Texas
75028. (Dkt. No. 255 at 11–12; Dkt. No. 294 at 20; Dkt. No. 294-13 at § 6.2). On August 15,
2017, Google and CTDI entered into the ISA, and thereafter, the SOW on May 15, 2018. (Dkt.
No. 294-13 at 27; Dkt. No. 294-15 at 15). The ISA provides that “[t]he terms in an SOW will
take precedence over conflicting terms in [the ISA] only for the Services and Deliverables
were terminated eight months before the SOW’s pre-defined “End Date.” (See PMC, Dkt. No. 257); (See also Case
No. 2:19-cv-361, Dkt. No. 294-13 at 2, 26 (establishing the “SOW End Date” as May 15, 2021)).
3 While Google requests that this Court revisit its prior decision concerning similar venue issues in PMC, the Court
notes that the Federal Circuit’s denial of Google’s petition for a writ of mandamus concerning the very PMC
decision that Google challenges herein is noticeably absent from Google’s Motion and subsequent briefing. (See In
re Google, No. 2020-144, Dkt. No. 35).
identified in that SOW.” (Dkt. No. 294-15 at 14). Pursuant to the SOW, CTDI must provide
repairing, refurbishing, and warehousing services for Google devices. (See id. at §§ 6.1, 6.3).
The SOW also provides for a “Google Secured Area,” and defines its requirements. (Id. at 5).
The SOW requires that the Google Secured Area have “walls from floor to ceiling” and “be fully
separate from other operations and other third[-]party products, as determined by Google, at
[CTDI’s] sites.” (Id.). The Google Secured Area must also “have video monitoring and
recording of all access points, as well as badge access limited solely to [CTDI] employees
authorized to work with Google products.” (Id.). Additionally, the location of the Flower
Mound Facility cannot change unless Google agrees to move it in writing. (Id. at § 6.2).
Here, the Google Secured Area is a “physical, geographical location” in the EDTX from
which Google conducts its business. (See also PMC, Dkt. No. 257 at 3–4). Google has a
defined place and sets out the physical specifications for its exclusive and separate area within
the Flower Mound Facility. Google restricts use to its aptly named Google Secured Area to
services solely performed for its products, and the Google Secured Area excludes all “other
operations and other third[-]party products.” (Id.). Google establishes certain safeguards such as
“video monitoring and recording of all access points” while also limiting access to the area to
CTDI employees who are “authorized to work with Google products.” (Id.). Google also
explicitly retains control over the exclusiveness of the Google Secured Area as well as its
location. Accordingly, the Google Secured Area of the Flower Mound Facility is a physical
place within the EDTX that satisfies the first Cray factor.
B. Regular and Established Place of Business
Under the second Cray factor, a “regular and established place of business” requires “the
regular, physical presence of an employee or other agent of the defendant conducting the
defendant’s business at the alleged ‘place of business.’” In re Google, 949 F.3d at 1345. The
Federal Circuit reiterated that “[t]he essential elements of agency are (1) the principal’s right to
direct or control the agent’s actions[;] (2) the manifestation of consent by the principal to the
agent that the agent shall act on his behalf[;] and (3) the consent by the agent to act.” In re
Volkswagen, 28 F.4th at 1208–09 (quoting id.). “The power to give interim instructions
distinguishes principals in agency relationships from those who contract to receive services
provided by persons who are not agents.” In re Google, 949 F.3d at 1345–46 (quoting
Restatement (Third) of Agency § 1.01 cmt. f(1)).
Recently in In re Volkswagen, relying on In re Google, the Federal Circuit noted that for
venue, an “agency relationship requires [that] ‘the principal have the right throughout the
duration of the relationship to control the agent’s acts.’” In re Volkswagen, 28 F.4th at 1209
(quoting Pac. Gas & Elec. Co., 838 F.3d at 1359). The Federal Circuit distinguished the
necessary “interim control,” which provides the interim right to give step-by-step instructions to
the purported agent, from agreements that merely “impose constraints” or “set[] standards . . . for
acceptable service quality.” Id. at 1209 (quoting Restatement (Third) of Agency § 1.01(f)(1)).
The Federal Circuit explained that “setting standards in an agreement for acceptable service
quality does not of itself create a right of control.” Id.
The Court thus considers whether Google’s employees regularly conduct business at the
Flower Mound Facility, and whether—in light of In re Volkswagen—CTDI serves as Google’s
agent regularly conducting Google’s business for the purposes of venue under Section 1400(b).
1. Regular, Physical Presence of Google Employees
Google argues that it does not have a regular and established place of business at the
Flower Mound Facility because only “six Google employees have . . . visited the Flower Mound
[F]acility[,]” and “[t]hose visits were for the purpose of reviewing contracts, not directing the
day-to-day activities of CTDI.” (Dkt. No. 255 at 12).
AGIS contends that “Google admits that [its] employees have repeatedly visited the
Flower Mound [F]acility to ‘conduct some operational reviews’ of CTDI’s work, including to
check up on ‘key performance indicators,’ and to ‘discuss the commercial terms of the contract
between Google and CTDI.’” (Dkt. No. 294 at 21–22). AGIS further contends that Google
employees regularly visited the Flower Mound Facility over the period of the Google-CTDI
contractual relationship. (Id. at 22).
The Court finds that AGIS has met its burden to plead facts that, if taken as true, show
the regular, physical presence of Google employees in this District conducting Google’s
business. Google maintains a regular and established place of business at the Google Secured
Area of the Flower Mound Facility by the regular, physical presence of its employees.
Throughout the duration of Google and CTDI’s relationship, Google employees have regularly
visited the Flower Mound Facility multiple times. (Dkt. No. 294-12 at 167:21–174:1). Google
alleges that only six Google employees visited the Flower Mound Facility; however, the record
reflects that Google did “not actively track[] or monitor[]” the total number of Google employees
travelling to the Flower Mound Facility and that “many [Google] employees visited” the facility
to carry out multiple duties integral to the ISA and SOW. (Dkt. No. 255 at 12; Dkt. No. 294-12
at 171:20–173:3 (deposition testimony of Google Program Manager Prem Pandian)). Although
not dispositive, the failure to track and monitor Google employees’ visitation to the Flower
Mound Facility suggests that the physical presence of such employees within the EDTX was
regular and established.4 The purpose of Google employees’ visits to the Flower Mound Facility
4 On a motion to dismiss for improper venue, a plaintiff need only present facts which, taken as true, establish
venue. Langton v. Cbeyond Commc’n, L.L.C., 282 F. Supp. 2d 504, 508 (E.D. Tex. 2003). The Court “must
included operational reviews of key performance indicators over Google’s business of repairing,
refurbishing, and warehousing services performed for Google devices. (Dkt. No. 294-12 at
187:22–188:6; Dkt. No. 294-13 at § 6.2). Google employees also visited the Flower Mound
Facility to discuss the commercial terms of the contract between Google and CTDI. (Dkt. No.
294-12 at 188:8–12).
Based on the foregoing, the Court finds that Google has a regular and established place of
business within the EDTX satisfied by the regular, physical presence of its employees.
However, in light of Google’s request that this Court revisit its ruling in PMC, the Court
proceeds to address—and affirm—its decision that Google’s agency relationship with CTDI
establishes proper venue over Google in this District.
2. Regular, Physical Presence of Agents of Google
Google presents various arguments disclaiming any agency relationship between itself
and CTDI. (Dkt. No. 255; Dkt. No. 320). Google argues that CTDI lacks the “authority to ‘alter
the legal relations between the principal and third parties.’” (Dkt. No. 255 at 17; Dkt. No. 320 at
7). Google states that CTDI lacks the “authority to accept service of process on Google’s
behalf.” (Dkt. No. 255 at 23; Dkt. No. 320 at 7). Google contends that CTDI’s repair activities
are ancillary to Google’s business. (Dkt. No. 255 at 22). Google notes that In re Google is
instructive because “‘maintenance activities’ that third-party ISPs performed for computer
servers ‘cannot, standing alone, be considered the conduct of Google’s business.’” (Id. (quoting
In re Google, 949 F.3d at 1346)). Finally, Google contends that it has no interim control over
. . . resolve all conflicts [of fact] in favor of the plaintiff.” Mayfield, 2014 WL 978685, at *1. Here, the parties
dispute the quantity of the “many” Google employees performing duties at the Flower Mound Facility—with even
Google’s Program Manager stating that “there are many [Google] employees who go to [the Flower Mound
Facility].” (Dkt. No. 294-12 at 170:10–11). Given the nature of the operational reviews and contractual discussions
and the quantity of Google employees which must be resolved in plaintiff’s favor, the Court finds that AGIS has
shown enough to support its contention that Google employees were regularly conducting business at the Flower
Mound Facility.
CTDI by comparing provisions between the Google-CTDI agreements and the franchise
agreements at issue in In re Volkswagen. (Dkt. No. 255 at 19; Dkt. No. 320 at 8, 9).
In response, AGIS notes that several contractual provisions in the SOW provide for
Google’s interim control over CTDI. For example, AGIS asserts that Google requires CTDI to
comply with various reporting requirements. (See id.). AGIS also asserts that Google requires
CTDI to “appoint an account representative to work with Google on all Service-related issues,”
“conduct a bi-weekly call with Google” regarding “trends in recurring failures[,]” and identify
“allocate[]d [human] resources” for Google. (Id. at 22–23; Dkt. No. 294-13 at § 9.1). AGIS
argues that Google retains control over CTDI by determining the specifications of the Google
Secured Area; determining which products are “qualifie[d] [] for repair”; identifying various
security standards, equipment, and software requirements; instructing on how to handle a
Returned Product; and “at Google’s sole discretion, direct[ing] [CTDI] to purchase materials
from a third[-]party vendor on Google’s Authorized Vendor List[.]” (Id. at 24). AGIS notes
Google and CTDI’s Vendor Master Inventory Agreement (“VMIA”) and contends that
provisions of the VMIA demonstrate Google’s interim control over CTDI based on specified
instructions as to how CTDI is required to maintain Google’s products. (See id. at 26).
The Court finds, as it did in PMC and consistent with the Federal Circuit’s guidance in In
re Volkswagen, that CTDI is Google’s agent for the purpose of conducting Google’s business in
this District because Google provides regular, “step-by-step instructions,” directing CTDI’s
performance of the repairing, refurbishing, warehousing, and packaging services that Google
offers to Google customers.5 Specifically, Google directs and controls CTDI’s actions within the
5 See In re Volkswagen, 28 F.4th at 1212 (finding venue improper because “there are no ‘step-by-step’ instructions
from [Defendants] that [the alleged agents] must follow when [conducting the Defendants’ business].”); (cf. Dkt.
No. 294-13 at § 6.10(D) (“[CTDI] may provide Kitting Services . . . in accordance with Google’s instructions.
. . . [CTDI] will kit the components into Fulfillment Product as per instructions from Google . . . .”) (emphasis
Google Secured Area of the Flower Mound Facility. Section 6.15(a) of the SOW provides that
CTDI “shall implement” any “change to the Services requested by Google,” so long as the
change does not negatively impact CTDI’s staffing model, existing systems, or costs in
providing the Services. (Dkt. No. 294-13 at § 6.15(A)). Google is given explicit authority to
direct and control CTDI’s actions. Therefore, Google exercises significant control over CTDI
through Section 6.15(A).
Google retains complete, absolute, and exclusive control over the Google Secured Area.
As previously noted, Google prescribes the physical specifications, outlining a sole and separate
space apart from the Flower Mound Facility. (Dkt. No. 294-13 at 5). Google restricts the
Google Secured Area to its products and services and excludes all other operations and
third-party products. (Id.). Google also maintains security and limits access to certified CTDI
employees permitted to follow Google’s instructions regarding the work on Google’s products
occurring within the Google Secured Area. (Id.). Finally, only Google possesses the authority to
move the Google Secured Area. (Id.). Thus, Google maintains absolute control over every
aspect of the Google Secured Area.
Further, Google provides step-by-step instructions for all services that it requires CTDI to
perform for Google customers as specified in the SOW such as: “[t]ak[ing] receipt of Returned
Products . . . Quarantine Services, Capture Services[,] and Sorting Services”; “Part Number
Transformation Services”; “Triage Services”; “Data Wipe Services”; “IW Services, OOW
Services, SUR Services, Scrap Services, Refurbishment Services and Fulfilment Services in
relation to Defective Products (as applicable), Labelling Services”; “Harvesting Services”;
“Inventory Procurement and Management Services”; “Warehousing Services”; “Shipping
added))). Unlike the agreements at issue in In re Volkswagen which merely “imposed constraints” or “set[]
standards . . . for acceptable service quality,” here—as discussed—Google has and exercises “the right throughout
the duration of the relationship to control the agent’s acts.” 28 F.4th at 1209–10.
Services”; “Report Services”; and “VAS.” (Dkt. No. 294-13 at § 6.1). For example, for Receipt-
of-Returned-Products services, Google requires CTDI to “take receipt of Returned Products
from: (i) Google; (ii) Google’s end customers (including enterprise); and/or (iii) Authorized
Retailers.” (Id. at § 6.5). The SOW states, “Each shipment of Returned Product(s) should
include a Return Material Authorization number provided by Google (‘RMA’).” (Id.) CTDI
must set aside the shipment in a secure location and escalate the issue to Google, “[i]f an RMA is
not included with a returned shipment of Returned Products.” (Id.). Next, CTDI must “report to
Google the received number of Returned Products, using the RMA numbers, multiple times
during the day via EDI transmission through Contractor’s warehouse management software
system.” (Id.). Google requires that for specified products, CTDI must “capture serial number
or IMEI upon Google’s receipt.” (Id.). Then, “[a]fter [CTDI] takes receipt of Returned
Products, [CTDI] will conduct an in-box check of each Returned Product to verify whether any
accompanying accessories are included. The accessories or any other materials which do not
form part of any incoming Returned Product and which do not have an associated RMA will be
quarantined by [CTDI] for disposal or reuse, as instructed by Google.” (Id. (emphasis added)).
Google imposes a detailed and strict level of compliance on CTDI for every required service in
the SOW. (See id. at §§ 6.5–6.14).
To further emphasize Google’s interim control over CTDI, this Court previously
exemplified various provisions throughout the SOW “affording Google the right to give interim
instructions to CTDI” (See PMC, Dkt. No. 257 at 6–7):
• “Google may change the levels of refurbishment at any time with written
notice . . . [CTDI] will implement such changes.” (Dkt. No. 294-13 at §
6.9(B));
• “[CTDI] will provide the following OOW Services, unless instructed
otherwise in writing by Google . . .” (Id. at § 6.9(G));
• “Google may, at its sole discretion, direct [CTDI] to purchase materials
from a third[-]party vendor.” (Id. at § 8.1(D));
• “[CTDI] will generate and apply a label . . . as directed by Google.” (Id. at §
6.10(A));
• “[CTDI] will change the Part Numbers of all the Returned Products (as
directed by Google).” (Id. at § 6.6);
• “Google may require [CTDI] to add, remove, or amend any of the above
information on labelling.” (Id. at § 6.10(B));
• “Google may direct [CTDI] to warehouse Products at one of its Locations
for a specified period of time.” (Id. at § 6.11(C));
• “The accessories or any other materials which do not form any incoming
Returned Product and which do not have any associated RMA will be
quarantined by [CTDI] for disposal or reuse, as instructed by Google.” (Id.
at § 6.5(A));
• “[CTDI] may provide Kitting Services . . . in accordance with Google’s
instructions.” (Id. at § 6.10(D));
• “Google may request [CTDI] to locate and ship received individual or
multiple Product(s) to a specified address.” (Id. at § 6.11(E));
• “Upon request, [CTDI] will report to Google the data wipe outcome . . .
[CTDI] will also store and maintain all data wipe records . . . and produce
such records for Google upon request.” (Id. at § 6.7(B));
• “[CTDI] will install the latest version of the operating system . . . as
instructed by Google.” (Id. at § 6.8(A));
• “[CTDI] will perform basic functionality testing . . . with instructions
provided by Google.” (Id.);
• “[CTDI] will mark the Returned Product as IW Product in accordance with
Google’s instructions . . .” (Id. at § 6.9(A)). 6
Additionally, for each service under the VMIA, entered into on March 27, 2017, Google
provides interim instruction to CTDI. The VMIA requires CTDI to provide “services” to
Google, which include receiving, warehousing, logistics, inventory management, fulfilment to
Customer, reporting, VAS (as defined below)[,] and third[-]party transportation management
services in the [U.S.]” (Dkt. No. 294-22 at 17). The VMIA generally requires that CTDI
6 The Court finds that these provisions give Google direct interim control over the repairing, warehousing, and
refurbishing work that Google requires CTDI to perform for Google customers. These provisions differ from those
in In re Volkswagen—there, the cited provisions merely placed “various constraints . . . on the [alleged agents] that
[were] arguably related to [the Defendants’ business].” 28 F.4th at 1211 (emphasis added). Here, Google provides
step-by-step instructions that CTDI must follow when directly performing the repairing, warehousing, and
packaging services that Google offers to its customers for devices such as the Google Pixel smartphone. (Case No.
2:19-cv-361, Dkt. No. 294-13 at §§ 6.8–6.9; Dkt. No. 294 at 16).
“receive, store[,] and replenish full pallets of Google Products in the [Flower Mound] Facility.”
(Id.). For each listed service, Google also provides clear, “step-by-step directions.” In re
Volkswagen, 28 F.4th at 1209 (citing In re Google, 949 F.3d at 1346). For example, the VMIA
requires CTDI to provide “Product Receipt Services” for Google. First, CTDI must “take receipt
of inbound shipment of Products in the Facility from (i) Google distribution centers in the [U.S.]
[]; and (ii) Google suppliers.” (Dkt. No. 294-22 at 17). Second, “Google will notify CTDI . . . of
expected Product delivery, upon shipment of the relevant Products.” (Id.). CTDI will receive
notice of “(1) shipment details; (2) carrier identification; (3) carrier tracking number; (4)
purchase order number; (5) part number; [and] (6) pallet quantity and identification.” (Id.).
Third, “[p]roducts will be received into the Facility via FTL, LTL, and Parcel carriers based on
prior notice to be submitted by Google carriers to CTDL.” (Id.). Fourth, “[p]roducts should
arrive on pallets according to Customer’s specifications. (Id. at 18). Fifth, “[p]roducts are
validated against the applicable Google ASN. In the event of a discrepancy, CTDI and Google
will mutually agree on the corrective action required.” (Id.). Sixth, “[a]fter Products are
received in the WMS, such Products will undergo the inspection process specified in Section (3)
below.” (Id. (emphasis added)). Not only does Google provide step-by-step direction to CTDI
concerning Product Receipt Services, Google also provides step-by-step instruction concerning
“the inspection process specified in Section (3)” and all other processes (i.e., “receiving,
warehousing, logistics, inventory managements, fulfilment to Customer, reporting, VAS (as
defined below)[,] and third[-]party transportation management services”) required of CTDI
throughout the VMIA. (See Dkt. No. 294-22 at 17–21). Thus, Google gives interim instructions
and retains the right of interim control over every step of each service.
Google contends that it has no interim control over CTDI. (Dkt. No. 255 at 19; Dkt. No.
320 at 8). Google compares provisions between the Google-CTDI agreements and In re
Volkswagen:
• Google specifies the boundaries of the Google Secured Area and the
requirements to include badges and cameras; however, Google contends that
this is similar to car dealers that “use specified tools when performing
warranty and maintenance work” and “use distributor-approved computer
hardware and software.” (Dkt. No. 320 at 9 (quoting In re Volkswagen, 28
F.4th at 1203)).
• “Provisions defining for CTDI which devices qualify for warranty repair are
equivalent to requirements on car dealers to ‘perform warranty work on
consumer vehicles.’” (Id.).
• “CTDI’s obligation to use Google branding and packaging is equivalent to
requirements on car dealers to ‘comply with the distributors’ standards
regarding dealership appearance and use of signs and brand logos.’” (Id.).
• “CTDI’s obligation to report on its activities is similar to requirements of car
dealers to ‘provide[s] sales reports.’” (Id.).
• Google also argues that the dealership agreements were more onerous than the
Google-CTDI agreements, including requirements that the dealers ‘employ
certain types of employees,’ ‘maintain a minimum amount of inventory,’ meet
‘working capital requirements,’ ‘attend mandatory training sessions[,]’ and
obtain ‘certain training certifications.’” (Id.).
Google selectively identifies certain contractual provisions that set constraints on CTDI;
however, Google makes no mention of the interim instructions throughout the Google-CTDI
agreements. In light of Google’s step-by-step instructions, the constraints that Google imposes
are indicative of Google’s interim control over CTDI. Not only does Google sequentially detail
each step of every service that CTDI must provide for Google, but Google also sets compliance
standards by which CTDI must carry out those services. Such so-called constraints noted by
Google are guardrails in order for CTDI to follow Google’s interim instructions.
Google argues that CTDI lacks the “authority to ‘alter the legal relations between the
principal and third persons.’” (Case No. 2:19-cv-361, Dkt. No. 255 at 17; Dkt. No. 320 at 7).
Google emphasizes that the foregoing is “an essential characteristic of an agency [relationship].”
(Dkt. No. 255 at 17 (citing U.S. v. Schaltenbrand, 930 F.2d 1554, 1560 (11th Cir. 1991); Griffin
v. U.S., 588 F.2d 521, 528–29 (5th Cir. 1979))). An agent’s authority to alter legal relations is
not the standard that the Federal Circuit employed to determine venue. See In re Google, 949
F.3d at 1345 (“[t]he essential elements of agency are (1) the principal’s right to direct or control
the agent’s actions, (2) the manifestation of consent by the principal to the agent that the agent
shall act on his behalf, and (3) the consent by the agent to act.”).
Google then argues that CTDI lacks the “authority to accept service of process on
Google’s behalf.” (Dkt. No. 255 at 23; Dkt. No. 320 at 7). In support, Google argues that “In re
Google confirmed that ‘the venue and service provisions were not just enacted together but
expressly linked, and both have always required that the defendant have a “regular and
established place of business.”’” (Dkt. No. 255 at 23 (quoting In re Google 949 F.3d at 1344)).
Google misunderstands In re Google. The Federal Circuit interpreted the phrase “regular and
established place of business” to stand for “the regular, physical presence of an agent at the place
of business” based on analyzing language from the service and venue statutes. In re Google, 949
F.3d at 1344. The Court does not read the Federal Circuit’s holding to impute a service of
process requirement for purposes of its test in determining venue.
Google argues that CTDI is not Google’s agent because CTDI’s repair activities are
ancillary to Google’s business. (Dkt. No. 255 at 22). Google considers In re Google to be
instructive because “‘maintenance activities’ that third-party ISPs preformed for computer
servers ‘cannot, standing alone, be considered the conduct of Google’s business.’” (Id. (citing In
re Google, 949 at F.3d at 1346)). The Court disagrees with Google’s assessment of In re
Google.
In determining what constitutes “conducting business,” the Federal Circuit concluded that
“activities, such as maintenance, that are merely connected to, but do not themselves constitute
the defendant’s conduct of business in the sense of production, storage, transport, and exchange
of goods and services” should be excluded from consideration under the venue statute. In re
Google, 949 F.3d at 1347. The Federal Circuit found that the maintenance activities in In re
Google were ancillary to Google’s primary business of providing online search engine services
through the servers because the maintenance activities were not actually Google’s primary
business. In this case, the “maintenance activities” contemplated in the SOW, ISA, and VMIA
are Google’s “conduct of business.” For example, Google requires that CTDI provide repairing,
refurbishing, and warehousing services for Google devices, and such activities actually constitute
Google’s business.7 Repairing, refurbishing, and/or replacing damaged or defective Google
devices purchased and delivered by Google’s retail customers is integral to the “exchange of
goods and services” as the Federal Circuit specified in In re Google. This is not, as Google
argues, equivalent to a technician periodically walking through a remote server site to make sure
node servers and equipment are maintained as intended.
Google contends that under In re Volkswagen, “no-agency clauses are probative of the
absence of an agency relationship.” (Dkt. No. 320 at 4). Google heavily relies on its no-agency
clause, which disclaims an agency relationship. The Federal Circuit held that its finding of no
agency was supported by contractual disclaimers of agency; however, the Federal Circuit was
careful to note that such clauses were not dispositive. See In re Volkswagen, 28 F.4th at 1212
7 Google’s repairing services are central to the SOW. CTDI receives Google devices from customers and provides
shipping and warehousing services for Google devices that need repaired. (See Dkt. No. 294-13 at §§ 6.3(A), 6.5,
6.9(B)). CTDI then ships the repaired devices back to Google’s customers. (See id. at § 6.12). As discussed below,
Google holds itself out as directly performing repairing and refurbishing services for its customers at the Flower
Mound Facility—thus, the Court rejects Google’s argument that CTDI’s services are merely ancillary to Google’s
business.
(“Our holding is further bolstered by the relevant—though not dispositive—consideration that
the parties to the franchise agreements disclaim an agency relationship.”). Similarly, the Court
concludes that no-agency clauses are not dispositive as to the determination of CTDI and
Google’s agency relationship. Based on the foregoing, the Court finds that Google and CTDI’s
agency relationship satisfies the second Cray factor.
C. Place of the Defendant
Under the third Cray factor, “‘the regular and established place of business’ must be ‘the
place of the defendant.’” In re Cray, 871 F.3d at 1363. To be the place of the defendant, “the
defendant must establish or ratify the place of business.” Id. A court may consider “whether the
defendant owns or leases the place”; “exercises other attributes of possession or control over the
place”; “[m]arketing or advertisements . . . but only to the extent they indicate that the defendant
itself holds out a place for its business”; “whether the defendant lists the alleged place of
business on a website, or in a telephone or other directory”; or whether the defendant “places its
name on a sign associated with or on the building itself.” Id. at 1363–64. However, the Federal
Circuit stated that “the mere fact that a defendant has advertised that it has a place of business or
has even set up an office is not sufficient.” Id. at 1364.
Google argues that the Flower Mound Facility is not a place “of Google” because it is owned
and operated by CTDI. (Dkt. No. 255 at 24). Google continues that it does not ratify the Flower
Mound Facility as its place of business merely because it tells customers to ship devices to CTDI’s
Flower Mound address using Google-branded labeling. (Id. (citations omitted)). Google then argues
that temporary storage of customer-owned products for repair at the Flower Mound Facility does not
confer venue because “the defendant ‘must exercise[] possession or control over’ the third party’s
business location; the mere use of that location is insufficient.” (Id. (collecting cases)). Finally,
Google argues that the Google Secured Area is insufficient to establish venue because, like the
Samsung Experience Shops in Int’l Techs. & Sys. Corp. v. Samsung Elecs. Co. Ltd., Google similarly
does not “own or lease any offices or facilities or have any employees that work[ed] at the Samsung
Experience Shops.” (Id. at 26 (citing No. SA CV 17-1748-DOC (JDEx), 2018 WL 4963129, at *8
(C.D. Cal. June 22, 2018))).
AGIS responds that the third Cray factor is satisfied because the Flower Mound Facility
is “of Google.” (Dkt. No. 294 at 26). AGIS relies on this Court’s decision in PMC and contends
that “[t]he [PMC] Court found that Google establishes and ratifies the Flower Mound Facility as its
place of business and that Google acts purposefully to make Google’s customers believe they are
sending their Google devices to Google to be repaired.” (Id. at 27).
Here, Google holds the Flower Mound Facility out as its place of business because it
exercises interim control over the CTDI’s activities and holds out to the public that Google’s
repairing services are being performed at the Flower Mound Facility. (See, e.g., Dkt. No. 294-13 at §
6.2). Within the Google Secured Area, Google has absolute control over CTDI’s conduct. (See id. at
5). As previously detailed under the second Cray factor, Google does not merely use the Flower
Mound Facility but controls all aspects of CTDI’s conduct as it pertains to Google’s exclusive and
restrictive Google Secured Area.
Further, on its website, Google advertises to its customers that it is the provider of repairs for
all Pixel phones (Dkt. No. 294-14) while CTDI—acting behind the scenes—receives and repairs
products for Google’s customers. (Dkt. No. 255 at 13). “Google handles all customer interactions
itself[,]” and “[c]ustomers do not interact with CTDI employees.” (Id.). Shipping labels and
packaging used for repairs have Google logos, but nothing identifies CTDI. (Dkt. No. 255 at 13;
Dkt. No. 256-1 at 254:3–256:13; Dkt. No. 294-13 at §§ 6.5, 6.10, 6.12). Indeed, by Google’s own
admission, “[Customers] are not even aware of CTDI.” (Dkt. No. 255 at 13). Taken together,
Google’s defined space in the Google Secured Area, Google’s control over CTDI, and Google’s
marketing initiatives as the provider of services and point of contact for customers, is sufficient to
satisfy the third Cray factor. Google essentially subsumes CTDI in every respect. Accordingly, the
Court concludes that Google has ratified CTDI as its place of business.
In sum, AGIS has established all three factors under Cray, and the Court concludes that
venue is proper as to Google in the EDTX.
IV. CONCLUSION
For the reasons stated herein, Google’s Motion should be and hereby is DENIED.
So ORDERED and SIGNED this 12th day of May, 2022.
RODNEY GILSTRAP \
UNITED STATES DISTRICT JUDGE
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