Tan v. Shein Distribution Corp.

Background

Kevin Tan alleged that Shein Distribution Corp. infringed his copyright in a sculpture called “Steampunk Bearguy” by copying and distributing it on clothing sold by Shein. Shein moved under 28 U.S.C. § 1404(a) to transfer the case from the Southern District of New York to the Southern District of Florida. The parties did not dispute that the case could have been brought in Florida.

Tan lives in Singapore. The opinion describes Shein as a fast-fashion retailer incorporated in Delaware and residing in California. Tan’s lawyer had filed at least five related copyright lawsuits against Shein in the Southern District of Florida. Those cases were consolidated before Judge Rodolfo A. Ruiz II. Three of those cases remained pending when this opinion was issued.

The related litigation raised questions about Sharp Shirter’s role as an “infringement agent.” The opinion states that Sharp Shirter’s agreements with the plaintiffs purported to give it authority to start lawsuits and settle claims, and that Sharp Shirter was also acting as Tan’s infringement agent. The Florida litigation had raised related issues involving standing, the identity of the real parties in interest, attorney-client privilege, discovery, deposition locations, and settlement authority. Tan had also participated through counsel in a global mediation involving the Florida litigants and other claimants.

Venue-transfer analysis

Section 1404(a) permits a federal court to transfer a civil action for the convenience of the parties and witnesses and in the interest of justice when the action could have been brought in the proposed district. The party seeking transfer bears the burden of showing that transfer is strongly justified.

The court gave relatively little weight to Tan’s choice of New York because Tan did not reside there and the operative facts had only a limited connection to New York. The convenience of the parties and witnesses favored transfer slightly. Tan would have to travel whether the case remained in New York or moved to Florida; Daniel Lachman was believed to reside in Florida, where Sharp Shirter was located; and important witnesses concerning the alleged infringement were in China. The Florida court also had subpoena power over more potential witnesses.

The location of documents was neutral because documents could be exchanged electronically. The location of the operative facts was also neutral: the alleged infringing products were manufactured in Asia, Shein resided in California, and Shein sold products nationwide. Although some sales occurred in New York, the opinion noted that sales in Florida were comparable and that a sample purchase supporting a cease-and-desist letter was delivered to Boca Raton, Florida. The parties’ relative financial means and the New York court’s familiarity with federal copyright law were likewise neutral.

Trial efficiency and the interest of justice strongly favored transfer. The court reasoned that the Florida court was already handling related cases involving the same alleged plaintiff representative and the same counsel. Keeping the cases together could make discovery more efficient, avoid duplicative litigation, and reduce the risk of inconsistent rulings, particularly on privilege and the authority to settle. The court stated that this factor alone can sometimes determine the transfer analysis.

Disposition

After weighing the factors, the court found that four factors were neutral, one—the plaintiff’s choice of forum—weighed slightly against transfer, and four favored transfer. The court granted Shein’s motion to transfer and directed the Clerk of Court to close the motion and transfer the case to the U.S. District Court for the Southern District of Florida. The opinion did not decide the merits of Tan’s copyright-infringement claim.