It Is Time To Change Bankruptcy Forum Laws – Patent – United States – Mondaq

13 October 2022

Nossaman LLP

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Chris Hughes co-authored the article "It is Time to Change BankruptcyForum Laws" for the California Lawyer'sAssociation. The article provides an overview of the impact offorum shopping and how it could be reformed.

The article begins:

"Forum shopping, the act of seeking the most favorablejurisdiction or court in which a claim might be heard, has a longhistory in the United States dating back to at least 1842 in thecase of Swift v. Tyson, 41 U.S. 1 (1842). For more than 250 years,courts and legislatures have taken steps to rein in rampant forumshopping. Nevertheless, forum shopping continues to be prevalent intwo sectors of the law.

The first is patent litigation where in 2021, approximately 23%of all patent cases were filed in Waco, Texas. This issue wasapparently noted by Chief Justice John Roberts in his 2021 year-endreport on the Federal Judiciary, highlighting 'an arcane, butimportant matter of judicial administration: judicial assignmentand venue for patent cases in federal trial court.'

The second sector of the law involves corporations using thecurrent venue statute to file bankruptcy petitions in only a smallhandful of districts such as the Southern District of New York orDelaware rather than where the corporation is headquartered. Intestimony provided at a House Judiciary Committee hearing,Georgetown Law professor Adam Levitin testified that in 2020'57% of all large, public company bankruptcy cases ended upbefore just three of the country's 375 bankruptcy judges.'Currently, bills have been proposed in both the House and theSenate intended to curtail bankruptcy forum shopping."

The content of this article is intended to provide a generalguide to the subject matter. Specialist advice should be soughtabout your specific circumstances.

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