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Judge Furman Sends Video Surveillance Case Packing Because an Employee’s Apartment is Not “a Place of the Defendant” Even Though Defendant’s Website Suggested It Was

On September 18, 2020, U.S. District Court Judge Jesse M. Furman ruled that an employee’s apartment in the jurisdiction did not constitute a place of business of Defendant Safety Vision even though Safety Vision’s website suggested that it was. 

Safety Vision, which sells mobile video surveillance products, is a Texas limited liability company with its principal place of business in Houston.  However, Plaintiff Rosco alleged that venue was also proper in New York under 28 U.S.C. § 1400(b) because, inter alia, Safety Vision had “a regular and established place of business” at a New York apartment where one of its employees worked from home, which Safety Vision’s website suggested was a “satellite office.” 

To determine whether venue is proper on this basis, courts employ a three-part test: “(1) there must be a physical place in the district; (2) it must be a regular and established place of business; and (3) it must be the place of the defendant.”  Plaintiff Rosco contended under part (3) of this test that the employee’s rental apartment in Manhattan was a “place of” Defendant Safety Vision because Safety Vision provided the employee with sales brochures and a computer to use for him to work from home, and represented on its website that it has a “satellite office” in New York.  The Court rejected this argument, reasoning that: the employee himself made the decision to move to New York, paid for his moving expenses, and pays the rent for the apartment; all expense reimbursements and administrative support for the employee were provided from outside the district; Safety Vision’s website and marketing materials, and the employee’s business cards and email signatures, do not identify the address of the apartment; and unlike corporations where all employees work from home, 90% of Safety Vision’s employees are based in the Houston office.  Accordingly, the New York apartment was merely a “place of the defendant’s employee,” not a “place of the defendant.”  With regard to the website’s representations, the Court found 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; the defendant must actually engage in business from that location.” (quoting In re Cray Inc., 871 F.3d 1355, 1364 (Fed. Cir. 2017)).

Rather than dismiss the case, however, Judge Furman elected to transfer to the Southern District of Texas, the location of Safety Vision’s principal place of business.

Rosco, Inc. v. Safety Vision LLC, No. 19-CV-8933 (JMF) (S.D.N.Y. Sept. 18, 2020)