Section 1 Short titles
This Act may be cited as the “Stop Helping Outcome Preferences Act” or the “SHOP Act”.
Stop Helping Outcome Preferences Act
A BILL
To amend title 28, United States Code, to limit the authority of district courts to provide injunctive relief, to modify venue requirements relating to bankruptcy proceedings, and to ensure that venue in patents cases is fair and proper, and for other purposes..
Sec. 2 Nationwide injunction abuse prevention
In general— Chapter 85 of title 28, United States Code, is amended by adding at the end the following:
“1370. Limitation on authority to provide injunctive relief
“Notwithstanding any other provision of law, a district court may not issue any order providing injunctive relief unless such order is applicable only to—
“(1) the parties to the case before the court; or
“(2) similarly situated individuals in the judicial district in which the district court has jurisdiction.”
Clerical amendment— The chapter analysis for chapter 84 of title 28, United States Code, is amended by adding at the end the following:
Sec. 3 Preventing judge shopping
In general— Chapter 131 of title 28, United States Code, is amended by inserting after section 2075 the following:
“2076. Preventing judge shopping
“(a) In general—Rules promulgated under this chapter may not permit an attorney to be admitted to practice in any Federal court if a disciplinary body of judges properly constituted under the rules and procedures of a Federal court determines that such attorney has engaged in judge shopping.
“(b) Defined term—In this section, the term judge shopping means attempting to interfere with a court’s case assignment process for the purpose of influencing the assignment of a particular judge to preside over a particular case by—
“(1) engaging in ex parte communications with a judge or a judge’s chambers;
“(2) successive filing of materially identical suits within a State, district, or circuit without good cause;
“(3) successive filing of materially identical suits with different plaintiffs;
“(4) improperly marking a suit as a related case under existing court docketing practices; or
“(5) otherwise attempting to change the assignment of a case after its filing, excepting a motion to recuse.”
Clerical amendment— The chapter analysis for chapter 131 of title 28, United States Code, is amended by inserting after the item relating to section 2075 the following:
Sec. 4 Bankruptcy venue reform
Short title— This section may be cited as the “Bankruptcy Venue Reform Act of 2024”.
Findings— Congress finds the following:
Bankruptcy laws provide a number of venue options for filing bankruptcy under chapter 11 of title 11, United States Code, including, with respect to the entity filing bankruptcy—
any district in which the place of incorporation of the entity is located;
any district in which the principal place of business or principal assets of the entity are located; and
any district in which an affiliate of the entity has filed a pending case under title 11, United States Code.
The wide range of permissible bankruptcy venue options has led to an increase in companies filing for bankruptcy outside of the district in which the principal place of business or principal assets of the company is located, a practice that is commonly known as “forum shopping”.
Forum shopping—
has resulted in a concentration of bankruptcy cases in a limited number of judicial districts;
prevents small businesses, employees, retirees, creditors, and other important stakeholders from fully participating in bankruptcy cases that have tremendous impacts on their lives, communities, and local economies; and
deprives district courts of the United States and courts of appeals of the United States of the opportunity to contribute to the development of bankruptcy law in the jurisdictions of those district courts.
Reducing the incidence of forum shopping in the bankruptcy system will strengthen the integrity of, and build public confidence and ensure fairness in, the bankruptcy system.
Purpose— The purpose of this section is to prevent the practice of forum shopping in bankruptcy cases filed under chapter 11 of title 11, United States Code.
Venue of cases under title 11— Title 28, United States Code, is amended—
by amending 1408 to read as follows:
“1408. Venue of cases under title 11
“(a) Principal place of business with respect to certain entities
“(1) In general—Except as provided in paragraph (2), for the purposes of this section, if any entity is subject to the reporting requirements under section 13 or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m and 78o(d)), the term principal place of business, with respect to such entity, means the address of the principal executive office of the entity, as stated in the last annual report filed under such Act before the commencement of a case under title 11 of which the entity is the subject.
“(2) Exception—With respect to an entity described in paragraph (1), the definition of principal place of business shall apply, for purposes of this section, unless another address is shown, by clear and convincing evidence, to be the principal place of business of such entity.
“(b) Venue—Except as provided in section 1410, a case under title 11 may be commenced only in the district court for the district—
“(1) in which the domicile, residence, or principal assets in the United States of an individual who is the subject of the case have been located—
“(A) during the 180-day period immediately preceding such commencement; or
“(B) for a longer portion of such 180-day period than the domicile, residence, or principal assets in the United States of the individual were located in any other district;
“(2) in which the principal place of business or principal assets in the United States of an entity, other than an individual, that is the subject of the case have been located—
“(A) during the 180-day period immediately preceding such commencement; or
“(B) for a longer portion of such 180-day period than the principal place of business or principal assets in the United States of the entity were located in any other district; or
“(3) in which there is pending a case under title 11 concerning an affiliate that directly or indirectly owns, controls, or holds 50 percent or more of the outstanding voting securities of, or is the general partner of, the entity that is the subject of the later filed case, but only if the pending case was properly filed in such district in accordance with this section.
“(c) Limitations
“(1) In general—For purposes of paragraphs (2) and (3) of subsection (b), no effect shall be given to a change in the ownership or control of an entity that is the subject of the case, or of an affiliate of such entity, or to a transfer of the principal place of business or principal assets in the United States, or to the merger, dissolution, spinoff, or divisive merger of an entity that is the subject of the case, or of an affiliate of such entity, to another district, if such event takes place—
“(A) during the 1-year period immediately preceding the date on which the case is commenced; or
“(B) for the purpose, in whole or in part, of establishing venue.
“(2) Principal assets
“(A) Principal assets of an entity other than an individual—For purposes of subsection (b)(2) and paragraph (1) of this subsection—
“(i) the term principal assets does not include cash or cash equivalents; and
“(ii) any equity interest in an affiliate is located in the district in which the holder of the equity interest has its principal place of business in the United States, as determined in accordance with subsection (b)(2).
“(B) Equity interests of individuals—For purposes of subsection (b)(1), if the holder of any equity interest in an affiliate is an individual, the equity interest is located in the district in which the domicile or residence in the United States of the holder of the equity interest is located, as determined in accordance with subsection (b)(1).
“(d) Burden of proof—On any objection to, or request to change, venue under paragraph (2) or (3) of subsection (b) of a case under title 11, the entity that commences the case shall bear the burden of establishing, by clear and convincing evidence, that venue is proper under this section.
“(e) Out-of-State admission for government attorneys—The Supreme Court shall prescribe rules, in accordance with section 2075, for cases or proceedings arising under title 11, or arising in or related to cases under title 11, to allow any attorney representing a governmental unit to be permitted to appear on behalf of the governmental unit and intervene without charge, and without meeting any requirement under any local court rule relating to attorney appearances or the use of local counsel, before any bankruptcy court, district court, or bankruptcy appellate panel.”
to amend section 1412 to read as follows:
“1412. Change of venue
“(a) In general—Notwithstanding that a case or proceeding under title 11, or arising in or related to a case under title 11, is filed in the correct division or district, a district court may transfer the case or proceeding to a district court in another district or division—
“(1) in the interest of justice; or
“(2) for the convenience of the parties.
“(b) Incorrectly filed cases or proceedings—If a case or proceeding under title 11, or arising in or related to a case under title 11, is filed in a division or district that is improper under section 1408(b), the district court shall—
“(1) immediately dismiss the case or proceeding; or
“(2) if it is in the interest of justice, immediately transfer the case or proceeding to any district court for any district or division in which the case or proceeding could have been brought under such section.
“(c) Objections and requests relating to changes in venue—Not later than 14 days after the filing of an objection to, or a request to change, venue of a case or proceeding under title 11, or arising in or related to a case under title 11, the court shall enter an order granting or denying such objection or request.”
Sec. 5 Venue equity in patent cases
Short title— This section may be cited as the “Venue Equity and Non-Uniformity Elimination Act of 2024”.
Amendment— Section 1400(b) of title 28, United States Code, is amended to read as follows:
“(b) Notwithstanding subsections (b) and (c) of section 1391, any civil action for patent infringement or any action for a declaratory judgment that a patent is invalid or not infringed may be brought only in a judicial district—
“(1) in which the defendant has its principal place of business or is incorporated;
“(2) in which the defendant has committed an act of infringement of a patent in suit and has a regular and established physical facility that gives rise to such act of infringement;
“(3) in which the defendant has agreed or consented to be sued in such action;
“(4) in which an inventor named on the patent in suit conducted research or development that led to the application for the patent in suit;
“(5) in which a party has a regular and established physical facility that such party controls and operates, not primarily for the purpose of creating venue, and has—
“(A) engaged in management of significant research and development of an invention claimed in a patent in suit before the effective filing date of the patent;
“(B) manufactured a tangible product that is alleged to embody an invention claimed in a patent in suit; or
“(C) implemented a manufacturing process for a tangible good in which the process is alleged to embody an invention claimed in a patent in suit; or
“(6) in the case of a foreign defendant that does not meet the requirements of paragraph (1) or (2), in accordance with section 1391(c)(3).”
Mandamus relief— For the purpose of determining whether relief may issue under section 1651 of title 28, United States Code, a clearly and indisputably erroneous denial of a motion under section 1406(a) of such title to dismiss or transfer a case on the basis of section 1400(b) of such title shall be deemed to cause irremediable interim harm.
Teleworkers— The dwelling or residence of an employee or contractor of a defendant who works at such dwelling or residence shall not constitute a regular and established physical facility of the defendant for purposes of section 1400(b)(2) of title 28, United States Code, as added by subsection (a).