ROBERT W. PRATT, District Judge.
Before the Court is a Motion to Transfer for Improper Venue ("Defendants' Motion"), filed by Robert Murray ("Murray"), Lamson, Dugan & Murray, L.L.P. ("LDM"), and Ryan Boe ("Boe") (collectively "Defendants") on October 4, 2012. Clerk's No. 25. On October 18, 2012, Richard Steen and Lloydene Steen (collectively "Plaintiffs") filed a resistance. Clerk's No. 28. Defendants replied to Plaintiffs' resistance on October 19, 2012. Clerk's No. 29. The matter is fully submitted.
In early 2003, Plaintiffs' past due debt to their lender — Farm Credit Services of America ("Farm Credit") — forced them to sell a portion of their farm in Emerson, Iowa to avoid a foreclosure proceeding by Farm Credit. See Murray Aff. (Clerk's No. 25-2) ¶¶ 5-6, Ex. A; Boe Aff. (Clerk's No. 25-3) ¶¶ 4-5; Richard "Bud" Steen Aff. (Clerk's No. 28-3) ¶¶ 5-6. Plaintiffs allege that they "retained
The relevant venue statute, 28 U.S.C. § 1391(b) provides:
If a plaintiff files a case in the wrong district, the district court "shall dismiss, or if it be in the interest of justice, transfer such case to any district ... in which it could have been brought." 28 U.S.C. § 1406(a).
Defendants argue that the Southern District of Iowa is an improper venue for this lawsuit because "none of [§ 1391(b)'s] sub[]sections provides a basis for venue in... [this District]." See Defs.' Br. in Supp. of Their Mot. to Transfer for Improper Venue ("Defs.' Br.") (Clerk's No. 25-1) at 4. Instead, Defendants claim that the District of Nebraska is the proper venue. See id. § III.D. Plaintiffs disagree, arguing that § 1391(b) provides a proper basis for venue in this District because "[a] substantial part of the events giving rise to [Plaintiffs'] claim[s] occurred here in Iowa."
Thus, the issue before the Court is whether § 1391(b)(2) provides a basis for venue in this District.
Section 1391(b)(2) provides that a lawsuit may be brought in any judicial district where "a substantial part of the events or omissions giving rise to the claim occurred." Thus, venue may be proper in more than one district. See Mitrano v. Hawes, 377 F.3d 402, 405 (4th Cir.2004). Accordingly, venue in the Southern District of Iowa will be proper even if another district has a closer connection to the claims in this lawsuit because § 1391(b)(2) only requires that a substantial part of the events or omissions giving rise to the claims in this lawsuit occurred in this District. See Setco Enters. Corp. v. Robbins, 19 F.3d 1278, 1281 (8th Cir.1994) ("[W]e ask whether the district the plaintiff chose had a substantial connection to the claim, whether or not other forums had greater contacts."); Advanced Logistics Consulting, Inc. v. C. Enyeart, L.L.C., No. 09-cv-720, 2009 WL 1684428, at *3, 2009 U.S. Dist. LEXIS 50603, at *9 (D.Minn. June 16, 2009) ("[T]he Court need not decide that it is the `best' venue or the one having the most significant connection to the claims at issue.").
The inquiry into this substantiality requirement is more of a qualitative than a quantitative nature. See Cold Spring Harbor Lab. v. Ropes & Gray, L.L.P., 762 F.Supp.2d 543, 553 (E.D.N.Y. 2011) (internal citation and quotation marks omitted); In re Tex. Prison Litig., No. 98-7110, 1999 U.S. Dist. LEXIS 11120, at *4 (W.D.Mo. Feb. 17, 1999) ("In analyzing whether substantial events or omissions occurred in Missouri, the court considers
Applying this framework to the present case, the Court concludes that venue in this District is improper. Plaintiffs maintain that the following alleged wrongful conduct underlies both of their claims: (1) Defendants drafted the Option in a way that favored the purchaser, see Third Am. Compl. ¶ 23 ("Defendants in their conduct ... favored the purchaser."), ¶ 26 ("Defendants were, in fact, representing and favoring the purchaser."); and (2) "Defendants ... failed to disclose to Plaintiffs their divided loyalties," id. ¶ 19; see also id. ¶ 25 ("Plaintiffs believed at all times that they were being represented by the Defendants, that their sole loyalties were to them."). For reasons that follow, the Court has determined that both of the alleged wrongdoings occurred in the District of Nebraska.
It is axiomatic that Defendants' failure to inform Plaintiffs of their alleged dual representation forms a substantial part of the events or omissions giving rise to the claims in this case. This alleged wrongdoing presents an interesting dilemma because Defendants' failure to disclose their "divided loyalties" is an omission, i.e. an event that did not occur. The Court concludes, however, that to the extent that this omission could be said to have occurred anywhere, it occurred in Nebraska because Defendants' duty to disclose the fact of the alleged dual representation arose when Murray learned in a telephone call, while in his office in Omaha, Nebraska, that Plaintiffs and the purchaser of their land had reached an agreement. See Murray Aff. ¶ 6.
"[Defendants'] duty of good faith [owed] to ... [Plaintiffs] require[d] ... [Defendants] to make the disclosure [concerning `their divided loyalties'] in sufficient time to enable ... [Plaintiffs] to determine whether to proceed with the transaction...." RESTATEMENT (THIRD) OF AGENCY § 8.06 cmt. d(1). Plaintiffs' motive for entering the Agreement was to generate funds and avoid an otherwise imminent foreclosure proceeding by Farm Credit. See Murray Aff. ¶¶ 5-6; Boe Aff. ¶¶ 4-5, Ex. A at 4 (showing that the Agreement was executed on March 9, 2003, a mere six days after Plaintiffs reached an agreement with the purchaser of their land); Richard "Bud" Steen Aff. ¶¶ 5-6. In light of the fact that Plaintiffs apparently needed these funds quickly, Defendants' duty of good faith demanded that they inform Plaintiffs of the alleged dual representation immediately upon learning the identity of the purchaser, so that Plaintiffs could consider whether to hire different counsel or whether to proceed with the transaction at all. See RESTATEMENT (THIRD) OF AGENCY § 8.06 cmt. d(1). Therefore, Defendants should have informed Plaintiffs of the alleged dual representation on March 3, 2003 when Murray, while in his Omaha,
As with Defendants' failure to disclose, the Court concludes that Defendants' work in drafting the Option also constitutes a substantial part of the events or omissions giving rise to Plaintiffs' two claims. See Mitrano, 377 F.3d at 405-06 (stating that the plaintiffs "work under the contract constituted `a substantial part of the events [and] omissions giving rise to [his] claim' for breach of contract" because it was such work that "allegedly created his entitlement to the payment" he sought by filing the lawsuit). Accordingly, venue in this District will be proper if Defendants completed such portion of the drafting of the Option in Iowa that is "sufficient to justify venue" here.
For the reasons above, Defendants' Motion (Clerk's No. 25) is hereby GRANTED. The Clerk of Court shall transfer this case to the United States District Court for the District of Nebraska.
IT IS SO ORDERED.