ROBERT W. PRATT, District Judge.
Before the Court is Arbela Technologies Corp.'s ("Defendant") Motion to Dismiss for Lack of Personal Jurisdiction ("Defendant's Motion"), filed April 3, 2013. Clerk's No. 2. Fastpath, Inc. ("Plaintiff") resisted the Motion on April 22, 2013. Clerk's No. 3. Defendant replied on May 6, 2013. Clerk's No. 6. The Motion is fully submitted.
In June 2012, Plaintiff, an Iowa company, and Defendant, a California company, entered into a mutual confidentiality agreement
Prior to executing the Agreement, Defendant "directed at least ten emails to ... [Plaintiff] in the State of Iowa ... [and] also approached ... [Plaintiff] on at least three occasions at conferences and trade shows[— taking place outside Iowa —]in which ... [Plaintiff] clearly held itself out as an Iowa company." Pl.'s Opp'n to Def.'s Mot. ("Pl.'s Resistance Br.") (Clerk's No. 3) at 6. After executing the Agreement, Defendant attended several presentations by Plaintiff in Seattle, Washington. Id. Additionally, Defendant directed at least one more email and three telephone calls to Plaintiff. Id. at 7-8.
Two other circumstances deserve attention. First, Defendant has no office or employees in Iowa and conducts no business within the State. Second, the Agreement does not contain a forum selection clause. See Clerk's No. 2-2 at 17-21.
When a defendant moves to dismiss a lawsuit for a lack of personal jurisdiction, the plaintiff — not the defendant — bears the burden of proof. Dairy Farmers of Am., Inc. v. Bassett & Walker Int'l, Inc., No. 5:11-cv-6052, 2012 WL 601232, at *1-2, 2012 U.S. Dist. LEXIS 22859, at *4 (W.D.Mo. Feb. 23, 2012) (internal citation omitted). The plaintiff is entitled to the benefit of all factual disputes. Id. at *1-2, 2012 U.S. Dist. LEXIS 22859, at *4-5. To conclude that it has personal jurisdiction over a non-resident defendant, a court must determine both that the requirements of the forum state's long-arm statute are met and that asserting personal jurisdiction over the defendant comports with due process. Digi-Tel Holdings, Inc. v. Proteq Telecomm., Ltd., 89 F.3d 519, 522 (8th Cir.1996). Asserting personal jurisdiction over a defendant does not offend due process if the defendant has purposefully established minimum contacts with the forum state. Asahi Metal Indus. Co. v. Super. Ct. of Cal., 480 U.S. 102, 108-09, 107 S.Ct. 1026, 94 L.Ed.2d 92 (1987). "[In other words,] it is essential in each case that there be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws." Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 85 L.Ed.2d 528 (1985) (internal citations and quotation marks omitted). "This `purposeful availment' requirement ensures that a defendant will not be haled into a jurisdiction solely as a result of random, fortuitous, or attenuated contacts... or the unilateral activity of another party or a third person...." Id. (internal citations and quotation marks omitted). "[Personal] [j]urisdiction is proper ... [only] where the contacts proximately result from actions by the defendant himself that create a `substantial connection' with the forum State." Id. (internal citations omitted). Physical presence within the forum
In addition to these basic due process principles, courts in this Circuit analyze the following five factors in deciding whether asserting personal jurisdiction over a non-resident defendant violates due process: "(1) the nature and quality of the contacts with the forum state; (2) the quantity of contacts with the forum; (3) the relation of the cause of action to these contacts; (4) the interest of the forum state in providing a forum for its residents; and (5) the convenience of the parties." Digi-Tel Holdings, Inc., 89 F.3d at 522-23 (internal citations omitted). The first three factors are deemed primary while the last two — secondary. Id. at 523 (internal citations omitted). With this legal framework in mind, the Court turns to analyzing Defendant's Motion.
Seeking dismissal of this lawsuit, Defendant argues that it has no minimum contacts with Iowa.
At the outset, the Court notes that whether a defendant has minimum contacts with the forum state is not a mechanical
The parties disagree whether the Covenant is enforceable under California law. Defendant asserts that covenants not to compete are enforceable if necessary to protect a plaintiff's trade secrets. Def.'s Reply at 1-2. Plaintiff, however, contends that this trade secret exception no longer exists, see Pl.'s Mot. for Leave to File Suppl. Authority (Clerk's No. 7) at 1-2, and that, therefore, Iowa is the only available forum for enforcing the Covenant, see Pl.'s Resistance Br. at 10.
The parties' dispute, however, is of no consequence to the personal jurisdiction inquiry. Even assuming that no forum other than Iowa would enforce the Covenant, such forum unavailability does nothing to ensure that this Court's assertion of personal jurisdiction over Defendant comports with due process.
For reasons that follow, the Court has determined that Plaintiff has not shown the requisite for personal jurisdiction minimum contacts between Defendant and Iowa. In urging the contrary conclusion, Plaintiff relies on the following: (1) Defendant actively pursued a business relationship with Plaintiff, an Iowa company; (2) Defendant directed more than ten communications to Plaintiff in Iowa regarding the Agreement; (3) Defendant executed the Agreement knowing that it calls for application of Iowa law;
The Agreement was meant to facilitate the sharing of information between the litigants "for the purpose of evaluating and negotiating a possible investment, acquisition, divestiture, partnership and/or joint venture transaction." Clerk's No. 2-2 at 17. It is, however, silent as to the location where the parties were to share such information. See id. at 17-20. Thus, while it may have been foreseeable at the time of executing the Agreement that at least some of the information exchange could occur in Iowa, nothing in the Agreement so requires. Additionally, the Covenant is not geographically limited to Iowa, but, rather, calls for a world-wide prohibition on the developing, marketing, sale, and licensing of products that are competitive with those developed, marketed, sold, or licensed by the other party to the Agreement.
In summary, applying the five-factor test set forth above, see supra p. 973, convinces the Court that dismissing Plaintiffs claim for a lack of personal jurisdiction is the correct conclusion in this case. Plaintiff has failed to establish that the first two factors — the nature, quality, and quantity of Defendant's contacts with Iowa — weigh in favor of asserting personal jurisdiction over Defendant. While the third factor — the relationship between Defendant's contacts with Iowa and Plaintiffs cause of action — arguably weighs in favor of asserting personal jurisdiction over Defendant, it is not enough to overcome Defendant's lack of minimum contacts with Iowa. See Digi-Tel Holdings, Inc., 89 F.3d at 523-25 (affirming the district court's dismissal for a lack of personal jurisdiction despite concluding that the defendant's contacts with the forum state were related to the cause of action). As for the fourth factor, while it is true that Iowa "has an interest in providing a forum for one of its residents [— Plaintiff —] ... [such] interest is minimal ... [where the] `dispute ... has no [real] connection to' this state." See Viracon, Inc., 929 F.Supp.2d at 885 (internal citation omitted); accord Digi-Tel Holdings, Inc., 89 F.3d at 525 ("Minnesota's interest in providing its residents with a forum cannot make up for the absence of minimum contacts."). The fifth "factor, party convenience, is in equipoise: litigating here would be more convenient for ... [Plaintiff], while litigating in ... [California] would be more convenient for ... [Defendant]." See Viracon, Inc., 929 F.Supp.2d at 885. Therefore, the facts of this case, when viewed through the prism of the five-factor test, do not meet the due process requirements for personal jurisdiction over Defendant.
Plaintiff cites four cases, see Pl.'s Resistance Br. at 17-19, where the respective courts "found personal jurisdiction to exist in [purportedly] similar, and even lesser, circumstances" than those present in this case, id. at 17 (capitalization modified from original). The Court does not agree that any of these cases compels the denial of Defendant's Motion. Contrary to Plaintiff's assertion, both Wessels and International Administrators, Inc. v. Pettigrew make stronger cases for finding personal jurisdiction over the defendant than this lawsuit because the defendants in those cases actually traveled to the respective forum State to negotiate or discuss obligations under the contracts at issue. See Wessels, 65 F.3d at 1434; Pettigrew, 430 F.Supp.2d 890, 896 (S.D.Iowa 2006). EFCO Corp. v. Aluma Systems, USA, Inc. is inapposite because it determined that exercising personal jurisdiction over the defendants was proper under the Calder effects test, 983 F.Supp. 816, 821-23 (S.D.Iowa 1997), which the Court has already determined is inapplicable in this case, see supra p. 976, n. 7.
Finally, even putting aside the fact that Vishay Intertechnology, Inc. v. Delta International Corp. is a Fourth Circuit case and, therefore, not binding on the Court, it is distinguishable on its facts from the present lawsuit. See 696 F.2d 1062 (4th Cir.1982). Although Vishay Intertechnology was decided two years before Calder, it utilizes similar logic as Calder in concluding that the district court erred in holding that asserting personal jurisdiction over the defendant would violate due process. See id. at 1068-69 (explaining that the defendant's intent to inflict a foreseeable injury upon the plaintiff in the forum State and the fact that the plaintiff's claim arises out of the defendant's contacts with the forum State are of paramount importance in deciding whether due process permits the assertion of personal jurisdiction over the defendant). Furthermore, the Vishay Intertechnology court noted that "[the] plaintiff seeks relief under the ... [forum State's] unfair trade practices statute ... [and that] the cause of action centers on the production of $130,000.00 worth of goods that would have been manufactured in [the forum State]." Id. at 1069.
For the foregoing reasons, Defendant's Motion To Dismiss for Lack of Personal Jurisdiction (Clerk's No. 2) is GRANTED.
IT IS SO ORDERED.
Although the plaintiff in Viracon, Inc. v. J & L Curtain Wall, LLC presented a stronger case for applying the Calder effects test by asserting tort claims in addition to its contract claims, the court nevertheless declined to apply the test. See 929 F.Supp.2d 878 (D.Minn. 2013). Finding "at least two problems with [the plaintiff's contrary] argument," id. at 885, the court concluded that the Calder effects test was inapplicable, and stated as follows:
Id. at 885-86. The Court finds Viracon persuasive, and, accordingly, concludes that even if Plaintiff had asserted a tort claim in addition to or instead of its breach-of-contract claim, the Calder effects test would have still been inapplicable in this lawsuit for the same two reasons articulated by the Viracon court.