IN THE UNITED STATES DISTRICT COURT 

 FOR THE NORTHERN DISTRICT OF IOWA 

 CEDAR RAPIDS DIVISION

BVS, INC., 

Plaintiff, No. C16-0065-LTS 

vs. 

MEMORANDUM 

RHUB COMMUNICATIONS, INC. OPINION AND ORDER

Defendant. 

 ____________________ 

 This matter is before me on a motion (Doc. No. 9) by defendant RHUB 

Communications, Inc. (RHUB) to dismiss this action for lack of personal jurisdiction, or 

alternatively, to transfer venue. Plaintiff BVS, Inc. (BVS), filed a resistance (Doc. No. 

18) and RHUB filed a reply (Doc. No. 21). While that motion was pending, BVS filed 

a motion (Doc. No. 24) for leave to amend its complaint. The motion was granted (Doc. 

No. 27) and a first amended and substituted complaint (Doc. No. 28) was filed. 

 RHUB then filed a supplemental motion (Doc. No. 29) to dismiss for lack of 

personal jurisdiction, or alternatively, to transfer venue. BVS has filed a resistance (Doc. 

No. 30) and RHUB has filed a reply (Doc. No. 31). Neither party has requested oral 

argument. I find that oral argument is not necessary. See N.D. Ia. L.R. 7(c). 

I. BACKGROUND 

 BVS is an Iowa corporation with its principal place of business in Cedar Rapids, 

Iowa. RHUB is a California corporation with its principal place of business in San Jose, 

California. After BVS commenced this action in the Iowa District Court for Linn County, 

RHUB removed it to this court on the basis of federal diversity jurisdiction. See Doc. 

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No. 2. The state court petition (Doc. No. 3) asserted one count of breach of contract 

based on a “ClickBranch Agreement” (CB Agreement), attached to the petition as Exhibit 

1. BVS contends that the parties entered into that agreement on or about August 22, 

2014. 

 Pursuant to the CB Agreement, RHUB agreed to provide services and make 

changes and enhancements to its TurboMeeting Software to create the ClickBranch 

product. The intended outcome was a video communications product that would allow a 

bank or credit union customer, or prospective customer, to click on a button on the 

institution’s website to initiate audio and visual communication with a live company 

representative while sharing screens to conduct financial business. BVS agreed to pay 

$200,000 to RHUB in exchange for a viable product and a license to use the product in 

the bank and credit union industry in the United States and other specified areas. The 

petition alleged that as of April 2016, RHUB’s efforts resulted in a “nonviable product 

riddled with glitches and mistakes that render it unusable for BVS and end users.” Doc. 

No. 3 at ¶ 9. BVS contends this failure to perform, or failure to perform in a reasonably 

competent and timely fashion, constitutes a breach of the CB Agreement. 

 BVS’s first amended and substituted complaint (Doc. No. 27) adds another breach 

of contract claim (Count II) based on additional agreements. BVS alleges that on or about 

January 17, 2014, and March 17, 2014, BVS entered into written agreements with RHUB 

for the delivery and maintenance of certain servers and software (Server Agreements). 

BVS further alleges that the RHUB products, including those subject to the Server 

Agreements, come with a one-year warranty service, called RHUB Enable, that provides 

customers with software updates and technical support. After that warranty expires, 

customers may purchase additional warranty coverage on an annual basis to continue the 

RHUB Enable support services. 

 BVS alleges that it purchased additional warranty and upgrade services for its 

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RHUB servers after the initial warranties expired. BVS contends that as part of this 

service, RHUB agreed to provide software updates and technical support. From February 

2015 through February 2016, RHUB allegedly invoiced BVS eight (8) times for services, 

software updates and support. BVS attached copies of the invoices to the first amended 

and substituted complaint. The most recent invoice purportedly extends warranty 

coverage through February 2017. BVS alleges RHUB breached the Server Agreements 

by refusing to perform support services in July 2016. BVS also seeks a declaratory 

judgment (Count III) regarding RHUB’s alleged refusal to perform its obligations under 

the Service Agreements and asks the court to declare that RHUB is required to perform 

ongoing warranty and support services. Doc. No. 27 at ¶ 25. 

 It its initial motion and supplemental motion, RHUB argues that it is not subject 

to personal jurisdiction in Iowa. It contends that it is a California corporation and that 

its only connection to Iowa is BVS’ solicitation to enter into an agreement through which 

RHUB’s performance was to occur entirely in California. RHUB argues that the first 

amended and substituted complaint does not change the jurisdictional analysis. While 

BVS added an allegation that RHUB consented to jurisdiction in Iowa, RHUB denies that 

the Server Agreements, or any actions allegedly performed pursuant to those agreements, 

indicate its consent to jurisdiction in Iowa. It contends that this court should either 

dismiss this action or transfer venue to the Northern District of California. 

 

II. DISCUSSION 

A. Personal Jurisdiction 

1. Standards Under Rule 12(b)(2) 

 To survive a Rule 12(b)(2) motion to dismiss, the plaintiff must make a prima 

facie showing of jurisdiction. Viasystems, Inc. v. EBM-Papst St. Georgen GmbH & Co., 

KG, 646 F.3d 589, 592 (8th Cir. 2011). This means the plaintiff is required to go beyond 

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the pleadings and come forward with affidavits and exhibits establishing jurisdiction. 

Miller v. Nippon Carbon Co., Ltd., 528 F.3d 1087, 1090 (8th Cir. 2008). The court 

“may exercise jurisdiction over a foreign defendant only to the extent permitted by the 

forum state’s long-arm statute and by the Due Process Clause of the Constitution.” Id. 

at 1090 (internal quotations omitted). 

 In this case, Iowa’s long-arm statute1

“expands Iowa’s jurisdictional reach to the 

widest due process parameters allowed by the United States Constitution.” Hammond v. 

Florida Asset Financing Corp., 695 N.W.2d 1, 5 (Iowa 2005) (citing Hodges v. Hodges, 

572 N.W.2d 549, 552 (Iowa 1997)). “Due process requires sufficient ‘minimum 

contacts’ between the defendant and the forum state so that ‘maintenance of the suit does 

not offend traditional notions of fair play and substantial justice.’” Epps v. Stewart Info. 

Servs. Corp., 327 F.3d 642, 647 (8th Cir. 2003) (quoting World-Wide Volkswagen Corp. 

v. Woodson, 444 U.S. 286, 291-92 (1980)). “The ‘substantial connection’ between the 

defendant and the forum State necessary for a finding of minimum contacts must come 

about by an action of the defendant purposefully directed toward the forum State.” Asahi 

Metal Indus. Co. v. Super. Ct. of Cal., 480 U.S. 102, 112 (1987). 

 There are two theories for evaluating personal jurisdiction: general and specific 

jurisdiction. Dever v. Hentzen Coatings, Inc., 380 F.3d 1070, 1073 (8th Cir. 2004). 

“Under the theory of general jurisdiction, a court may hear a lawsuit against a defendant 

who has ‘continuous and systematic’ contacts with the forum state, even if the injuries at 

issue in the lawsuit did not arise out of the defendant’s activities directed at the forum.” 

Id. (quoting Helicopteros Nacionales de Columbia, S.A. v. Hall, 466 U.S. 408, 415-16 

(1984)). Specific jurisdiction “is viable only if the injury giving rise to the lawsuit 

occurred within or had some connection to the forum state.” Dever, 380 F.3d at 1073 

 

1 See Iowa R. Civ. P. 1.306 and Iowa Code § 617.3. 

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(quoting Helicopteros, 466 U.S. at 414). Both theories require “some act by which the 

defendant purposely avails itself of the privilege of conducting activities within the forum 

State, thus invoking the benefits and protections of its laws.” Hanson v. Denckla, 357 

U.S. 235, 253 (1958). 

 The Eighth Circuit has identified the following factors to consider when evaluating 

whether the court has personal jurisdiction over a particular defendant: 

 (1) the nature and quality of [the defendant’s] contacts with the forum 

 state; 

 (2) the quantity of such contacts; 

 (3) the relation of the cause of action to the contacts; 

 (4) the interest of the forum state in providing a forum for its residents; 

 and 

 (5) convenience of the parties. 

Myers v. Casino Queen, Inc., 689 F.3d 904, 911 (8th Cir. 2012) (citing Precision Const. 

Co. v. J.A. Slattery Co., Inc., 765 F.2d 114, 118 (8th Cir. 1985) for the proposition that 

the first three factors are of primary importance and the last two of secondary 

importance). “The third factor distinguishes between specific and general jurisdiction.” 

Myers, 689 F.3d at 911. 

 BVS argues jurisdiction may be established based on the following: 

(1) RHUB accepted $200,000 from BVS for services RHUB contracted 

 to perform; 

(2) RHUB has sold and shipped multiple computer servers and support 

 services to Iowa residents during the past five years; 

(3) RHUB highlights the reputation of an Iowa company on its website 

 as a means to develop more business; and 

(4) RHUB breached the Server Agreement with BVS that 

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 includes a forum selection clause identifying Linn County, Iowa as 

 the appropriate forum for litigation. 

I will address each argument in turn. 

2. Analysis 

a. Acceptance of Payment for Contracted Services 

BVS argues I can find personal jurisdiction over RHUB based on its acceptance 

of $200,000 from BVS to create the ClickBranch product. BVS notes that it began its 

relationship with RHUB in January 2014 by purchasing computer servers that contained 

RHUB software. BVS made a second server purchase in March 2014. In August 2014, 

BVS and RHUB entered into the CB Agreement, which required BVS to pay $200,000 

to RHUB in exchange for the ClickBranch product and a license. BVS attests it has paid 

the full $200,000. See Doc. No. 18-1 at 20. 

 Acceptance of payment for contracted services is generally insufficient to establish 

personal jurisdiction. See Fastpath, Inc. v. Arbela Techs. Corp., 760 F.3d 816, 821 (8th 

Cir. 2014) (“A contract between a plaintiff and an out-of-state defendant is not sufficient 

in and of itself to establish personal jurisdiction over the defendant in the plaintiff’s forum 

state.”). A prima facie case of specific personal jurisdiction requires that the defendant 

“‘purposefully directed’ [its] activities at residents of the forum” and that “the litigation 

results from alleged injuries that ‘arise out of or relate to’ those activities.” Burger King 

Corp. v. Rudzewicz, 471 U.S. 462, 472 (1985) (citing Keeton v. Hustler Magazine, Inc., 

465 U.S. 770, 774 (1984) and Helicopteros, 466 U.S. at 414). Stated another way, 

specific jurisdiction is proper only “where the contacts proximately result from actions 

by the defendant himself that create a substantial connection with the forum state.” 

Fastpath, 760 F.3d at 821 (quoting Stanton v. St. Jude Med., Inc., 340 F.3d 690, 694 

(8th Cir. 2003)). “The unilateral activity of those who claim some relationship with a 

nonresident defendant cannot satisfy the requirement of contact with the forum State.” 

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Hanson, 357 U.S. at 253. “[T]he relationship must arise out of contacts that the 

defendant himself creates with the forum State.” Walden v. Fiore, __U.S. __, 134 S. Ct. 

1115, 1122 (2014) (quoting Burger King Corp., 471 U.S. at 475). 

The record demonstrates that BVS contacted RHUB to create the ClickBranch 

product and to purchase computer servers and support services. See Doc. No. 21-1 at 2 

(“The only way to purchase products or services from RHUB is to contact RHUB directly 

at its office in California, which is the method BVS used to purchase products.”); Id. at 

4-7 (describing various invoices to BVS that indicate orders were placed through verbal 

or email communication). RHUB did not solicit BVS to make the purchases. See id. 

(“RHUB has a website that is RHUB’s primary marketing tool . . . . That website 

primarily supplies potential customers with general information about RHUB’s business 

and products.”). The fact that RHUB fulfilled purchase orders from BVS, entered into 

an agreement to create a product for BVS and was paid by BVS does not establish that 

RHUB “purposefully avail[ed] itself of the privilege of conducting activities within the 

forum State, thus invoking the benefits and protections of its laws.” Hanson, 357 U.S. 

at 253. BVS has failed to establish personal jurisdiction on this basis. 

 b. Sale and Shipment of Products to Forum Residents 

BVS’ next argument focuses on RHUB’s relationship with Iowa customers other 

than BVS. BVS points out that RHUB has six current customers in Iowa. Doc. No. 18-

1 at 6. One of these customers is featured on RHUB’s website. Id. at 16. Larry Dorie, 

President and CEO of RHUB, estimates that it derived approximately $3,000 to $4,000 

in revenue from Iowa during the first half of 2016 and $10,000 during 2015.2

 Id. at 6. 

He further states that for the past five years, RHUB’s Iowa sales have accounted for less 

 

2

 These estimates exclude any income from BVS. 

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than two percent of its total sales in the United States for each year. See Doc. No. 21-1 

at 7-8. Four of RHUB’s Iowa customers have extended their maintenance contracts, 

meaning RHUB provides ongoing support services of the following nature to four Iowa 

companies: 

We provide advanced replacement in case the unit becomes defective. 

Software updates, we protect from obsolescence by updating the software 

on your server, and we can do that automatically. Technical support, if 

you need support you can have access to our support people. Continuous 

availability, if your product fails, we will put you up on our servers and 

give you accounts on our servers until your product is replaced. And audio 

conferencing service, we provide an external – what we call BSTN – 

audioconferencing service that we provide with the product that comes with 

it if you’re on – if you subscribe to the warranty. If you don’t subscribe to 

the warranty, you have to use the internal system, which is the speaker 

microphone that I’m using. 

Doc. No. 18-1 at 6, 8. To put these contacts in context, RHUB does business in 46 states 

and 19 countries. Id. at 13. 

 “A court may assert general jurisdiction over foreign (sister-state or foreigncountry) corporations to hear any and all claims against them when their affiliations with 

the State are so ‘continuous and systematic’ as to render them essentially at home in the 

forum State.” Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 

(2011). Contacts which are “random,” “fortuitous” or “attenuated” are insufficient to 

establish general jurisdiction. Steinbuch v. Cutler, 518 F.3d 580, 586 (8th Cir. 2008). 

“Merely entering into a contract with a forum resident does not provide the requisite 

contacts between a (nonresident) defendant and the forum state.” Mountaire Feeds, Inc. 

v. Agro Impex, S.A., 677 F.2d 651, 655 (8th Cir. 1982). 

 I find that RHUB’s limited Iowa contacts do not rise to the level of systematic and 

continuous contacts such that RHUB could be considered to be “at home” in Iowa. First, 

nothing in the record suggests RHUB solicited business from these Iowa companies. 

Second, there is no indication that a RHUB representative has ever visited Iowa in 

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connection with one of these relationships. Third, the record suggests RHUB performs 

all services related to these customers in California, Texas or India, where its employees 

are located. Fourth, any ongoing maintenance and support services RHUB provides is 

at the customer’s request upon payment of the annual maintenance fee. In other words, 

it is the third party that is maintaining the relationship, not RHUB. See Burger King 

Corp., 471 U.S. at 475 (“Jurisdiction is proper, however, where the contacts proximately 

result from actions by the defendant himself that create a ‘substantial connection’ with the 

forum state.’”) (emphasis in original); Hanson, 357 U.S. at 253 (stating “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.”). 

 For these reasons, I find that BVS has not established that this court has general 

personal jurisdiction over RHUB based on RHUB’s limited, unsolicited commercial 

relationships with Iowa companies. 

 

 c. Internet Activity 

 BVS argues that two of RHUB’s Internet activities establish personal jurisdiction: 

(1) listing an Iowa customer on its website3

 and (2) conducting business and providing 

services via the Internet. In considering the significance of Internet activity, the Eighth 

Circuit has adopted the sliding scale analysis developed in Zippo Mfg. Co. v. Zippo Dot 

Com, Inc., 952 F. Supp. 1119, 1124 (W.D. Pa. 1997). See Lakin v. Prudential Sec., 

Inc., 348 F.3d 704, 710 (8th Cir. 2003). The Zippo court explained the analysis as 

follows: 

 

3

 BVS has provided a screenshot of the website, which lists the Iowa customer along with four 

others from different states. Doc. No. 18-1 at 16. The website itself, www.rhubcom.com, contains 

a continuous scroll of various customers throughout the United States. 

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At one end of the spectrum are situations where a defendant clearly does 

business over the Internet. If the defendant enters into contracts with 

residents of a foreign jurisdiction that involve the knowing and repeated 

transmission of computer files over the Internet, personal jurisdiction is 

proper. At the opposite end are situations where a defendant has simply 

posted information on an Internet Web site which is accessible to users in 

foreign jurisdictions. A passive Web site that does little more than make 

information available to those who are interested in it is not grounds for the 

exercise [of] personal jurisdiction. The middle ground is occupied by 

interactive Web sites where a user can exchange information with the host 

computer. In these cases, the exercise of jurisdiction is determined by 

examining the level of interactivity and commercial nature of the exchange 

of information that occurs on the Web site. 

Zippo Mfg. Co., 952 F. Supp. at 1124 (citations omitted). In cases alleging specific 

jurisdiction, the Zippo analysis is sufficient to determine whether there are minimum 

contacts. However, when general jurisdiction is alleged, the Eighth Circuit requires the 

additional step of evaluating the quantity of the contacts with forum state residents. 

Lakin, 348 F.3d at 712. 

 RHUB argues it has a passive website under Zippo because it merely makes 

information available to interested users. RHUB supplies general information about its 

products and services and does not permit customers to purchase products directly 

through the website. See Doc. No. 21-1 at 2. To purchase products or services, 

customers must contact RHUB at its office in California. Id. Because its website does 

not meet the initial Zippo standard, RHUB argues BVS cannot establish general 

jurisdiction. In any event, BVS has not submitted any evidence or requested jurisdictional 

discovery to determine the number of Iowa residents who have accessed RHUB’s website. 

Instead, BVS relies only on the number of RHUB’s actual Iowa customers. 

 RHUB’s website, without more, does not come close to establishing general 

jurisdiction in Iowa. Under the Zippo analysis, RHUB maintains a passive website. It 

is not interactive and requires customers to contact RHUB directly in order to purchase 

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its products or services. Nor is RHUB’s advertisement of an Iowa customer on the 

website noteworthy. There is no indication that RHUB provides this information for the 

purpose of targeting Iowa residents or soliciting business from Iowa. Instead, the 

identities of the Iowa customer and various customers from other states are available to 

all who view RHUB’s website. See VGM Financial Servs. v. Singh, 708 F. Supp. 2d 

822, 839 (N.D. Iowa 2010) (finding that a website listing six Iowa medical practitioners 

who used third party defendant’s products was insufficient to establish general jurisdiction 

without more). RHUB’s website does not give rise to general jurisdiction over RHUB 

in Iowa. 

 The same is true regarding RHUB’s business activities on the Internet. BVS 

alleges that RHUB conducts business exclusively via electronic means and provides its 

services via the Internet. As such, RHUB is able to conduct business in 46 states, 

including Iowa, and 19 other countries. In Iowa, RHUB has six customers and provides 

ongoing support services for four of them. The services are provided through electronic 

communication, including video conferencing and remote access. 

 Of course, in analyzing whether there is personal jurisdiction, “it is essential 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 law.’” VGM Financial Servs., 708 F. Supp. 2d at 836-37 (quoting Burger King Corp., 

471 U.S. at 475). There is no evidence that RHUB reached into Iowa to solicit its Iowa 

customers or specifically marketed to Iowa residents via the Internet. While RHUB 

maintains an ongoing relationship with four Iowa customers by providing remote support 

services, this is at the request of (and upon payment by) those customers on an annual 

basis. The support services occur only after the Iowa customer contacts RHUB. See 

Doc. No. 18-1 at 3 (stating that if a customer has an issue requiring technical support, 

the customer contacts RHUB’s support organization). The record is clear that it is the 

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customers’ actions that maintain the relationships, not RHUB’s. 

 Finally, the fact that RHUB utilizes the Internet to meet the needs of its customers 

is not particularly relevant, as the Internet is not an Iowa-specific form of communication. 

RHUB did not purposely avail itself of the privilege of conducting activities in Iowa 

simply by using the Internet. RHUB’s Internet activities do not give rise to personal 

jurisdiction in Iowa. 

 d. Forum Selection Clause 

 BVS also attempts to establish personal jurisdiction based on a choice of law and 

forum selection clause contained in purchase orders that were drafted and issued by BVS. 

These purchase orders were for servers that contained RHUB software and state: “This 

Agreement shall be governed by the laws of Iowa. Should a dispute arise concerning the 

products or this Agreement, the Court to determine the dispute shall be the state Court 

in Linn County, Iowa.” See Doc. No. 18-1 at 17-18. BVS’ President attests that BVS 

has continued to pay the annual maintenance fee to RHUB for updates and support for 

the servers. Id. at 19-20. H further states that BVS has paid more than $139,000 for the 

servers, software and support. Id. 

BVS argues that RHUB agreed to the terms of the purchase orders based on Iowa 

Code § 554.2206(1). This provision of Iowa’s Uniform Commercial Code states, in 

relevant part: “Unless otherwise unambiguously indicated by the language or 

circumstances . . . an order or other offer to buy goods for prompt or current shipment 

shall be construed as inviting acceptance either by a prompt promise to ship or by the 

prompt or current shipment of conforming or nonconforming goods.” Thus, BVS argues 

that RHUB’s shipment of the servers after receipt of BVS’ orders bound RHUB to the 

choice of law and forum selection clauses. 

 RHUB acknowledges that it shipped the servers to BVS in Iowa after receiving the 

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purchase orders. It argues, however, that the purchase orders do not apply to any dispute 

over support services BVS claims it was entitled to receive in 2016, or to the CB 

Agreement. The servers were purchased in 2014 and included the RHUB Enable service 

for one year. After that, BVS separately purchased RHUB Enable support for these 

servers on an annual basis. See Doc. No. 21-1 at 3. RHUB states, by affidavit, that 

BVS did not purchase the RHUB Enable support services by issuing written purchase 

orders but, instead, through verbal or email communication. See Doc. No. 21-1 at 3-7. 

Therefore, RHUB argues the purchase orders BVS relies upon are immaterial to this 

dispute and should not apply. 

 RHUB also argues the forum selection clauses in BVS’ purchase orders do not 

apply because RHUB shipped the servers with its End-User License Agreements, which 

specify the application of California law and state that they: 

are the entire agreement between you and RHUB relating to the Product 

and the support services (if any) and they supersede all prior or 

contemporaneous oral or written communications, proposals and 

representations with respect to the Product or any other subject matter 

covered by this EULA. 

See Doc. No. 21-1 at 3; Doc. No. 21-2 at 2. RHUB relies on Iowa Code § 554.2207 to 

argue that the terms of BVS’ purchase orders were superseded by the End-User License 

Agreements. Section 554.2207 states: 

 1. A definite and seasonable expression of acceptance or a written 

 confirmation which is sent within a reasonable time operates as an 

 acceptance even though it states terms additional to or different from 

 those offered or agreed upon, unless acceptance is expressly made 

 conditional on assent to the additional or different terms. 

 2. The additional terms are to be construed as proposals for addition to 

 the contract. Between merchants such terms become part of the 

 contract unless: 

 a. the offer expressly limits the acceptance to the terms of the 

 offer; 

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 b. they materially alter it; or 

 c. notification of objection to them has already been given or is 

 given within a reasonable time after notice of them is 

 received. 

Iowa Code § 554.2207. RHUB argues that “[t]here is no evidence BVS notified RHUB 

of objections to the terms of the End-User License Agreement.” Doc. No. 21 at 7. It 

further argues that “[t]he End-User License Agreements constitute written confirmations 

within the meaning of § 554.2207 and the additional terms they contained should be 

enforced.” Id. at 8.4

 However, the BVS purchase orders state: “No BVS purchase is 

authorized without a copy of this purchase order, accepting these terms by signing below 

by the Seller and returning to BVS.” See Doc. No. 18-1 at 17-18. Thus, this is a classic 

“battle of the forms” situation. 

 I need not wade further into this UCC morass because I find that the question of 

whether RHUB is subject to jurisdiction in Iowa is not dependent upon which boilerplate 

form (if any) controls. There is no evidence that the forum selection clauses in BVS’ 

purchase orders were communicated and negotiated between the parties. Because the 

ultimate inquiry is whether RHUB purposely invoked the benefits and protections of Iowa 

law, it is important to consider whether RHUB affirmatively submitted to Iowa law and 

an Iowa forum through negotiations with BVS. See, e.g., Servewell Plumbing, LLC v. 

Federal Ins. Co., 439 F.3d 786, 789 (8th Cir. 2006) (courts generally honor a forum 

selection clause if it was “the fruit of an arm’s-length negotiation”). 

 

4 RHUB appears to assume that BVS is a “merchant,” meaning “a person who deals in goods of 

the kind or otherwise by the person's occupation holds that person out as having knowledge or 

skill peculiar to the practices or goods involved in the transaction.” See Iowa Code § 

554.2104(1). While the current record is not definitive on this point, the available information 

supports RHUB’s assumption. The CB Agreement contemplated that RHUB and BVS would 

“work together” to develop the ClickBranch product and that the product would include software 

developed or supplied by BVS. See Doc. No. 28 at 11. The CB Agreement also included 

RHUB’s grant of a license to BVS to reproduce and distribute the product to end users. Id. 

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 Here, Dorie states by affidavit that he does not recall seeing the purchase order 

forms from BVS and notes that the exhibits submitted by BVS are not signed by an RHUB 

representative. He adds, “RHUB did not and would not have agreed to the terms of the 

purchase order included on these forms, particularly the [forum selection clause and 

choice of law clause].” Doc. No. 21-1 at ¶ 7. This is consistent with the CB Agreement, 

the one written agreement of record that was negotiated and signed by the parties, as that 

agreement does not specify an Iowa forum. Doc. No. 28 at 11-12. BVS has submitted 

no evidence suggesting that the parties’ negotiations included discussions of a forum 

selection clause. I find that BVS’ boilerplate purchase order terms are not particularly 

relevant to the question of whether RHUB purposely availed itself of the privilege of 

conducting activities in Iowa. 

 e. Personal Jurisdiction -- Conclusion 

 BVS has failed to establish personal jurisdiction as to RHUB under the five factors 

considered by the Eighth Circuit: (1) the nature and quality of [the defendant’s] contacts 

with the forum state; (2) the quantity of such contacts; (3) the relation of the cause of 

action to the contacts; (4) the interest of the forum state in providing a forum for its 

residents and (5) convenience of the parties. Myers, 689 F.3d at 911. RHUB’s limited 

contacts with Iowa have been initiated by the actions of Iowa residents, not by actions on 

the part of RHUB that were purposefully directed at Iowa. RHUB maintains a passive 

website such that any potential customer interested in its products or services must contact 

RHUB in California. RHUB does not have a physical presence in Iowa and conducts its 

business with Iowa residents solely through mail and electronic communications. 

Moreover, RHUB has just six Iowa customers and provides ongoing support services to 

four of those customers. RHUB conducts business in 46 states and 19 countries and its 

sales of computer servers to Iowa customers account for no more than two percent of its 

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annual sales over the past five years. See Doc. No. 21-1 at 7-8. 

 BVS’ causes of action clearly relate to RHUB’s contacts with Iowa, as BVS is one 

of RHUB’s Iowa customers and claims that RHUB has failed to fulfill its contractual 

obligations. While this factor weighs in favor of jurisdiction, it is somewhat mitigated 

by the fact that RHUB’s services were performed in California and other locations, not 

in Iowa. As for Iowa’s interest in providing a forum for its residents to litigate contract 

disputes, that interest is not compelling where, as here, the Iowa resident chose to conduct 

business with an entity outside of Iowa that does not directly solicit Iowa customers. 

Finally, the convenience of the parties is a neutral factor. An Iowa forum would be 

convenient for BVS but not for RHUB, which is based in California and has employees 

in California, Texas and India. 

 Having considered and weighed the relevant factors, I conclude BVS has failed to 

meet its burden of showing that this court has personal jurisdiction over RHUB. 

 

B. Venue 

 Because personal jurisdiction is lacking, I must consider whether the appropriate 

disposition is dismissal or a transfer of venue. “The district court of a district in which 

is filed a case laying venue in the wrong division or district shall dismiss, or if it be in 

the interest of justice, transfer such case to any district or division in which it could have 

been brought.” 28 U.S.C. § 1406(a). Based on my finding that RHUB is not subject to 

personal jurisdiction in Iowa, venue is not appropriate in this district. See 28 U.S.C. § 

1391.5

 When both personal jurisdiction and proper venue are absent, a district court has 

the authority to transfer venue to another district under Section 1406(a). See Goldlawr, 

Inc. v. Heiman, 369 U.S. 463, 466 (1962) (holding that Section 1406(a) “is amply broad 

 

5

 Under Section 1391, venue is proper where a defendant “resides” and a corporate defendant 

“resides” where it is subject to personal jurisdiction. See 28 U.S.C. § 1391(b)-(c). 

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enough to authorize the transfer of cases, however wrong the plaintiff may have been in 

filing his case as to venue, whether the court in which it was filed had personal jurisdiction 

over the defendants or not.”); see also Eggleton v. Plasser & Theurer Exp. Von 

Bahnbaumaschinen Gesellschaft, MBH, 495 F.3d 582, 584 (8th Cir. 2007) (citing 

Goldlawr for the proposition that Section 1406(a) “grants district courts the power to 

transfer cases for lack of personal jurisdiction, as well as for improper venue”). 

 I find a transfer of venue, rather than dismissal, to be in the interests of justice. 

RHUB argues that venue is appropriate in the Northern District of California because 

RHUB resides in that District, preliminary negotiations of the CB Agreement took place 

there and RHUB performed its services there. I agree. Accordingly, I find this case 

should be transferred to the United States District Court for the Northern District of 

California pursuant to 28 U.S.C. § 1406(a). 

III. CONCLUSION 

 For the reasons stated herein: 

 1. RHUB’s motion (Doc. No. 9) and supplemental motion (Doc. No. 29) to 

dismiss for lack of personal jurisdiction or, alternatively, transfer venue are granted in 

part and denied in part. The motions are denied as to the request for dismissal but are 

granted as to RHUB’s alternative request to transfer venue to the Northern District of 

California. 

 2. The Clerk shall transfer this case to the United States District Court for the 

Northern District of California. 

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IT IS SO ORDERED. 

 DATED this 6th day of February, 2017. 

 ________________________________ 

 LEONARD T. STRAND 

 UNITED STATES DISTRICT JUDGE 

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