United States Court of Appeals

For the Eighth Circuit

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No. 13-2663

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Richard “Bud” Steen; Lloydene Steen

lllllllllllllllllllll Plaintiffs - Appellants

v.

Robert Murray, et al.

lllllllllllllllllllll Defendants - Appellees

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 Appeal from United States District Court 

for the District of Nebraska - Omaha

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 Submitted: June 10, 2014

 Filed: October 21, 2014

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Before LOKEN, BEAM, and GRUENDER, Circuit Judges.

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LOKEN, Circuit Judge.

When lender Farm Credit Services threatened to foreclose on his farm in

Emerson, Iowa, Richard “Bud” Steen retained Lamson, Dugan & Murray, LLP, an

Omaha law firm, and Robert Murray, a member of the firm. To generate funds to

repay the loan, Steen and his wife Lloydene agreed to sell part of the farm to AGRKeast, an Iowa general partnership. At Steen’s request, Murray, assisted by RyanBoe
of the Lamson law firm, prepared agreements by which AGR-Keast would buy 80

acres of the Steens’ farm and lease another 331 acres for six years, with an option to

purchase the leased property. After executing the agreements, the parties closed the

transaction at the Lamson firm’s Omaha office in April 2003. In July 2012, after state

court litigation with AGR-Keast, the Steens filed this action in the Southern District

of Iowa against Murray, Boe, and the Lamson law firm, alleging that defendants

breached a contract for legal services when they “drafted an unrestricted option in

favor of” AGR-Keast instead of “a first option to purchase or a first right of refusal.” 

The Steens sought compensatory damages for litigation costs and the loss of their

land, plus punitive damagesfor defendants’ allegedly unethicalfailure to disclose that

Murray also represented AGR-Keast at the time of the 2003 agreements. 

On defendants’ motion, the district court transferred the legal malpractice suit 1

to the District of Nebraska under 28 U.S.C. § 1406(a), ruling that the Southern

District of Iowa was an improper venue. In the District of Nebraska, defendants

moved for judgment on the pleadings, asserting the claims were time-barred under

Nebraska law. The Steens moved to retransfer the case to the Southern District of

Iowa. Alternatively, they urged the Nebraska court to treat the case as transferred

under 28 U.S.C. § 1404(a), apply Iowa law, and conclude the suit was timely filed

under the applicable Iowa statute of limitations. The district court denied the Steens’ 2

motion to retransfer and, applying the Nebraska statute of limitations, concluded the

malpractice claims were time-barred. The Steens appeal dismissal of their complaint

with prejudice, arguing the claims were timely under Iowa law because the case was

properly venued in the Southern District of Iowa and therefore Iowa law applies, or

The Honorable Robert W. Pratt, United States District Judge for the Southern 1

District of Iowa.

The Honorable Laurie Smith Camp, Chief Judge, United States District Court

2

for the District of Nebraska.

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because the district court erred in applying the Nebraska statute of limitations under

Nebraska choice-of-law principles. Reviewing these issues de novo, we affirm.

I. Framing the Issues on Appeal.

A. Defendants provided the challenged legal services in early 2003. The

Steens allege they first discovered the alleged malpractice in October 2008. The

complaint was filed in July 2012. Under Nebraska law, a legal malpractice claim is

time-barred unless brought within two years after the act or omission “providing the

basis for” the claim, or, if not discovered within that period, within one year from the

discovery of facts which would reasonably lead to discovery of the claim. Neb. Rev.

Stat. § 25-222; see Guinn v. Murray, 837 N.W.2d 805, 816 (Neb. 2013). The Steens

do not appeal the district court’s ruling that their claim was time-barred under

Nebraska law. Rather, they contend the claim was not time-barred under applicable

Iowa law. 

Under Iowa law, legal malpractice of the type alleged is a claim for breach of

an unwritten oral services contract that is subject to a five-year statute of limitations. 

See Venard v. Winter, 524 N.W.2d 163, 165-66 (Iowa 1994); Iowa Code Ann.

§ 614.1(4). The Steens argue this statute of limitations applies and did not begin to

run until they discovered the alleged malpractice in 2008, within five years of the

filing of their complaint. The district court did not address whether the claim was

timely under Iowa law. Thus, the choice of law issue is at the core of the appeal. 

That issue, as we will explain, brings into play the venue dispute. 

B. In the absence of a special venue statute, 28 U.S.C. § 1391(b) governs

where a federal civil action may be venued. Venue in this case turns on § 1391(b)(2),

which provides that a civil action may be brought in:

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(2) a judicial district in which a substantial part of the events or

omissions giving rise to the claim occurred, or a substantial part of

property that is the subject of the action is situated. 

Two statutes define circumstances when a district court may transfer venue to another

federal district. For the convenience of parties and witnesses, a court “may transfer

any civil action to any other district . . . where it might have been brought or to any

district . . . to which all parties have consented.” 28 U.S.C. § 1404(a). A case may

be transferred under § 1404(a) only when venue is proper in the transferor and

transferee forums. By contrast, if a case is brought in a district where venue is

improper under § 1391(b), the district court “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). 

When a case istransferred under § 1404(a), the transferee district court applies

the choice-of-law rules of the transferor court’s State. Ferens v. John Deere Co., 494

U.S. 516, 531 (1990). But when a diversity case is transferred under § 1406(a)

because venue in the transferor court was improper, “§ 1406(a) transfer calls for

application of the law of the transferee court,” beginning with its choice-of-law rules. 

Wisland v. Admiral Beverage Co., 119 F.3d 733, 736 (8th Cir. 1997), followed in

Eggleton v. Plasser & Theurer Export Von Bahnbaumaschinen Gesellschaft, MBH,

495 F.3d 582, 588-89 (8th Cir. 2007). In this case, the Southern District of Iowa

transferred the case under § 1406(a), concluding venue was improper in Iowa. The

District of Nebraska denied the Steens’ motion to retransfer the case, applied

Nebraska choice-of-law principles, asWisland required, and concluded the claimwas

time-barred under Nebraska law.

C. The Southern District of Iowa order transferring the case to another district

within this circuit was a non-appealable interlocutory order, not subject to mandamus

review, because it did not “in any way impair or defeat the jurisdiction of this Court

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to review any appealable order or judgment which eventually may be entered in the

case.” Carr v. Donohoe, 201 F.2d 426, 428-29 (8th Cir. 1953); accord Bankers Life

& Cas. Co. v. Holland, 346 U.S. 379, 383-84 (1953). The District of Nebraska order

denying the Steens’ motion to retransfer was reviewable on appeal from that court’s

final order of dismissal and was included in the Steens’ notice of appeal. But rulings

on motions to retransfer, like discretionary decisions to transfer for the convenience

of the parties under § 1404(a), are reviewed under a deferential abuse-of-discretion

standard. See Christianson v. Colt Indus. Operating Corp., 486 U.S. 800, 817 (1988)

(courts “should be loathe to [order retransfer] in the absence of extraordinary

circumstances”); Technitrol, Inc. v. McManus, 405 F.2d 84, 90 (8th Cir. 1968); see

generally 15 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure

§ 3855 (4th ed. 2013). 

Unlike a § 1404(a) transfer order, the Southern District of Iowa’s § 1406(a)

transfer was based upon its interpretation of § 1391(b)(2), a question of federal law. 

Leroy v. Great W. United Corp., 443 U.S. 173, 183 n.15 (1979). We review a

decision that venue was improper under § 1391(b) de novo. See Gulf Ins. Co. v.

Glasbrenner, 417 F.3d 353, 355 (2d Cir. 2005). So what do we review in this case,

the transfer order or the denial of retransfer, and what is our standard of review, de

novo or abuse of discretion? Suffice it to say our extensive research unearthed no

clear precedent resolving these questions. But defendants concede on appeal that

interpretation of the venue statute is a question of law we review de novo, and they

defend the Southern District of Iowa’s ruling on the merits. That is consistent with

the review we conducted in Knowlton v. Allied Van Lines, Inc., 900 F.2d 1196 (8th

Cir. 1990), and we will proceed accordingly. However, the question we consider in

this case is not whether to retransfer the case to the Southern District of Iowa, the

relief granted in Knowlton. Rather, we review the Southern District of Iowa’s venue

decision, de novo, solely for the purpose of determining whether the District of

Nebraska applied the proper State’s statute of limitations in dismissing the action.

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II. The § 1391(b)(2) Issue.

Under § 1391(b)(2) as amended in 1990, “venue may be proper in any of a

number of districts, provided only that a substantial part of the events giving rise to

the claim occurred there.” Woodke v. Dahm, 70 F.3d 983, 985 (8th Cir. 1995). 

“Under the amended statute, we no longer ask which district among two or more

potential forums is the ‘best’ venue.” Setco Ent. Corp. v. Robbins, 19 F.3d 1278,

1281 (8th Cir. 1994). Citing Woodke as “controlling Eighth Circuit case law,” the

Southern District of Iowa ruled, “in deciding whether a substantial part of the events

or omissions giving rise to Plaintiffs’ claims occurred in this District, the Court must

focus only on Defendants’ alleged wrongful activity.” 

Applying thatrule, the court concluded that all of defendants’ alleged wrongful

activity had occurred in Nebraska. Murray and Boe lived in Nebraska, worked out

of the firm’s only office in Omaha, and were not licensed to practice law in Iowa. On

March 3, 2003, Steen called Murray in his Omaha office to advise of a tentative

agreement with AGR-Keast. Murray failed to disclose his representation of AGRKeast. He immediately called the Farm Credit Services representative in Lincoln,

Nebraska, with whom he had discussed the Steens’ predicament. Farm Credit

Services agreed to give the Steens twenty days to close the deal with AGR-Keast and

apply the sale proceeds to the loan. Murray and Boe then drafted the agreements

entirely in Nebraska. The court acknowledged the Steens’ contention that defendants

performed legal services for Iowa residents, the Steens suffered injury in Iowa, and

the land was located in Iowa. These facts, the court explained, may have established

personal jurisdiction over defendants in the Southern District of Iowa but were

“irrelevant to the Court’s venue analysis” under Woodke.3

A defendant may be subject to personal jurisdiction in a venue that is 3

nonetheless improper because a substantial part of the events or omissions giving rise

to the claim did not occur in that district. See Maybelline Co. v. Noxell Corp., 813

F.2d 901, 903-05 (8th Cir. 1987).

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On appeal, the Steens argue that we adopted “a more expansive interpretation

of the venue statute” in Pecoraro v. Sky Ranch for Boys, Inc., 340 F.3d 558, 563 (8th

Cir. 2003), a subsequent decision we are free to follow if it conflicts with Woodke’s

focus on the defendant’s alleged wrongful activity. The contention that we may

follow the later of two inconsistent Eighth Circuit precedents is flatly contrary to our

recent en banc decision in Mader v. United States, 654 F.3d 794, 800 (8th Cir. 2011)

(en banc). Moreover, contrary to the Steens’ contentions, our decisions in Setco

Enterprises and Pecoraro were not inconsistent with the principle adopted in Woodke. 

In Setco, we held that venue was proper in the Western District of Missouri because

plaintiff’s fraud claim was based in large part on defendant’s alleged violation of a

bankruptcy court order issued in that District. 19 F.3d at 1281. In Pecoraro, we

upheld venue in the District of Nebraska because defendant’s alleged tortious acts in

that District were a substantial part of plaintiff’s claims. 340 F.3d at 562. 

The Steens further note that Woodke’s focus on defendants’ wrongful activity

“has been questioned” by district courts in this and other circuits. That may be true,

but more telling in our view are decisions of our sister circuits agreeing with Woodke

“that [§ 1391(b)] protects defendants, and Congress therefore ‘meant to require courts

to focus on relevant activities of the defendant, not of the plaintiff.’” Jenkins Brick

Co. v. Bremer, 321 F.3d 1366, 1371-72 (11th Cir. 2003) (quoting Woodke, 70 F.3d

at 985); accord Daniel v. Amer. Bd. of Emergency Med., 428 F.3d 408, 431-34 (2d

Cir. 2005). The district court correctly concluded that Woodke is controlling Eighth

Circuit authority. We do not read Woodke as holding that a court in applying

§ 1391(b)(2) may only consider the defendant’s allegedlywrongful activities. But the

court’s focus must be on relevant activities of the defendant in the forum state, not on

the effect of those activities on the plaintiff in the forum state.

Alternatively, the Steens argue that venue was proper in the Southern District

of Iowa under Woodke. Though the question is not free from doubt, we disagree. 

Plaintiffin Woodke alleged that defendants had advertised plaintiff’s brand oftrailers

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under defendants’ trademark -- a “reverse passing off” claim under the Lanham Act. 

Though the offending advertisement was not circulated in Iowa, Woodke argued

venue was proper in the Northern District of Iowa, where he lived, “because that is

the location of the ultimate effect of the passing off.” 70 F.3d at 985. We held that

the Northern District of Iowa was an improper venue because defendants did not

commit passing off in that District, even if Woodke resided and was injured there. 

Though defendants manufactured the trailers in that district, “a necessary event, in a

causal sense, to an attempt to pass them off,” the manufacturing was not “an event

giving rise to Mr. Woodke’s claim because it was not itself wrongful.” Id. at 985-86.

Here, as in Woodke, the Steens claim a wrongful act committed by defendants

outside the Southern District of Iowa. Murray was retained to work with a

representative of Farm Credit Services in Nebraska to resolve the Steens’ credit

problem and avoid foreclosure. Richard Steen called Murray in Nebraska to notify

him of an agreement to sell part of the farmland to AGR-Keast. The alleged

malpractice -- drafting option and purchase agreementsthat improperly favoredAGRKeast, either negligently or by design -- was entirely performed in Nebraska. The

Steens do not allege, and Murray and Boe specifically deny, traveling to Iowa in

connection with the negotiation or execution of the agreements. 

The Steens argue that venue was proper in Iowa under § 1391(b)(2) because

their claims would not exist if defendants had not entered into an attorney-client

relationship to represent Iowa clients in matters controlled by Iowa law, while failing

to disclose the unethical dual representation of AGR-Keast. But these events did not

“give rise to” the Steens’ claims. True, defendants could not have committed

malpractice had they refused to represent the Steens. But the decision to represent

the Steens was not the alleged malpractice. Rather, the Steens claim punitive

damages for subsequent malpractice based on Murray’s alleged failure to disclose a

conflict of interest. As we explained in Woodke, an event does not “give rise to the

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claim” simply because the alleged wrongful conduct would have been impossible

without the event. See 70 F.3d at 985-86. 

The Steens further argue that the Southern District of Iowa was a proper venue

because their farmland waslocated there, noting that § 1391(b)(2) providesfor venue

in “a judicial district in which . . . a substantial part of property that is the subject of

the action issituated.” But cases have construed this provision “to apply only to suits

involving property disputes or in rem actions.” Cold Spring Harbor Lab. v. Ropes &

Gray LLP, 762 F. Supp. 2d 543, 553 (E.D.N.Y. 2011) (quotation omitted). Here,

defendants’ alleged malpractice in drafting contracts was “the subject of” the action. 

The malpractice affected the Steens’ farmland, but this was not a property dispute. 

Woodke rejected the notion that venue lies in a district simply because defendants’

wrongful conduct caused effects there. 70 F.3d at 985. 

Because the malpractice --the alleged wrongful activity -- occurred exclusively

in the District of Nebraska, neither district court erred in concluding that the Southern

District of Iowa was an improper venue. See Wisland, 119 F.3d at 736. 

III. The Choice of Law Issue.

The Steens argue that, even if venue was improper in the Southern District of

Iowa, the District of Nebraska erred in applying Nebraska’s statute of limitations

governing malpractice actions, rather than Iowa’s. As previously explained, in a

diversity case transferred under § 1406(a), the transferee court, and this court on

appeal, apply the choice-of-law rules of the transferee forum. Thus, this issue is

governed by Nebraska choice-of-law principles. Eggleton, 495 F.3d at 586-88. 

Historically, courts in Nebraska, as in many States, applied the Nebraska

statute of limitationsto an action venued in Nebraska, even if the law of another State

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governed the parties’ substantive rights. As the Supreme Court of Nebraska 4

explained in Whitten v. Whitten, 548 N.W.2d 338, 340 (Neb. 1996), “procedural

matters are dictated by the law of the forum. . . . A statute of limitations does not

create or extinguish a right, but only places a limitation on a remedy which may be

tolled or waived.” More than twenty years before the decision in Whitten, we 5

applied this general Nebraska conflict-of-laws principle in concluding that a

Nebraska federal court must apply the five-year Nebraska statute oflimitations, rather

than the ten-year Iowa statute of limitations, in a breach of contract action governed

by Iowa substantive law. Player Pianette, Inc. v. Dale Elecs., Inc., 478 F.2d 336, 336-

37 (8th Cir. 1973), followed in Grand Island Express Corp. v. Timpte Indus., Inc., 28

F.3d 73,74 (8th Cir. 1994). 

The Steens argue that the Supreme Court of Nebraska would apply the “most

significant relationship” test of § 145 of the Restatement (Second) of Conflict of

Laws, in lieu of the Whitten rule. Lacking supporting authority from that Court, they

rely on our decision in FDIC v. Nordbrock, 102 F.3d 335 (8th Cir. 1996). In

Nordbrock, the FDIC as receiver for an Illinois bank sued a Nebraska debtor in

Nebraska federal court to collect a promissory note more than six years after the claim

accrued. The suit was governed by the Financial Institutions Reform, Recovery, and

Enforcement Act of 1989, which provided that the statute of limitations was “the

longer of (I) the 6-year period beginning on the date the claim accrues; or (II) the

period applicable under State law.” 12 U.S.C. § 1821(d)(14)(A)(i). We held the

FDIC’s claim timely under § 1821(d)(14)(A)(i), applying the Illinois ten-year statute

For the impact of this rule in diversity cases, see generally Semtek Int’l Inc. 4

v. Lockheed Martin Corp., 531 U.S. 497, 504 (2001). 

In 2006, the Nebraska Legislature enacted the Uniform Conflict of Laws 5

Limitation Act, which provides that a claim accruing after July 14, 2006, is subject

to the statute of limitations of the State upon whose substantive law the claim is

based. Neb. Rev. Stat. §§ 25-3203, 25-3206. Because the Steens’ claim accrued

before 2006, the traditional rule applies.

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oflimitations, rather than the federalsix-year limitations period, because theSupreme

Court of Nebraska would apply the “substantial relationship” test from § 142 of the

Restatement (Second) of Conflict of Laws (1989) to this “unique factual setting,”

rather than the general rule in Whitten “that the forum will apply its own statue of

limitations.” 102 F.3d at 339. 

The Steens’ reliance on Nordbrock is misplaced. First, that case was governed

by federal law, including a statute of limitations that borrowed an applicable state

statute if it extended the limitations period. This casts doubt on whether Nordbrock

was applying Nebraska choice-of-law rules or federal common law in determining

what state law to apply under the federal statute. See id. at 340 (Loken, J.,

concurring). Second, in Nordbrock we emphasized that a unique factual setting

justified departure from the general rule in Whitten. By contrast, in this diversity

case, no government institution stands to lose hundreds of thousands of dollars of

depositors’ money, and no statute suggests the limitations period should err on the

side of preserving the claim. In other words, while this dispute is significant to the

parties, no exceptional circumstances are present. Finally, if the Steens are correct

and Nordbrock standsfor the proposition that Whitten is not the controlling Nebraska

choice-of-law decision, our en banc decision in Mader requires that our panel follow

our earlier contrary rulings in Player Piannette and Grand Island Express. 

For these reasons, we conclude the district court correctly applied the Nebraska

legal malpractice statute of limitations in ruling that the Steens’ claim was timebarred. Accordingly, the judgment of the district court is affirmed.

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