# U ni te d S ta te s Co ur t of A pp ea ls

For the Eig hth Circu it

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No. 1 3- 26 63

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Ri ch ard “ Bu d” Ste en ; Ll oyden e St een

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff s - Ap pe ll an ts

v.

Ro be rt M ur ray, et a l.

ll ll ll ll ll ll ll ll ll ll l Defe nd

an ts - App el le es

__ __ __ __ __ __

App eal fro m

Uni te d S ta te s Di st ric t Co ur t
fo r th e Dis tri ct of Ne br as ka - Om ah a

__ __ __ __ __ __

Su bm it te d: Ju ne 10 , 20 14

Fil ed : Oct ob er 2 1, 2 01 4

__ __ __ __ __ __

Befo re LOKEN, BEAM, and GRUENDER, Circu it Ju dg es

.

__ __ __ __ __ __

LOKEN, Ci rcu it Ju dg e.

W he n le nd er Farm Cred it Serv ic es th reat en ed to fo recl o s e on hi s farm in

Em ers on , Io wa, Ri ch ard “ Bu d” St een ret ai ne d Lam so n, Du g a n & Mu rray, LLP, an

Om ah a la w fir m , an d Ro be rt Mu rray, a m em be r of th e fir m

. To ge ne rat e fu nd s to

rep ay th e lo an , Ste en an d h is wife Llo y de ne ag reed to se ll pa rt of th e far m to AGRKeas t, an Io wa ge ne ral pa rtn ers hi p. At St een ’s req ue st

, Mu rray, as si st ed by Ry an Bo eof th e Lam so n la w fir m , pr ep ared ag r eem en ts by whi ch AGR-Keas t wou ld bu y 80

acre s of th e St een s’ farm an d le as e an ot he r 33 1 acre s fo r si x y ears , wit h an op ti on to

pu rch as e th e le as ed pr op ert y

. Afte r ex ecu ti ng th e ag reem en ts

, th e pa rti es cl os ed th e

tra ns act io n at th e Lam so n fir m ’s Om ah a of fic e in Apr il 20 03

. In Ju ly 20 12

, aft er st at e

co ur t li ti ga ti on wit h AGR-Keas t, th e St een s fil ed th is act io n in th e So ut he rn Dis tri ct

of Io wa ag ai ns t Mu rray, Bo e, an d th e Lam so n la w fir m , al le g i ng th at de fen da nt s

br each ed a c o n t r act fo r le ga l se rv ic es whe n th ey “ dr aft ed an un res tri ct ed op ti on in

fav or of ” AGR-Keas t in st ead of “ a fir st op ti on to pu rch as e or a fir st rig ht of refu sa l.”

The S t e e n s s o u g ht co m

pe ns at or y da m ag es fo r li ti ga ti on co st s an d th e lo ss of th ei r

la nd

, pl us pu ni ti ve da m ag es fo r de fe nda nts ’ al le ge dl y un et hi cal fai lu re to di sc lo se th at

Mu rray als o re pr es en te d AGR- Keas t at th e ti m e o f th e 2 00 3 a gr eem en ts

.

On de fen da nt s’ m ot io n, th e di st ric t co ur t tra ns ferr ed th e le ga l m al pr act ic e su it 1

to th e Dis tri ct of Neb ras ka un de r 28 U.S.C. § 14 06 (a), ru l i ng th at th e So ut he rn

Dis tri ct of Io wa was an im pr op er ve nu e. In th e Dis tri ct of Neb ras ka

, de fen da nt s

m ov ed fo r jud gm en t on th e pl ead in gs , a s s e r t i ng th e cl ai m s were ti m e-b arre d un de r

Neb ras ka la w. The St een s m o v e d to ret ran sf er th e cas e to th e So ut he rn Dis tri ct of

Io wa. Alt ern at iv e l y, t h ey ur ge d th e Neb ras ka co ur t to tre at th e cas e as tra ns ferr ed

un de r 28 U.S.C

. § 14 04 (a), ap pl y Io wa la w, an d co nc lu de th e su it was ti m el y fil ed

un de r th e ap pl ic ab le Io wa st at ut e of li m it at io ns

. The di st ric t co ur t de ni ed th e St een s’ 2

m ot io n to ret ran sf

er an d, ap pl y in g th e Neb ras ka st at ut e of li m it at io ns , co nc lu de d th e

m al pr act ic e cl ai m s were ti m e-b arre d. The St een s ap pe al di sm is sa l of th ei r co m pl ai nt

wit h pr ejud ic e, arg ui ng th e cl ai m s were ti m el y un de r Io wa la w be cau se th e cas e was

pr op erl y ve nu ed in th e So ut he rn Dis tri ct of Io wa an d th eref or e Io wa la w ap pl ie s, or

The Hon or ab le Ro be rt W

. Prat t, Uni te d St at es Dis tri ct Ju dg e fo r th e So ut he rn 1

Dis tri ct of I owa

.

The Hon or ab le Lau rie Sm it h Cam p, Ch ie f Ju dg e, Uni te d St at es Dis tri ct Co ur t 2

fo r th e Dis tri ct of Ne br as ka

.

-2

-be cau se th e di st ric t co ur t erre d in ap pl y in g th e Neb ras ka st at ut e of li m it at io ns un de r

Neb ras ka ch oi ce-o f-l aw pr in ci pl es . Rev ie win g t he se is su es de no vo , we affi rm

.

I. Fra m in g th e Is su es on Appea l.

A. Defen da nt s pr ov id ed th e ch al le ng ed le ga l se rv ic e s i n e arl y 20 03

. The

St een s al le ge th ey fir st di sc ov ered th e al le ge d m al pr act ic e in Octo be r 20 0 8

. Th e

co m pl ai nt was fil ed in Ju ly 20 12

. Und er Neb ras ka la w, a le ga l m al pr act ic e cl ai m is

ti m e-b arre d un le ss br ou gh t wit hi n two y ears aft er th e act or om is si on “ pr ov id in g th e

ba si s fo r” th e cl ai m , or , if no t di sc ov ered wit hi n th at pe rio d, wit hi n on e y ear fro m th e

di sc ov ery of fact s whi ch wou ld reas on ab ly le ad to di sc ov ery of th e cl ai m

. Neb

. Rev

. St at

. § 25 -2 22 ; se e Gui nn v. Mu rray, 83 7 N.W .2d 80 5, 81 6 (Neb

. 20 13 ). The St een s

do no t a p p e a l th e di st ric t co ur t’s ru li ng th at th ei r cl ai m was ti m e-b arre d un de r

Neb ras ka la w. Rat he r, th ey co nt en d th e cl ai m was no t ti m e-b arre d un de r ap pl ic ab le

Io wa la w.

Und er Io wa la w, le ga l m al pr act ic e of th e type al le ge d is a cl ai m fo r br each of

an un writ te n or al se rv ic es co nt ract th at is su bjec t to a fiv e-year st at ut e of li m it at io ns

. See Ven ard v. W in te r, 52 4 N.W .2d 16 3, 16 5- 66 (Io wa 19 94 ); Io wa Co de Ann

. § 61 4.1 (4 ). The St een s argu e th is st at ut e of li m it at io ns ap pl ie s and di d no t beg in to

ru n un ti l th ey di sc ov ered th e al le ge d m al pr act ic e in 20 08

, wit hi n fiv e y ears of th e

fil in g of th ei r co m

pl ai nt

. The di st ric t co ur t di d no t ad dr es s whe th er th e cl ai m was

ti m el y un de r I o wa la w. Thu s, th e ch oi ce of la w is su e is at th e co re of th e ap pe al

. Tha t i ss ue , as we wi ll ex pl ai n, b rin gs in to pl ay th e v en ue di sp ut e.

B. In th e ab se nc e of a sp eci al ve nu e st at u te

, 28 U.S.C. § 13 91 (b ) go ve rn s

whe re a fed eral ci vi l act io n m ay be ve nu ed

. Ven ue in th is cas e tu rn s on § 13 91 (b )(2 ),

whi ch pro vi de s t ha t a c iv il act io n m ay be bro ug ht in :

-3

-(2 ) a jud ic ia l di s t r i c t i n whi ch a su bs ta nt ia l pa rt of th e ev en ts or

om is si on s gi vi ng ris e t o th e cl ai m oc cu rred

, or a su bs ta nt ia l pa rt of

pr op ert y th at is th e su bjec t o f th e act io n i s s it ua te d.

Two st at ut es de fin e ci rcu m st an ces whe n a di st ric t co ur t m ay tra ns fer ve nu e to an ot he r

fed eral di st ric t. Fo r th e co nv en ie nc e of pa rti es an d witn es se s, a co ur t “ m ay tra ns fer

an y civ il act io n t o a ny oth er d is tri ct

. . . whe re i t m ig ht ha ve be en bro ug ht or t o an y

di st ric t . . . to whi ch all pa rti es ha ve co ns en te d.” 28 U.S.C. § 14 04 (a). A cas e m ay

be tra ns ferr ed un de r § 14 04 (a) on ly w h en ve nu e is pr op er in th e tra ns fero r an d

tra ns fere e fo ru m s. By co nt ras t, if a cas e is br ou gh t in a di st ric t whe re v e n u e is

im pr op er un de r § 13 91 (b ), th e di st ric t co ur t “ sh al l d is m is s, o r if it be in th e in te res t

of jus ti ce, tra ns fer su ch c a s e t o an y di st ric t or di vi si on in whi ch it co ul d ha ve be en

br ou gh t.” 2 8 U.S.C. § 14 06 (a).

W he n a cas e is tra ns ferr ed un de r § 14 04 (a), th e tra ns fere e di st ric t co ur t ap pl ie s

th e ch oi ce-o f-l aw ru le s of th e tra ns fero r co ur t’s St at e. Fere ns v. Jo hn Deere Co

., 49 4

U.S. 51 6, 53 1 (1 99 0)

. Bu t w h e n a d i ve rs it y cas e is tra ns ferr ed un de r § 14 06 (a)

be cau se ve nu e in t h e t ran sf ero r co ur t was im

pr op er, “ § 14 06 (a) tra ns fer cal ls fo r

ap pl ic at io n of th e la w of th e tra ns fere e co ur t,” be gi nn in g wit h it s ch oi ce-o f-l aw ru le s.

W is la nd v. Adm ira l Bev erag e Co

., 11 9 F.3 d 73 3, 73 6 (8 th Ci r. 19 97 ), f o l l o w e d in

Egg le to n v. Pl as se r & The ur er Exp or t Von Bah nb au m as ch in en Ges el ls ch aft

, MBH,

49 5 F.3 d 58 2, 58 8- 89 (8 th Ci r. 20 07 ). In th is cas e, th e So ut he rn Dis tri ct of I o wa

tra ns ferr ed th e cas e un de r § 14 06 (a), co nc lu di ng ve nu e was im pr op er i n Io wa. The

Dis tri ct of Neb ras ka de ni ed th e St een s’ m ot io n to ret ran sf er th e cas e, ap pl ie d

Neb ras ka ch oi ce-o f-l aw pr in ci pl es , as W isl and req ui red

, an d co nc lu de d th e cl ai m was

ti m e-b arre d u nd er Neb ras ka law.

C. The So ut he rn Dis tri ct of Io wa or de r tra ns ferr in g th e cas e to an ot he r di st ric t

wi th in th is ci rc ui t was a no n- ap pe al ab le in te rlo cu to ry or de r, no t su bjec t to m an da m us

rev ie w, be cau se it di d no t “ in an y way im pa ir or de feat th e juri sd ic ti on of th is Co ur t

-4

-to rev ie w an y ap pe al ab le or de r or jud gm en t whic h eve nt ua ll y m ay be en te red in th e

cas e.” Carr v. Don oh oe , 20 1 F.2 d 42 6, 42 8- 29 (8 th Ci r. 19 53 ); acco rd Ban ke rs Life

& Cas

. Co

. v. Hol la nd

, 34 6 U.S. 37 9, 38 3- 84 (1 95 3)

. The Dis tri ct of Neb ras ka or de r

de nyin g th e St een s’ m ot io n to ret ran sf er was rev ie wab le on ap pe al fro m th at co ur t’s

fin al or de r of di sm is sa l an d was in cl ud ed in th e St een s’ no ti ce of ap pe al

. Bu t ru li ng s

on m ot io ns to ret ran sf

er, li ke di sc ret io na ry de ci si on s to tra ns fer fo r th e co nv en ie nc e

of th e p art ie s u nd er § 14 04 (a), ar e rev ie wed un de r a d efer en ti al ab us e-o f-d is cret io n

st an da rd

. See Ch ris ti an so n v. Co lt In du s. Ope rat in g Co rp ., 48 6 U.S. 80 0, 81 7 (1 98 8)
( c ou rts “ sh ou ld be lo at he to [o rd er ret ran sf er] in th e ab se nc e of ex tra o r d i n a r y

ci rcu m st an ces ”); Tech ni tro l, In c. v. M cMa nu s, 40 5 F.2d 84

, 90 (8 th Ci r. 19 68 ); see

ge ne ral ly 15 Ch arl es Alan W rig ht & Arth ur R. Mi ll er, Fed eral Prac ti ce an d Pro ced ur e § 3 85 5 (4 th ed . 20 13 ).

Unl ik e a § 14 04 (a) tra ns fer or de r, th e S o u t h ern Dis tri ct of Io wa’s § 14 06 (a)

tra ns fer was ba se d up on it s in te rp ret at io n of § 13 91 (b )(2 ), a qu es ti on of fed eral la w.

Lero y v. Great W

. Uni te d Co rp ., 44 3 U.S. 17 3, 18 3 n.1 5 (1 97 9)

. W e rev ie w a

de ci si on th at ve n u e was im pr op er un de r § 13 91 (b ) de no vo

. See Gul f In s. Co

. v.

Glas br en ne r, 41 7 F .3d 35 3, 3 55 (2d Cir . 20 05 ). S o wha t d o we r ev ie w in th is cas e,

th e tra ns fer or de r or th e de ni al of ret ran sf er, an d wha t is ou r st an da rd of rev ie w, de

no vo or ab us e of di sc ret io n? Su ffi ce it to sa y ou r ex te ns iv e res earc h un eart he d no

cl ear pr eced en t res ol vi ng th es e q u e s t i on s. Bu t de fen da nt s co nc ed e on ap pe al th at

in te rp ret at io n of

th e v en ue st at ut e is a qu es ti on of l aw we rev ie w de no vo , a nd th ey

de fen d t he So ut he rn Dis tri ct of Io wa’s ru li ng on th e m eri ts . That is co ns is te nt wit h

th e rev ie w we co nd uc te d in Kno wlt on v. All ie d Van Lin es , In c., 90 0 F.2 d 11 96 (8 th

Ci r. 19 90 ), an d we wil l pr oc eed acco rd in gl y

. Howev er, th e qu es ti on we co ns id er in

th is cas e is no t whe th er to ret ran sf er th e cas e to th e So ut h e rn Dis tri ct of Io wa, th e

rel ie f gr an te d in Kno wlt on

. Rat he r, we rev ie w th e So ut he rn Dis tri ct of Io wa’s ve nu e

de ci si o n , d e n o vo , so le ly fo r th e pu rp os e of de te rm in in g whe th er th e Dis tri ct of

Neb ras ka ap pl ie d t he pro pe r St at e’s st at ut e o f li m it at io ns in di sm is si ng th e act io n.

-5

-II . The § 13 91 (b)( 2) Is su e.

Und er § 13 91 (b )(2 ) as am en de d in 19 90

, “ ve nu e m ay be pr op er in an y of a

nu m be r of di st ric ts

, pr ov id ed on ly th at a su bs ta nt ia l part of th e ev en ts gi vi ng ris e to

t h e c l a im oc cu rred th ere.” W oo dk e v. Dah m , 70 F.3 d 98 3, 98 5 (8 th Ci r. 1 9 9 5 )

.

“ Und er th e a mend ed st at ut e, we no lo ng er as k whi ch di st ric t am on g two or m or e

po te nt ia l fo ru m s is th e ‘bes t’ ve nu e.” Set c o En t

. Co rp

. v. Ro bb in s, 19 F.3 d 12 78

, 12 81 (8 th Ci r. 19 94 ). Ci ti ng W oo dk e as “ co nt ro ll i n g Ei gh th Ci rcu it cas e la w,” th e

So ut he rn Dis tri ct of Io wa ru le d, “ in de ci di ng whe th er a su bs ta nt ia l pa rt of th e ev en ts

or om is si on s gi vi ng ris e to Pl ai nt iff s’ cl ai m s oc cu rred in th is Dis tri ct

, th e Co ur t m us t

fo cu s o nl y

on Defen da nt s’ all eg ed wron gf ul act iv it y .”

App ly in g th at ru le

, th e co ur t co nc lu de d th at al l of de fen da nt s’ al le ge d wro ng fu l

act iv it y ha d oc c ur red in Neb ras ka

. Mu rray an d Bo e li ve d in Neb ras ka , wo rk ed ou t

of th e fir m ’s on ly of

fic e in Om ah a, an d were no t li cen se d to pr act ic e la w in Io wa. On

Mar ch 3, 20 03

, St een cal le d Mu rray in hi s Om ah a of fic e to ad vi se of a te nt at iv e

ag reem en t wit h AGR-K e a s t. Mu rray fai le d to di sc lo se hi s rep res en ta ti on of AGRKeas t. H e im m ed ia te ly cal le d th e Farm Cred it Serv ic es rep res en ta ti ve in Lin co ln

, Neb ras ka

, wit h who m he ha d d i s c u s se d th e St een s’ pr ed ic am en t. Farm Cred it

Serv ic es ag reed to gi ve th e St een s twen ty da y s to cl os e th e de al wit h AGR-Keas t an d

ap pl y th e sa l e pr oc eed s to th e lo an

. Mu rray an d Bo e th en dr aft ed th e ag reem en ts

en ti rel y in Neb ras ka

. The co ur t ack no wled ge d th e St een s’ co nt en ti on th at de fen da nt s

pe rfo rm ed leg al ser vi ces for Iowa res id en ts , th e St een s s uf fere d i nju ry

in Io wa, an d

th e la nd was lo cat ed in Io wa. The se fact s, th e co ur t ex pl ai ne d, m ay ha ve es ta bl is he d

pe rs on al juri sd ic ti on ov er de fen da nt s in th e S o u th ern Dis tri ct of Io wa bu t were

“ irr el ev an t t o t he Co ur t’s v en ue an al y si s” un de r W oo dk e. 3

A de fen da nt m ay be su bjec t to p e r s o n al juri sd ic ti on in a ve nu e th at is 3

no ne th el es s im

pr op er be cau se a su bs ta nt ia l pa rt of th e ev en ts or om is si on s gi vi ng ris e

to th e cl ai m

di d n ot oc cu r in th at di st ric t. See Maybel li ne Co . v. No xe ll Co rp ., 81 3

F.2 d 9 01 , 90 3- 05 (8t h C ir. 1 98 7)

.

-6

-On ap pe al

, th e St een s arg ue th at we ad op te d “ a m or e ex pa ns iv e in te rp ret at io n

of th e ve nu e st at ut e” in Peco raro v. Sk y Ran ch fo r Bo y s, In c., 34 0 F.3 d 55 8, 56 3 (8 th

Ci r. 20 03 ), a su bs eq ue nt de ci si on we are free to fo ll ow if it co nf li ct s wit h W oo dk e’s

fo cu s on th e de fen da nt ’s al le ge d wro ng fu l act iv it y

. The co nt en ti on th at we m ay

fo ll ow th e la te r of two in co ns is te nt Eig ht h Ci rcu it pr eced en ts is fla tl y co nt rary to ou r

rece nt en ba nc de ci si on in Mad er v. Uni te d St at es , 65 4 F.3 d 79 4, 80 0 (8 th Ci r. 20 11 )
(en ba nc ). Mo reo ve r, co nt rary to th e St een s’ co nt en ti on s, ou r de ci s i o n s i n Set co

Ent erp ris es an d Peco raro were no t in co ns is te nt wit h th e pr in ci pl e ad op te d in W oodk e.

In Set co , we he ld th at ve nu e was pr op er in th e W es te rn Dis tri ct of Mi ss ou ri be cau se pl ai nt iff ’s f

rau d cl ai m was ba se d in la rg e p a r t on de fen da nt ’s a ll eg ed vi ol at io n of a

ba nk ru pt cy co ur t or de r is su ed in th at Dis tri ct

. 19 F.3 d at 12 81

. I n P e c or aro , we

up he ld ve nu e in th e Dis tri ct of Neb ras ka be cau se de fen da nt ’s al le ge d to rti ou s act s in

th at Dis tri ct were a s ub st an ti al pa rt o f pl ai nt iff ’s cla im s. 3 40 F.3d at 5 62

.

The St een s fu rth er no te th at W oo dk e’s fo cu s on de fen da nt s’ wro ng fu l act iv it y

“ ha s be en qu es ti on ed ” by di st ric t co ur ts in th is an d ot he r ci rcu it s. Tha t m ay be tru e,

bu t m or e te ll in g in ou r vi ew are de ci si on s of ou r si st er ci rcu it s ag reei ng wit h W oo dk e

“ that [§ 13 91 (b )] pr ot ect s de fen da nt s, an d Co ng res s th eref or e ‘m ean t to req ui re co ur ts

to fo cu s on rel ev an t acti vi ti es of th e de fen da nt

, no t of th e pl ai nt iff .’ ” Je nk in s Bric k

Co

. v. Brem er, 321 F.3 d 13 66

, 13 71 -7 2 (11 th Ci r. 20 03 ) (q uo ti ng W oo dk e, 70 F.3 d

at 98 5) ; ac co rd Dani el v. Am er. Bd . of Em erg en cy Med ., 42 8 F .3d 40 8, 4 31 -3 4 (2 d

Ci r. 20 05 ). The di st ric t co ur t co rrec tl y co nc lu de d th at W oo dk e is co nt ro ll in g Eig ht h

Ci rcu it au th or it y

. W e do no t read W oo dk e as ho ld in g th at a co ur t in ap pl y in g § 13 91 (b )(2 ) m ay on ly co ns id er th e de fen da nt ’s al le ge dl y wro ng fu l act iv it ie s. Bu t th e

co ur t’s fo cu s m

us t be on rel ev an t act iv it ie s of th e de fen da nt in th e fo ru m st at e, no t on

th e eff ect of t ho se act iv it ie s o n t he pl ai nt iff in th e fo ru m

st at e.

Alt ern at iv el y , th e St een s arg ue th at ve nu e was pr op er in th e So ut he rn Dis tri ct

of Io wa un de r Wo o d k e

. Tho ug h th e qu es ti on is no t free fro m do ub t, we di sa gr ee.

Pl ai nt iff in W oo dk e al le ge d th at de fen da nt s ha d ad ve rti se d pl ai nt iff ’s br an d of tra il ers

-7

-un de r de fen da nt s’ tra de m ark

-- a “ rev ers e pa ss in g of f” cl ai m un de r th e Lan ha m Act.

Tho ug h th e of

fen di ng ad ve rti se m en t wa s n o t ci rcu la te d in Io wa, W oo dk e arg ue d

ve nu e was pr op er in th e Nor th ern Dis tri ct of Io wa, whe re h e li ve d, “ be cau se th at is

th e lo cat io n o f th e u lt im at e effe ct of th e pa ss in g off.” 70 F.3 d at 98 5. W e he ld th at

th e Nor th ern Dis tri ct of Io wa was an im pr op e r v en ue be cau se de fen da nt s di d no t

co m m it pa ss in g of

f in th at Dis tri c t

, e v en if W oo dk e res id ed an d was in jure d th ere.

Tho ug h de fen da nt s m an uf act ur ed th e tra il ers in th at di st ric t, “ a ne ces sa ry ev en t, in a

cau sa l se ns e, to an at te m

pt to pa ss th em of

f,” t h e man u f

a ct ur in g was no t “ an ev en t
gi vi ng ris e to Mr. W oo dk e’s cl ai m be cau se it was no t it se lf wro ng fu l.” Id

. at 98 5- 86

.

Here, as in W oo dk e, th e St een s cl ai m a wro ng fu l act co m m it te d by de fen da nt s

ou ts id e t h e So ut he rn Dis tri ct of Io wa. Mu rray was ret ai ne d to wor k wit h a

re p r e s e n t at iv e of Farm Cred it Serv ic es in Neb ras ka to res ol ve th e St een s’ cred it

pr ob le m an d a vo id for ecl os ur e. Ri ch ard Ste en cal le d M ur ray in Nebr as ka to no ti fy

hi m of an ag reem en t to se ll p a r t o f t h e farm la nd to AGR-Keas t. The al le ge d

m al pr ac ti ce -- dr aft in g op ti on an d pu rch as e ag reem en ts that im pr ope rl y fa

vor ed A G RKeas t, ei th er ne gl ig en tl y or b y de si gn -- was en ti rel y pe rfo rm ed in Neb ras ka

. The

St een s do no t al le ge , an d Mu rray an d Bo e sp eci fic al ly de n y, t r a ve li ng to Io wa in

co nn ect io n wi th th e n eg ot ia ti on or e xe cu ti on of t he ag reem en ts

.

The St een s arg ue th at ve nu e was pr op er in Io wa un de r § 13 9 1 ( b ) ( 2 ) be cau se

th ei r cl ai m s wou ld no t ex is t if de fen da nt s ha d no t en te red in to an at to rn ey -cl ie nt

rel at io ns hi p to rep res en t Io wa cl ie nt s in m at te rs co nt ro ll ed by Io wa la w, whi le fai li ng

to di sc lo se th e un et hi cal du al rep res en ta ti on of AGR-Keas t. Bu t th es e ev en ts di d no t

“ gi ve ris e to ” th e St een s ’ cl ai m s. True

, de fen da nt s co ul d no t ha ve co m m it te d

m al pr act ic e ha d th ey refu se d to rep res en t th e St een s. Bu t th e de ci si on to rep res en t

th e St een s was no t th e al le ge d m al pr act ic e. Rat he r, th e St een s c l a im pu ni ti ve

da m ag es fo r su bs eq ue nt m al pr act ic e ba se d on Mu rray’ s al le ge d fai lu re to di sc lo se a

co nf li ct of in te res t. As we ex pl ai ne d in W oo dk e, an ev en t do es no t “ gi ve ris e to th e

-8

-c l a i m” si m

pl y be cau se th e al le ge d wro ng fu l co nd uc t wou ld ha ve be en im po ss ib le

wit ho ut th e ev en t. See 70 F.3d at 9 85 -8 6.

The St een s fu rth er arg ue th at th e So ut he rn Dis tri ct of Io wa was a pr op er ve nu e

be cau se th ei r farm la nd was lo cat ed th ere, no ti ng th at § 13 91 (b )(2 ) pr ov id es fo r ve nu e

in “ a jud ic ia l di st ric t in whi ch

. . . a su bs ta nt ia l pa rt of pr op ert y th at is th e su bjec t of

th e act io n is si tu at ed .” Bu t cas es ha ve co ns tru ed th is pr ov is io n “ to ap pl y on ly to su it s

in vo lv in g pr op ert y di sp ut es or in rem act io ns .” Co ld Sp rin g Harb or Lab

. v. Ro pe s &

Gray LLP, 76 2 F. Su pp

. 2d 54 3, 55 3 (E.D.N.Y. 20 11 ) (q uo ta ti on om it te d)

. Here,

de fen da nt s’ al le ge d m al pr act ic e in dr aft in g co nt ract s was “ th e su bjec t of ” th e act io n.

The m al pr act ic e affe ct ed th e St e e n s ’ f a rm la nd

, bu t th is was no t a pr op ert y di sp ut e.

W oo dk e reject ed th e no ti on th at ve nu e li es in a di st ric t s im pl y be cau se de fen da nt s’

wro ng fu l co nd uc t ca us ed effe ct s t he re. 7 0 F .3d at 9 85

.

Bec au se th e m al pr act ic e

-- the al le ge d w ro ngf ul act iv it y -- oc cu rred ex cl us iv el y

in th e Dis tri ct of Neb ras ka

, ne it he r di st ric t co ur t erre d in co nc lu di ng th at th e So ut he rn

Dis tri ct of I owa was a n i m pr op er v en ue . See Wisl an d, 1 19 F.3d at 7 36

.

II I. Th e Cho ic e o f La w Is su e.

The St een s arg ue th at

, ev en if ve nu e was im pr op er in th e So ut he rn Dis tri ct of

Io wa, th e Dis tri ct of Neb ras ka erre d in ap pl y in g Neb ras ka ’s st at ut e of li m it at io ns

go ve rn in g m al pr act ic e act io ns , rat he r th an Io wa’s. A s pr ev io us ly ex pl ai ne d, in a

di ve rs it y cas e t r a n s f

e r red un de r § 14 06 (a), th e tra ns fere e co ur t, an d th is co ur t on

ap pe al

, ap pl y th e ch o i ce-o f-l aw ru le s of th e tra ns fere e fo ru m

. Thu s, th is is su e is

go ve rn ed by N eb ras ka ch oi ce-o f-l aw pr in ci pl es . Egg le to n, 4 95 F.3d at 5 86 -8 8.

His to ric al ly, c o u r ts in Neb ras ka

, as in m an y St at es , ap pl ie d th e Neb ras ka

st at ut e of li m it at io ns to an act io n ve nu ed in Neb ras ka

, ev en if th e la w of an ot he r St at e

-9

-go ve rn ed th e pa rti e s ’ s u b s t an ti ve rig ht s. As th e Su pr em e Co ur t of Neb ras ka 4

ex pl ai ne d in W hi tt e n v

. Wh i tt en , 54 8 N.W .2d 33 8, 34 0 (Neb

. 19 96 ), “ pr oc ed ur al

m at te rs are di ct at e d b y t h e l a w of th e fo ru m

. . . . A st at ut e of li m it at io ns do es no t

crea te or ex ti ng ui sh a rig ht , b ut on ly p la ces a li m it at io n on a rem ed y whi ch m ay be

to ll ed or waiv ed .” Mo re th an twen ty y ears be fo re th e de ci si on in W hi tt en , we 5

ap pl ie d t h is ge ne ral Neb ras ka co nf li ct -o f-l aws pr in ci pl e in co nc lu di ng th at a

Neb ras ka fed eral co ur t m

us t ap pl y th e fiv e-year Neb ras ka st at ut e of li m it at ion s, rat he r

th an th e te n- y ear Io wa st at ut e of li m it at io ns , in a br each of co nt ract act io n go ve rn ed
by Io wa su bs ta nt iv e la w. Pl ay er Pi an et te

, In c. v. Dale Elec s., In c., 47 8 F.2 d 33 6, 33 6-

37 (8 th Ci r. 19 73 ), fo ll owe d in Gran d Is la nd Exp res s Co rp

. v. Tim pt e In du s., In c., 28

F.3 d 7 3,7 4 (8 th Cir . 19 94 ).

The St een s arg ue th at th e Su pr em e Co ur t of Neb ras ka wou ld ap pl y th e “ m os t

si gn ifi can t rel at io ns hi p” te st of § 14 5 of th e Res ta te m en t (Sec on d) of Co nf li ct of

Laws, in li eu of th e W hi tt en ru le

. Lack in g su pp or ti ng au th or it y fro m th at Co ur t, th ey

r e l y o n o ur de ci si on in FDIC v. Nor db ro ck

, 10 2 F.3 d 33 5 (8 th Ci r. 19 96 ). I n

Nor db ro ck

, th e FDIC as rece iv er fo r an Ill in oi s ba nk su ed a Neb ras ka de bt or in

Neb ras ka fed eral co ur t to co ll ect a pr om is so ry no te m or e th an si x y ears aft er th e cl ai m

accr ue d. The su it was go ve rn ed by th e Fi na nc ia l In st it ut io ns Refo rm , Rec ov ery, an d

En f o r c e m en t Act of 19 89

, whi ch pr ov id ed th at th e st at ut e of li m it at io ns was “ th e

lo ng er of (I) th e 6- y ear pe rio d be gi nn in g on th e da te th e cl ai m accr ue s; or (II) th e

pe rio d ap pl ic ab le un d e r S t a t e l aw.” 12 U.S.C. § 18 21 (d )(1 4) (A)(i ). W e he ld th e

FDIC’s cl ai m ti m el y un de r § 18 21 (d )(1 4) (A)(i ), ap pl y in g th e Ill in oi s te n- y ear st at ut e

Fo r th e im

pa ct of th is ru le in di ve rs it y cas es , s ee g en eral ly Sem te k In t’l In c. 4

v. Lo ck he ed Mart in Co rp ., 53 1 U.S. 4 97 , 50 4 (2 00 1)

.

In 20 06

, th e Neb ras ka Leg is la tu re en a c t ed th e Uni fo rm Co nf li ct of Laws 5

Lim it at io n Act, whi ch pr ov id es th at a cl ai m accr ui ng aft er J ul y 14 , 2 00 6, is su bjec t

to th e st at ut e of li m it at io ns of th e St at e up on who se su bs ta nt iv e la w th e cl ai m is

ba se d. Neb

. Rev

. St at

. §§ 25 -3 20 3, 2 5 -3 20 6. Bec au se th e St een s’ cl ai m accr ue d

be fo re 2 00 6, t he tra di ti on al rul e ap pl ie s.

-1 0-of li m it at io ns , rat he r th an th e fed eral si x- y ear li m it at io ns pe rio d, be cau se the Su pr em e

Co ur t of Neb ras ka wou ld ap pl y th e “ su bs ta nt ia l rela ti on sh ip ” te st fro m § 14 2 of th e

Res ta te m en t (Sec on d) of Co nf li ct of Laws (1 98 9) to th is “ un iq ue fact ua l se tt in g,”

rat he r th an th e ge ne ral ru le in W hi tt en “ th at th e fo ru m wil l a p p l y i t s o wn st at ue of

li m it at io ns .” 10 2 F .3d at 3 39

.

The St een s’ rel ia nc e on Nor db ro ck is m is pl aced

. Fi rs t, th at cas e was go ve rn ed
by fed eral la w, in cl ud in g a st at ut e of li m it at io ns th at bo rr ow ed an ap p l i c a b l e s t at e

st at ut e if it ex te nd ed th e li m it at io ns pe rio d. Thi s cas ts do ub t on whe th er Nor db ro ck

was ap pl y in g Neb ras ka ch oi ce-o f-l aw ru le s o r fed eral co m m on la w in de te rm in in g

wha t st at e la w to ap pl y un de r th e fed eral st at ut e. See i d

. a t 3 4 0 (Lok en , J.,

c o n cu rri ng ). Seco nd

, in Nor db ro ck we em ph as iz ed th at a un iq ue fact ua l s e t t i n g jus ti fie d de pa rtu re fro m th e ge ne ral ru le in W h i t t e n

. By co nt ras t, in th is di ve rs it y

cas e, n o g o v e rn m en t in st it ut io n st an ds to lo se hu nd red s of th ou sa nd s of do ll ars of

de po si to rs ’ m on ey , an d no st at ut e su gg es ts th e li m it a t i o n s p eri od sh ou ld err on th e

si de of p res erv in g t he cla im

. In ot he r wor ds , wh il e th is di sp ut e is si gn ifi can t t o t he

pa rt i e s , n o ex cep ti on al ci rcu m st an ces are pr es en t. Fi na ll y , i f th e St een s are co rrec t

an d Nor db ro ck st an ds fo r th e pr op os it io n th at W hi tt en is no t th e co nt ro ll in g Neb ras ka

ch oi ce-o f-l aw de ci si on , ou r en ba nc de ci si on in Mad er req ui res th at ou r pa ne l fo ll ow

ou r ear li er co nt rary rul in gs in Pla y er Pi an ne tt e an d Gra nd Isl an d Ex pr es s.

Fo r th es e reas on s, we co nc lu de th e di st ric t co ur t co rrec tl y ap pl ie d th e Neb ras ka

le ga l m al p r a c t i c e st at ut e of li m it at io ns in ru li ng th at th e St een s’ cl ai m was ti m eba rred . Accor di ng ly, th e jud gm en t o f th e d is tri ct co ur t i s af fir m ed

.

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