Opinion ID: 2744093
Heading Depth: 1
Heading Rank: 1

Heading: Framing the Issues on Appeal.

Text: 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: -3- (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 is transferred 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, as Wisland required, and concluded the claim was 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 -4- 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. -5-