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Rust Consulting, Inc. v. Schneider Wallace Cottrell Konecky Wotkyns, LLP

United States District Court, D. Minnesota

March 9, 2018

Rust Consulting, Inc. Plaintiff,
v.
Schneider Wallace Cottrell Konecky Wotkyns, LLP, Defendant.

          Michael R. Cunningham, Esq., Amy E. Erickson, Esq. and Gray Plant Mooty, counsel for plaintiff.

          Kyle G. Bates, Esq. and Schneider Wallace Cottrell Konecky Wotkyns, LLP, counsel for defendant.

          Robert K. Shelquist, Esq. and Lockridge Grindal Nauen PLLP, counsel for defendant.

          ORDER

          David S. Doty, Judge

         This matter is before the court upon the motion to dismiss or transfer venue by defendant Schneider Wallace Cottrell Konecky Wotkyns LLP. Based on a review of the file, record, and proceedings herein, and for the following reasons, the motion is denied.

         BACKGROUND

         This contract dispute arises out of defendant Schneider Wallace's alleged failure to pay plaintiff Rust Consulting, Inc. for rendered services. In 2011, Schneider Wallace, a law firm based in California, and Rust, a Minnesota consulting services company, entered into a Master Services Agreement in which Rust agreed to perform services for Schneider Wallace relating to certain mass tort actions. Compl. ¶¶ 1-3; Blake Aff. Ex. A.[1] The agreement provides that any claims arising from or in connection to the agreement are governed by Minnesota law. Blake Aff. Ex. A ¶ 11. From 2011 to 2013, Rust provided client intake services, project consulting, call center services, data management, medical record collection and review, client portal design and maintenance, forms processing, and reporting services for Schneider Wallace in connection with nine separate tort cases. Blake Aff. ¶¶ 5, 16. Most of this work was performed by Rust's employees located in Minnesota. Id. ¶ 17.

         Rust claims that, from April 2012 through December 2013, it sent invoices to Schneider Wallace for its services totaling $323, 756.22 and that Schneider Wallace has failed to pay. Compl. ¶¶ 8-9. Rust also alleges that it is entitled to a per-claim fee of $2, 500 for each resolved claim in the relevant mass tort actions. Id. ¶¶ 10-12.

         On October 9, 2017, Rust filed suit in Hennepin County court alleging breach of contract, account stated, quantum meruit, and accounting. Schneider Wallace timely removed and now moves to dismiss for lack of personal jurisdiction, for failure to state a claim, and for improper venue and, in the alternative, to transfer venue to the Northern District of California.

         DISCUSSION

         I. Personal Jurisdiction A. Standard of Review

         To survive a motion to dismiss for lack of personal jurisdiction, a plaintiff must establish a prima facie case that the forum state has personal jurisdiction over the defendant. Stevens v. Redwing, 146 F.3d 538, 543 (8th Cir. 1998). In the absence of an evidentiary hearing, a court “must look at the facts in the light most favorable to the nonmoving party and resolve all factual conflicts in favor of that party.” Dakota Indus., Inc. v. Dakota Sportswear, Inc., 946 F.2d 1384, 1387 (8th Cir. 1991). A federal court may assume jurisdiction over a nonresident defendant “only to the extent permitted by the long-arm statute of the forum state and by the Due Process Clause.” Romak USA, Inc. v. Rich, 384 F.3d 979, 984 (8th Cir. 2004) (citation and internal quotation marks omitted). Because the Minnesota long-arm statute “confers jurisdiction to the fullest extent permitted by the Due Process Clause, ” the court need only consider due process requirements. Coen v. Coen, 509 F.3d 900, 905 (8th Cir. 2007).

         To satisfy due process, a defendant must have “sufficient minimum contacts” with the forum state such that maintaining the suit “does not offend traditional notions of fair play and substantial justice.” Romak, 384 F.3d at 984. “Sufficient contacts exist when [a] defendant's conduct and connection with the forum state are such that [it] should reasonably anticipate being haled into court” here. Coen, 509 F.3d at 905 (citation and internal quotation marks omitted).

         A defendant's contacts with the forum state can establish personal jurisdiction under either general or specific jurisdiction. General jurisdiction is present when, regardless of the cause of action, a defendant's “affiliations with the [forum] State are so continuous and systematic as to render [it] essentially at home in the forum State.” Daimler AG v. Bauman, 134 S.Ct. 746, 754 (2014) (internal quotation marks omitted)(quoting Goodyear Dunlop Tires Operations, S.A. v. Brown, 564 U.S. 915, 919 (2011)). A forum state has specific jurisdiction when the cause of action “arise[s] out of” or “relate[s] to” a defendant's activities within that state and when a defendant “purposefully avails itself of the privilege of conducting activities within the forum State.” Burger King Corp. v. Rudzewicz, 471 U.S. 462, 472, 474-75 (1985) (citation and internal quotation marks omitted).

         Under either analysis, the Eighth Circuit considers five factors in determining whether personal jurisdiction exists: “(1) the nature and quality of defendant's contacts with the forum state; (2) quantity of contacts; (3) source and connection of the cause of action with those contacts; and to a lesser degree, (4) the interest of the forum state; and (5) the convenience of the parties.” Wessels, Arnold & Henderson v. Nat'l Med. Waste, Inc., 65 F.3d 1427, 1432 (8th Cir. 1995).

         In breach of contract cases, courts determine whether a defendant purposefully availed itself of the forum state by considering the prior negotiations, contemplated future consequences, and terms of the contract, and the parties' actual course of dealings. Morris v. Barkbuster, ...


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