Fastpath, Inc. v. Arbela Technologies Corp.
2014 U.S. App. LEXIS 14161
8th Cir.2014Background
- Fastpath (Iowa) and Arbela (California) executed a mutual confidentiality agreement with a three-year, worldwide noncompete and an Iowa choice-of-law clause; Arbela signed outside Iowa and has no offices or employees in Iowa.
- Initial contacts occurred at trade shows and conferences in Atlanta, Las Vegas, Houston, and a sales presentation in Seattle; telephone calls and emails were exchanged between the parties, one call from Fastpath in Iowa.
- Arbela attended a Fastpath presentation in Seattle and later hosted a public webinar that Fastpath employees in Iowa watched; Fastpath alleges Arbela marketed a competing product to its prospective client Hexcel.
- Fastpath sued in Iowa state court for breach of the covenant not to compete; Arbela removed and moved to dismiss for lack of personal jurisdiction.
- The district court dismissed for lack of personal jurisdiction; the Eighth Circuit affirmed, holding Arbela lacked sufficient minimum contacts with Iowa.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Iowa courts have specific personal jurisdiction over Arbela for breach of the Agreement | Choice-of-law clause (Iowa law) plus emails, calls, webinar access, and that Arbela knowingly solicited an Iowa company create sufficient contacts | Arbela had no offices/employees in Iowa; negotiations and alleged breaches occurred outside Iowa; contacts with Iowa were incidental | No — insufficient minimum contacts; jurisdiction would violate due process |
| Whether a choice-of-law provision alone supports jurisdiction | Iowa choice-of-law shows deliberate affiliation and foreseeability of litigation in Iowa | Choice-of-law alone is insufficient without conduct targeting Iowa | No — choice-of-law is not determinative and here did not show targeted activity in Iowa |
| Whether communications directed to Fastpath in Iowa (emails, calls) establish purposeful availment | Repeated emails and calls to an Iowa plaintiff demonstrate purposeful availment | Plaintiff’s forum contacts cannot be imputed to defendant; isolated communications are insufficient | No — scattered emails/calls do not create the substantial connection required |
| Whether public webinar/website access by Iowa residents subjects Arbela to jurisdiction in Iowa | Webinar viewed in Iowa and marketing reach to Iowa customers supports jurisdiction | Passive online presence and a public webinar not targeted to Iowa do not constitute purposeful availment | No — incidental online access does not create jurisdiction |
Key Cases Cited
- World–Wide Volkswagen v. Woodson, 444 U.S. 286 (definition of minimum contacts and foreseeability)
- Int’l Shoe Co. v. Washington, 326 U.S. 310 (due process / minimum contacts framework)
- Burger King v. Rudzewicz, 471 U.S. 462 (purposeful availment and contract analysis)
- Walden v. Fiore, 134 S. Ct. 1115 (plaintiff’s forum connections cannot be imputed to defendant)
- KV Pharm. Co. v. J. Uriach & CIA, S.A., 648 F.3d 588 (choice-of-law can be evidence but not dispositive)
- Viasystems, Inc. v. EBM–Pabst St Georgen GMBH & Co., KG, 646 F.3d 589 (scattered emails/calls insufficient)
- Wells Dairy, Inc. v. Food Movers Int’l, Inc., 607 F.3d 515 (jurisdiction where contract specifically contemplated forum-centered performance)
- Digi-Tel Holdings, Inc. v. Proteq Telecomms. (PTE), Ltd., 89 F.3d 519 (contract formation or communications alone do not automatically confer jurisdiction)