Accidents Newsroom

Iowa's Long Arm Statute And That The Exercise Of Jurisdiction Over It Would Violate Due Process

Braime Holdings argues that it cannot be reached under Iowa's long-arm statute and that the exercise of jurisdiction over it would violate due process. Holdings points out that it is merely the holding company for Pressings and Components, which are its wholly owned subsidiaries. Holdings further stresses that it was not involved in the transaction surrounding Synatel's sale of the M-700 to Pressings and Components. Synatel claims that jurisdiction over Holdings is appropriate because it reaped the financial benefits in connection with the sale of the M-700 by its subsidiaries, Components and Pressings, who are not contesting personal jurisdiction. Furthermore, Synatel contends that jurisdiction is proper because Nicholas Braime, who was involved in the development of the M-700 is a representative of all three Braime entities. Finally, Synatel argues that it would be improper to dismiss Holdings from its suit before determining whether Pressings and Components have liability insurance, or are otherwise undercapitalized or judgment proof.

While the plaintiff bears the ultimate burden of proof on the issue of personal jurisdiction, jurisdiction need not be proved by a preponderance of the evidence until trial or until the court holds an evidentiary hearing. To defeat a motion to dismiss for lack of personal jurisdiction, the nonmoving party need only make a prima facie showing of jurisdiction. If the district court does not hold a hearing and instead relies on pleadings and affidavits, the court must look at the facts in a 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 (8th Cir. 1991).

In determining whether a federal court has jurisdiction over a non-resident party, a two-step inquiry is utilized: "(1) whether the facts presented satisfy the forum state's long-arm statute, and (2) whether the nonresident has 'minimum contacts' with the forum state, so that the court's exercise of jurisdiction would be fair and in accordance with due process." Soo Line R.R. Co. v. Hawker Siddeley Canada, Inc., 950 F.2d 526, 528 (8th Cir. 1991) (quoting Wines v. Lake Havasu Boat Mfg., 846 F.2d 40, 42 (8th Cir. 1988)). See also Dakota Indus., Inc. v. Best Ever Ltd., 28 F.3d 910, 915 (8th Cir. 1994) ("A federal court may assume jurisdiction over a foreign defendant only to the extent permitted by the forum state's long-arm statute and by the Due Process Clause of the Constitution."); Mountaire Feeds, Inc. v. Agro Impex, S.A., 677 F.2d 651, 653 (8th Cir. 1982) (same).

Iowa's long-arm statute provides, in relevant part:

If a foreign corporation makes a contract with a resident of Iowa to be performed in whole or in party by either party in Iowa, or if such foreign corporation commits a tort in whole or in part in Iowa against a resident of Iowa, such acts shall be deemed to be doing business in Iowa by such foreign corporation. . . .