StoreWorks Technologies, Limited v. Aurus, Inc.

Background

StoreWorks Technologies, Limited brought a contract dispute against Aurus, Inc. StoreWorks alleged that Aurus failed to pay referral commissions and $15,000 in one-time project fees under a 2015 Reseller Services Agreement. StoreWorks also alleged that Aurus intentionally interfered with StoreWorks’ business relationship with Target and sought a declaration concerning future referral commissions.

The agreement required StoreWorks to refer retail clients to Aurus for software-related services. StoreWorks alleged that the parties worked together through frequent emails, telephone calls, and in-person meetings, including meetings in Minnesota. It also alleged that Aurus sent referral payments to Minnesota and that Aurus employees traveled there for sales training, strategic discussions, and joint efforts to obtain clients. Aurus had no employees or offices in Minnesota, but one of its sixteen data centers was located there.

Aurus’s Motions

Aurus moved to dismiss for lack of personal jurisdiction. Personal jurisdiction is a court’s authority to decide a case involving a defendant. Aurus argued that its contacts with Minnesota were insufficient, that the referred clients connected to the commission claims were not located in Minnesota, that any breach occurred in Massachusetts, and that the agreement selected Massachusetts law. Aurus also moved to dismiss under the forum non conveniens doctrine or, alternatively, to transfer the case to the District of Massachusetts.

Personal Jurisdiction

The court rejected general personal jurisdiction. General jurisdiction allows a court to hear any claim against a defendant, but ordinarily requires contacts so substantial that the defendant is essentially at home in the state. Aurus was not incorporated in Minnesota, had no Minnesota employees or offices, and its Minnesota data center and Minnesota-related revenue were insufficient to make it subject to general jurisdiction there.

The court nevertheless found specific personal jurisdiction. Specific jurisdiction applies when the lawsuit arises from or relates to the defendant’s contacts with the forum. The court considered the quality and amount of Aurus’s Minnesota contacts and their relationship to StoreWorks’ claims. Viewing disputed facts in StoreWorks’ favor because no evidentiary hearing had occurred, the court found that Aurus had engaged in frequent communications with StoreWorks employees in Minnesota, sent thousands of emails there, sent payments there, and traveled to Minnesota at least four times for sales training, strategy discussions, and joint sales efforts related to the Reseller Agreement.

The court concluded that these contacts concerned the formation and performance of the agreement and therefore related to StoreWorks’ claims. The court also rejected Aurus’s arguments that the locations of the referred clients, the location of the alleged breach, and the Massachusetts choice-of-law provision defeated jurisdiction. The court held that it could exercise specific personal jurisdiction over Aurus.

Forum Non Conveniens and Transfer

The court explained that federal courts generally cannot dismiss a case under forum non conveniens when the proposed alternative is another federal court in the United States. The court therefore treated Aurus’s forum non conveniens request as a request to transfer venue.

Under the federal transfer statute, the party seeking transfer must show that the alternative district is substantially more convenient. The court found that Aurus did not meet that burden. Moving the case to Massachusetts would shift inconvenience to StoreWorks, and Aurus identified no likely nonparty witnesses who could not be required to appear in Minnesota. The court also found that a Minnesota federal court could apply Massachusetts law, so that issue did not justify transfer.

Disposition

The court denied Aurus’s motion to dismiss for lack of personal jurisdiction or under the forum non conveniens doctrine. The court also denied Aurus’s alternative motion to transfer venue to the District of Massachusetts. The order was signed by United States District Judge Susan Richard Nelson.