The Importance Of Preserving A Personal Jurisdiction Defense

Without personal jurisdiction over the defendant in a lawsuit, the court lacks authority to make decisions binding on the defendant. Personal jurisdiction does not exist when the defendant lacks constitutionally required “minimum contacts” with the state where the lawsuit is filed. Critically, though, appearing before a court without first objecting to the court’s lack of jurisdiction can waive a defendant’s personal jurisdiction defense.

The Colorado Court of Appeals recently examined personal jurisdiction in Giduck v. Niblett, 2014 COA 86 (Colo. App. July 3, 2014). The plaintiffs, John Giduck and his wife Shari Nicoletti, who are Colorado residents, sued six out-of-state defendants for defamation, trespass, assault, invasion of privacy, intentional interference with contract, tortious interference with prospective business advantage, extreme and outrageous conduct, civil conspiracy, aiding and abetting tortious conduct, and violation of the Colorado Organized Crime Control Act, based on multiple alleged Internet postings concerning Mr. Giduck and his business. The defendants filed various motions to dismiss the suit, including a motion based on the court’s lack of personal jurisdiction. The trial court dismissed the claims, and the plaintiffs appealed.

The Court of Appeals began its analysis emphasizing that: (1) for a nonresident defendant to be subject to personal jurisdiction, the plaintiff must allege that the defendant has contacts with Colorado that are sufficient for the defendant to reasonably foresee being answerable in a Colorado court; (2) the defendant’s relationship with the Colorado plaintiff is, alone, insufficient to establish personal jurisdiction; and, (3) the conduct underlying the plaintiff’s claims generally must create the required “substantial connection” to Colorado. Giduck at 15-16, 24. In Giduck, the plaintiffs relied on their claim that the defendants’ statements were distributed “as widely as possible” on the Internet. The Court of Appeals, however, concluded that, although the Internet content may have reached Colorado residents, the plaintiffs failed to show the statements were directed to specific Colorado residents. The Court of Appeals therefore affirmed the district court’s decision to dismiss the suit.

The Court of Appeals also rejected the plaintiffs’ contention that, by filing counterclaims, certain defendants waived their personal jurisdiction challenge. The court emphasized that a defendant may not actively participate in litigation and then later raise a personal jurisdiction defense, but concluded that, because the defendants moved to dismiss the original complaint for lack of personal jurisdiction before they filed their answer, and pleaded lack of personal jurisdiction in their answer, the assertion of the compulsory counterclaim was insufficient to waive their personal jurisdiction defense. This conclusion highlights the importance of a defendant with a personal jurisdiction defense raising the defense before, or contemporaneously with, filing their answer or counterclaim, and analyzing counterclaims to insure that they arise out of, or relate to, the plaintiff’s claims. Failing to do so creates the risk of waiving a personal jurisdiction defense.