On May 6, 2014, in Rockwood Select Asset Fund XI (6)-1, LLC v. Devine, Millimet & Branch, the US Court of Appeals for the Tenth Circuit held that personal jurisdiction could not be exercised over a defendant with no contacts to the forum state based on the defendant's interactions with a plaintiff who had strong connections to the forum state, even where the defendant knew about those connections (No. 13-4112, (10th Cir. May 6, 2014)).

In Rockwood, a borrower asked the plaintiff (Rockwood) for a loan. Before it would give the loan, Rockwood, a Utah company, required the borrower to obtain an opinion letter from its New Hampshire law firm, Devine, Millimet & Branch (Devine). Devine provided the letter, which was then forwarded to Rockwood in Utah. After concluding that the opinion letter contained falsehoods, Rockwood sued Devine in the US District Court for the District of Utah. The district court dismissed the case based on lack of personal jurisdiction. Rockwood appealed.

The Tenth Circuit affirmed the dismissal of the case, holding that Devine had insufficient contacts with Utah to permit the exercise of personal jurisdiction. In its analysis, the court noted that Rockwood relied on specific jurisdiction in its arguments, requiring that the lawsuit relate to Devine's contacts with the forum state.

Rockwood focused on seven factual allegations in the complaint to establish specific jurisdiction over Devine, including that:

The court found that the specified allegations fell into three basic categories of connections to Utah:

Applying the US Supreme Court's recent decision in Walden v. Fiore, 134 S. Ct. 1115 (2014) and a similar circuit court decision in Trierweiler v. Croxton & Trench Holding Corp., 90 F.3d 1523 (10th Cir. 1996), the Tenth Circuit concluded that Rockwood's strong connection to Utah did not suffice as a basis for personal jurisdiction over Devine, a New Hampshire professional association. As the Tenth Circuit explained, Walden reinforced the principle that a defendant must create contacts with the forum state and that personal jurisdiction over a defendant cannot be driven by "a plaintiff's contacts with the defendant and forum," even where a defendant knows of the plaintiff's connections to the forum state. Thus, the Tenth Circuit concluded that Devine's interactions with the plaintiff even after learning of the plaintiff's strong connections to Utah was insufficient to establish personal jurisdiction over Devine.

As Rockwood demonstrates, it is critical for counsel to determine whether a defendant has sufficient minimum contacts before filing suit, and to raise lack of personal jurisdiction as a defense in responsive pleadings whenever minimum contacts are in question.

For a detailed summary of the Walden case, see Legal Update, Supreme Court Reinforces Basic Principles of Personal Jurisdiction. For more information on personal jurisdiction, see: