Legal malpractice plaintiffs fended off motions to dismiss for lack of personal jurisdiction in two separate cases, in two different jurisdictions, under opinions that happened to be filed on the same day last week. The opinions, from a New Jersey state appeals court and a North Carolina federal district court, stand as a warning to lawyers: in a later malpractice suit against you, your conduct in the underlying case can be viewed as “purposeful availment,” potentially creating personal jurisdiction over you and forcing you to defend yourself away from your home court.
Mississippi lawyer haled into New Jersey court
The New Jersey case involved a Mississippi lawyer who was engaged in the underlying medical-license revocation case by a New Jersey physician. The Mississippi lawyer was admitted pro hac vice in New Jersey federal district court and prepared numerous pleadings that were filed in the underlying case there by New Jersey-admitted local counsel. Although the lawyer never physically came to the Garden State in connection with the underlying case, he participated in at least one telephone conference with the district court judge.
The totality of these circumstances, the state court of appeals held, was sufficient to constitute purposeful availment of the privilege of conducting activities in New Jersey, thus meeting the minimum-contacts requirement necessary for the court to exercise jurisdiction over the lawyer.
The lawyer argued, among other things, that the malpractice plaintiff failed to establish purposeful availment because the plaintiff solicited the lawyer’s representation, not vice versa. In affirming the trial court’s denial of the malpractice plaintiff’s motion to dismiss for lack of personal jurisdiction, the appeals court rejected that argument, writing that “while solicitation in the forum state may demonstrate purposeful availment, the lack of solicitation is but one factor to consider in deciding whether an out-of-state attorney purposely availed himself of the forum state’s jurisdiction.”
New Jersey lawyer haled into North Carolina court
In North Carolina, the district court came to the same basic conclusion as the New Jersey appeals court, under some different facts. There, a North Carolina client retained a firm with offices in Pennsylvania, New York and New Jersey to defend against claims asserted against the client in the underlying trade secrets case in Pennsylvania district court. The lawyer who handled the case day to day lived and was licensed in New Jersey. After a four-year long battle, the client lost at a bench trial, and later sued for malpractice in North Carolina.
Accepting a magistrate judge’s recommendation, and noting a split in the Fourth Circuit, the district court denied the lawyer’s motion to dismiss for lack of personal jurisdiction. Like the New Jersey state court of appeals, the North Carolina district court considered the purposeful availment factor and found it satisfied, including based on counsel’s four years of “extensive” communications with the North Carolina client, and the fact that the representation included hiring local North Carolina counsel, who provided “substantial and ongoing assistance in the [underlying] litigation.”
Although representing an out-of-state client is not alone sufficient to establish purposeful availment of the privilege of conducting activities in the forum state, the court wrote, the entire course of dealing satisfied the requirement. Especially salient was the action of engaging North Carolina local counsel: in doing so, the lawyer and his firm “plainly reached into North Carolina to conduct their business.” They also defended numerous depositions in the underlying case in North Carolina, the court noted.
Spotlight on jurisdiction
These two opinions, coincidentally released on the same day, spotlight the purposeful availment requirement and how your conduct in underlying litigation away from your home turf or simply in representing out-of-state clients in your home court can meet it.
One noteworthy aspect of both opinions is that each gave at least a nod to the due-process requirement that being compelled to defend in a foreign jurisdiction be consistent with “fair play.” But as the New Jersey appeals court put it, “Having to defend oneself in a foreign jurisdiction will almost always entail some measure of inconvenience, and the burden only becomes meaningful where defendants can demonstrate some special or unusual burden.”
A good ALR article collects the cases, including some that, based on particular facts and factors, hold differently from the two issued last week. See Marjorie Shields, Annot., In Personam Jurisdiction, under Long-Arm Statute, over Nonresident Attorney in Legal Malpractice Action, 78 ALR 6th 151 (2012).