In Rockwood Select Asset Fund XI v. Devine, 750 F.3d 1178 (10th Cir. 2014), the Tenth Circuit held that a New Hampshire law firm’s opinion letter issued to its client’s lender in Utah did not subject the law firm to personal jurisdiction in Utah.
Rockwood Select Asset Fund XI (6)-1, LLC (“Rockwood”) was a lender based in Utah. As part of the consummation of a lending deal, Rockwood required the borrower to obtain an opinion letter from its New Hampshire law firm, Devine, Millimet & Branch (“Devine”). Devine provided the opinion letter to Rockwood. Rockwood subsequently learned that the opinion letter contained falsehoods and attempted to sue Devine in federal district court in Utah. The district court dismissed the case because it did not have personal jurisdiction over Devine.
The Tenth Circuit affirmed the dismissal and held that there was no basis for specific personal jurisdiction over Devine in Utah. Specific jurisdiction is based on a defendant’s contacts with the foreign state. The Tenth Circuit noted that there were three primary contacts between Devine and Utah: (1) Rockwood's (plaintiff’s) formation in Utah and transaction of business there, (2) Devine's act of sending the opinion letter to a Utah address; and (3) Devine's telephone communication with Rockwood's owner while he was in Utah. These contacts were insufficient for personal jurisdiction.
In rejecting the first contact, the court relied heavily on Walden v. Fiore, 134 S.Ct. 1115, 188 L.Ed.2d 12 (2014). In Walden, the Supreme Court stated that personal jurisdiction over a defendant cannot be based solely on the defendant’s interactions with a plaintiff known to bear a strong connection to the forum state. In that case, the Court stated that the defendant “did not create sufficient contacts” by simply directing “his conduct at plaintiffs whom he knew had [forum state] connections.” As applied here, the fact that Devine knew Rockwood was a resident of Utah could not be sufficient for personal jurisdiction over Devine in Utah.
In rejecting the second and third contacts, the court relied heavily on Trierweiler v. Croxton & Trench Holding Corp., 90 F.3d 1523 (10th Cir. 1996), a case with a similar set of facts. In Trierweiler, a Colorado law firm issued an opinion letter, which was forwarded to a lender in Michigan. The law firm also spoke once by telephone with the lender’s attorney while he was in Michigan. The lender sued the Colorado law firm in Michigan. The court held that making the phone call and sending the opinion letter were insufficient to establish personal jurisdiction in Michigan.
Though Devine, a New Hampshire law firm, had knowledge of the lender’s location in Utah, issued an opinion letter to the lender’s address in Utah, and spoke telephonically with the lender while the lender was in Utah, the court nonetheless held that Devine was not subject to personal jurisdiction in Utah.