Chapter 24 - § 24.3 • CHOOSING A COURT
| Jurisdiction | Colorado |
Jurisdictional issues can arise in one of two ways. Personal jurisdiction concerns the court's authority over the parties that are before it. Subject matter jurisdiction focuses on the power of a court to address the substantive issues that are presented and to accord the relief that is requested.
§ 24.3.1-Personal Jurisdiction
C.R.C.P. 12(b)(2) provides for the dismissal of a claim if a court lacks personal jurisdiction over the party subject to the claim. Practitioners must carefully analyze this issue whenever they represent out-of-state defendants, since the absence of personal jurisdiction is a waivable defense.70 The defense can be waived in several ways. For example, if a defendant files a motion to dismiss under C.R.C.P. 12(b) but fails to include the lack of personal jurisdiction among the bases for the motion, the defense is waived.71 If no C.R.C.P. 12(b) motion is asserted and a defendant neglects to assert the defense in its responsive pleading or any permissible amendment thereof, again the defense will be waived.72 If the defense is asserted in the responsive pleading but not specifically raised before the trial court within a reasonable time, the defense may be waived.73 The defense may be waived by other conduct as well. For example, the assertion of a permissive counter claim, a cross-claim, or a third-party claim may likely effect a waiver of the defense.74
When arguing that the court has personal jurisdiction over a party, it is the plaintiff's burden to make a prima facie demonstration that the defendant has sufficient contacts or connections with the court's jurisdiction under the long-arm statute.75 A prima facie demonstration of personal jurisdiction may be determined from the allegations of the complaint.76 The court may also consider any affidavits offered by the parties, as well as evidence presented at the hearing on the motion to dismiss.77 The issue of personal jurisdiction is determined based on facts that existed at the time the complaint was filed.78
In order to assert personal jurisdiction over an out-of-state defendant, the plaintiff must show that the requirements of both the Colorado long-arm statute and due process of law are met.79 Colorado's long-arm statute is codified at C.R.S. § 13-1-124, and provides as follows:
(1) Engaging in any act enumerated in this section by any person, whether or not a resident of the state of Colorado, either in person or by an agent, submits such person and, if a natural person, such person's personal representative to the jurisdiction of the courts of this state concerning any cause of action arising from:
(a) The transaction of any business within this state;
(b) The commission of a tortious act within this state;
(c) The ownership, use, or possession of any real property situated in this state;
(d) Contracting to insure any person, property, or risk residing or located within this state at the time of contracting;
. . .
The legislature's intent in enacting this statute was to extend the jurisdiction of Colorado courts to the fullest extent permitted by the Due Process Clause of the Fourteenth Amendment to the U.S. Constitution.80
In some cases, service of process on an out-of-state corporation with a single employee doing a limited amount of business within the forum state may be sufficient to establish personal jurisdiction without resorting to the long-arm statute.81 While a casual or intermittent presence is inadequate, a showing that the corporation has participated in a course of dealing in the state that was "systematic and continuous" and was carried on over a period of years may satisfy due process.82 This may even be the case where the cause of action does not arise from the corporation's dealings in the state.83
A due process analysis requires assessment of whether the defendant has had sufficient minimum contacts with the state such that maintenance of the suit does not offend the traditional notions of fair play and substantial justice, as articulated by the U.S. Supreme Court in International Shoe Co. v. Washington.84 Due process requires that individuals have a fair warning that a particular activity may subject them to the jurisdiction of a foreign sovereign.85 States vary on the extent of what constitutes "fair warning." Colorado is in the minority of states, maintaining a more inclusive long-arm statute.86
A critical issue to consider is whether the defendant has purposefully availed himself or herself of the privilege of conducting activities within the forum state, thereby invoking the benefits and protections of its laws.87 If sufficient minimum contacts exist, the court may consider those contacts in light of other factors to determine whether the assertion of personal jurisdiction passes constitutional muster.88 These factors include the burden on the defendant, the forum state's interest in adjudicating the dispute, and the plaintiff's interest in obtaining convenient and effective relief.89
§ 24.3.2-Subject Matter Jurisdiction
"[S]ubject matter jurisdiction concerns the court's authority to deal with the class of cases in which it renders judgment."90 In determining whether a court has subject matter jurisdiction, it is necessary to evaluate both the nature of the claim and the relief sought.91 Unlike issues of personal jurisdiction, the issue of subject matter jurisdiction is not a waivable defense and may be raised at any time.92
State Court Jurisdiction
Colorado's state courts are divided into district courts and county courts.
District Court
Article VI, § 9 of the Colorado Constitution confers general jurisdiction upon district courts, with original jurisdiction in all civil, probate, and criminal cases.93 This jurisdiction extends to cases involving federal rights, even when there is no governing Colorado authority.94 When a federal question arises, state and federal courts have concurrent jurisdiction unless Congress has affirmatively given exclusive jurisdiction to the federal courts.95
County Court
Colorado county courts have concurrent jurisdiction with the district courts in civil actions in which the debt, damages, or value of personal property claimed does not exceed $25,000.96 However, county courts do not have jurisdiction to hear cases relating to (1) matters of probate; (2) matters of mental health; (3) matters relating to dissolution of marriage; (4) matters affecting children and the allocation of parental responsibilities; and, most importantly in relation to construction projects, (5) matters affecting boundaries or title to real property.97
Federal Question Jurisdiction
Federal district courts have original jurisdiction of all civil actions arising under the Constitution, laws, and treaties of the United States.98 Federal question jurisdiction applies to claims founded upon federal common law as well as those of statutory origin.99 The mere fact that a federal statute or regulation may apply to a dispute may not be enough, however, to confer federal jurisdiction.100 As Justice Cardozo explained in Gully v. First National Bank, the federal right must be central to the case for federal question jurisdiction to exist:
To bring a case within the statute, a right or immunity created by the Constitution or laws of the United States must be an element, and an essential one, of the plaintiff's cause of action. The right or immunity must be such that it will be supported if the Constitution or laws of the United States are given one construction or effect, and defeated if they receive another. A genuine and present controversy, not merely a possible or conjectural one, must exist with reference thereto, and the controversy must be disclosed upon the face of the complaint, unaided by the answer or by the petition for removal.101
Moreover, the mere adoption by a state law of a federal law as a criterion or test does not cause a case under the state law to be subject to federal question jurisdiction.102
As mentioned above, state and federal courts share concurrent jurisdiction over matters involving federal questions unless they concern an area involving exclusive federal jurisdiction. A number of federal statutes may arise in construction cases that are subject to exclusive federal jurisdiction, such as the Miller Act,103 the Federal Tort Claims Act,104 the Tucker Act,105 and the Administrative Procedure Act.106 Additionally, claims involving property of the estate of a debtor in bankruptcy are subject to exclusive federal jurisdiction; the district courts have original, but not exclusive, jurisdiction over all other proceedings under the Bankruptcy Code.107
As to federal court jurisdiction over disputes concerning arbitration, see Chapter 21, "Arbitration and Mediation of Construction Disputes."
Diversity Jurisdiction
Federal jurisdiction is also available in cases where the matter in controversy exceeds $75,000 before interest and costs, and is between either citizens of different states, citizens of a state and citizens or subjects of a foreign state, or citizens of different states when citizens or subjects of a foreign state are additional parties.108 The diversity of citizenship must be complete as between the plaintiffs on the one hand and the defendants on the other; if any plaintiff and any defendant are citizens of the same state, diversity jurisdiction does not exist.109 If the diversity of citizenship is challenged, it is the plaintiff's burden to prove that the parties are diverse by a preponderance of the evidence.110
The citizenship of the parties at the time the action is commenced determines whether diversity of the parties exists.111 In the case of natural citizens, state citizenship is the equivalent of domicile.112 Domicile is established by demonstrating physical presence in a location coupled with the intent to remain there indefinitely.113 With respect to corporations, 28 U.S.C. § 1332(c)(1) provides that a corporation is "deemed to be a...
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