The Colorado Supreme Court recently addressed general personal jurisdiction and venue in Magill v. Ford Motor Company, ---P.3d --- (2016), and its ruling marks a shift that brings Colorado’s approach to these issues in line with the U. S. Supreme Court’s ruling in Daimler A.G. v. Bauman, 134 S.Ct. 746 (2014). By way of background, general jurisdiction, also known as “all-purpose” jurisdiction, allows a court to exercise jurisdiction over a defendant for any and all causes of action arising from any of the defendant’s activities, even those that occurred outside the forum state. Daimler held that a state may exercise general jurisdiction over a nonresident corporation whose affiliations with the forum state are “so continuous and systematic” as to render it essentially at home. As a matter of first impression, the Court in Magill narrowed the scope of sufficient contacts to exercise general jurisdiction over a nonresident corporate defendant in Colorado.
The underlying case arose out of a motor vehicle accident that occurred in Douglas County, Colorado. Plaintiffs, who resided in Douglas County, filed suit against Ford and other defendants in Denver County. While Ford maintained a registered agent in Denver County and conducted business throughout Colorado, the Court acknowledged its status as a Delaware corporation with a principal place of business in Michigan.
The key inquiry in Magill was whether Ford was “at home” in Colorado. Adopting the rationale of Daimler, the Court explained that it would be “unacceptably grasping” to determine a corporation is “at home” merely because it does business in Colorado. To be “at home,” a nonresident corporation must have systematic and continuous contacts that set it apart from other states and effectively renders the forum state equivalent to a principal place of business. While the Court recognized Ford’s nationwide presence, it found no evidence or special circumstances to suggest Ford’s contacts with Colorado were somehow different or more substantial than its contacts with other states.
Next, the Court looked at venue and concluded that maintaining a registered agent does not convert a foreign corporation into a resident company. Although a foreign corporation must maintain a registered agent to receive service under the Colorado Constitution, it remains “foreign.” Indeed, the practical effects of this ruling warrant closer examination.
Simply operating a nationwide business no longer subjects a nonresident corporation to general personal jurisdiction in Colorado. In the past, a corporation likely assumed it “resided” wherever its registered agent was located. But now, arguments against general jurisdiction and venue have teeth and may provide the opportunity for a nonresident corporation to defend actions on more neutral ground.