HeplerBroom’s Indiana office recently secured the dismissal of a long-standing lawsuit against its client, a product defendant in an asbestos case, on the basis that the Court lacked personal jurisdiction over the client. Notably, HeplerBroom was able to overcome the plaintiff’s various tactics for attempting to prove jurisdiction over the client, including an attempt to establish jurisdiction by piercing the corporate veil. This result was significant as it likely will bar any future attempts to name the client as a defendant in future asbestos litigation in Indiana. Below is a brief overview of Indiana-specific issues that may arise while asserting defense of lack of personal jurisdiction on behalf of the defendant.
Specific and General Personal Jurisdiction
In Indiana, jurisdiction is presumed and plaintiff need not allege jurisdiction in the complaint. Rather, when personal jurisdiction is challenged, plaintiff is required to present evidence to support that personal jurisdiction can exist. Indiana Trial Rule 4.4(A) – Indiana’s “long-arm” rule for exercising personal jurisdiction over out-of-state defendants – permits exercising personal jurisdiction in any manner that is consistent with the Due Process Clause of the Fourteenth Amendment to the United States Constitution. Before an Indiana court can properly assert personal jurisdiction over a defendant, the Due Process Clause of the Fourteenth Amendment requires that the defendant have certain “minimum contacts” with the state “such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Arnold v. Long, 59 N.E.3d 1075 (Ind. Ct. App. 2016).
Per Supreme Court precedent, there are two different types of personal jurisdiction: “specific jurisdiction” and “general jurisdiction.” Daimler AG v. Bauman, 571 U.S. 117, 138 (2014). The first, and more permissive, form of jurisdiction is known as “specific” personal jurisdiction, which may be exercised upon a showing that a plaintiff’s alleged injury arises from the instate activities of a non-resident defendant. See Goodyear Dunlop Tires Operations, S. A. v. Brown, 131 S. Ct. 2846; Bristol-Myers Squibb Co. v. Superior Court of California, 2017 WL 2621322, at *6 (U.S. June 19, 2017). The second, and more restrictive, form of jurisdiction is known as “general” or “all purpose” personal jurisdiction, which may be exercised regardless of whether the claim arises from the defendant’s contacts with the forum state if, but only if, those contacts “are so ‘continuous and systematic’ as to render [it] essentially at home in the forum [s]tate.” BNSF Ry. Co. v. Tyrrell, et al., 137 S. Ct. 1549, 1559 (2017).
Specific jurisdiction exists when a lawsuit arises from or is closely related to a defendant’s minimum contacts with or substantial connection to the forum state. Boyer v. Smith, 42 N.E.3d 505, 510 (Ind. 2015). In evaluating what constitutes sufficient minimum contacts for the exercise of specific personal jurisdiction, an important factor is “whether the plaintiff’s claim arises from the defendant’s forum contacts.” Simek v. Nolan, 64 N.E.3d 1237, 1243 (Ind. Ct. App. 2016). The Supreme Court of Indiana stressed that “substantial connection to Indiana is the touchstone, because that is the only way defendants can reasonably anticipate being called into court here to defend themselves.” Boyer, 42 N.E.3d, at 511.
Assertion of the Defense of Lack of Personal Jurisdiction
Significantly, there are several avenues to challenge the court’s exercise of jurisdiction in Indiana. Two of the most common methods for challenging a lack of personal jurisdiction are as an affirmative defense in the answer to the plaintiff’s complaint or in a 12(B)(2) motion. The defense is preserved regardless of which method a defendant chooses; however, both offer different strategic benefits. After the assertion of the defense, the parties may address the merits of the case by participation in discovery without waiving any issues as to personal jurisdiction. A party questioning the trial court’s jurisdiction over her person is still permitted to defend against the action brought against her; she is not required to sit idly by at trial, allowing the other party to prevail while hoping she will win the jurisdictional issue on appeal. El v. Beard, 795 N.E.2d 462 (Ind. Ct. App. 2003). Once the challenge to the personal jurisdiction over the defendant is asserted, the defendant may engage in the defense of the case without voluntarily submitting herself to the court’s jurisdiction.
Nonetheless, the defendant may still waive the personal jurisdiction defense after proper preservation if it seeks affirmative relief from the court. The court in Hotmix v. Bituminous Equipment, Inc. v. Hardrock Equipment Corp., 719 N.E.2d 824, 830 (Ind. Ct. App. 1999) held that the defendant properly raised the issue of personal jurisdiction it its answer. However, the plaintiff argued that the defendant submitted to the jurisdiction of Indiana by filing a counterclaim with its answer. The court admitted that it is possible to waive the personal jurisdiction defense despite a timely objection if the defendant’s subsequent actions go beyond matters of defense and seek affirmative relief from the court. The examples cited by the court included filing of a permissive counterclaim, a third party cross claim, or a counter-petition in a divorce action. However, participation in discovery and building the defense on the merits after preservation of the defense based on personal jurisdiction will not result in the waiver of the same defense. Id. See also In re Marriage of Rinderknecht, 367 N.E.2d 1128 (Ind. Ct. App. 1977).