This isn’t an important case, instead its one of those cautionary tales we see too often.
Plaintiff sued the out-of-state Defendant for breach of contract. Defendant defaulted but then moved to dismiss for lack of personal jurisdiction. It asked (but not until its Reply to Plaintiff’s Opposition) for an extension of time to file the motion, saying that it would have filed before the default became effective but for a computer virus that messed up its lawyers’ calendar. The trial court denied that and also entered default judgment, on the theory that the default admitted the jurisdictional allegations of the Complaint.
The Court of Appeals agrees that denying Defendant more time was proper. The computer excuse barely explains why the motion came after default and doesn’t explain why Defendant didn’t file a timely Answer in the first place.
This is what happens when lawyers work to deadlines. Instead of doing what’s important when its important they do whatever their calendar tells them has to be filed today. They have no apparent system to triage tasks and no effective task lists or reminders, much less any sense of how to time things to the needs of a particular case. And having bought software to do their thinking for them, when the computer goes down they shrug their shoulders and say it wasn’t their fault.
But Plaintiff found an even better way to lose than Defendant did. The basis for jurisdiction was the Complaint. It alleged that Defendant had a web site. Although some Arizona judges have said that that’s a perfectly good reason for jurisdiction this opinion cites a Ninth Circuit case holding that simply having a web site available to Arizonans, and everyone else, does not show purposeful contact directed toward them. The Complaint also contained a brief paragraph alleging summarily that various things happened in Arizona. “Even assuming [that paragraph] contains well-pleaded facts, it does not show that [Defendant ] purposefully availed itself of the privilege of conducting business in Arizona” nor that jurisdiction here would be reasonable. So the allegations, even assuming their truth, didn’t show jurisdiction. The Court of Appeals vacates the judgment and dismisses the case.
Did Plaintiff know it had a jurisdiction problem and do its best to tiptoe around it? Did it not know? Did it not understand enough about jurisdiction to know how to plead it? Both parties are foreign corporations yet the case arises out of an underlying lawsuit contested, for reasons unstated, in the District Court of Arizona. There being more here than meets the eye, we’ll opt for the most charitable explanation.