Concept
Conduct That Affects the Defense
Waiver of personal jurisdiction
Conduct That Affects the Defense
Rule 12(b)(2) lets a federal defendant raise lack of personal jurisdiction by motion before answering, and the earlier sections of this chapter showed how the Rule 12 filings preserve or lose that defense.1 Defendants do more in a lawsuit than file those papers, however. They move the case to another court, assert claims of their own against the plaintiff, and respond to orders about discovery.
Each of these steps can look like acceptance of the plaintiff’s chosen forum. A student who has learned that the defense can be lost by silence, by appearance, or by default may conclude that any visible participation forfeits it. The first section of this chapter points the other way: the defense belongs to the defendant, and every route to waiver runs through consent. The Rules and the cases do not treat all participation as consent. Some conduct that feels like submission leaves the objection intact, and some conduct that seems peripheral to the jurisdictional dispute costs the defendant the defense. The test for any step is whether the Rules or the cases treat it as consent, and the effort the defendant has invested in the case does not answer that question.
Three situations produce most of the errors. The first is removal, which students often assume has already committed the defendant to the forum. The second is the defendant who asserts a claim against the plaintiff while contesting jurisdiction. The third is the defendant who refuses to comply with a discovery order aimed at the facts that bear on jurisdiction. Removal waives nothing, a counterclaim usually waives nothing, and defiance of a discovery order can cost the defendant the defense.
Removal Does Not Waive
Removal looks like the defendant’s first response to the complaint, and the first response is where Rule 12 enforces the personal-jurisdiction objection: a defendant that omits the objection from its first motion or answer loses it.2 The question is whether a notice of removal counts as that response. It does not.
Removal is the procedure by which a defendant moves a case from the state court where the plaintiff filed it to a federal district court. It is available when the plaintiff could have sued in federal court to begin with, as when the plaintiff asserts a right to relief under federal law.3 The defendant files a notice of removal in the federal district and division where the state action is pending, promptly gives written notice to the adverse parties, and files a copy with the clerk of the state court. That last step achieves the removal and divests the state court of jurisdiction.4 The notice carries the case from one court to the other; it neither answers the plaintiff’s allegations nor asks for dismissal. That feature decides the waiver question.
The Supreme Court has said as much. In Morris & Co. v. Skandinavia Ins. Co., the petitioner suggested that removal had waived the objection to jurisdiction over the person, and the Court answered, “Our decisions are to the contrary.” Filing a notice of removal therefore waives no challenge to personal jurisdiction, and Silva v. City of Madison, cited alongside Morris, applies the same rule.5
The text of the Rules shows why. Rule 12(g)(2) bars a later motion only for a party that has already made a Rule 12 motion, and a defendant that has done nothing but remove has made none. Rule 12(h)(1) treats the objection as waived only when it is omitted from a Rule 12 motion or from the answer, and a notice of removal is neither.6 Each rule is triggered by a motion or a pleading, and neither reaches a notice that only relocates the case. Rule 81(c)(2) then tells the defendant what to do next: it must answer or present its other defenses and objections under the Rules within the time that rule allows.7 The defendant’s first response to the complaint thus comes in federal court, and the objection belongs in that response, either as a Rule 12(b)(2) motion or as a defense in the answer. A contrary rule would force a defendant with no contacts with the state to choose between the federal forum and the defense.
The protection has a limit, and the limit is whatever the defendant filed before the case moved. Removal changes the court; it does not undo earlier filings. A defendant that answered in state court without the objection has already lost it,8 and removing the case does not bring it back.
The two defendants differ only in what each filed before removing. The roofing company filed a notice, which waives nothing. The supplier filed an answer, a pleading that responds to the complaint, and left the objection out, so the waiver rule had already done its work.
Some lawyers state the objection in the notice of removal anyway. In one reported case the defendants “covered all bases” by saying in the notice that they did not intend to waive personal jurisdiction by removing, and the statement does no harm.9 The Rules do not require it, however, and a notice that omits it loses nothing. The caution is understandable given Fink v. Swisshelm, where a Kansas federal court, relying on a local rule that lets counsel enter an appearance in the notice of removal, treated the notice as the defendant’s voluntary appearance when he argued that the court lacked personal jurisdiction because he had not been served before default was entered.10 That decision rested on a local rule and on questions of service and default. The general rule from Morris stands: removal does not waive the personal-jurisdiction objection.
Asserting a Counterclaim
A defendant that objects to the court’s power over it and also asks the court for relief appears to be arguing both sides at once. The request for relief is a counterclaim, a claim the defendant asserts against the plaintiff in the same lawsuit, and the question is whether asserting it waives the objection. Rule 12(b) points toward no: it provides that no defense or objection is waived by being joined with other defenses or objections in a responsive pleading or motion.15 Whether that principle reaches a counterclaim depends on what kind of counterclaim the defendant asserts.
The worry has a historical source in the special appearance discussed earlier in this chapter. At common law an answer on the merits counted as a general appearance that submitted the defendant to the court for all purposes, and a claim for affirmative relief looked like an even plainer acknowledgment of the court’s authority, since a defendant who asks a judge to award it damages can hardly say the judge has no power over it.16 Some decisions still apply that former practice and find that a defendant who asserts a counterclaim waives its objection to personal jurisdiction or venue; others go the other way.17 The cases therefore have to be sorted by the type of counterclaim.
The compulsory counterclaim is the easy case. It arises from the same transaction or occurrence as the plaintiff’s claim, and a defendant that does not plead it in the pending action loses the chance to bring it at all. A finding of waiver is wholly impermissible when the counterclaim is compulsory.18 Waiver rests on consent, and a defendant forced to choose between abandoning a claim and abandoning a jurisdictional objection has not freely accepted the forum by pleading the claim. A contrary rule would also let a plaintiff pressure a defendant into surrendering the objection merely by suing in a distant forum on a transaction that gives the defendant a claim of its own.
The permissive counterclaim is harder, because the defendant need not assert it. It is a claim unrelated to the plaintiff’s that the defendant could bring in a separate suit, and the argument for waiver is that bringing it here is a voluntary use of the forum that cannot coexist with a claim that the forum lacks power over the defendant. Some reported decisions still accept that argument. The better-reasoned view, and increasingly the prevailing one, finds no waiver even when the counterclaim is permissive only.19 Two points support it. Rule 12(b)’s statement that joining defenses and objections waives nothing treats a responsive pleading as one document in which several things may travel together, and a counterclaim in the same pleading is easily read as one more of them. And the older rationale drew its strength from the special appearance, a device a federal defendant no longer needs.
Because the cases split on permissive counterclaims, a defendant should not stake the defense on the better view when a safer course is available. The safe course is to state the objection and any counterclaim together in the first response, so that the pleading itself shows a defendant asserting a claim while insisting that the court lacks power over it, and then to press the objection promptly. As the earlier discussion of failing to press the defense explained, a defendant that counterclaims and litigates for months without asking for a ruling gives the court conduct from which to find forfeiture. An answer that contains the counterclaim but omits the objection has a different problem: the answer was the first response, and the omission waives the defense under the first-response rule.20 An exam stem that mentions a counterclaim should therefore prompt two questions: was the counterclaim compulsory, and did the objection appear in the same first response?
Discovery Sanctions
A defendant that objects to personal jurisdiction under Rule 12(b)(2) asks the court to examine facts about the forum, such as where the defendant does business and what it did there, and those facts usually sit in the defendant’s own files.22 A court deciding the objection can order the defendant to produce them, and the defendant may refuse. That refusal can cost the defendant the defense even though it preserved the objection at every step the Rules require, and that is what sets the third situation apart from removal and the counterclaim.
In Insurance Corp. of Ireland v. Compagnie des Bauxites de Guinee a party failed to comply with court-ordered discovery designed to determine whether personal jurisdiction existed. The trial court imposed a sanction treating the defense as waived, and the Supreme Court affirmed.23 The Court explained that a sanction under Rule 37(b)(2)(A) consisting of a finding of personal jurisdiction has precisely the same effect as the waiver that Rule 12(h)(1) attaches to an untimely objection.24
The decision applies the principle drawn from the same opinion at the start of this chapter. Personal jurisdiction is an individual right, and individual rights are exercised under procedural rules whose violation can curtail the right.25 A defendant that misses the Rule 12 deadline loses the objection because the Rules treat the omission as consent. A defendant that defies a discovery order loses it for a parallel reason: the court treats the defiance as grounds for presuming the facts against the defendant. In both settings the law attaches a consequence to the party’s own behavior, and the Court found that the Rule 37 sanction creates no more of a due process problem than the Rule 12 waiver.26
Due process is violated only if the defendant’s behavior will not support the presumption recognized in Hammond Packing Co. v. Arkansas, and a proper application of Rule 37(b)(2) will, as a matter of law, support it.27 There the Court upheld striking a defendant’s answer and entering a default judgment after the defendant refused to comply with a pretrial discovery order, because a refusal to produce ordered evidence supports a presumption that the defense lacks merit.28 Hovey v. Elliott marks the other side of the line: the Court held there that similar action violated due process when taken as punishment for failing to pay a sum of money into the registry of the court.29 The difference lies in what the conduct reveals. A party that withholds evidence on the very issue in dispute invites the inference that the evidence would hurt, so the sanction rests on a presumption drawn from the behavior. A party that fails to pay money tells the court nothing about the merits of any defense, so the same sanction would be a penalty with no presumption behind it. When a defendant refuses to produce records of its forum contacts, the court may presume the records would have shown contacts. If the trial court did not abuse its discretion, the sanction is simply the invocation of a legal presumption, which the Court called a “constructive waiver.”30
The petitioners answered that jurisdictional discovery is different, because a party need not obey a court’s orders until the court has established personal jurisdiction over it, and an order that need not be obeyed cannot support a sanction.31 The Court replied that the argument assumes something unique about personal jurisdiction, which prevents it from being established or waived like other rights, and that nothing is unique about it in that respect. A defendant is always free to ignore the proceedings, risk a default judgment, and challenge that judgment on jurisdictional grounds in a collateral proceeding.32 A defendant that instead appears to contest jurisdiction has made a different choice. In the Court’s words, “By submitting to the jurisdiction of the court for the limited purpose of challenging jurisdiction, the defendant agrees to abide by that court’s determination on the issue of jurisdiction.”33 The court’s way of deciding the question may include legal rules and presumptions as well as straightforward factfinding, and the use of procedural rules does not in itself violate the defendant’s due process rights.34
Tying the consequence to the refusal follows from what the defendant has asked the court to do. A court cannot test a claim of no forum contacts against a record that only the defendant holds and the defendant will not open. If refusal were free, a defendant could assert that it had no contacts, block every inquiry into the assertion, and leave the court with nothing to weigh against it. The sanction removes that advantage and leaves the defendant a real choice: produce the facts and let the court rule, or stay out of the case and risk default.
The company in that scene is bound because it submitted to the court to contest jurisdiction, and the decision it lost is res judicata on that issue in any further proceedings.35 Compliance and refusal therefore lead to the same place by different routes. The defendant that produces the records loses on the facts, after the court has examined them. The defendant that refuses loses on a presumption, because the court never saw the facts. Both are bound, since both asked the court to decide the question.
An exam stem that pairs a jurisdictional objection with a discovery order about the defendant’s forum contacts and a refusal to comply is testing this rule. The first question is whether the order was directed at the jurisdictional facts, and the second is whether the sanction was a proper use of the discovery rules or an arbitrary penalty unrelated to the defendant’s conduct. Raising the objection on time under Rule 12 does not protect the defendant, because the sanction operates after the objection is preserved and reaches the defense through the defendant’s own conduct in litigating it.