The Colorado Court of Appeals examined that question in Rome v. Reyes, (2017 COA 84).
In this case, Gerald Rome, the Securities Commissioner for the State of Colorado (“Rome”) is appealing the district court’s dismissal of claims against the defendants, Antonio Reyes, Craig Kahler, and Betty Schnorenberg. The three defendants were a part of a Ponzi scheme that defrauded more than 250 investors out of more than $15 million dollars. Defendant Schnorenberg formed a company, KJS Marketing, to get money for investment in insurance and financial sales companies. Shnorenberg hired Antonio Reyes, who lives in California, and Craig Kahler, who lives in Wyoming, to find investors for her. When Reyes and Kahler found out-of -state investors, they were told to contact Schnorenberg (in Colorado) to complete the transactions. All the promissory notes given to the investors were issued by Schnorenberg and governed by Colorado law. The investment scheme was a fraud. That is not in question.
The district court said it did not have personal jurisdiction over the California and Wyoming based defendants, and dismissed the claims against them. To exercise jurisdiction over a non-resident defendant, the court must comply with the Colorado long-arm statute and constitutional due process. Due process requires that the defendants have certain minimum contacts with the forum. The court looks at whether the defendant purposefully availed himself of the privilege of conducting business in the forum state, and whether the litigation ‘arises out of’ the defendant’s forum related contacts. In this case, the answer to both questions was yes. The defendants were benefitting from a Colorado-based business, and the litigation in question was absolutely related to that Colorado-based business.
The Court of Appeals examined each defendant in light of those two questions, and found that yes, the court did have personal jurisdiction over the defendants. The judgment was reversed matter and remanded to the district court for further proceedings consistent with this opinion.
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Nationally recognized litigation attorney Thomas Metier practice areas include traumatic brain injuries, spinal cord injuries, trucking accidents and motor vehicle accidents. He is licensed to practice in Colorado, Wyoming, the U.S. District Court–District of Colorado, and the U.S. District Court–District of Wyoming, the 10th Circuit Court of Appeals and the U.S. Supreme Court.