Or the more important question: By representing an out of State client have you “purposely availed” yourself of the privilege of conducting business there such that it would be fair to hale you into their courts to answer for your alleged errors? I know, I know – you never actually stepped foot in the other State and you only wrote a few letters that found their way over the border. You should be safe, but then again …
In First Reliance Bank v. Romig, 2014 WL 5644602 (D.S.C., November 4, 2014), the United States District Court rejected the motion of an Atlanta attorney to dismiss a malpractice action which had been filed against him in South Carolina arising out of his representation of a Florence, South Carolina based bank. In short, the bank complained that its Atlanta lawyer failed to give proper notice to its E&O carriers after claims were made against the bank which resulted in the denial of coverage and in the bank being forced to pay hundreds of thousands of dollars for claims which would have otherwise been covered.
The attorney, Romig, maintained no offices in South Carolina, did not solicit business in South Carolina and never stepped foot in the State of South Carolina in furtherance of his representation of the bank. All of these factors would weigh significantly against the exercise of personal jurisdiction here. However, in denying Romig’s motion to dismiss for lack of jurisdiction, the Court noted that a) Romig accepted the role as lead counsel on claims which arose in South Carolina, b) the representation was not “fleeting”, but instead lasted for two years, c) Romig made at least 74 contacts with South Carolina via letter, phone and email and d) Romig sent letters to South Carolina businesses threatening to sue them on the bank’s behalf.
Following a lengthy recitation of cases from around the Country finding both for and against jurisdiction, the Court identified a bright-line test of sorts: “Courts reviewing these and other similar cases have noted a ‘common theme’ in their resolution: ‘where the legal malpractice claim is filed in the same forum as the original action serving as the predicate for the legal malpractice (or where it would have been filed), jurisdiction is found; where the legal malpractice claim is filed in a different forum, jurisdiction is lacking.’
For Romig, threatening to sue someone in South Carolina for claims that would have to be prosecuted in South Carolina served as an invitation to stay in South Carolina and to enjoy a little Pee Dee barbeque to go along with his malpractice claim.
PRACTICE POINTER: If you are representing a client for a matter that arises in a foreign jurisdiction, please appreciate that you are traversing a fine line that may ultimately get you invited to answer for your conduct elsewhere. While not addressed in Romig, it is also reasonable to expect that the foreign jurisdiction’s State Bar may have a keen interest in your activities as well. After all, if you have represented a client to such an extent that a court sweeps you into its jurisdiction, have you not also engaged in the unauthorized practice of law? At least in the Romig decision, the line that appears to have been crossed was the threat of bringing an action which could only have been brought in the foreign jurisdiction. As with most things in life – if you’re in for the pleasure, you’re in for the pain.
Ronnie Richter and Eric Bland