Borup v. The CJS Solutions Group, LLC

Background

Timothy C. Borup sued The CJS Solutions Group, LLC, doing business as The HCI Group, in a wage-and-hour case. Borup brought a federal Fair Labor Standards Act claim as a proposed nationwide collective action and a Minnesota wage claim as a proposed class action limited to people who worked in Minnesota. He alleged that HCI failed to properly pay overtime compensation. The parties disputed whether Borup was an employee or an independent contractor.

HCI's original answer asserted that certifying a collective or class action would violate its substantive and procedural due-process rights. The answer did not expressly state that the court lacked personal jurisdiction over HCI for claims involving people who neither worked nor resided in Minnesota when they worked for HCI. HCI later moved to amend its answer to state that defense more clearly.

Analysis

Personal jurisdiction is the court's authority over a defendant in a particular case. Under Federal Rule of Civil Procedure 12(b)(2), a defendant must raise a personal-jurisdiction defense in a preliminary motion, in its answer, or in an amended answer filed within the rule's specified period. Otherwise, the defense is generally waived. The court explained that a defense must be stated clearly enough to give the opposing party notice and avoid unfair surprise.

The court concluded that HCI's due-process defense, although inartfully worded, sufficiently raised personal jurisdiction as an affirmative defense. The court relied in part on its treatment of the same defendant's similar defense in a connected case. Because the two cases involved the same defendant and nearly identical facts and claims, the court decided to apply the same approach here.

The court then applied Rule 15, which generally directs courts to allow amendments when justice requires, absent reasons such as undue delay, bad faith, undue prejudice, or futility. Borup argued that the amendment would prejudice the proposed collective. The court rejected that argument because it addressed the possible application of personal-jurisdiction limits to nationwide collective actions, rather than showing that allowing HCI to clarify its answer would itself cause prejudice. The court stated that whether those limits apply to nationwide collective actions was not before it.

Disposition

The court granted HCI's motion to amend its answer to clarify its personal-jurisdiction defense. The order did not decide whether the defense is valid, whether the court actually has personal jurisdiction over particular claims, or whether personal-jurisdiction limits apply to nationwide collective actions.