May 19, 2019

Colorado Court of Appeals: Uniform Debt-Management Services Act Does Not Implicate Subject Matter Jurisdiction

The Colorado Court of Appeals issued its opinion in State of Colorado v. Johnson Law Group, PLLC on Thursday, November 6, 2014.

Uniform Debt-Management Services Act—Subject Matter Jurisdiction—Affirmative Defense—Waiver.

Plaintiff, the State of Colorado, appealed the district court’s order dismissing its complaint against defendants, Johnson Law Group, PLLC, a Florida private limited liability company, and Clint L. Johnson. Johnson is an attorney who, in 2006, was licensed to practice law in Florida. In 2008, he added a debt-management services practice that extended to approximately forty-two states. In 2011, plaintiff filed a complaint against defendants, asserting violations of the Uniform Debt-Management Services Act (UDMSA) and the Colorado Consumer Protection Act. The court dismissed the complaint, concluding that the legal services exception defense was jurisdictional and, therefore, defendants were not subject to UDMSA regulation.

On appeal, plaintiff contended that the district court erred in dismissing its complaint for lack of subject matter jurisdiction. Because the legal services exception in the UDMSA does not implicate subject matter jurisdiction, it can be waived if not timely asserted as an affirmative defense. Defendant did not assert this affirmative defense until the eve of trial. Therefore, defendant waived any legal services exception defense by failing to assert it in their responsive pleading. The order dismissing the action was reversed and the case was remanded to the district court for a determination of penalties to be assessed against defendants.

Summary and full case available here, courtesy of  The Colorado Lawyer.

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