1. Introduction
This published opinion addresses three connected questions: when alleged participation in a trade-secret scheme supports personal jurisdiction; when Colorado law requires defendants’ attorneys’ fees following a jurisdictional dismissal; and when fee awards associated with a partial final judgment become appealable.
The opinion’s clearest new circuit-level holding concerns appellate finality. A quantified fee award collateral to a judgment properly certified under Federal Rule of Civil Procedure 54(b) may itself be final and appealable, even though litigation against other defendants continues. The court also reinforces an important jurisdictional distinction: purposeful contacts with a state do not establish specific personal jurisdiction unless the claims sufficiently arise out of or relate to those contacts.
The parties and alleged scheme
The plaintiffs were Flux Drive Inc., Flux Drive LLC, Impact Engineering Inc., Tri-Tec Manufacturing LLC, and Philip Corbin III. They alleged that several defendants conspired to obtain their trade secrets and transmit them to PRD Technologies, Ltd., a Chinese manufacturer producing unauthorized competing products.
The controversy arose against the background of an arrangement to develop a large, water-cooled adjustable-speed drive for Asian markets. John Qiang Rong allegedly used his technical involvement in that project to identify employees with access to the plaintiffs’ confidential information. The plaintiffs asserted that he subsequently helped arrange secret work for PRD by Michael Troy Sparks, a Colorado-based engineer associated with Flux Drive and Tri-Tec.
The appellees were Rong, his wife Leigh Wang, and their Illinois limited liability partnership, Zyrcon Global Strategies LLP, collectively the “Rong Defendants.” Their alleged Colorado connections principally consisted of Rong’s communications with Sparks concerning a Master Services Agreement and a $23,000 bridge loan transferred to Sparks’s Colorado bank account. The Rong Defendants disputed any knowing participation in trade-secret theft.
The six claims against them were fraudulent concealment, misappropriation under the Colorado Uniform Trade Secrets Act (“CUTSA”), violation of the federal Defend Trade Secrets Act (“DTSA”), civil conspiracy, unjust enrichment, and conversion. The appeal concerned their dismissal and related fee awards—not the ultimate truth of the alleged theft or the liability of the remaining defendants.
3. Analysis: Legal Reasoning and Precedents Cited
A. The new appellate-finality holding
Ordinarily, an order resolving fewer than all claims or parties is not immediately appealable. Rule 54(b) permits an exception when the district court expressly determines that the disposition is final as to the resolved claims or parties and that there is no just reason to delay appellate review.
Okla. Tpk. Auth. v. Bruner, 259 F.3d 1236 (10th Cir. 2001), supplied both this two-part framework and the appellate court’s obligation to examine certification independently. Whether an order is final is reviewed de novo; the decision that there is no just reason for delay is reviewed for abuse of discretion.
The jurisdictional dismissal completely resolved the claims against the Rong Defendants. Its issues were also sufficiently distinct from the underlying merits to justify immediate review. The court relied persuasively on Butler v. Daimler Trucks N.A., LLC, which recognized that certifying jurisdictional dismissals can resolve threshold questions early and potentially avoid a second trial.
Although the plaintiffs filed their first notice of appeal before certification, that defect was cured. Under Lewis v. B.F. Goodrich Co., 850 F.2d 641 (10th Cir. 1988), a premature notice ripens when the relevant Rule 54(b) certification is subsequently obtained. B. Willis, C.P.A., Inc. v. BNSF Ry. Corp. similarly supported treating a later final disposition as curing premature appellate filing.
Why the fee award was also appealable
The Tenth Circuit had not previously decided whether a fee award associated with a Rule 54(b) judgment becomes final while other claims remain pending. It adopted the reasoning of Johnson v. Orr, 897 F.2d 128 (3d Cir. 1990): once the underlying judgment is made immediately final, its collateral consequences should not remain nonfinal merely because unrelated litigation continues.
Yost v. Stout supported the premise that attorneys’ fees ordinarily are collateral to the merits judgment. Treating the certified judgment as final but its resolved fee consequences as unappealable would create an unnecessary mismatch.
There remains an independent requirement, however. Under Phelps v. Washburn Univ. of Topeka, 807 F.2d 153 (10th Cir. 1986), an award of fees is not final until the court determines a specific amount. Here, the $114,663.11 award satisfied that requirement.
The holding is therefore bounded: a quantified fee award tied to a properly certified judgment, and unrelated to the remaining claims, is not rendered nonfinal merely by continuing proceedings against other defendants. The opinion does not make an unquantified entitlement to fees immediately appealable.
B. Personal jurisdiction: a light preliminary burden, but a real evidentiary requirement
The district court decided jurisdiction on the pleadings and written materials rather than after an evidentiary hearing. The plaintiffs therefore needed only a prima facie showing, not proof by a preponderance of the evidence.
Wenz v. Memery Crystal, 55 F.3d 1503 (10th Cir. 1995), established that relatively light burden and the treatment of competing submissions. Uncontroverted factual allegations receive credit, but bare allegations contradicted by defense affidavits cannot simply be assumed true. Actual conflicts in competent evidence must be resolved in the plaintiffs’ favor. Rambo v. Am. S. Ins. Co. and FDIC v. Oaklawn Apartments reinforced these principles.
That favorable treatment extends only to adequately pleaded facts. Dudnikov v. Chalk & Vermilion Fine Arts, Inc., 514 F.3d 1063 (10th Cir. 2008), drawing on Bell Atl. Corp. v. Twombly, required plausible, nonconclusory, nonspeculative allegations. Thus, the preliminary burden was modest, but labels such as “conspiracy” or “bridge financing” could not replace facts connecting particular conduct to the alleged wrong.
The statutory and constitutional framework
Trujillo v. Williams required consideration of both statutory authorization for service and constitutional due process. The DTSA supplied no nationwide-service provision applicable here, a conclusion supported by Mission Measurement Corp. v. Blackbaud, Inc.. Federal Rule of Civil Procedure 4(k)(1)(A) therefore directed the court to Colorado’s jurisdictional law.
Under Archangel Diamond Corp. v. Lukoil, Colorado’s long-arm statute extends as far as the Fourteenth Amendment permits. The statutory inquiry consequently merged with the constitutional inquiry.
The constitutional foundation came from Int'l Shoe Co. v. Washington, 326 U.S. 310 (1945): defendants must have minimum contacts with the forum, and jurisdiction must accord with traditional notions of fair play and substantial justice. Specific jurisdiction requires both purposeful forum-directed activity and a sufficient relationship between that activity and the claims.
The opinion mentioned Helicopteros Nacionales v. Hall in distinguishing general jurisdiction. But the plaintiffs did not pursue general jurisdiction, and the court decided only whether these particular claims supported specific jurisdiction.
Contacts must belong to the defendant and connect to the controversy
Walden v. Fiore, 571 U.S. 277 (2014), and Anzures v. Flagship Rest. Grp. emphasized that jurisdiction depends on the defendant’s own connection with the state—not simply a relationship with someone who lives there. Random, fortuitous, or attenuated associations are inadequate.
Dental Dynamics, LLC v. Jolly Dental Grp., LLC likewise required an adequate connection between the forum and the underlying controversy. These authorities prevented the plaintiffs from treating Sparks’s Colorado residence as a substitute for showing how the Rong Defendants’ Colorado-related conduct implicated the alleged theft.
Finally, OMI Holdings v. Royal Ins. Co. of Can. and Burger King Corp. v. Rudzewicz supplied the subsequent reasonableness inquiry: after a prima facie showing of minimum contacts, defendants may present a compelling case that jurisdiction would nevertheless be unreasonable. Because the plaintiffs failed at the minimum-contacts stage, the court never reached that balancing exercise.
C. Why purposeful direction existed but specific jurisdiction did not
Purposeful direction was sufficiently supported
The plaintiffs identified two principal Colorado contacts: Rong’s communications and alleged supervisory relationship with Sparks, and the Rong Defendants’ transfer of $23,000 to Sparks’s Colorado account.
The court credited Sparks’s deposition statement that Rong was someone to whom he would “supposedly report.” Although qualified, that testimony concerned a relationship within Sparks’s personal knowledge. Under Hafen v. Howell, equivocation could affect the testimony’s weight without making it legally worthless at this stage.
The court also rejected the suggestion that only sustained commercial activity could suffice. Burger King Corp. v. Rudzewicz, relying on McGee v. Int'l Life Ins. Co., recognizes that even one act can support jurisdiction if it creates a substantial forum connection. Rambo v. Am. S. Ins. Co. similarly explains that, in appropriate circumstances, a single communication may satisfy due process.
Considering the record favorably to the plaintiffs, the communications, supervisory evidence, and transfer satisfied purposeful direction. This was a contextual conclusion, not a categorical rule that every email or bank transfer to a resident establishes jurisdiction.
The missing element was the connection to the alleged injury
The court nevertheless found no adequately supported connection between those contacts and the alleged misappropriation. Newsome v. Gallacher, 722 F.3d 1257 (10th Cir. 2013), directed attention to whether the claimed injury resulted from the defendant’s forum-related activities.
The Master Services Agreement was an independent-contractor agreement between PRD and Sparks for design and development work. It did not mention the plaintiffs, their technologies, or Rong. The plaintiffs did not explain what contractual provision enabled theft or how Rong’s transmission of the agreement facilitated it.
Evidence that Rong acted as a technical liaison, agent, or possible supervisor did not fill that gap. It described relationships and technical involvement, but not how the forum contacts produced or related sufficiently to the particular injuries alleged. Under Walden v. Fiore, a relationship with a third party, standing alone, cannot establish jurisdiction.
The loan suffered from the same deficiency. On appeal, the plaintiffs asserted that the transferred money financed a workstation and software used for misappropriation. But they identified no supporting record evidence and had not pleaded that factual chain. Nor did they identify evidence showing that the Rong Defendants knew or controlled the funds’ alleged wrongful use. Their general allegation that the loan aided concealed unlawful activity was conclusory.
The court’s discussion should not be converted into a universal requirement that every lender control a borrower’s spending before jurisdiction can exist. Knowledge and control mattered here because the plaintiffs relied on the transfer as an instrument of the alleged theft yet supplied no facts establishing that connection.
Jurisdictional sufficiency was not a merits adjudication
Newsome v. Gallacher, citing Smith v. Sperling, distinguishes jurisdictional analysis from deciding whether a complaint states a legally sufficient merits claim. Nevertheless, the court could disregard conclusory jurisdictional allegations without deciding ultimate liability.
XMission, L.C. v. Fluent LLC required an adequate link between the forum and the claims actually asserted. Extrinsic evidence could support jurisdiction, but it could not transform the pleaded claims into a different controversy. Here, the additional evidence illuminated Rong’s role without supplying the missing connection to misappropriation.
Shrader v. Biddinger supplied the concluding principle: both purposeful contacts and the required claim-related connection must exist. Satisfying the first did not excuse failure on the second. The opinion applies the “arise out of or relate to” requirement to this deficient record; it does not announce a new universal causation test.
D. Colorado’s mandatory fee statute reaches statutory tort claims
Colo. Rev. Stat. § 13-17-201 generally requires reasonable defense fees when an action arising from tortious injury is dismissed before trial on a qualifying Rule 12(b) motion. The court applied that statute following the dismissal for lack of personal jurisdiction.
Jones v. Denv. Post Corp., 203 F.3d 748 (10th Cir. 2000), established that state fee statutes are substantive law and apply to pendent state claims in federal court. It also supported applying § 13-17-201 to federal Rule 12(b) dismissals. The unpublished Weidner v. Doe provided additional persuasive support. Consistent with United States v. Ellis, the court expressly treated unpublished decisions as persuasive rather than binding authority.
Under Xlear, Inc. v. Focus Nutrition, LLC, the fee award and amount were reviewed for abuse of discretion, while the underlying statutory interpretation received de novo review. The federal appellate standard applied even though state law supplied the fee entitlement.
“Statutory” and “tort” are not opposing classifications
The plaintiffs argued that their action was principally statutory because CUTSA and DTSA were its central claims. The court rejected that distinction: a statute can create or codify a tort duty.
Castro v. Lintz supplied Colorado’s “essence of the action” test for litigation combining tort and non-tort claims. US Fax L. Ctr., Inc. v. Henry Schein, Inc. established that the statute can apply where tort claims predominate and that its language does not exclude federal statutory torts.
DeGette v. Mine Co. Rest., Inc. recognized statutory theft of a trade secret as tortious conduct. Sticky.io, Inc. v. Martingale Software, LLC supported applying § 13-17-201 to statutory misappropriation claims, while Multimedia Games, Inc. v. WLGC Acquisition Corp. characterized trade-secret and confidential-information misappropriation as essentially sounding in tort.
Together, those authorities supported the conclusion that this action predominantly sounded in tort. The reasoning does not mean that every statutory claim—or every restitutionary claim—is necessarily a tort.
Important limitation: the court did not decide the plaintiffs’ separate theories that purely economic loss falls outside the statute, CUTSA’s own fee provision displaces it, or the DTSA preempts it. Those theories were waived, so the opinion should not be cited as resolving their merits.
E. Reasonable fees, billing judgment, and artificial intelligence
The court upheld the initial award using the lodestar method: reasonable hours multiplied by a reasonable hourly rate.
Robinson v. City of Edmond established the lodestar starting point and its presumption of reasonableness. Case v. Unified Sch. Dist. No. 233 placed the documentation burden on the applicants and required consideration of billing judgment, unnecessary duplication, imprecise records, litigation complexity, and work generated by opposing parties.
The magistrate judge reviewed detailed billing records, found no block or double billing, considered reductions already made, and evaluated prevailing Colorado rates for comparably experienced counsel. The plaintiffs did not demonstrate error in that assessment.
Anchondo v. Anderson, Crenshaw & Assocs., LLC was particularly important. General assertions that hours were excessive did not overcome the district court’s supported lodestar determination. Nor did the possibility that a junior attorney could have performed a task establish that an experienced attorney must perform it without compensation. That principle did not eliminate reasonableness review; it defeated unsupported categorical objections to partner involvement.
AI use does not automatically justify a fee reduction
The plaintiffs also argued that artificial intelligence and online research should have reduced defense counsel’s billable hours. The court acknowledged the possibility of efficiency gains. Arbor Hill Concerned Citizens Neighborhood Ass'n v. Cnty. of Albany recognized that online research can reduce time otherwise required for manual research and thereby lower the lodestar.
But potential efficiency did not prove that the hours actually claimed were unreasonable. Lawyers remain responsible for checking authorities and ensuring that arguments have legal support:
- Amarsingh v. Frontier Airlines, Inc. illustrated sanctions arising from failure to verify authorities generated through AI research and drafting.
- Wadsworth v. Walmart Inc. addressed Rule 11 violations involving AI-generated fictitious citations.
- Coomer v. Lindell reinforced that Rule 11 obligations apply when counsel uses artificial intelligence.
The resulting principle is evidence-based: AI may reduce reasonably necessary hours in a particular case, but its availability or use does not create an automatic discount. Conversely, the opinion does not authorize billing time never actually worked or immunize inefficient work from scrutiny.
F. Supplemental fees: authority, timeliness, and prior adjudication
The plaintiffs argued that the initial quantified award exhausted the district court’s authority unless it expressly reserved jurisdiction. The Tenth Circuit rejected that proposition.
Glass v. Pfeffer had affirmed a supplemental award for collateral fee litigation after an initial award. Stroup v. United Airlines, Inc. illustrated the use of Rule 54(d) for supplemental fees. The unpublished Hutchinson v. Beckworth supported the district court’s authority to consider additional fees even while an appeal concerning earlier fees and sanctions was pending.
These authorities demonstrated that a final initial award does not necessarily prevent a later award for additional compensable work. They did not establish unlimited supplementation irrespective of deadlines or prior adjudication.
The supplemental motion was timely
The operative amended final judgment was entered December 11, 2025. Under Rule 54(d)(2)(B)(i), the relevant fourteen-day period ended on December 25. Because that date was a legal holiday, Rule 6 extended the deadline to December 26, when the Rong Defendants filed their motion.
Newmont U.S.A. Ltd. v. Ins. Co. of N. Am. supported the court’s attention to entry of judgment under Rule 58 rather than merely the preceding date on which the fee order issued.
Silence did not amount to an implicit denial
The Rong Defendants had mentioned $48,658.29 in additional fees in their reply supporting the original motion. The plaintiffs argued that the initial award’s omission of that sum implicitly denied it.
The record showed otherwise. The original recommendation addressed only the $114,663.11 requested in the initial motion. The district court explained that it had not considered the additional request because Local Civil Rule 7.1(d) required a separate motion rather than a request embedded in a reply.
Baker ex rel. Thomas v. Gen. Motors Corp. explained that issue preclusion concerns matters actually litigated and resolved by a valid final judgment. Because these additional fees had not been adjudicated, the initial award did not preclude their later consideration.
Fees incurred obtaining and defending fees
The plaintiffs’ argument that § 13-17-201 excluded collateral fee litigation and nonfrivolous appeals was waived. As an alternative answer, the court cited Dubray v. Intertribal Bison Coop., which allowed appellate fees for successfully defending an award under the statute.
The opinion therefore rejected a categorical exclusion of fee-related proceedings. Its discussion should not be read as dispensing with the need to establish authorization, success where relevant, and reasonableness for a particular fee request.
G. The district court’s review error was harmless
Rule 54(d)(2)(D) permits referral of a fee motion to a magistrate judge under Rule 72(b), as a dispositive matter. Properly presented objections therefore required de novo consideration by the district judge.
The district court instead applied the more deferential “clearly erroneous or contrary to law” standard associated with Rule 72(a). The appellate court expressly identified that as error.
Nevertheless, the district court had separately relied on law of the case for the statute’s applicability. Bishop v. Smith explains that an earlier legal ruling ordinarily governs later stages of the same litigation, subject to recognized exceptions, including clear error producing manifest injustice. The plaintiffs did not adequately challenge that independent ground.
For the remaining objections, the district court stated that its conclusion would be the same under de novo review, and the appellate court’s examination confirmed that the arguments did not warrant relief. Relying on Quint v. Vail Resorts, Inc., the court treated the wrong review standard as harmless rather than ordering an unnecessary remand.
The practical distinction matters: the court did not approve deferential review of fee recommendations. It found that the conceded procedural error did not affect the result in this case.
H. Preservation and briefing repeatedly limited appellate review
A significant feature of the opinion is how often the plaintiffs’ arguments failed because they were not properly presented. Several different procedural doctrines were involved.
Specific objections to magistrate recommendations
Morales-Fernandez v. INS states the firm-waiver rule: failure to object timely to a magistrate judge’s recommendation ordinarily forfeits appellate review. United States v. B.N.M. requires objections specific enough to identify the genuinely disputed factual and legal issues.
Some objections here were deficient. Nevertheless, under Hicks v. Franklin, the opposing party can itself waive or forfeit reliance on the firm-waiver rule. Because the Rong Defendants did not invoke it for certain issues, the court addressed those issues on other grounds.
New arguments and inadequate appellate development
Richison v. Ernest Grp., Inc., drawing on United States v. Olano, supplied the preservation framework. United States v. McBride reinforced that an appellant who failed to preserve an argument and does not request plain-error review ordinarily cannot obtain appellate consideration of it.
United States v. Clay, United States v. Woodmore, and Bronson v. Swensen supported declining review of assertions lacking developed reasoning, supporting authority, or record citations. Star Fuel Marts, LLC v. Sam's E., Inc. barred attempts to introduce a new argument for the first time in reply. Under Marshall v. Chater, waiting until objections to the magistrate judge’s recommendation was also too late to raise new theories.
The request for an evidentiary hearing
The plaintiffs had not requested the hearing below, but the district court had expressly considered and rejected one requested by the defense. Under Tesone v. Empire Mktg. Strategies, an issue actually decided on its merits can remain reviewable despite the appellant’s failure to raise it independently.
The plaintiffs nevertheless inadequately briefed their appellate challenge. They also failed to identify evidence a hearing would have produced that could change the jurisdictional result.
Dutcher v. Matheson supported requiring demonstrated prejudice rather than speculation that additional proceedings might uncover something useful. The plaintiffs’ reliance on that case and Breakthrough Mgmt. Grp., Inc. v. Chukchansi Gold Casino & Resort was otherwise misplaced: both concerned jurisdictional discovery, not a categorical requirement to hold an evidentiary hearing whenever written submissions conflict.
Under FDIC v. Oaklawn Apartments, a hearing would also have increased the plaintiffs’ burden to proof by a preponderance of the evidence. Without a hearing, factual conflicts could instead be resolved in their favor under the lighter prima facie framework.
The conditional amendment request
The plaintiffs requested leave to amend only if the dismissal was not final and appealable. Certification eliminated that premise. Applying the mootness principle described in Phelps v. Hamilton, the court denied the conditional request as moot. It did not generally decide that amendment would always be unavailable after such a dismissal.