You can file a motion to dismiss based on "forum non conveniens", which means exactly what you said: they are doing this just to gain an advantage, and there is a better place to bring the lawsuit. Look up the local rules for the court you're in to find out how to draft a pleading and send it to the court and the people suing.
Otherwise, if you don't appear and answer the lawsuit, the plaintiff can file for default, get a default judgment against you, and garnish your wages or take your personal property.
Default judgment is a binding judgment in favor of either party based on some failure to take action by the other party. Most often, it is a judgment in favor of a plaintiff when the defendant has not responded to a summons or has failed to appear before a court of law. Federal Rule 37(b)(iii) also states that a balky plaintiff can be found in default and have his case dismissed if the plaintiff repeatedly fails to comply with things like court orders and discovery requests. The failure to take action is the default. The default judgment is the relief requested in the party's original petition, which is why initial pleadings are often so exaggerated.
Default can be compared to a forfeit victory in sports. In a civil trial involving damages, a default judgment will enter the amount of damages pleaded in the original complaint. If proof of damages is required, the court may schedule another hearing on that issue. A party can have a default judgment vacated, or set aside, by filing a motion, after the judgment is entered, by showing of a proper excuse.
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