Opinion ID: 28423
Heading Depth: 2
Heading Rank: 3

Heading: issues

Text: Perhaps the Jacksons’ best argument is one that relates to the oddest aspect of this case: To prove that the judgment was void for lack of personal jurisdiction, Fratelli Tanfoglio raises an assertedly meritorious defense (identity of the pistol’s manufacturer) that the district court’s default judgment on the merits had flatly rejected. Because the identity of the pistol’s manufacturer has ramifications for both jurisdiction and the merits, the “foundational principle” embodied in Rule 60(b)(4) collides head-on with a well-established rule of claim preclusion. In general, [a]ttempts by a defendant to escape the effects of his default should be strictly circumscribed: he should not be given the opportunity to litigate what has already been considered admitted in law. The defendant, by his default, admits the plaintiff’s well-pleaded allegations of fact, is concluded on those facts by the judgment, and is barred from contesting on appeal the facts thus established. A default judgment is unassailable on the merits....28 The Jacksons urge that their default judgment conclusively establishes well-pleaded facts, including the identity of the 26 Recreational Properties, 804 F.2d at 314; see also Magness, 247 F.3d at 619 n.19. 27 Bludworth Bond, 841 F.2d at 649 (citations omitted and emphasis original). 28 Nishimatsu Constr. Co., Ltd. v. Houston Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975) (citations omitted). 15 pistol’s manufacturer, and that those facts cannot be re-examined under Rule 60(b)(4). The district court accepted this reasoning. As support for this proposition, both the Jacksons and the district court looked to general language in a treatise,29 without pointing to other passages of the same work that shed a different light on the proposition.30 They also relied on broad language in two of our opinions without acknowledging that each opinion recites a more generalized version of this preclusion rule, and that in neither case did we apply that rule in the context of Rule 60(b)(4). One of these cases, United States v. Shipco General, Inc.,31 dealt with preclusion at an earlier stage of the default-judgment process, and did not turn on jurisdiction at all. We did observe there that “[a]fter a default judgment, the plaintiff’s wellpleaded factual allegations are taken as true, except regarding 29 10A CHARLES ALAN WRIGHT, ARTHUR R. MILLER, & MARY KAY KANE, FEDERAL PRACTICE & PROCEDURE § 2688 at 58–59 & n.5 (3d ed. 1998) (“If the court determines that defendant is in default, the factual allegations of the complaint, except those relating to the amount of damages, will be taken as true.”). See also id. § 2684 at 29 (“When a judgment by default is entered, it generally is treated as a conclusive and final adjudication of the issues necessary to justify the relief awarded.”). 30 See, e.g., id. § 2682 at 14 & n.4 (3d ed. 1998) (“Before a default can be entered, the court must have jurisdiction over the party against whom the judgment is sought.”); id. § 2695 at 131 (“[W]hen the court fails to establish personal jursidiction over defendant, any judgment rendered against him will be void.”). 31 814 F.2d 1011 (5th Cir. 1987). 16 damages,”32 and we neglected to mention personal jurisdiction as another exception. But as jurisdiction was not at issue in Shipco, the quoted passage is dictum with respect to the instant case. The other case, Nishimatsu Construction Co., Ltd., v. Houston Nat’l Bank,33 is of limited relevance here, for two reasons. First, in that case, the default-judgment debtor, after sitting out the trial, appealed the default judgment directly and therefore did not need to file a Rule 60(b) motion. Second, and more importantly, we did recite the rule that the “defendant, by his default, admits the plaintiff’s well-pleaded allegations of fact,” is precluded from challenging those facts by the judgment, “and is barred from contesting on appeal the facts thus established.”34 But this was written in the merits section of the opinion and was not meant to preclude the defendants’ arguing that the district court lacked subject-matter jurisdiction. In fact, we agreed in part with one defendant’s contention on that point and determined that the judgment against him was in part “void for want of subject matter jurisdiction.”35 Thus, rather than supporting the Jacksons and the district court here, Nishimatsu merely stands for the universal rule that objections to subject-matter jurisdiction cannot be 32 Id. at 1014. 33 515 F.2d 1200 (5th Cir. 1975). 34 Id. at 1206 (“A default judgment is unassailable on the merits.”). 35 Id. at 1205. 17 waived; it does not stand for the principle that objections to personal jurisdiction can be lost in a Rule 60(b)(4) context. In like manner, Fratelli Tanfoglio proffers dicta from several of our cases which do suggest, as another court has put it, that a “defendant’s ability to contest personal jurisdiction should not be lost merely because some of the facts relevant to personal jurisdiction are also relevant to the merits.”36 The two Fifth Circuit cases relied on by Fratelli Tanfoglio have nothing to do, however, with Rule 60(b)(4); rather, they are concerned with subject-matter jurisdiction, a question that a registering court (and an appellate court, for that matter) has an obligation to answer, on its own motion if necessary. Furthermore, because these two cases hold that when jurisdictional and merits issues are factually intermeshed, questions about jurisdiction should be referred to the merits, they conceivably could be read against Fratelli Tanfoglio rather in its favor.37 36 Board of Trustees, Sheet Metal Workers’ Nat’l Pension Fund v. Elite Erectors, Inc., 64 F. Supp. 2d 839, 846 (S.D. Ind. 1999), rev’d on other grounds, 212 F.3d 1031, 1039 (7th Cir. 2000). 37 Spector v. L Q Motor Inns, Inc., 517 F.2d 278, 284 (5th Cir. 1975) (citations omitted): The District Court, we believe, should have considered more extensively the merits of the controversy in a plenary hearing in order to insure a proper determination of [subject-matter] jurisdiction. The jurisdictional and substantive issues are factually meshed. Therefore, decision on the jurisdictional issues is dependent on decision of the merits and should have been reserved until a hearing on the merits. If the plaintiff prevails on his theory on the merits then he would also prevail on the jursidictional issue. It is impossible to decide one 18 Being unable to resolve the instant conflict between these well-established rules of preclusion and personal jurisdiction on our own jurisprudence, we naturally look further afield for guidance. When we do, however, we encounter a paucity of cases in which a Rule 60(b)(4) movant has attacked a merits fact purporting to support due-process amenability to personal jurisdiction. To find such (or similar) cases, we must hark back all the way to the nineteenth century, prior to the adoption of the Federal Rules of Civil Procedure and the institution of the current personaljurisdiction regime. In that era, we find one hoary Supreme Court case that comes close to resolving the tension that we address today. In Thompson v. Whitman,38 a citizen of New York, Whitman, sued Thompson, the sheriff of Monmouth County, New Jersey, in the Southern District of New York.39 Whitman, the forum resident, without the other. McBeath v. Inter-American Citizens for Decency Committee, 374 F.2d 359, 363 (5th Cir. 1967): [W]here the factual and jurisdictional issues are completely intermeshed the jurisdictional issues should be referred to the merits, for it impossible to decide one without the other.... The question of jurisdiction here, including the existence of a conspiracy and a boycott or secondary boycott and their significant effect on interstate commerce, is so inextricably connected with the merits of the case itself that it was error for the court to determine that it lacked jurisdiction...without affording [the plaintiff] a full opportunity to prove his case on the merits. 38 85 U.S. 457 (1873). 39 Id. at 458 (statement of the case). 19 alleged that Thompson, the non-resident, had seized and taken his (Whitman’s) sloop from its situs in the forum state.40 Thompson defended by relying on a prior New Jersey judgment in rem against the sloop itself, which vessel justices of the peace of Monmouth County had condemned and ordered sold on the ground that the sloop had been clamming within that county in violation of New Jersey law.41 The question before the Supreme Court was “whether the record [of the New Jersey case] produced by the defendant was conclusive of the jurisdictional facts therein contained.”42 The Court determined that the principal jurisdictional fact —— whether the sloop had been seized in Monmouth County —— could be attacked collaterally in the New York court: [I]f it is once conceded that the validity of a judgment may be attacked collaterally by evidence showing that the court had no jurisdiction, it is not perceived how any allegation contained in the record itself, however strongly made, can affect the right so to question it. The very object of the evidence is to invalidate the paper as a record. If that can be successfully done no statements contained therein have any force.43 Because the New York jury had found that “the seizure was not made within the limits of the county of Monmouth, and that no clams were raked within the county on that day,”44 the Supreme Court ruled that 40 Id. (statement of the case). 41 Id. at 458–59 (statement of the case). 42 Id. at 460. 43 Id. at 468. 44 Id. at 469. 20 “the justices [of Monmouth County] had no jurisdiction, and the record had no validity.”45 Having held the New Jersey judgment to be invalid for want of jurisdiction, the Court did not remark on this result’s tension with principles of preclusion, or on whether the New York court permissibly re-examined the merits of the New Jersey judgment. Thompson is distinguishable from the instant case on several grounds, however. First, the New Jersey judgment was in rem, rather than in personam, albeit this distinction evidently did not strike the Thompson Court as particularly meaningful.46 Second, Thompson had a full-faith-and-credit posture, unlike the instant case, in which Fratelli Tanfoglio has brought a jurisdictional challenge not collaterally, but directly in the rendering court. Under our Rule 60(b)(4) jurisprudence, this distinction actually militates in favor of entertaining the jurisdictional argument.47 In a number of other cases, the Supreme Court has applied the principle that the personal jurisdiction of the default-judgment rendering court may always be attacked by the default-judgment debtor in the registering court. Nevertheless, of the cases we 45 Id. at 470. 46 Id. at 466 (“[A] judgment may be attacked in a collateral proceeding by showing that the court had no jurisdiction of the person, or, in proceedings in rem, no jurisdiction of the thing.”). 47 Harper Macleod, 260 F.3d at 394 (“Typically, relief under Rule 60(b) is sought in the court that rendered the judgment at issue.”) & n.3 (collecting Fifth Circuit cases on direct challenges). 21 have found, none features a dually significant fact, such as the location of the sloop in Thompson or the identity of the pistol maker here. Yet many Supreme Court opinions —— going back at least as far as Harris v. Hardeman,48 in 1852 —— have held that the registering court must inquire into notice and service of process.49 To similar effect is a line of divorce cases holding that, as a corollary to the personal-jurisdiction exception of the Full Faith and Credit 48 55 U.S. (14 Howard) 334 (1852). 49 Peralta v. Heights Medical Center, Inc., 485 U.S. 80, 84 (1988) (suit on guarantee of hospital debt) (“[U]nder our cases, a judgment entered without notice or service is constitutionally infirm.”); Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314 (1950); Adam v. Saenger, 303 U.S. 59, 62 (1938) (merits judgment for conversion of chattels) (“[W]hen the matter of fact or law on which jurisdiction depends was not litigated in the original suit it is a matter to be adjudicated in the suit founded upon the judgment.”); Earle v. McVeigh, 91 U.S. (1 Otto) 503, 507 (1875) (suits on promissory notes) (“[T]he want of jurisdiction is a matter that may always be set up against a judgment when sought to be enforced.”); Harris, 55 U.S. at 339 (action on a promissory note): [I]t would seem to be a legal truism...that no person can be bound by a judgment, or any proceeding conducive thereto, to which he never was party or privy; that no person can be in default with respect to that which it never was incumbent upon him to fulfil. The court entering such judgment by default could have no jurisdiction over the person as to render such personal judgment, unless, by summons or other process, the person was legally before it.... [A] judgment depending upon proceedings in personam can have no force as to one on whom there has been no service of process, actual or constructive; who has had no day in court, and no notice of any proceeding against him. That with respect to such a person, such a judgment is absolutely void; he is no party to it, and can no more be regarded as a party than can any and every other member of the community. 22 Act, the registering court may always inquire into the domicile of the parties to the divorce.50 Our own cases are similar. We have frequently applied the foregoing principles to appeals of Rule 60(b)(4) motions that alleged improper service of process or a lack of notice.51 In Recreational Properties, Inc. v. Southwest Mortgage Service Corp.,52 50 See, e.g., Williams v. North Carolina, 325 U.S. 226, 230 (1945): As to the truth or existence of a fact, like that of domicil [sic], upon which depends the power to exert judicial authority, a State not a party to the exertion of such judicial authority in another State but seriously affected by it has a right, when asserting its own unquestioned authority, to ascertain the truth or existence of that crucial fact. See also id. at 232 (“[T]he decree of divorce is a conclusive adjudication of everything except the jurisdictional facts upon which it is founded, and domicil [sic] is a jurisdictional fact.”); German Savings & Loan Society v. Dormitzer, 192 U.S. 125, 128 (1904) (“It is too late now to deny the right collaterally to impeach a decree of divorce made in another State, by proof that the court had no jurisdiction, even when the record purports to show jurisdiction and the appearance of the other party.”). 51 See, e.g., Miner v. Punch, 838 F.2d 1407, 1410 (5th Cir. 1988) (“There being no valid service of process, the default judgment against Proprietors is an absolute nullity and must be vacated.”); Auster Oil & Gas, Inc. v. Stream, 891 F.2d 570, 581 (5th Cir. 1990) (Garwood, J., concurring) (“For one to be bound by a judgment in a suit to which it was not a party and of which it had no notice is, to say the least, unusual, if not unconstitutional.”). See also Aetna Business Credit v. Universal Decor & Interior Design, Inc., 635 F.2d 434 (5th Cir. Unit A Jan. 1981) (holding, in the context of a direct appeal, that “[i]n the absence of valid service of process, proceedings against a party are void”). 52 804 F.2d 311, 314 (5th Cir. 1986) (“If a court lacks jurisdiction over the parties because of insufficient service of process, the judgment is void and the district court must set it aside.”). 23 for example, we reversed the denial of a Rule 60(b)(4) motion because, when the defendant received the mail containing service of process, he reasonably believed that the envelopes lacked sufficient postage and that postage was due.53 Consequently, the defendant was free to refuse delivery, which he did.54 We concluded that “[s]ervice of process...was not perfected and the default judgment is void and must be vacated.”55 One of our later cases relied on Recreational Properties for the principle that when service of process is improper, the default judgment is void, and the district court must grant a Rule 60(b)(4) motion for relief from it.56 Other courts have done the same.57 Service of process and notice of proceedings, however, are not merits issues; neither is domicile of parties. No matter how 53 Id. at 314–15. 54 Id. 55 Id. at 315. 56 Carimi v. Royal Carribean [sic] Cruise Line, Inc., 959 F.2d 1344, 1345, 1349 (5th Cir. 1992). See also Miner, 838 F.2d at 1410. 57 Peralta v. Heights Medical Center, Inc., 485 U.S. 80, 86 (1988): The Texas court held that the default judgment must stand absent a showing of a meritorious defense to the action in which judgment was entered without proper notice to appellant, a judgment that had substantial adverse consequences to appellant. By reason of the Due Process Clause of the Fourteenth Amendment, that holding is plainly infirm. See also 10A WRIGHT, MILLER, & KANE, FEDERAL PRACTICE & PROCEDURE § 2682 at 14 & n.4 (3d ed. 1998) (collecting cases). 24 strongly cases on these issues may state the rule that a registering court may inquire into the personal jurisdiction of a rendering court, they do not necessarily control the instant situation, in which the district court found, on the merits, a fact that Fratelli Tanfoglio now seeks to undermine, so as to defeat jurisdiction. We conclude, nevertheless, that the logic of the service and notice cases, of the domicile cases, and of Thompson should apply equally here. We do so not so much because the precedents compel this result, but because we judge that —— at least given the conflict here between the federal rules governing jurisdiction on the one hand and res judicata on the other58 —— in this case, the protections of personal jurisdiction must trump the doctrine of claim preclusion. This result rests on at least two justifications. 58 “We apply federal law to the question of the res judicata or collateral estoppel effect of prior federal court proceedings, regardless of the basis of federal jurisdiction in either the prior or the present action.” Avondale Shipyards, Inc. v. Insured Lloyd’s, 786 F.2d 1265, 1269 n.4 (5th Cir. 1986). The applicability of this choice-of-law rule to this case is not imperiled by Semtek Int’l, Inc. v Lockheed Martin Corp., 531 U.S. 497, 505–09 (2001) (holding that the federal common law of preclusion incorporates state law), because a federal court of registration has a clear interest in ensuring that personal jurisdiction in the rendering federal court (here, the same court) comports with federal due-process standards. As the Semtek Court stated, “[F]ederal reference to state [preclusion] law will not obtain, of course, in situations in which the state law is incompatible with federal interests.” Id. at 509. 25 First, “[r]es judicata is very much a common law subject.”59 A judicially-derived principle of preclusion generally must perforce yield to the contrary command of a formal rule such as Rule 60(b)(4).60 Second, the res judicata doctrine protects private and public values —— such as repose, finality, and efficiency —— that are important, but have not yet found much expression as constitutional principles, at least in the civil context.61 It appears that the Supreme Court has only once adverted, and then obliquely, to the possibility that due process might prevent the relitigation of 59 18 CHARLES ALAN WRIGHT, ARTHUR R. MILLER, AND EDWARD H. COOPER, FEDERAL PRACTICE & PROCEDURE § 4403 at 35 (2d ed. 2002); id. § 4403 at 35 n.22 (collecting cases). 60 Premier Elec. Constr. Co. v. Nat’l Elec. Contractors Ass’n, 814 F.2d 358, 364 (7th Cir. 1987) (citations omitted): The rules that govern the extent to which one judgment in a federal case precludes litigation in a second case are part of the federal common law. Issue preclusion is made available when it is sound to do so in light of the effects on the rate of error, the cost of litigation, and other instrumental considerations. When there are good reasons to allow relitigation..., preclusion does not apply. ....Under the Rules Enabling Act, 28 U.S. C. § 2072, the Rules of Civil Procedure have the effect of statutes. A development in the common law of judgments is not a reason to undo a statute. 61 18 WRIGHT, MILLER & COOPER, FEDERAL PRACTICE & PROCEDURE § 4403 at 35 (“Courts have identified these fundamental policies and elaborated them into detailed rules of res judicata almost entirely on their own, with little meaningful guidance from statutes or constitutional provisions.”). In the criminal context, by contrast, issue preclusion —— in the form of the prohibition on double jeopardy —— has developed as a constitutional principle. 26 matters already decided.62 We ourselves do not appear ever to have contemplated this possibility. Whatever due-process theory might require, current due-process doctrine concerns itself only minimally, if at all, with preserving any property right that the Jacksons may have acquired through their default judgment. Dueprocess doctrine is far more concerned with protecting the ability of a party like Fratelli Tanfoglio to contest a rendering court’s power to bind it to a judgment in the first place. The fact that one of the principles in tension here is a development of the jurisprudence, and the other is a constitutional value, may partly be a matter of historical contingency rather than logic or principled theory. But that is nonetheless the state of the law, and we must apply it as we find it.