Opinion ID: 3214377
Heading Depth: 2
Heading Rank: 1

Heading: Validity of the Default Judgments

Text: Trade Well first argues that the district court lacked personal jurisdiction over it, rendering the default judgments invalid. Under Federal Rule of Civil Procedure 60(b), a final judgment must be set aside if the court lacked personal jurisdiction. Bally Exp. Corp. v. Balicar, Ltd., 804 F.2d 398, 400 (7th Cir. 1986). A judgment is also void as to any party who was not adequately served. Relational, LLC v. Hodges, 627 F.3d 668, 671 (7th Cir. 2010). In addition, a judgment is void if it was rendered “in a manner inconsistent with due process of law.” United States v. Indoor Cultivation Equip. from High Tech Indoor No. 15-3353 7 Garden Supply, 55 F.3d 1311, 1316 (7th Cir. 1995) (citation and internal quotation marks omitted). Although the standard of review for appeals under Rule 60(b) is abuse of discretion, it is a per se abuse of discretion for a district court to refuse to vacate an invalid judgment. Id. at 1317. We cannot accept Trade Well’s contention that the district court lacked personal jurisdiction over it because Trade Well is a foreign corporation that did not have counsel at the time of the default judgments. By filing the original replevin action, Trade Well submitted itself to jurisdiction in Wisconsin for purposes of the replevin action and the counterclaim. In general, when a defendant interposes a permissive counterclaim, the plaintiff cannot object that the court lacks personal jurisdiction for purposes of adjudicating the claim. See Leman v. Krentler-Arnold Hinge Last Co., 284 U.S. 448, 451 (1932) (holding, in a patent case, that “[w]hen the [plaintiff] brought the suit in [federal district court], it submitted itself to the jurisdiction of the court with respect to all the issues embraced in the suit, including those pertaining to the counterclaim of the defendants”); 6 CHARLES ALAN WRIGHT & ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1424 (3d ed. 2016). Moreover, a district court may exercise personal jurisdiction over any party that purposefully avails itself of the forum. J. McIntyre Mach., Ltd. v. Nicastro, 564 U.S. 873, 880 (2011). By filing suit in Wisconsin, Trade Well availed itself of the forum, whether by explicitly consenting to jurisdiction, waiving any challenge to jurisdiction, or simply receiving the privileges and benefits of the forum state. See id. at 880–81. Indeed, the purposeful availment inquiry is ultimately about whether the party should reasonably anticipate being haled into court in the forum state. Burger King Corp. v. Rudzewicz, 471 U.S. 462, 8 No. 15-3353 474 (1985). When a plaintiff files a claim in a particular state, he should reasonably expect to answer a counterclaim in that forum. Relatedly, Trade Well argues that it was fundamentally unfair and a violation of due process for the district court to impose a default judgment after its counsel was removed. We disagree. Trade Well received notice of the proceedings and an opportunity to be heard. See Grun v. Pneumo Abex Corp., 163 F.3d 411, 423 (7th Cir. 1998) (outlining the requirements for due process). The Bank claims that following Salem’s removal, it served Trade Well directly with all relevant motions at its last known address; Trade Well does not dispute that it had notice of the proceedings, including both motions for default judgment. Trade Well does argue that without Salem, it had no means of representing itself because corporations cannot proceed pro se. United States v. Hagerman, 545 F.3d 579, 581 (7th Cir. 2008) (“A corporation is not permitted to litigate in a federal court unless it is represented by a lawyer licensed to practice in that court.”). Nonetheless, Trade Well had ample time—nearly seven months—to secure replacement counsel to prosecute the original action, and roughly five months to respond to the counterclaim. Trade Well also could have requested a stay pending Salem’s appeal, but did not do so. Given the circumstances, we agree with the district court that the default judgments did not violate due process. Trade Well also suggests that the judgments are invalid due to inadequate service of process. This argument is unavailing because the Bank adequately served Trade Well under Rules 4 and 5. As mentioned above, Trade Well does not dispute the Bank’s assertion that, following Salem’s removal, it No. 15-3353 9 served all filings on Trade Well at its last known address. Service of process therefore was proper under Rule 4, which provides that a foreign corporation may be served “by any internationally agreed means of service that is reasonably calculated to give notice, such as those authorized by the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents.” Fed. R. Civ. P. 4(f)(1), (h)(2); see also Research Sys. Corp. v. IPSOS Publicite, 276 F.3d 914, 926 (7th Cir. 2002) (“[S]imple certified mail [is] a method permitted by Article 10(a) of the Hague Convention, so long as the foreign country does not object.” (internal citation omitted)). Similarly, service of process was valid under Rule 5 because all documents were mailed to Trade Well’s last known address. See Fed. R. Civ. P. 5(b)(2)(C) (allowing service to a person’s last known address and specifying that service is complete upon mailing). In sum, the default judgments are valid and the district court did not abuse its discretion by refusing to set them aside.