Jackson v. Fie Corp.

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
__________________________
No. 01-30679
__________________________
ARNOLD JACKSON; LINDA JACKSON;
and BRIAN JACKSON,
Plaintiffs-Appellees,
versus
FIE CORPORATION; ET AL.,
Defendants,
FRATELLI TANFOGLIO DI TANFOGLIO
BORTOLO & C.S.N.C., formerly
known as Fratelli Tanfoglio SPA,
Defendant-Appellant.
___________________________________________________
Appeal from the United States District Court
for the Eastern District of Louisiana
___________________________________________________
August 20, 2002
Before KING, Chief Judge, REAVLEY, and WIENER, Circuit Judges.
WIENER, Circuit Judge:
This appeal turns on whether a defendant that knowingly
suffers a default judgment to be rendered against it may thereafter
employ Rule 60(b)(4) to contest a factual finding that was vital to
both (1) the rendering court’s specific personal jurisdiction ——
here, as a putative minimum contact with the forum state —— and (2)
the merits of the default judgment —— here, as proof that the
defendant manufactured the offending product in this product-
liability suit. We conclude, apparently for the first time in this
Circuit, that when a court rendering a default judgment makes a
factual finding that has that kind of dual significance, such a
finding has no preclusive effect in a subsequent Rule 60(b)(4)
challenge to personal jurisdiction. Put differently, despite the
importance of such a factual finding to the merits of the default
judgment, the finding’s jurisdictional significance remains
amenable to attack under Rule 60(b)(4). In the instant case, the
district court’s refusal to permit such a challenge constituted
legal error, leaving us no choice but to vacate and remand.
I. FACTS AND PROCEEDINGS
A. The Default Judgment
In May 1992, while moving into his new home in New Orleans,
Plaintiff-Appellee Arnold Jackson accidentally dropped an envelope
that contained a loaded but uncocked .25 caliber pistol. The
pistol discharged, firing a bullet that struck Jackson in the neck,
severing his spinal cord and rendering him a permanent
quadriplegic.
Jackson, together with his wife and son, Plaintiffs-Appellees
Linda Jackson and Brian Jackson, brought suit in Louisiana state
court against parties that he alleged were responsible for, inter
alia, manufacturing the pistol and its component parts, namely
Defendant-Appellant Fratelli Tanfoglio di Tanfoglio Bortolo & C.
2
S.n.c. (hereafter, “Fratelli Tanfoglio”1), an Italian firearms
manufacturer; and two other, confusingly-named Italian firearms
firms, Fabrica D’Armi di Tanfoglio Giuseppe, S.r.l. (hereafter,
“Tanfoglio Giuseppe”), and Giuseppe Tanfoglio, S.p.a. Whether
these three firms (collectively, the “Tanfoglio firms”) were truly
independent of each other at all times relevant to this action is
disputed, but the record suggests that Fratelli Tanfoglio was
founded by the children of the founder of Tanfoglio Giuseppe.
Whatever their degree of corporate interrelationship, none of
the Tanfoglio firms chose to make an appearance in this case,
either before or after another defendant removed it to federal
court. Over time, the defendants that did make appearances were
dismissed,2 leaving the three absent Tanfoglio firms as the only
defendants.
The Jacksons filed for a default judgment against the
Tanfoglio firms. After an intervening appeal, the district court
held several days of hearings, taking testimony from the Jacksons
and their expert witnesses in medicine and economics. Also in
evidence was the deposition of Lama S. Martin, the Jacksons’
firearms expert. Martin testified that the design of the pistol
1
“Fratelli Tanfoglio” is Italian for “Tanfoglio Brothers.”
2
We sustained the district court’s summary judgment in favor
of one defendant, Southern Diecast Company, in Jackson v. FIE
Corp., No. 97-31090 (5th Cir. Oct. 5, 1998) (unpublished), 161 F.3d
8 (table), available at http://www.circ5.dcn/isys_ca5/index.htm.
Another corporate defendant filed for bankruptcy, and still more
corporate defendants appear to have been dissolved.
3
was unsafe; specifically, that it was obsolete in ignoring
specified principles of gun design and safety that had been
established for a century. Hence the proffered product defect: The
pistol’s firing pin assertedly was too long, which caused the
uncocked pistol to fire on impact when it was dropped.
Given this testimony, identification of the pistol’s
manufacturer and distributor loomed large. The pistol itself bears
the trademark of Firearms Import and Export Corporation, a Florida
firm. The only record evidence identifying Fratelli Tanfoglio as
the manufacturer of the pistol or any of its parts is a short
passage from Martin’s deposition, when he answered a compound
question:
Q. Now, Mr. Martin, have you had occasion to do some
research and study in your reference materials as
to the origin of this gun, the Tanfoglio and
Giuseppe Tanfoglio [sic]?
A. I have, yes.
Q. And was this gun made by Giuseppe Tanfoglio and
Fratelli Tanfoglio?
A. Yes, in —— in their plant in Gardone, Italy.
On the strength of this testimony, and seemingly absent any
further evidence linking any of the Tanfoglio firms to the pistol,
the court entered a default judgment in the Jacksons’ favor,
finding that the pistol had been “manufactured and distributed by
the Italian defendants” and concluding that the Tanfoglio firms
were liable under Louisiana’s product liability law. The district
court also concluded that it had the jurisdictional power to bind
the Tanfoglio firms to a judgment, noting that the Jacksons had
4
properly served the Tanfoglio firms under both the Louisiana long-
arm statute3 and the Hague Service Convention.4 The court did not,
however, analyze whether personal jurisdiction of the Tanfoglio
firms otherwise comported with due process.5
The court awarded the Jacksons $11.02 million in compensatory
and special damages, plus interest and costs. No appeal was taken,
so in March 1999, the district court declared the judgment to be
final and executory.
B. The Rule 60(b)(4) Motion
In October 2000, nearly two years after the district court
entered judgment, Fratelli Tanfoglio, acting alone, filed in the
district court a Rule 60(b)(4) motion to vacate judgment,
contending that the default judgment was void ab initio because the
3
LA. REV. STAT. ANN. § 13:3201 (West 1991). This statute extends
the personal jurisdiction of a Louisiana court up to federal due-
process limits. Therefore an inquiry by a federal court sitting in
diversity in Louisiana into personal jurisdiction over a
nonresident collapses into the federal due-process inquiry. Patin
v. Thoroughbred Power Boats Inc., 294 F.3d 640, 652 (5th Cir.
2002).
4
Convention on the Service Abroad of Judicial and Extra-
judicial Documents in Civil or Commercial Matters, Nov. 15, 1965,
20 U.S.T. 361, T.I.A.S. No. 6638.
5
Fratelli Tanfoglio contends on appeal that the district court
thereby failed to perform its “affirmative duty to look into its
jurisdiction both over the subject matter and [over] the parties”
when rendering a default judgment. System Pipe & Supply, Inc. v.
M/V Victor Kurnatovskiy, 242 F.3d 322, 324 (5th Cir. 2001)
(citation and internal quotation marks omitted). This case is
before us on appeal of denial of a Rule 60(b)(4) motion, however,
as Fratelli Tanfoglio never appealed the default judgment. Given
our interpretation of Rule 60(b)(4) below, we do not reach the
System Pipe issue.
5
court had lacked personal jurisdiction to enter judgment against
that defendant.
At the heart of Fratelli Tanfoglio’s challenge to personal
jurisdiction lies its assertion that it never manufactured .25
caliber pistols until 1993, well after Jackson’s injury occurred.
That being so, argues Fratelli Tanfoglio, it could not possibly
have made Jackson’s pistol or any of its parts. Rather, this
argument goes, the legally unrelated firm of Tanfoglio Giuseppe
made the firing pin, and Tanfoglio Giuseppe is now defunct, having
been properly liquidated and dissolved under Italian law.
Therefore, reasons Fratelli Tanfoglio, it lacked the minimum
contacts with Louisiana vis-à-vis this cause of action to support
the court’s exercise of specific personal jurisdiction without
violating due process. Fratelli Tanfoglio contends further that
any contacts it may have had with Louisiana that were unrelated to
this cause of action do not rise to the “continuous and systematic”
level required before general personal jurisdiction can attach.
To prove these assertions in prosecuting its Rule 60(b)(4)
motion in the district court, Fratelli Tanfoglio submitted several
affidavits. It also sought to depose Jackson and his firearms
expert and to engage in other discovery. Limited discovery of
jurisdictional facts did occur, but the magistrate judge in charge
appears to have regarded inquiry into the identity of the gun’s
manufacturer as an impermissible attempt to reopen the merits of
the default judgment. Consequently, the magistrate judge refused
6
Fratelli Tanfoglio’s request to depose the Jacksons’ firearms
expert, Martin. Herein lies the problem posed by the dual nature
of this crucial fact: It is highly significant both to the merits
of the judgment (which the magistrate judge focused on) and to the
court’s personal jurisdiction (which the magistrate judge
slighted).
Fratelli Tanfoglio challenged this ruling and raised other
discovery issues in the district court. That court, however, ruled
against Fratelli Tanfoglio on its Rule 60(b)(4) motion without ever
reaching the validity of the magistrate judge’s proposal. Noting
that the question who bears the burden of proof in a Rule 60(b)(4)
challenge to personal jurisdiction is one that has not been
answered for this circuit, the district court adopted the view of
the Seventh Circuit that once a defendant with notice chooses to
suffer a default judgment, he is the party who thereafter must
shoulder the burden of proving the absence of personal
jurisdiction.6
6
See Bally Export Corp. v. Balicar, Ltd., 804 F.2d 398, 401
(7th Cir. 1986). We have previously adverted to this question, but
did not resolve it. Bludworth Bond Shipyard, Inc. v. M/V Caribbean
Wind, 841 F.2d 646, 649 n.7 (5th Cir. 1988). Here, the district
court held that the burden of proof shifts to the defaulting
defendant and Rule 60(b)(4) movant, Fratelli Tanfoglio. As
Fratelli Tanfoglio has not challenged this ruling on appeal, it is
now the law of the case. It is not yet, however, the law of this
circuit, as we do not reach the issue and need not choose a side in
the split of authority on this question, leaving that for another
day. See Ariel Waldman, Comment, Allocating the Burden of Proof in
Rule 60(b)(4) Motions to Vacate a Default Judgment for Lack of
Jurisdiction, 68 U. Chi. L. Rev. 521, 529–36 (2001) (describing the
split among circuit and district courts, and counseling against the
7
The district court then evaluated Fratelli Tanfoglio’s Rule
60(b)(4) motion under the multifactor balancing test that we set
forth in Magness v. Russian Federation.7 Using this standard, the
court determined that “Fratelli Tanfoglio’s principal defense, that
it did not manufacture the Titan .25 caliber pistol at issue, is
not meritorious in this motion.” The court also determined that
other contacts that Fratelli Tanfoglio had with the United States
firearms market and Louisiana in particular supported its personal
jurisdiction. The court concluded:
The factual allegations in Plaintiff’s Petition,
conclusively established due to Fratelli Tanfoglio’s
default, establish that Fratelli Tanfoglio manufactured,
sold, and distributed the Titan .25 caliber pistol that
caused his Arnold Jackson’s [sic] injuries in Louisiana.
Fratelli Tanfoglio’s own discovery responses confirm that
it has “minimum contacts” with Louisiana, and that the
exercise of personal jurisdiction over it does not offend
“traditional notions of fair play and substantial
justice.” The court therefore denies Fratelli
Tanfoglio’s Rule 60(b)(4) motion.
The court’s denial of the Rule 60(b)(4) motion mooted Fratelli
Tanfoglio’s desire for further discovery, and this appeal followed.
II. ANALYSIS
A. Standard of Review
In general, “whether in personam jurisdiction can be exercised
over a defendant is a question of law and subject to de novo
Seventh Circuit’s approach in Bally Export).
7
247 F.3d 609, 618–19 (5th Cir. 2001).
8
review” by this court.8 This de novo standard, we have held,
applies to personal-jurisdiction challenges under Rule 60(b)(4),
just as it does in other contexts.9 Our cases have justified this
rule in different ways. For example:
Though we generally review a district court's Rule 60(b)
ruling solely for abuse of discretion, Bludworth Bond,
841 F.2d at 649, “Rule 60(b)(4) motions leave no margin
for consideration of the district court's discretion as
the judgments themselves are by definition either legal
nullities or not.” Carter v. Fenner, 136 F.3d 1000, 1005
(5th Cir. 1998). As a consequence, our review of the
issues raised in this appeal is effectively de novo. See
Export Group v. Reef Industries, Inc., 54 F.3d 1466, 1469
(9th Cir. 1995) (“We review de novo . . . . a district
court’s ruling upon a Rule 60(b)(4) motion to set aside
a judgment as void, because the question of the validity
of a judgment is a legal one.”).10
Stated differently, but to the same effect, we have written that we
review Rule 60(b)(4) challenges de novo because it is “a per se
abuse of discretion for a district court to deny a motion to vacate
a void judgment.”11 We have also reasoned that if “the motion is
based on a void judgment under rule 60(b)(4), the district court
has no discretion —— the judgment is either void or it is not.”12
8
Dickson Marine Inc. v. Panalpina, Inc., 179 F.3d 331, 335
(5th Cir. 1999).
9
Carter v. Fenner, 136 F.3d 1000, 1005 (5th Cir. 1998) (“[W]e
review the district court’s ruling on a Rule 60(b)(4) motion de
novo.”).
10
Harper Macleod Solicitors v. Keaty & Keaty, 260 F.3d 389, 394
(5th Cir. 2001).
11
Carter, 136 F.3d at 1006.
12
Recreational Properties, Inc., v. Southwest Mortgage Service
Corp., 804 F.2d 311, 314 (5th Cir. 1986).
9
We see no need to reconcile these semantic variations today,
however, as they effect no substantive difference in the way that
we apply this plenary standard in our review of the instant case.
B. Rule 60(b)(4)
Rule 60(b), under which Fratelli Tanfoglio brought its motion
to vacate, provides:
(b) Mistakes; Inadvertence; Excusable Neglect; Newly
Discovered Evidence; Fraud, Etc. On motion and upon such
terms as are just, the court may relieve a party...from
a final judgment...for the following reasons: (1)
mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence which by due diligence
could not have been discovered in time to move for a new
trial under Rule 59(b); (3) fraud..., misrepresentation,
or other misconduct of an adverse party; (4) the judgment
is void; (5) the judgment has been satisfied, released,
or discharged...; or (6) any other reason justifying
relief from the operation of the judgment. The motion
shall be made within a reasonable time, and for reasons
(1), (2), and (3) not more than one year after the
judgment...was entered.13
Subsection (4) of this rule embodies the principle that in federal
court, a “defendant is always free to ignore the judicial
proceedings, risk a default judgment, and then challenge that
judgment on jurisdictional grounds.”14
1. Louisiana Statute Does Not Apply
To counter the federal jurisprudence that expresses this
principle, the Jacksons argue on appeal that, under a Louisiana
13
FED. R. CIV. P. 60(b) (emphasis added).
14
Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites
de Guinee, 456 U.S. 694, 706 (1982).
10
statute,15 jurisdiction over a person is conclusively established
if the person fails timely to file a declinatory exception. The
Jacksons seem to assume that this Louisiana statute applies in
federal district court. Not necessarily. As we clarified last
year in Harper Macleod,16 when a state rule of preclusion would
operate to undermine a federal default-judgment defendant’s ability
to contest personal jurisdiction in federal enforcement
proceedings, the state rule must yield to Rule 60(b)(4).17 In
Harper Macleod we rejected a judgment creditor’s assertion of Texas
law, holding that Texas law did not control: The principle that a
party may silently suffer a default judgment and later challenge
personal jurisdiction is a “foundational principle of federal
jurisdictional law.”18 Our precedent requires that we reject the
Jacksons’ contention that Louisiana’s rule of jurisdictional
preclusion governs this appeal.
2. Waiver
The Jacksons also urge that Fratelli Tanfoglio waived any
right it may have had to object to personal jurisdiction by failing
15
LA. CODE CIV. PROC. ANN. art. 6(A)(3) (West 1999).
16
Harper Macleod Solicitors v. Keaty & Keaty, 260 F.3d 389 (5th
Cir. 2001).
17
Like the Harper Macleod court, we “need not determine whether
a different state law could be used as the federal rule for
determining the preclusive effect of jurisdictional findings made
by a federal court sitting in diversity.” Harper Macleod, 260 F.3d
at 397 n.10.
18
Id. at 397 & n.9.
11
to appear. Whatever the validity of this notion under Louisiana
law, it is against all federal authority. True, a party’s right to
object to personal jurisdiction certainly is waived under Rule
12(h) if such party fails to assert that objection in his first
pleading or general appearance.19 But a party’s right to contest
personal jurisdiction is not waived by his failure to appear at
all.20 “It is well-established [sic] that defendants need not
appear in a federal court without authority to exercise personal
jurisdiction over them to raise a jurisdictional defect.”21 The
Jacksons’ waiver argument fails.
3. Unreasonable Delay
The Jacksons’ contention that Fratelli Tanfoglio cannot make
19
See Patin, 294 F.3d at 653; Broadcast Music, Inc. v. M.T.S.
Enterprises, Inc., 811 F.2d 278, 281 (5th Cir. 1987) (“[Defendants]
never filed a pleading in the case prior to the entry of default
judgment. Therefore, it cannot be said that they failed to raise
the defense [of personal jurisdiction], as required by Rule 12(h),
in their first pleading.”).
20
Hazen Research, Inc. v. Omega Minerals, Inc., 497 F.2d 151,
154 (5th Cir. 1974) (citations and internal quotation marks
omitted):
In those case [sic], however, in which the defendant
makes no appearance and the judgment goes by default, the
defendant may defeat subsequent enforcement in another
forum by demonstrating that the judgment issued from a
court lacking personal jurisdiction. Of course, the
burden of undermining [the judgment] rests heavily upon
the assailant, and, should the attack fail, the default
judgment becomes no less final and determinative on the
merits of the controversy than a decree entered after
full trial.
21
Harper Macleod, 260 F.3d at 393 (quoting Insurance Corp. of
Ireland, 456 U.S. at 706, and citing Broadcast Music, 811 F.2d at
281).
12
a Rule 60(b)(4) motion nearly two years after suffering the default
judgment runs into similar difficulties. This contention is
counter to logic, which compels the conclusion that —— at least
absent extraordinary circumstances —— the mere passage of time
cannot convert an absolutely void judgment into a valid one.22 This
is one reason for our having held that there is no time limit on
Rule 60(b)(4) motions, and that the doctrine of laches has no
effect.23 As a general rule, the fact that such a motion is made
22
Bludworth Bond, 841 F.2d at 649 n.6 (“[T]here seems to be
universal agreement that laches [in bringing a Rule 60(b)(4)
motion] cannot cure a void judgment, and no court has denied relief
under Rule 60(b)(4) because of delay.”).
23
Carter, 136 F.3d at 1006:
Motions brought pursuant to Rule 60(b)(4), however,
constitute such exceptional circumstances as to relieve
litigants from the normal standards of timeliness
associated with the rule. While Rule 60(b)(1) motions
must be brought within one year, we have held that
motions brought pursuant to subsection (4) of the rule
have no set time limit. This court has explained that
“‘[t]here is no time limit on an attack on a judgment as
void. The one-year limit applicable to some Rule 60(b)
motions is expressly inapplicable, and even the
requirement that the motion be made within a “reasonable
time,” which seems literally to apply to motions under
Rule 60(b)(4), cannot be enforced with regard to this
class of motion.’” New York Life Insurance Company v.
Brown, 84 F.3d 137, 142–43 (5th Cir. 1996 (quoting Briley
v. Hidalgo, 981 F.2d 246, 249 (5th Cir. 1993)).
See also Orner v. Shalala, 30 F.3d 1307, 1310 (10th Cir.
1994); Katter v. Arkansas Louisiana Gas Co., 765 F.2d 730, 734 (8th
Cir. 1985); Austin v. Smith, 312 F.2d 337, 343 (D.C. Cir. 1962);
Von Dardel v. Union of Soviet Socialist Republics, 736 F. Supp. 1,
4 n.8 (D.D.C. 1990); Ruddies v. Auburn Spark Plug Co., 261 F. Supp.
648, 658 (S.D.N.Y. 1966) (“A void judgment can acquire no validity
because of laches on the part of one who applies for relief from
it.”); 11 CHARLES ALAN WRIGHT, ARTHUR R. MILLER, & MARY KAY KANE, FEDERAL
PRACTICE & PROCEDURE § 2862 at 324–25 (2d ed. 1995):
[T]here is no time limit on an attack on a judgment as
13
long after the entry of a default judgment should not be an
obstacle to the jurisdictional inquiry.24 Fratelli Tanfoglio’s
motion was not barred by the time that elapsed prior to its being
filed.
4. The Magness Balancing Test Does Not Apply
The district court reached the merits of the motion and
assessed them by employing the eight-factor balancing test that we
laid down in Magness v. Russian Federation.25 Our precedents
demonstrate that here the court’s reliance on Magness was legal
error. The Magness balancing test is appropriate when Rule 60(b)
motions are based on such reasons as mistake or inadvertence and
thus call for a weighing of equities. It is never the appropriate
test when the movant proceeds under Rule 60(b)(4) and urges that
the judgment is void. “When...the motion is based on a void
judgment under rule 60(b)(4), the district court has no
void. The one-year limit applicable to some Rule 60(b)
motions is expressly inapplicable, and even the
requirement that the motion be made within a “reasonable
time,” which seems literally to apply to motions under
Rule 60(b)(4), cannot be enforced with regard to this
class of motion. A void judgment cannot acquire validity
because of laches on the part of the judgment debtor.
See also 10A CHARLES ALAN WRIGHT, ARTHUR R. MILLER, & MARY KAY KANE, FEDERAL
PRACTICE & PROCEDURE § 2698 at 164 (3d ed. 1998) (“When the ground for
setting aside a default judgment is found to be within Rule
60(b)(4)——the judgment is void——it has been held that there is no
time limit that will bar relief.”); id. at 164 n.2 (collecting
cases).
24
Carter, 136 F.3d at 1006.
25
247 F.3d 609, 618–19 (5th Cir. 2001).
14
discretion——the judgment is either void or it is not.”26 If the
judgment is void, “the district court must set it aside.”27
C. Issue Preclusion
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 well-
pleaded 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 personal-
jurisdiction 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. Due-
process 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.
D. General Jurisdiction?
The state of the law also requires that our review of this
case now turn from specific personal jurisdiction to the
possibility of general personal jurisdiction.
Aside from the question who made and distributed the defective
pistol, the district court’s jurisdictional analysis described many
contacts by Fratelli Tanfoglio with the United States firearms
market in general and some contacts with Louisiana in particular ——
62
Goldblatt v. Hempstead, 369 U.S. 590, 597 (1962) (“The claim
that rights acquired in previous litigation are being undermined is
completely unfounded.... We therefore do not need to consider to
what extent such issues would have come under the protective wing
of due process.”).
27
the latter including the attendance of firm principals at two gun
shows in New Orleans —— but none directly related to the Jacksons’
pistol, its acquisition, or its manufacture. We are not sure in
what sense the district court believed these unrelated contacts
might be relevant to its jurisdictional inquiry. Having satisfied
itself that Fratelli Tanfoglio could not be heard to argue that it
did not manufacture the pistol, the court might have been
analyzing, under our stream-of-commerce cases, whether the pistol’s
presence in Louisiana was foreseeable.63
If not, these additional contacts would not have been relevant
to specific personal jurisdiction, which can exist only if the
particular cause of action being litigated arises from or relates
to conduct of the defendant in or vis-à-vis the forum.64 (Nothing
in the record suggests, for example, that Jackson bought the pistol
from Tanfoglio’s representatives at the gun shows.) We must
therefore acknowledge the possibility that, without saying so, the
district court was holding that Fratelli Tanfoglio was amenable to
general personal jurisdiction, even if the firm had nothing to do
with making or distributing the pistol here at issue. We therefore
assume arguendo that the court’s discussion of these contacts,
unrelated to Jackson’s acquisition of the gun, implicated general
rather than specific personal jurisdiction.
63
See, e.g., Ruston Gas Turbines, Inc. v. Donaldson Co., 9 F.3d
415, 418–19 (5th Cir. 1993).
64
Id.
28
To justify general personal jurisdiction, Fratelli Tanfoglio
had to have had not just minimum contacts, but continuous and
systematic ones.65 Yet neither the phrase “continuous and
systematic” nor any synonymous wording appears anywhere in the
district court’s opinion; the terms “general jurisdiction” and
“general personal jurisdiction” are almost entirely absent as well.
We are satisfied that if, on remand, continuous and systematic
contacts justifying general jurisdiction are determined to exist,
the court will expressly identify them as such.
III. CONCLUSION
As the jurisdictional allegations and findings supporting the
default judgment are not entitled to preclusive effect in the
personal-jurisdiction context of Rule 60(b)(4), the district
court’s denial of Fratelli Tanfoglio’s motion was legal error. We
are thus constrained to vacate that order and remand the case for
further (and adversarial) proceedings, including appropriate
discovery, on the issue of personal jurisdiction, whether specific,
general, or both.
We are aware that remand may saddle the district court with
the arduous task of determining the jurisdictional contacts of each
65
Bearry v. Beech Aircraft Corp., 818 F.2d 370, 374 (5th Cir.
1987) (“When the cause of action does not arise from or relate to
the foreign corporation’s purposeful conduct within the forum
state, due process require that there be continuous and systematic
contacts between the State and the foreign corporation to support
an exercise of ‘general’ personal jurisdiction by that forum.”)
(emphasis in original).
29
of the Tanfoglio firms, and, if necessary, analyzing —— perhaps
even under Italian law —— whether any of the defunct Tanfoglio
firms’ contacts should be imputed to the surviving entity, Fratelli
Tanfoglio. In this endeavor, a recent opinion of ours in Patin v.
Thoroughbred Power Boats Inc.66 may assist by clarifying some of the
legal standards involved in an imputation inquiry, should one prove
necessary.
We also realize that remand could produce anomalous results.
It is at least theoretically conceivable that the district court
might, for specific-jurisdiction purposes, find that Fratelli
Tanfoglio did not make the pistol or any of its components and
cannot be imputed with having done so; and yet, if the court should
also determine that general personal jurisdiction does lie as the
result of continuous and systematic contacts with Louisiana, the
court might conclude that it nevertheless must enforce its judgment
against Fratelli Tanfoglio, on the theory that, as a merits fact,
the manufacture of the pistol cannot be further litigated. If
remand should indeed produce such a paradox, that would simply be
the price for the collision here of two basic principles to which
we owe fealty: that a default judgment is final on the merits, on
the one hand, and on the other, that a default judgment always may
be challenged for want of personal jurisdiction. It is the latter
rule, embodied in Rule 60(b)(4), that trumps in this appeal; but
66
294 F.3d 640 (5th Cir. June 12, 2002).
30
the former still has force going forward.
VACATED and REMANDED for further consistent proceedings.
31