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Hawkins v. i-TV Digitalis Tavkozlesi zrt.

United States Court of Appeals for the Fourth Circuit · Civil Procedure

Civil ProcedureSubject Matter JurisdictionPersonal JurisdictionRule 60(b)(4)Enforcement of JudgmentsRule 60(b)(4)void judgmentarguable basis

Facts

Plaintiffs obtained a 2007 default judgment against Borsy and several Hungarian companies, including i-TV, awarding damages and injunctive relief requiring transfer of ownership interests and forbidding asset dissipation without plaintiffs' consent. In 2017, Plaintiffs sought to enforce that judgment against i-TV and several foreign entities that had later acquired i-TV, alleging those entities were successors-in-interest and had aided and abetted Borsy's violation of the injunction by purchasing i-TV. While discovery against the foreign Respondents was underway, Respondents and i-TV argued the 2007 judgment was void because complete diversity was allegedly destroyed if defendant Peterfia, a Hungarian kft. partly owned by plaintiff Hawkins, should be treated as an unincorporated association rather than a corporation. The district court accepted that argument, vacated the default judgment, and did not resolve the pending personal-jurisdiction challenge by the foreign Respondents.

Issue

Whether the 2007 default judgment was void under Rule 60(b)(4) for lack of subject matter jurisdiction, and whether the district court had personal jurisdiction over foreign nonparty Respondents in post-judgment enforcement proceedings based on allegations that they aided and abetted violations of the court's injunction or were successors-in-interest. Also at issue was whether Plaintiffs preserved their successor-in-interest theory as a basis for personal jurisdiction.

Rule

When a defendant appeared in the proceedings leading to a default judgment but failed to pursue a direct appeal, Rule 60(b)(4) relief for lack of subject matter jurisdiction is available only in the rare case of a clear usurpation of power; the judgment is not void if there was an arguable basis for jurisdiction. For foreign nonparties in contempt or enforcement proceedings, due process still requires valid service and minimum contacts with the forum; aiding and abetting a violation of an injunction under Rule 65(d)(2)(C) does not, by itself, necessarily establish the substantial, expressly aimed forum contacts required for specific personal jurisdiction. A successor-liability theory cannot support jurisdiction when the appellant abandons the theory presented below and advances a different unpreserved theory on appeal.

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Nora Ellis, a citizen of Maryland, sued Alpine Grid GmbH and several related entities in federal court in Richmond on diversity grounds. Alpine Grid appeared through counsel, litigated for several months, then stopped participating; a default judgment was entered, and Alpine Grid never appealed. Ten years later, Alpine Grid moves under Rule 60(b)(4), arguing that one defendant was a Swiss entity whose classification for diversity purposes was unsettled in the circuit and reasonably debatable.

How should the court rule on Alpine Grid's Rule 60(b)(4) motion?

Explanation. When a defendant appeared in the underlying action and then failed to pursue a direct appeal, Rule 60(b)(4) relief is available only in the rare case of a clear usurpation of power. The judgment is not void if there was an arguable basis for subject matter jurisdiction. Because the entity-classification issue was unsettled and reasonably debatable, the judgment is not void. (Derived from Hawkins v. i-TV Digitalis Tavkozlesi zrt. (n.d.).)