Case of the Day: Box v. Dallas Mexican Consulate General

The case of the day is Box v. Dallas Mexican Consulate General (N.D. Tex. 2013). The case was on remand from the Fifth Circuit. I wrote about the earlier decision in September 2012. In short, Box was a real estate broker; the claim arose out of Box’s work attempting to find new premises for the consulate and was for breach of contract, fraud, etc. The procedural posture was pretty much the same as in yesterday’s case of the day: the consulate failed to appear in the action; Box sought and obtained a default judgment; the consulate then moved for relief from the judgment under FRCP 60(b)(4) on the grounds that the court lacked jurisdiction under the FSIA.

The orthodox view, which we saw in Bell Helicopter, is that when a defendant has not appeared in a case, the defendant can later seek relief from a default judgment, and if the court lacked jurisdiction, the judgment is void, period:

Relief sought on the ground of the invalidity of the judgment may be obtained without regard to time limits, except when a statute of limitations applies to the claim for relief from the judgment itself. The justification for permitting such a delayed challenge to judicial authority varies according to the ground of invalidity that is availed of by the applicant. [ellipsis] When the person knew about the action but perceived that the court lacked territorial or subject matter jurisdiction, he is given a right to ignore the proceeding at his own risk but to suffer no detriment if his assessment proves correct. The right to challenge jurisdiction makes him an instrument for confining judicial authority to its prescribed limits. The fact that the challenge may be asserted after judgment gives it additional weight and effect. In any case, no public purpose is served by protecting the judgment. By hypothesis the proceeding was infected by fundamental error, usually attributable to the plaintiff’s own acts or omissions. Since the judgment was by default no significant investment of judicial effort was made. Thus, the judgment is supported by none of the considerations supporting preclusion and properly may be treated as wholly abortive.

Restatement (Second) of Judgments § 65 cmt. b.

The court in Box, though, took a narrower view. It reasoned that because the consulate had actual notice of the lawsuit, but chose not to defend, it was entitled to relief under FRCP 60(b)(4) only if there was “no arguable basis” on which the court could have exercised subject matter jurisdiction.

As we saw in Bell Helicopter, a defendant with a real jurisdictional argument has some strategic possibilities to consider. But Box shows that before even thinking about a default, a defendant should first make sure that the relevant jurisdiction adheres to the traditional view of void judgments.

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