BHTT Entertainment, Inc. v. Brickhouse Café & Lounge, L.L.C.
858 F.3d 310
| 5th Cir. | 2017Background
- BHTT owns trademarks for "Brick House Tavern + Tap" and "Brick House Subs" and sued Brickhouse Café & Lounge, LLC for trademark infringement in Aug. 2015.
- After an initial default against Brickhouse Café & Lounge, BHTT amended to add two related LLCs and attempted service on their registered agent, Charles Bailey, who was evasive.
- The district court authorized substituted service under Fed. R. Civ. P. 4(e)(1) / Tex. R. Civ. P. 106(b)(2): leave summons and amended complaint with anyone over 16 at the Arlington restaurant.
- Brickhouse did not respond; the clerk entered default and the district court entered default judgment in Apr. 2016. Brickhouse first appeared on appeal and missed initial appellate briefing deadlines, leading to a clerk dismissal for want of prosecution.
- The clerk later reopened the appeal (order said only “case is reopened”); appellee BHTT argued that the mandate was never recalled and appellate jurisdiction was therefore lacking.
- The Fifth Circuit concluded the clerk’s reopening recalled the mandate (within clerk authority), reached the service-of-process issue, and affirmed the default judgment.
Issues
| Issue | Plaintiff's Argument (BHTT) | Defendant's Argument (Brickhouse) | Held |
|---|---|---|---|
| Appellate jurisdiction after clerk's dismissal — was the mandate recalled? | Clerk lacked power to recall mandate; reopening order did not explicitly recall mandate, so no appellate jurisdiction. | Clerk’s order reopening the case sufficed to recall the mandate and restore appellate jurisdiction. | Reopening order amounted to recall; clerk had authority to reinstate appeals under Fifth Cir. Rule 27.1 and jurisdiction exists. |
| Waiver — must service defects be raised first in district court via Rule 60(b)? | Brickhouse waived service challenge by not moving to set aside default in district court; appeals should not bypass Rule 60(b). | Brickhouse contended it could challenge service on appeal without first moving under Rule 60(b). | Court assumed arguendo Brickhouse could raise service on appeal and addressed the merits, leaving circuit split unresolved. |
| Validity of substituted service under Texas law (Rule 106/Rule 4(e)(1)) | N/A (BHTT defended service): substituted service authorized by district court; affidavits complied with order. | Service was defective: inconsistent affidavit times/locations, Secretary of State not served, affidavits failed to state proper time/location under Tex. R. Civ. P. 107. | Service was valid: affidavits complied with the court's substituted-service order; Texas statutes do not preclude Rule 106(b)(2) methods; Rule 107 requirements met. Default judgment affirmed. |
Key Cases Cited
- Arenson v. S. Univ. Law Ctr., 963 F.2d 88 (5th Cir.) (mandate returns jurisdiction to district court)
- Goodwin v. Johnson, 224 F.3d 450 (5th Cir.) (discussing motion to recall mandate)
- Cambridge Toxicology Grp., Inc. v. Exnicios, 495 F.3d 169 (5th Cir.) (standard of review for default-judgment entry — abuse of discretion)
- Harper Macleod Solicitors v. Keaty & Keaty, 260 F.3d 389 (5th Cir.) (reversed default where substituted service did not comply with applicable Texas provision)
- Sinochem Int’l Co. v. Malay. Int’l Shipping Corp., 549 U.S. 422 (2007) (sequencing of procedural issues related to jurisdiction)
- Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83 (1998) (federal courts cannot assume hypothetical jurisdiction)