Jakks Pacific, Inc. v. Accasvek, LLC
270 F. Supp. 3d 191
| D.D.C. | 2017Background
- Jakks obtained a default money judgment against Accasvek in the C.D. Cal.; that judgment was later registered in the D.D.C. under 28 U.S.C. § 1963.
- Jakks sought discovery in D.D.C. to locate assets; non-parties (Cunningham and Fortress) opposed and argued the C.D. Cal. judgment is void for lack of subject-matter jurisdiction.
- The original C.D. Cal. complaint alleged diversity but pleaded facts appropriate for corporations rather than the citizenship of LLC members; Accasvek never appeared in that action.
- After a D.D.C. hearing, the court ordered sworn declarations about Accasvek’s (and its members’) citizenship; Fortress provided a declaration indicating that at least some indirect members are California citizens; Jakks had no contrary proof.
- The D.D.C. concluded the C.D. Cal. court lacked an "arguable basis" for diversity jurisdiction because LLC citizenship requires tracing members through all tiers, the complaint failed to allege members’ citizenship, and a default judgment cannot itself supply an arguable basis for subject-matter jurisdiction.
- The D.D.C. vacated the C.D. Cal. default judgment, denied Jakks’s motions (to compel, to strike, for sanctions) as moot, and dismissed the registered-action for lack of subject-matter jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant/Challenger's Argument | Held |
|---|---|---|---|
| Whether the registering court (D.D.C.) may entertain a collateral challenge that the rendering court (C.D. Cal.) lacked subject-matter jurisdiction | Jakks: default judgment is presumptively valid; the registering court should not reopen or void the judgment absent stronger proof | Fortress/Cunningham: registering court must ensure it has jurisdiction to enforce the registered judgment and may consider such challenges | The D.D.C. may consider the challenge and must ensure subject-matter jurisdiction; it treated the challenge akin to a Rule 60(b)(4) inquiry and considered facts presented |
| Whether default judgment itself supplies an “arguable basis” for subject-matter jurisdiction | Jakks: the existence of a final default judgment creates a presumption of an arguable basis for jurisdiction | Fortress/Cunningham: a default judgment does not cure jurisdictional pleading defects; defendants can collaterally attack jurisdiction without heightened burden | Held: default judgment cannot itself provide an arguable basis for subject-matter jurisdiction; court must look to pleadings/record and may consider external facts |
| Whether the C.D. Cal. had diversity jurisdiction over Accasvek (an LLC) | Jakks: contends members were diverse (proffers no specifics) and burden is on challengers to show non-diversity | Fortress/Cunningham: provided declarations alleging that indirect members include California citizens, undermining complete diversity | Held: on the available record, complete diversity was lacking or at least not supported; court concluded C.D. Cal. lacked subject-matter jurisdiction |
| Effect of void judgment on registered enforcement and pending motions in D.D.C. | Jakks: sought discovery/enforcement; argued challengers lack standing or burden to prove non-diversity | Fortress/Cunningham: argued enforcement is barred because the underlying judgment is void | Held: judgment in rendering court is void; D.D.C. vacated that judgment, denied Jakks’s enforcement motions, and dismissed the action for lack of subject-matter jurisdiction |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (court has independent obligation to ensure subject-matter jurisdiction)
- Arbaugh v. Y & H Corp., 546 U.S. 500 (jurisdictional defects may be raised at any stage)
- United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260 (Rule 60(b)(4) relief limited to cases where rendering court lacked an arguable basis for jurisdiction)
- Ins. Corp. of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694 (defendant may ignore proceedings and later collaterally challenge jurisdiction of default judgment)
- CostCommand, LLC v. WH Adm’rs, Inc., 820 F.3d 19 (LLC citizenship is the citizenship of each member)
- Americold Realty Trust v. Conagra Foods, Inc., 136 S. Ct. 1012 (treatment of unincorporated associations for diversity purposes)
- Bell Helicopter Textron, Inc. v. Islamic Republic of Iran, 734 F.3d 1175 (judgments entered without subject-matter jurisdiction are void)
- Practical Concepts, Inc. v. Republic of Bolivia, 811 F.2d 1543 (party who risks default may later challenge jurisdiction in collateral proceeding)