Philos Technologies, Inc. v. Philos & D, Inc.
645 F.3d 851
7th Cir.2011Background
- Philos Technologies filed a diversity-based federal suit for conversion against Don-Hee Park, Jae-Hee Park, and Philos & D, Inc. (South Korea).
- Defendants were properly served in January 2009 but did not appear or answer; only a pro se letter claimed no involvement and sought dismissal.
- The district court entered a default on June 30, 2009 and awarded $2,916,332 after a damages hearing on July 21, 2009.
- Nearly a year later, on June 14, 2010, defendants moved under Rule 60(b)(4) to vacate as void for lack of personal jurisdiction.
- The district court denied the motion on timeliness grounds without addressing the merits, prompting this appeal.
- The Seventh Circuit reversed and remanded to allow full merits consideration, holding the defendants are entitled to a full opportunity to litigate jurisdictional issues.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standard of review for Rule 60(b)(4) ruling | Philos Technologies contends de novo review is appropriate due to jurisdictional void. | Defendants contend an abuse-of-discretion standard applies, as the district court had jurisdiction due to service. | Standard of review is de novo for void-judgment Rule 60(b)(4) rulings. |
| Timeliness of Rule 60(b)(4) motion in collateral challenge | Motion was untimely as a post-judgment challenge to a default. | Rule 60(b)(4) motions may be brought at any time to challenge void judgments. | Motion was timely; collateral challenge permitted. |
| Whether defendants appeared to challenge personal jurisdiction | Pro se letter to dismiss constitutes appearance submitting to jurisdiction. | The letter did not constitute an appearance; individuals could not appear pro se for a corporation; no submission to jurisdiction occurred. | Defendants did not appear to challenge jurisdiction; Rule 60(b)(4) remand appropriate. |
Key Cases Cited
- Insurance Corp. of Ireland, Ltd. v. Compagnie des Bauxites de Guinee, 456 U.S. 694 (U.S. 1982) (collateral attack can contest jurisdiction after judgment; proper vehicle for void judgments)
- Stoll v. Gottlieb, 305 U.S. 165 (U.S. 1938) (res judicata limits re-litigation of jurisdictional issues after contesting judgment)
- Bell v. Eastman Kodak Co., 214 F.3d 798 (7th Cir. 2000) (collateral attack not substitute for timely appeal of judgment)
- Be2 LLC v. Ivanov, 642 F.3d 555 (7th Cir. 2011) (per se abuse of discretion to deny void-judgment relief when no jurisdiction exists)
- Textile Banking Co. v. Rentschler, 657 F.2d 844 (7th Cir. 1981) (voidness of judgment when court lacked personal jurisdiction necessitates relief)
- Planet Corp. v. Sullivan, 702 F.2d 123 (7th Cir. 1983) (Rule 60(b)(4) relief delimits when judgment is void for lack of jurisdiction)