Lead Opinion
Appellees Thomas Keaty, Robert Keaty and Keaty & Keaty, d/b/a the Keaty Law Firm, (the Defendants) suffered a default judgment in the Southern District of Texas in favor of Appellant Harper Macleod Solicitors (Harper), a Scottish law firm. When Harper sought to register the default judgment in the Eastern District of Louisiana pursuant to 28 U.S.C. § 1963, the Defendants challenged its validity alleging deficient service of process. The Louisiana district court sustained that challenge and, using Rule 60(b)(4), voided the default judgment. Harper now appeals, arguing that (1) the Texas district court’s jurisdictional findings should be afforded preclusive effect in accordance with Texas law, and (2) service on the Defendants sufficiently complied with the Texas long arm statute to support the default judgment issued by the Texas district court. After concluding that district courts have authority to entertain motions challenging the validity of another district court’s judgment using Rule 60(b)(4), we confirm the propriety of the district court’s reliance on federal rules of issue preclusion to determine that the Texas district court’s jurisdictional findings did not preclude the Defendants from arguing their jurisdictional claims. Further, we agree with the Louisiana district court’s conclusion that service on the Defendants was defective under Texas law. Accordingly, we AFFIRM the judgment of the Louisiana district court voiding the default judgment of the Texas district court.
FACTUAL AND PROCEDURAL BACKGROUND
On August 18, 1998, Harper filed suit against the Defendants in the Southern
Harper attempted service on the Defendants in accordance with the Texas long-arm statute by forwarding three copies of the complaint, as well as three summonses, to the Texas Secretary of State (the Secretary). Harper provided the Secretary with the following “home or home office” addresses for the Defendants:
1. To Defendant Keaty & Keaty d/b/a The Keaty Firm’s home or home office:
345 Doucet Road, Suite 104 Lafayette, LA 70503
2. To Defendant Robert M. Keaty’s home or home office:
c/o Keaty & Keaty
1140 World Trade Center
Two Canal Street
New Orleans, LA 70130
3. To Defendant Thomas S. Keaty Jr.’s home or home office:
c/o Keaty & Keaty
1140 World Trade Center
Two Canal Street
New Orleans, LA 70130
On September 1, 1998, Harper received from the Secretary certifications attesting that two copies of the summons and complaint had been delivered by certified mail to each defendant at the address provided for that defendant. The Secretary further certified that return receipts had been received “bearing Signature of Addressee’s Agent.”
The Defendants did not appear in the Texas Court. On January 14, 1999, the Texas Court entered an Amended Default Judgment in favor of Harper. The order judged the Defendants jointly and severally hable to Harper for $1,108,734.30 in liquidated damages, inclusive of pre-judgment interest and attorneys’ fees. The order also recited that the Texas Court had jurisdiction over the Defendants and that the Defendants had been “properly served with the Summons and Complaint.”
On March 2, 1999, Harper registered the default judgment in the Eastern District of Louisiana (the Louisiana Court) pursuant to 28 U.S.C. § 1963,
On June 4, 1999, Harper filed an unopposed Rule 60(a) motion in the Texas Court seeking to amend the default judgment to include express findings in support of that court’s exercise of personal jurisdiction over the Defendants. The Texas Court subsequently signed an Order specifying that (1) Harper “properly provided the Texas Secretary of State with the addresses of each of the Defendants’ ‘home or home office’ address” in accordance with the Texas long arm statute; (2)
Harper then moved for summary judgment in the Louisiana Court as to the validity of the Texas Court’s default judgment. The district court granted the motion as unopposed on November 19, 1999, having granted the Defendants several extensions to oppose. The Defendants filed a “motion for reconsideration” on December 20, 1999 in support of which they offered evidence suggesting that neither the Keaty Law Firm nor Keaty & Keaty existed as a legal entity at the time Harper attempted service. Moreover, the Defendants maintained that none of the addresses provided to the Secretary by Harper accurately reflected the “home or home office” address of any of the Defendants. Because Texas law requires strict compliance with the Texas long arm statute, the Defendants asserted that service was defective and the Texas judgment void.
Treating Defendants’ motion as a Rule 60(b)(4) request for relief from judgment on grounds of insufficient service, the Louisiana Court determined that (1) the Texas Court’s jurisdictional findings did not preclude the Defendants from collaterally raising jurisdictional defects under federal res judicata principles, and (2) service to the Defendants was defective under Texas law. As a consequence, the Louisiana court declared that “the default judgment entered by the United States District Court, Southern District of Texas, Galveston Division is void.” Harper’s subsequent motion for relief from judgment pursuant to Rule 60(b)(1) or (b)(6) was denied and final judgment was entered on July 13, 2000. This appeal followed.
Discussion
Federal courts generally disfavor default judgments, preferring to resolve disputes according to their merits. Lindsey v. Prive Corp.,
Harper, as the beneficiary of the default judgment, has not challenged the ability of a registering court to grant relief from another district court’s judgment using Rule 60(b)(4) when the rendering court did not properly exercise jurisdiction. Instead, Harper alternatively argues that (1) a registering court should apply the relevant state law on issue preclusion to determine the effect of jurisdictional findings
Though we generally review a district court’s Rule 60(b) ruling solely for abuse of discretion, Bludworth Bond,
I. A Registering Court May Rely on Rule 60(b)(1) to Entertain Jurisdictional Challenges to the Validity of a Default Judgment Issued By Another District Court
Although both the Louisiana Court and the parties assume that Rule 60(b)(4) empowers a registering court to void a judgment rendered by another district court, the scope of a registering court’s power to alter or amend judgments rendered by another court through Rule 60(b) is uncertain. See WRIght, Miller & Kane, FEDERAL PRACTICE AND PROCEDURE: Civil 2d § 2787 (1995).
We join the majority of circuits and hold that registering courts may use Rule 60(b)(4) to sustain jurisdictional challenges to default judgments issued by another district court. Though judicial efficiency and comity among district courts often counsel a registering court to defer ruling on Rule 60(b) motions in favor of the rendering court, see Fuhrman,
II. The Louisiana Court Properly Applied Federal Rules of Issue Preclusion to Determine the Preclusive Effect of the Texas Court’s Jurisdictional Findings.
Having concluded that the Louisiana Court had authority to undertake an independent inquiry into the jurisdictional basis of the Texas Court’s judgment using Rule 60(b)(4), we next consider the first of Harper’s two primary arguments on appeal: whether the Louisiana Court properly applied federal law when determining the preclusive effect of the jurisdictional recitations and related factual findings contained in the Texas Court’s original and amended judgments. Traditional rules of preclusion as adopted in federal case law— whether under the doctrine of collateral estoppel or res judicata — require that the party to be estopped from re-litigating a claim have had a full and fair opportunity to litigate the issue. See Parklane Hosiery Co. v. Shore,
As support for its argument, Harper relies principally on the Supreme Court’s full faith and credit jurisprudence which provides that “a federal court must give to a state-court judgment the same preclusive effect as would be given that judgment under the law of the State in which the judgment was rendered.” Migra v. Warren City Sch. Dist. Bd. of Educ.,
We decline to extend full faith and credit principles to cases like this one involving the enforcement of a federal judgment by another federal court. We begin our analysis by reiterating the power of a court of registration to inquire into the jurisdiction of the rendering court before enforcing the rendering court’s judgment. See Covington Indus.,
power to void the judgment[.]” (citing Baldwin,
III. The Louisiana Court Properly Ruled That Service Upon the Defendants Was Defective Pursuant to Texas Law
Having determined that the district court properly undertook an independent review of the Texas Court’s jurisdiction to enter a default judgment against the Defendants, we next turn to the merits of the jurisdictional, issues raised. The parties, agree that Texas law, specifically the Texas long arm statute and the cases interpreting it, determine whether service of process was effective on the Defendants. See Fed. R. Civ. Proc. 4(e)(1) (West 1999). To support a default judgment against a jurisdictional challenge, Texas law requires plaintiffs to prove that (1) the pleadings established that the Defendants were amenable to service, and (2) evidence in the record demonstrates the Defendants were in fact served in the manner required by the Texas long arm statute. Bludworth,
Section 17.044(b) of the Texas Civil Practice & Remedies Code provides for substituted service on the Secretary for nonresident defendants doing business in Texas that do not maintain a regular place of business in Texas, provided that the relevant proceeding arises out of business done in Texas. See Tex. Civ. Prac. & Rem. Code Ann. § 17.044(b) (West 1999). Specifically, plaintiffs must comply with notice requirements of section 17.045(a):
If the Secretary of State is served with duplicate copies of process for a nonresident, he shall require a statement of the name and address of the nonresident’s home or home office and shall immediately mail a copy of the process to the nonresident.
Id. at § 17.045(a). In analyzing whether Harper complied with the Texas long arm statute, we must screen the record “to factually determine that the address provided to the Secretary of State was in fact the home or home office of the nonresident defendant (notwithstanding it was so labeled).” Mahon v. Caldwell, Haddad, Skaggs, Inc.,
Texas courts have consistently required strict compliance with the terms of the Texas long arm statute. See Mahon,
The Louisiana Court held that service was defective with respect to each of the Defendants because, inter alia, none of the addresses provided to the Secretary accurately stated a home or home office address for any one of the defendants. Harper has not provided any basis for reversing this determination. Instead, Harper concedes that it provided the Secretary with (1) “a former address for service upon the partnership Keaty & Keaty d/b/a The Keaty Firm at its Lafayette office;” and (2) addresses for Robert and Thomas Keaty that contained “a typographical error in the suite number.” According to Texas law, such mistakes render service defective. Royal Surplus Lines,
Conclusion
A party may contest personal jurisdiction or method of service by refusing to appear, suffering a default judgment, then collaterally attacking that default judgment when the plaintiff initiates enforcement proceedings. Thus, the Louisiana Court properly considered whether the Texas Court had jurisdiction over the Defendants. In undertaking its jurisdictional analysis, the Louisiana Court appropriately applied federal rules of issue preclusion to determine that the Texas Court’s jurisdictional recitals were not entitled to deference because they were not produced after full and thorough litigation. Finally, the Louisiana Court correctly concluded that Harper failed to provide the Secretary with an accurate “home or home office” address for any of the Defendants. Hence, we AFFIRM the Louisiana Court’s judgment voiding the Texas Court’s default judgment under Rule 60(b)(4).
AFFIRMED.
Notes
. Section 1963 provides:
A judgment in an action for the recovery of money or property entered in any ... district court ... may be registered by filing a certified copy of the judgment in any other district ... when the judgment has become final by appeal or expiration of the time for appeal.... A judgment so registered shall have the same effect as a judgment of the district court of the district where registered and may be enforced in like manner....
28 U.S.C. § 1963 (Supp.2000).
. The Defendants styled their challenge as an "Answer and Counterclaim Under Rule 13 Asserting an Independent Action to Vacate 'Void' Default Judgment For Lack of Personal Jurisdiction.”
. This Court has never expressly recognized the authority of a registering court to void a judgment rendered in another district court. The Fifth Circuit cases relied upon by the district court to support its review of the Texas Court's jurisdiction, as well as those cited by the parties, involved either a rendering court considering a Rule 60(b)(4) motion to void its own judgment, see Bludworth,
. Prior to Elite Erectors, the Seventh Circuit had suggested that a registering court could use Rule 60(b)(4) to void the judgment of another court. See In re Joint Eastern & Southern Dist. Asbestos,
. See Akers v. Simpson,
. We note that the Defendants do not argue that they had no notice of the claim pending against them such that enforcement of the Texas Court's judgment would violate the Due Process Clause. Instead, the Defendants argue that service upon them violated technical requirements of Texas law, and, under that law alone, was insufficient.
. Harper's argument also finds some jurisprudential support in a recent Supreme Court decision holding that, while federal law determines the preclusive effect of all federal judgments on the merits of a case, the federal rule of decision in diversity cases generally should refer to the law of the state in which the rendering court sits. See Semtek Int’l Inc. v. Lockheed Martin Corp.,
. This statute provides:
[t]he ... judicial proceedings of any court of any such State ... shall have the same full faith and credit in every court within the United States and its Territories and Possessions as they have by law or usage in the courts of such State....
28 U.S.C. § 1738 (1982).
. This principle has a long lineage in our jurisprudence. See Chicago Life Ins. Co. v. Cherry,
. We recognize that our refusal to apply state law to resolve this question turns on the substance of Texas law. We need not determine in this case whether a different state law could be used as the federal rule for determining the preclusive effect of jurisdictional find
. This Court has previously noted possible tension between Texas and federal law on the burden of proof: Texas law assigns the burden of proving service issues to the plaintiff, while the movant under Rule 60(b) generally bears the burden of proof. Bludworth Bond,
Concurrence Opinion
specially concurring:
I concur in the judgment and in all of Judge Benavides’s fine opinion with the exception of Part I, which addresses whether a registering court has the power to alter or amend a rendering court’s judgment through Rule 60(b). I write only to state that I agree with Judge Easter-brook’s treatment of this issue in Board of Trustees, Sheet Metal Workers’ National Pension Fund v. Elite Erectors, Inc.,
