302 F.3d 515 (5th Cir. 2002), 01-30679, Jackson v. FIE Corp.
|Citation:||302 F.3d 515|
|Party Name:||Arnold JACKSON; Linda Jackson; and Brian Jackson, Plaintiffs-Appellees, v. FIE CORPORATION; et al., Defendants, Fratelli Tanfoglio di Tanfoglio Bortolo & C.S.N.C., formerly known as Fratelli Tanfoglio SPA, Defendant-Appellant.|
|Case Date:||August 20, 2002|
|Court:||United States Courts of Appeals, Court of Appeals for the Fifth Circuit|
Rehearing Denied Sept. 17, 2002.
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Thomas A. Gennusa, II, Law Office of Thomas A. Gennusa, II, Metairie, LA, Addison Kennon Goff, III (argued), Goff & Goff, Ruston, LA, for Plaintiffs-Appellees.
John F. Renzulli, John J. McCarthy (argued), Renzulli & Rutherford, New York City, Robert Emmett Kerrigan, Jr. (argued), Isaac H. Ryan, Deutsch, Kerrigan & Stiles, New Orleans, LA, for Defendant-Appellant.
Appeal from the United States District Court for the Eastern District of Louisiana.
Before KING, Chief Judge, and REAVLEY, and WIENER, Circuit Judges.
WIENER, Circuit Judge:
This appeal turns on whether a defendant that knowingly suffers a default judgment to be rendered against it may thereafter employ Rule 60(b)(4) to contest a factual finding that was vital to both (1) the rendering court's specific personal jurisdictionhere, as a putative minimum contact with the forum stateand (2) the merits of the default judgmenthere, as proof that the defendant manufactured the offending product in this product-liability suit. We conclude, apparently for the first time in this Circuit, that when a court rendering a default judgment makes a factual finding that has that kind of dual significance, such a finding has no preclusive effect in a subsequent Rule 60(b)(4) challenge to personal jurisdiction. Put differently, despite the importance of such a factual finding to the merits of the default judgment, the finding's jurisdictional significance remains amenable to attack under Rule 60(b)(4). In the instant case, the district court's refusal to permit such a challenge constituted legal error, leaving us no choice but to vacate and remand.
I. FACTS AND PROCEEDINGS
A. The Default Judgment
In May 1992, while moving into his new home in New Orleans, Plaintiff-Appellee Arnold Jackson accidentally dropped an envelope that contained a loaded but uncocked .25 caliber pistol The pistol discharged, firing a bullet that struck Jackson in the neck, severing his spinal cord and rendering him a permanent quadriplegic.
Jackson, together with his wife and son, Plaintiffs-Appellees Linda Jackson and Brian Jackson, brought suit in Louisiana state court against parties that he alleged were responsible for, inter alia, manufacturing the pistol and its component parts, namely Defendant-Appellant Fratelli Tanfoglio di Tanfoglio Bortolo & C.S.n.c. (hereafter, "Fratelli Tanfoglio"1), an Italian firearms manufacturer; and two other, confusingly-named Italian firearms firms, Fabrica D'Armi di Tanfoglio Giuseppe, S.r.1. (hereafter, "Tanfoglio Giuseppe"), and Giuseppe Tanfoglio, S.p.a. Whether
these three firms (collectively, the "Tanfoglio firms") were truly independent of each other at all times relevant to this action is disputed, but the record suggests that Fratelli Tanfoglio was founded by the children of the founder of Tanfoglio Giuseppe.
Whatever their degree of corporate interrelationship, none of the Tanfoglio firms chose to make an appearance in this case, either before or after another defendant removed it to federal court. Over time, the defendants that did make appearances were dismissed,2 leaving the three absent Tanfoglio firms as the only defendants.
The Jacksons filed for a default judgment against the Tanfoglio firms. After an intervening appeal, the district court held several days of hearings, taking testimony from the Jacksons and their expert witnesses in medicine and economics. Also in evidence was the deposition of Lama S. Martin, the Jacksons' firearms expert. Martin testified that the design of the pistol was unsafe; specifically, that it was obsolete in ignoring specified principles of gun design and safety that had been established for a century. Hence the proffered product defect: The pistol's firing pin assertedly was too long, which caused the uncocked pistol to fire on impact when it was dropped.
Given this testimony, identification of the pistol's manufacturer and distributor loomed large. The pistol itself bears the trademark of Firearms Import and Export Corporation, a Florida firm. The only record evidence identifying Fratelli Tanfoglio as the manufacturer of the pistol or any of its parts is a short passage from Martin's deposition, when he answered a compound question:
Q. Now, Mr. Martin, have you had occasion to do some research and study in your reference materials as to the origin of this gun, the Tanfoglio and Giuseppe Tanfoglio [sic]?
A. I have, yes.
Q. And was this gun made by Giuseppe Tanfoglio and Fratelli Tanfoglio?
A. Yes, inin their plant in Gardone, Italy.
On the strength of this testimony, and seemingly absent any further evidence linking any of the Tanfoglio firms to the pistol, the court entered a default judgment in the Jacksons' favor, finding that the pistol had been "manufactured and distributed by the Italian defendants" and concluding that the Tanfoglio firms were liable under Louisiana's product liability law. The district court also concluded that it had the jurisdictional power to bind the Tanfoglio firms to a judgment, noting that the Jacksons had properly served the Tanfoglio firms under both the Louisiana long-arm statute3 and the Hague Service Convention.4 The court did not, however, analyze whether personal jurisdiction of the
Tanfoglio firms otherwise comported with due process.5
The court awarded the Jacksons $11.02 million in compensatory and special damages, plus interest and costs. No appeal was taken, so in March 1999, the district court declared the judgment to be final and executory.
B. The Rule 60(b)(4) Motion
In October 2000, nearly two years after the district court entered judgment, Fratelli Tanfoglio, acting alone, filed in the district court a Rule 60(b)(4) motion to vacate judgment, contending that the default judgment was void ab initio because the court had lacked personal jurisdiction to enter judgment against that defendant.
At the heart of Fratelli Tanfoglio's challenge to personal jurisdiction lies its assertion that it never manufactured .25 caliber pistols until 1993, well after Jackson's injury occurred. That being so, argues Fratelli Tanfoglio, it could not possibly have made Jackson's pistol or any of its parts. Rather, this argument goes, the legally unrelated firm of Tanfoglio Giuseppe made the firing pin, and Tanfoglio Giuseppe is now defunct, having been properly liquidated and dissolved under Italian law. Therefore, reasons Fratelli Tanfoglio, it lacked the minimum contacts with Louisiana vis-a-vis this cause of action to support the court's exercise of specific personal jurisdiction without violating due process. Fratelli Tanfoglio contends further that any contacts it may have had with Louisiana that were unrelated to this cause of action do not rise to the "continuous and systematic" level required before general personal jurisdiction can attach.
To prove these assertions in prosecuting its Rule 60(b)(4) motion in the district court, Fratelli Tanfoglio submitted several affidavits. It also sought to depose Jackson and his firearms expert and to engage in other discovery. Limited discovery of jurisdictional facts did occur, but the magistrate judge in charge appears to have regarded inquiry into the identity of the gun's manufacturer as an impermissible attempt to reopen the merits of the default judgment. Consequently, the magistrate judge refused Fratelli Tanfoglio's request to depose the Jacksons' firearms expert, Martin. Herein lies the problem posed by the dual nature of this crucial fact: It is highly significant both to the merits of the judgment (which the magistrate judge focused on) and to the court's personal jurisdiction (which the magistrate judge slighted).
Fratelli Tanfoglio challenged this ruling and raised other discovery issues in the district court. That court, however, ruled against Fratelli Tanfoglio on its Rule 60(b)(4) motion without ever reaching the validity of the magistrate judge's proposal. Noting that the question who bears the burden of proof in a Rule 60(b)(4) challenge to personal jurisdiction is one that has not been answered for this circuit, the district court adopted the view of the Seventh Circuit that once a defendant with notice chooses to suffer a default judgment, he is the party who thereafter must shoulder the burden of proving the absence
of personal jurisdiction.6
The district court then evaluated Fratelli Tanfoglio's Rule 60(b)(4) motion under the multifactor balancing test that we set forth in Magness v. Russian Federation.7 Using this standard, the court determined that "Fratelli Tanfoglio's principal defense, that it did not manufacture the Titan .25 caliber pistol at issue, is not meritorious in this motion." The court also determined that other contacts that Fratelli Tanfoglio had with the United States firearms market and Louisiana in particular supported its personal jurisdiction. The court concluded:
The factual allegations in Plaintiffs Petition, conclusively established due to Fratelli Tanfoglio's default, establish that Fratelli Tanfoglio manufactured, sold, and distributed the Titan .25 caliber pistol that caused his Arnold Jackson's [sic] injuries in Louisiana. Fratelli Tanfoglio's own discovery responses confirm that it has "minimum contacts" with Louisiana, and that the exercise of personal...
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