The Seventh Circuit Court of Appeals reminds us that a motion to dismiss for lack of personal jurisdiction can be brought at any time, even after judgment or in an ancillary proceeding.
In Philos Technologies, Inc. v. Philos & D., Inc. 645 F.3d 851 (7th Cir., 2011). The plaintiffs sued three Korean defendants for failing to pay for equipment. All of the defendants were served with process in January, 2009 but none filed an appearance or answer to the complaint. Two of the defendants sent a letter to the court saying that they had no involvement in the transaction and they requested a dismissal of the lawsuit against them. The Court issued a default against all of the defendants on June 30, 2009 and after a hearing on the issue of damages on July 21, 2009 the Court entered a judgment for plaintiffs totaling Two Million Nine Hundred Sixteen Thousand Three Hundred Thirty Two Dollars ($2,916,332.00).
Nearly a year after that, on June 14, 2010 counsel for the defendants appeared and moved to vacate the default judgment on the ground that there was no personal jurisdiction. The District Court denied the motion to vacate and did so without reaching the merits of the defendants’ personal jurisdiction objection. The District Court agreed with the defendants position that the motion was untimely because it was filed nearly a year after the entry of the default judgment against the plaintiffs.
The Court held that the pro se letter written by two of the defendants did not constitute an appearance submitting them to the Court’s jurisdiction. In remanding the case for a hearing to determine whether or not the Court had personal jurisdiction, the Court of Appeals pointed out contesting jurisdiction under Post-judgment Rule 60(b)(4) “benefits from the fact that the collateral challenge to jurisdiction can be brought at any time” (citations omitted) and that “the reasonable time limitation in Rule 60(c)(1) must generally mean no time limit at least absent exceptional circumstances.”