P (a domiciliary of Mississippi) and D (a domiciliary of Nevada) met on a cruise that started in Miami and ended in the Bahamas. On the cruise, D agreed to ship a rare widget to P’s home for $100,000. P mailed D the check from P’s home in Mississippi, but D failed to ship the widget.
P brought suit against D in Mississippi state court for breach of a contract. Although D was served with a summons and complaint in hand in Nevada, D defaulted. Prior to P’s suit, the state of Mississippi passed a statute which states that any defendant who receives actual notice of a lawsuit in Mississippi state court and fails to take advantage of a special appearance to challenge the personal jurisdiction of the court over him will be taken to have waived the defense of personal jurisdiction.
P then sued D on the Mississippi judgment in federal court in Nevada. D argued that the Mississippi judgment is void for lack of personal jurisdiction. P claimed that D waived that defense. How should the federal court decide the issue?
In general, a federal court must give state court judgments full faith and credit – which means that they must give them the same preclusive effect that they would have in the rendering state. This obligation comes not from the Full Faith and Credit Clause in Art. IV of the Constitution (which obligates state courts to give the judgments of other states full faith and credit), but from the full faith and credit statute (28 U.S.C. § 1738).
Accordingly, under 28 U.S.C. § 1738, the federal court in Nevada must give the Mississippi state court default judgment against D the same preclusive effect in would have in Mississippi state courts. Since under Mississippi law the judgment precludes D from litigating whether there was PJ over him, it sounds like the federal court in Nevada must take D to be precluded from litigating the question of PJ.
But the federal court in Nevada is not obligated to apply this Mississippi law if it is unconstitutional. After all, if the Mississippi law is unconstitutional it isn’t applicable even in Mississippi state courts, so a federal court would not be violating its obligations under 28 U.S.C. § 1738 if it did not apply the law. Accordingly we must answer the question of whether the Mississippi approach to PJ violates the 14th Amendment.
The black letter law is that such a statute would be unconstitutional. See Earle v. McVeigh, 91 U.S. 503, 507 (1875) (“A party that simply refuses to appear may contend in a later case that the first tribunal lacked jurisdiction….”); Baldwin v. Iowa State Traveling Men's Assn., 283 U.S. 522, 525 (1931) (The defendant “had the election not to appear at all. If, in the absence of an appearance, the court had proceeded to judgment, and the present suit had been brought thereon, respondent could have raised and tried out the issue in the present action, because it would never have had its day in court with respect to jurisdiction.”).
But I expected you to venture an account of why it is unconstitutional. Some of you mischaracterized the statute by saying that it somehow forced PJ upon D even when none existed otherwise. It is hard to see how that’s so. If there is in fact no PJ over D in Mississippi, all D has to do is make a special appearance in the Mississippi court, argue that there is no PJ, and the court should dismiss the action. All the Mississippi statute does is require that the litigation about whether there is PJ take place in Mississippi.
But perhaps the Mississippi state court would read its personal jurisdictional power too broadly. As Judge Easterbrook has put it, if the Mississippi statute were constitutional, “a court that lacked jurisdiction could strong-arm a party to litigate the subject, decide in favor of its own power, and thus block any review of its adjudicatory competence.” United States v. Cook County, 167 F.3d 381, 388 (7th Cir.1999). But in fact, if the Mississippi court wrongly found that it had PJ, there would remain the possibility of review of this matter through the US SCt.
Another possible argument is that even if the Mississippi court would make the right decision that there is no PJ, it violates due process to require D to travel to Mississippi to litigate the question.
Some of you argued that the statute was unconstitutional because – per Scalia in Burnham – it was not allowed at the time of time of the enactment of the 14th Amendment (and, even if it were, it is not generally accepted by the states today). That is a possible argument, although, once again, it is important to note that the Mississippi statute does not really create a novel form of PJ. It simply determines where the issue of PJ is to be litigated.
In the end, I did not care which way you came down on the matter of the constitutionality of the statute – what mattered is that you addressed the right questions. In fact, I wonder whether there are really any good arguments that the statute would be unconstitutional. Here is what 18A Wright & Miller, Federal Practice & Procedure § 4430 have to say on the matter: “It would not be unthinkable to require a defendant to raise the jurisdictional objection in the initial forum or lose it. The opportunity to default and raise the question later distinguishes personal jurisdiction from defenses on the merits in deference to longstanding traditions that may one day vanish.”
Some of you who claimed that the statute was unconstitutional (and thus that D was not precluded from collaterally attacking the Mississippi default judgment) went on to discuss whether the collateral attack would be successful – that is, whether there actually was PJ over D in Mississippi. That was fine, although the constitutionality of the Mississippi statute was the heart of the question. There was obviously no general PJ over D in Mississippi. The only possible PJ was specific. That P mailed the check to D won’t work, since that is something P did, not something D did. Nor is the fact that D contracted (outside of Mississippi) with someone he knew to be a Mississippian enough. The best one could do is point to the fact that D promised to ship the widget to Mississippi, which, one might argue, is a form of intentionally reaching out to the state. It is questionable, however, that this is sufficient for specific PJ. The US SCt, as we have seen, prefers some sort of physical reaching out to the forum state and the widget was not in fact shipped to Mississippi.
A remarkably large number of you thought this was an Erie question of whether federal or Mississippi law on the preclusive effect of the default judgment applied. This showed considerable confusion on your part. The judgment at issue was made by a STATE court in Mississippi, not a federal court sitting in diversity. The law on the preclusive effect of the default judgment of a state court in Mississippi is Mississippi, not federal, law (although, as we have seen, that Mississippi law could be unconstitutional).
In short, this was not like the Semtek case. In Semtek, a Maryland state court (and ultimately, on appeal, the US Supreme Court) was asked to decide the preclusive effect of a dismissal by a federal court sitting in diversity in California. That introduced an Erie question, namely whether the preclusive effect of the dismissal was governed by federal or California law.
Once again, in our question the judgment at issue was made by a state court, not a federal court sitting in diversity. Of course, the court that is trying to decide the preclusive effect of the state court judgment is a federal court sitting in diversity (in Nevada). But the fact that the court making this decision is a federal court sitting in diversity introduces no Erie questions (which, if they existed would be about whether federal or NEVADA law applies).
The reason is that we know that under the federal full faith and credit statute (28 U.S.C. § 1738) that the federal court must give the default judgment of the Mississippi state court the same preclusive effect it would have in Mississippi (unless Mississippi law is invalid because it is contrary to the 14th Amendment). Since this is determined by a federal statute (which is clearly valid), there is no interesting Erie issue about whether Nevada or federal law on the recognition of judgments applies. Furthermore, there is no interesting difference between federal courts’ obligations under 28 U.S.C. § 1738 and the obligations of a Nevada state court, since under the Full Faith and Credit Clause of the Constitution Nevada state courts also must give the default judgment of the Mississippi state court the same preclusive effect it would have in Mississippi (unless the Mississippi law is unconstitutional).
In short, Erie discussions were a blind alley.