[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
___________________________ ELEVENTH CIRCUIT
JUNE 8, 2007
No. 05-15890 THOMAS K. KAHN
___________________________ CLERK
D.C. Docket No. 05-00459-CV-AR-S
SLOSS INDUSTRIES CORPORATION,
Plaintiff-Appellee,
versus
EURISOL,
Defendant-Appellant.
_____________________________
Appeal from the United States District Court
for the Northern District of Alabama
______________________________
(June 8, 2007)
Before CARNES and MARCUS, Circuit Judges, and JORDAN,* District Judge.
JORDAN, District Judge:
Sloss Industries Corporation, an Alabama company, manufactures and sells
*
Honorable Adalberto J. Jordan, United States District Judge for the Southern District of
Florida, sitting by designation.
slag wool, a fibrous form of blast furnace slag that resembles asbestos and is used for
insulation and similar applications.1 Starting in mid-2004, Eurisol SARLy,2 a French
limited liability company, began placing orders with Sloss for slag wool. When
Eurisol failed to pay for certain of the shipments, Sloss filed a federal lawsuit in the
Northern District of Alabama against Eurisol and its managing director, Jean Claude
Ferrarin. Eurisol and Mr. Ferrarin, despite having been served with process, did not
timely appear or respond to Sloss’ complaint. As a result, about six weeks after
service was effected, the district court entered a default judgment against Eurisol and
Mr. Ferrarin on liability, and set a trial on damages before a jury. Five weeks later,
a jury awarded Sloss $324,551.82 in damages against Eurisol and Mr. Ferrarin.
A month or so following the jury verdict, Eurisol and Mr. Ferrarin filed a
motion requesting that the judgment be set aside, arguing first (under Rule 60(b)(4))
that the district court lacked personal jurisdiction over them, and second (under Rule
60(b)(1)) that the default judgment on liability should be set aside due to excusable
neglect. The district court denied the motion.
Eurisol and Mr. Ferrarin then filed a motion to alter, amend, or vacate the
1
See 2 SHORTER OXFORD ENGLISH DICTIONARY 2864 (5th ed. 2002).
2
SARL is the French abbreviation for a term used to describe a private company
similar to an American limited liability company.
2
judgment. The district court granted the motion as to Mr. Ferrarin – finding that
Sloss had not presented any viable theory as to how Mr. Ferrarin could be held
individually liable for Sloss’ breach of contract – but denied the motion as to Eurisol.
Eurisol now appeals. We affirm, concluding that Eurisol was subject to specific
personal jurisdiction in Alabama, and that the district court did not abuse its
discretion in refusing to set aside the default judgment.
I
Rule 60(b)(4) allows a litigant – even one who does not initially appear – to
collaterally attack a judgment on the ground that it is void due to lack of personal
jurisdiction. See, e.g., Hazen Research, Inc. v. Omega Minerals, Inc., 497 F.2d 151,
154 (5th Cir. 1974). This is because “[a]n in personam judgment entered without
personal jurisdiction over a defendant is void as to that defendant.” Combs v. Nick
Garin Trucking, 825 F.2d 437, 442 (D.C. Cir. 1987). See also Burke v. Smith, 252
F.3d 1260, 1263 (11th Cir. 2001) (generally a judgment is void if the district court
lacked subject-matter jurisdiction, lacked personal jurisdiction over the parties, or
acted inconsistent with due process). Accord Jackson v. Fie Corp., 302 F.3d 515,
522-23 (5th Cir. 2002); Thos. P. Gonzalez Corp. v. Consejo Nacional de Produccion
de Costa Rica, 614 F.2d 1247, 1255-56 (9th Cir. 1980).
The district court’s determination that personal jurisdiction could
3
constitutionally be exercised over Eurisol is subject to plenary review. See, e.g.,
McGow v. McCurry, 412 F.3d 1207, 1214 n.2 (11th Cir. 2005). The fact that the
district court was addressing Eurisol’s Rule 60(b)(4) motion when it ruled on
personal jurisdiction does not convert the standard of review into a more deferential
one: “Unlike motions pursuant to other subsections of Rule 60(b), Rule 60(b)(4)
motions leave no margin for consideration of the district court’s discretion as the
judgments themselves are by definition either legal nullities or not. Therefore, [w]e
review de novo . . . a district court’s ruling upon a Rule 60(b)(4) motion to set aside
a judgment as void, because the question of the validity of a judgment is a legal one.”
Burke, 252 F.3d at 1263 (citations and quotation marks omitted).
A
Personal jurisdiction generally entails a two-step inquiry. First, we determine
whether the exercise of jurisdiction is appropriate under the forum state’s long-arm
statute. See Sculptchair, Inc. v. Century Arts, Ltd., 94 F.3d 623, 626 (11th Cir. 1996).
Second, we examine whether exercising jurisdiction over the defendant would violate
the Due Process Clause of the Fourteenth Amendment, which requires that the
defendant have minimum contacts with the forum state and that the exercise of
jurisdiction not offend “traditional notions of fair play and substantial justice.” Id.
(quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)). In this case, the
4
two inquiries merge, because Alabama’s long-arm statute permits the exercise of
personal jurisdiction to the fullest extent constitutionally permissible. See Ala. R.
Civ. P. 4.2(b); Sieber v. Campbell, 810 So. 2d 641, 644 (Ala. 2001).
Everyone agrees that this case involves only the concept of specific
jurisdiction, that is, jurisdiction arising “out of a party’s activities in the forum state
that are related to the cause of action alleged in the complaint.” McGow, 412 F.3d
at 1214 n.3 (internal quotation marks omitted). In a case involving specific
jurisdiction, a defendant’s contacts with the forum state must satisfy three criteria:
they “must be related to the plaintiff’s cause of action or have given rise to it;” they
must involve “some act by which the defendant purposefully avails itself of the
privilege of conducting activities within the forum;” and they “must be such that the
defendant should reasonably anticipate being haled into court there.” Id. at 1214.3
With these general concepts in mind, we turn to Eurisol’s contacts with
Alabama. Understanding that a minimum contacts analysis is “immune to solution
by checklist,” Product Promotions, Inc. v. Cousteau, 495 F.2d 483, 499 (5th Cir.
1974) (quotation marks omitted), and that contacts must be viewed both
3
In contrast, general jurisdiction – jurisdiction not related to and not arising out of a
defendant’s contacts with the forum – can only be exercised if the defendant has “continuous and
systematic” contacts with the forum. See Helicopteros Nacionales de Colombia, S.A. v. Hall, 466
U.S. 408, 415-16 (1984).
5
quantitatively and qualitatively, we discuss in detail the dealings between Eurisol and
Sloss in 2004.4
B
Eurisol, as noted earlier, is a French company. It does not have any offices,
officers, employees, or agents in Alabama. It does not own any real property in
Alabama. It is not licensed or authorized to do business in Alabama, does not do
business in Alabama, and does not have any customers in Alabama. It sells all of its
goods in Europe. It does not solicit business in Alabama. Other than Sloss, it does
not have any suppliers in Alabama.
On June 29, 2004, Eurisol sent an e-mail to Sloss asking for a price quote on
a 40-foot container of slag wool to be delivered to France. The next day, Sloss sent
Eurisol a ten-pound sample of slag wool, and provided Eurisol with the requested
price quote. From July 5 to July 12, Eurisol and Sloss exchanged numerous e-mails
and phone messages concerning matters such as Eurisol’s opinion of the sample slag
wool, the specifications and makeup of the slag wool Eurisol was looking for, the
storage capacity of the shipping containers that would be used, the size of Sloss’ bales
of slag wool, the price of the slag wool, and the cost of shipping the containers to
4
All of the communications summarized in the text were, of course, between
employees or representatives of Sloss and Eurisol. But, for ease of reference, we use the names of
the companies instead of the names of the individuals involved.
6
France.
Sloss approved Eurisol as a customer in July. On July 13, Eurisol placed an
order with Sloss, by facsimile, for five containers of slag wool, consisting of about
52 bales per container. On that same day, Sloss and Eurisol sent each other e-mails
concerning the payment terms initially proposed by Eurisol, and the companies
ultimately agreed that Eurisol would make payment within 45 days of the date of the
ocean bill of lading. On July 15, Eurisol, again by facsimile, placed an order for
another five containers of slag wool. On July 20, Eurisol sent an e-mail to Sloss
indicating that the initial orders of slag wool had not been received, and that Eurisol
needed the wool so it could fulfill orders from its own customers. Two days later,
Sloss responded by e-mail that it was working around the clock and delaying
shipments to other customers in order to provide Eurisol with the slag wool it had
ordered. In late July, Sloss and Eurisol exchanged more e-mails seeking to confirm
how many containers Eurisol had ordered.
On August 13, Eurisol, by e-mail, informed Sloss that it would place another
order the following week. Several days later, Eurisol, by facsimile, placed an order
for another ten containers of slag wool. On August 20, Eurisol sent Sloss an e-mail
concerning the first shipment of slag wool that it had received. According to Eurisol,
the fiber was not regular in color, as some bales were darker than others, and the
7
fibers in the wool were too thin. Eurisol asked Sloss to see if it could “improve the
quality, the color, and [the] thickness” of the fibers. Sloss responded that same day,
by e-mail. Sloss indicated that it thought Eurisol used the slag wool for fireproofing,
but inquired if there were other uses so it could produce the “best fiber” for Eurisol.
In reply, again by e-mail, Eurisol said that it manufactured products for fireproofing
and thermal insulation, and that it needed a “regular fiber (quality and color)” because
it applied its products through spraying. As to quality, Eurisol indicated that it
needed slag wool with resilience (“not short, not thin”). Eurisol also stated that Sloss
might be using too little oil in the slag wool, and that, for its applications, it needed
0.2% of oil in the wool. Eurisol asked what Sloss was going to do to provide better
a quality product.
Sloss, by e-mail on August 23, informed Eurisol that it could make the
diameter of the fibers larger, and that the color of the slag wool would be white to
light gray. Sloss also told Eurisol that it might be able to make the color lighter by
adding gravel, but that Eurisol needed to make a “bigger commitment” to take a
certain amount. As to the amount of oil being used, Sloss said it would find out and
get back to Eurisol. Eurisol placed an order for 14 containers of slag wool, by
facsimile, on August 23. The very next day, however, Eurisol complained to Sloss
in an e-mail about the quality of the first five containers it had received, saying it was
8
“very disappointed” because the slag wool was irregular in color, and the fibers were
shorter with very high density and “very breakable.” Eurisol also told Sloss that it did
not know if it would use the slag wool from the first five containers, and warned
Sloss that if quality did not improve, it would not continue purchasing from Sloss.
Later that day, Sloss responded by e-mail, suggesting that all shipments of slag wool
stop until the problems could be resolved.
Despite these apparent problems, on August 30 Eurisol placed yet another
order with Sloss for slag wool, requesting eight more containers.5 Later that same
day, Sloss sent an e-mail to Eurisol indicating that the new fiber it was making was
thicker and better, and asking questions about a sample of slag wool that Eurisol had
sent to Sloss. Eurisol next sent an e-mail to Sloss on the morning of September
3. In that e-mail, Eurisol said that it was trying to come up with a business plan for
its dealings with Sloss and wanted to work with Sloss in “guaranteeing a certain
amount of purchase.” Eurisol also indicated that it was attempting, with Sloss, to “fix
up” the quality issues. Finally, Eurisol requested that Sloss not sell its slag wool to
Eurisol’s competitors in Europe: “It would be very nice for us to know that Sloss . .
. will not deliver to other[ ] industrial companies in Europe in our specific business
(bales for spraying market). . . . Do you think it is possible?”
5
Sloss alleged that Eurisol failed to pay for this order.
9
On the afternoon of September 3, Eurisol placed four more orders with Sloss
by facsimile. These orders, respectively, were for 12, 16, 14, and 14 containers.6 For
the next seven days or so, Sloss and Eurisol exchanged e-mails and facsimiles about
the recent orders placed by Eurisol and about a wire transfer for $25,690.50 that
Eurisol had sent to Sloss’ bank in Alabama. Sloss had been unable to locate the wire
transfer at its bank, but ultimately realized that it had given the wrong bank
information to Eurisol.7
Eurisol next contacted Sloss on September 13. In an e-mail, Eurisol informed
Sloss that, in one of the containers it had received, all of the bales were wet and
therefore unusable. Eurisol wanted to know what Sloss would do, and provided Sloss
the container number, the bill of lading number, and the shipping date. Sloss
responded that same day by e-mail, explaining that it did not load wet bales.
The next communication was on September 16. Sloss, by e-mail, told Eurisol
that it was going to shut down production due to Hurricane Ivan, and that it was likely
that no containers would be shipped the following week. The following day, Eurisol
sent an e-mail to Sloss indicating that it had sent another wire transfer, this one for
6
According to Sloss’ complaint, Eurisol also failed to pay for these four orders.
7
On September 15, Sloss sent an e-mail to Eurisol confirming that it had received
Eurisol’s wire transfer.
10
$27,904.80.8
On September 24, Mr. Ferrarin and his wife, Lorena Ferrarin (also a Eurisol
employee), traveled to Birmingham, Alabama, to learn about Sloss’ production
process and to offer suggestions as to how to improve the slag wool. Mr. and Mrs.
Ferrarin met with various Sloss employees and discussed the differences between the
manufacturing processes of Sloss and Eurisol. They again requested that Sloss sell
slag wool only to Eurisol in Europe, but Sloss would not agree to an exclusive
relationship. They also discussed having Eurisol’s agent in New York, Ocean World
Lines (“OWL”), send containers to Sloss for shipment of the slag wool to France.9
After lunch, Mr. and Mrs. Ferrarin toured Sloss’ fiber manufacturing facility for about
an hour. They were then taken to the airport for their flight home.
Following the Ferrarins’ visit to Birmingham, Sloss and Eurisol exchanged
facsimiles and e-mails concerning topics such as the delivery of containers by OWL,
the price Eurisol was paying OWL for the containers, and the oil content in the slag
wool. Then, on September 29, Sloss sent Eurisol an e-mail discussing various things
8
By this time, there had also been various other phone conversations between Sloss
and Eurisol.
9
In six of the ten orders placed by Eurisol, OWL sent Sloss the containers to be loaded
with slag wool. The containers were then sent by truck to Charleston, from where they were shipped
to France.
11
that it was planning to do to make the slag wool more acceptable to Eurisol. Eurisol
responded the next day, saying it would consider Sloss’ proposal. Eurisol also
inquired about two free containers of slag wool it had previously requested. A week
later, on October 7, Sloss responded by e-mail, saying that it was “still working” on
Eurisol’s request for the two free containers, and inquiring whether Eurisol would
need any more slag wool during the month. On October 8, Eurisol replied to Sloss
by e-mail, indicating that it did not need more slag wool because it was having
problems with Sloss’ product, and suggesting again that Sloss send it the two free
containers. Eurisol also told Sloss in that e-mail that it preferred that Sloss use 0.2%
mineral oil instead of glycol, and that it would wait to see the quality of the next
shipment before deciding whether to continue doing business with Sloss.
On October 18, Eurisol sent an e-mail to Sloss concerning the problems it said
it was having with Sloss’ slag wool. According to Eurisol, employees in its factory
did not want to work with the wool because it was too “prickly and dusty,” and three
employees had already resigned. In addition, Eurisol said that its own customers
were refusing to buy its product if it was made with Sloss’ slag wool due to
application problems caused by high density, and that spraying applications had been
stopped by health officials due to the dangers posed by the dust from the wool.
Eurisol further complained that it had been forced to take back about ten truck loads
12
on jobs that used Sloss’ slag wool, and replace those orders with its own product.
Eurisol closed by telling Sloss that its slag wool remained as “deplorable” as in the
first shipments, and that it had (or would soon have) 700 tons of Sloss’ slag wool in
its factory, which it did not want to use.
Sloss responded to Eurisol by e-mail the same day. It denied most of Eurisol’s
allegations, and said that Eurisol had provided specifications only when the Ferrarins
visited Birmingham in September. As to the amount of slag wool sitting in Eurisol’s
factory, Sloss said it was “not sure” what could be done about it, but suggested there
might be something Eurisol could do “on [its] end” to make the product acceptable.
Sloss told Eurisol that it could make the slag wool consistent with the discussions
during the Birmingham meeting, and inquired when it could expect payment on the
slag wool that had already been shipped.
A week later, on October 25, Eurisol replied to Sloss’ e-mail. It rejected Sloss’
explanation, and detailed how, in its view, it had repeatedly told Sloss of the various
problems with the slag wool. Eurisol also claimed that it was not until the Ferrarins’
visit to Birmingham that it had learned that Sloss was using glycol, and not oil, in the
slag wool. Eurisol told Sloss that it refused to use the 700 tons of slag wool it had left
over, and that this amount of product was at Sloss’ disposal. Finally, Eurisol
informed Sloss that it was stopping payments.
13
Following a phone conversation on November 2, Sloss sent an e-mail to
Eurisol on November 8 indicating that it would try to sell the unused slag wool from
Eurisol’s factory. Sloss demanded, however, that Eurisol pay for the slag wool it had
used. Eurisol responded by e-mail on December 6 that it had 719 tons of Sloss’ slag
wool, that the amount of the unpaid invoices was $294,840.50, that its own customer
complaints amounted to $68,000 in losses, and that the freight it had paid for the
unused shipments amounted to $79,000.
Eurisol proposed two “solutions.” The first was that Sloss deduct the $68,000
and $79,000 from the unpaid balance of $294,840.50 and then “add a convenient
compensation” to Eurisol at a sum to be agreed by the companies. The second was
that Eurisol incorporate Sloss’ slag wool into its own slag wool at a one to nine ratio,
allowing it to get rid of the 719 tons of product in about six months. Under this
second proposal, Sloss would give Eurisol a 50% credit, and Eurisol would pay the
balance ($147,420.25) over the first four months of 2005.
Sloss apparently did not think much of Eurisol’s proposals. In March of 2005,
Sloss sued Eurisol and Mr. Ferrarin in the Northern District of Alabama.
C
The district court concluded that Eurisol’s contacts with Alabama, though
“minimal,” distinguished the case from a “mere purchaser” scenario, and were
14
sufficient to allow it to exercise personal jurisdiction. These contacts, said the
district court, included Eurisol (1) initiating contact with Sloss, (2) having its
representatives visit Sloss’ manufacturing facilities in Alabama to discuss the
production of the slag wool, (3) proposing an exclusive supplier arrangement, and (4)
sending shipping containers to Sloss in Alabama for use in shipping the slag wool to
France.
In asking us to reverse the district court’s decision, Eurisol relies mainly on
Borg-Warner Acceptance Corp. v. Lovett & Tharpe, Inc., 786 F.2d 1055 (11th Cir.
1986), a case in which we held that personal jurisdiction did not exist with respect to
an out-of-state purchaser of goods. Because of its importance to Eurisol’s position,
we discuss the case in detail.
Lovett & Tharpe, a Georgia corporation, contracted with Coon Manufacturing,
a Missouri corporation, for Coon to manufacture certain merchandise that would be
purchased by Lovett & Tharpe. All negotiations took place in Georgia, and no
representative of Lovett & Tharpe visited Missouri to negotiate the contract or inspect
Coon’s manufacturing plant. Lovett & Tharpe executed a “trade acceptance” (a type
of letter of credit) with Coon and Borg-Warner, an entity which then loaned money
to Coon to finance the manufacturing of the merchandise. See id. at 1056 & n.1.
Coon manufactured the merchandise in Missouri and shipped it to Lovett & Tharpe
15
in Georgia. Lovett & Tharpe subsequently returned some of the merchandise to
Coon, and in connection with that return, some Lovett & Tharpe representatives
traveled to Missouri. Borg-Warner sent the trade acceptance through normal banking
channels for payment from Lovett & Tharpe’s account at a Georgia bank, but Lovett
& Tharpe refused to make payment or permit payment, and as a result the trade
acceptance was returned unpaid. See id. at 1056. Borg-Warner then sued Lovett &
Tharpe in Missouri. A Missouri court found that it had personal jurisdiction over
Lovett & Tharpe, and issued a default judgment in favor of Borg-Warner for the full
amount of the trade acceptance. When Borg-Warner brought a diversity action in the
Southern District of Georgia to domesticate the judgment, Lovett & Tharpe asserted
that the Missouri judgment was unenforceable because the Missouri courts lacked
personal jurisdiction over it.
We ultimately concluded that the Missouri default judgment was void, and
could not be domesticated in Georgia, because Lovett & Tharpe was not subject to
suit in Missouri, not even under a specific jurisdiction theory. The three contacts
asserted by Borg-Warner – the manufacturing of the merchandise in Missouri, the
visit to Missouri by Lovett & Tharpe representatives in connection with the return of
merchandise, and Borg-Warner’s placement of the trade acceptance with a Missouri
bank – were insufficient to satisfy the Due Process Clause. See id. at 1058. Relying
16
on Owen of Georgia, Inc. v. Blitman, 462 F.2d 603, 604 (5th Cir. 1972), we explained
that “a mere one-time purchaser of goods from a seller in the forum state cannot be
constitutionally subject to the exercise of personal jurisdiction by the courts of the
forum state.” Borg-Warner, 786 F.2d at 1059.10
The post-execution visit to Missouri by Lovett & Tharpe representatives was
“jurisdictionally significant,” see id. at 1058, but we found a Fifth Circuit decision,
Hydrokinetics, Inc. v. Alaska Mechanical, Inc., 700 F.2d 1026 (5th Cir. 1983), to be
“persuasive precedent.” Borg-Warner, 786 F.2d at 1061. In Hydrokinetics, the Fifth
Circuit held that an Alaskan purchaser was not subject to personal jurisdiction in
Texas even though, while contract negotiations were ongoing, two of its
representatives visited and inspected the seller’s equipment and facilities in Texas,
and even though, after delivery of the goods, two of its representatives and its counsel
went to Texas to discuss problems with the manufactured goods with the seller. See
Hydrokinetics, 700 F.2d at 1029. The Fifth Circuit ruled that the purchaser’s
10
We also indicated, by quoting favorably from an Eighth Circuit case, that non-resident
purchasers are not treated the same as non-resident sellers for purposes of personal jurisdiction:
“‘Solicitation by a nonresident purchaser for delivery outside the forum state is a more minimal
contact than that of a [nonresident] seller soliciting the right to ship goods into the forum state.’”
Borg-Warner, 786 F.2d at 1059 (quoting Scullin Steel Co. v. Nat’l Ry. Utilization Corp., 676 F.2d
309, 314 (8th Cir. 1982)). Dicta in an earlier Fifth Circuit decision, Standard Fittings Co. v. Sapag,
S.A., 625 F.2d 630, 639 n.18 (5th Cir. 1980), had suggested that “the distinction between buyers and
sellers should be only one factor in the due process analysis, a factor which may have a bearing on
the quality of the defendant’s contact with the forum.”
17
agreement to purchase goods made in Texas, and to make payment for the goods in
Texas, did not show that the purchaser purposefully availed itself of the privilege of
conducting business in Texas. See id. It also concluded that the exchange of
communications between the parties (by telex, telephone, and letter) was insufficient
to show purposeful activity invoking the benefits of Texas’ laws, and that the two
visits to Texas by the purchaser’s representatives did not alter the “basic quality and
nature of [the purchaser’s] contact” with Texas. Id. Even though the agreement
between the parties was “cemented” in Texas, where the purchaser’s offer was
accepted, the significance of that factor was “diminished” due to a contractual
provision indicating that the agreement was to be governed by the law of Alaska. Id.
Significantly, the Fifth Circuit emphasized in Hydrokinetics that the case did not
“involve a repeated series of transactions,” but rather a single one. See id. at 1030.
Another case that appears to support Eurisol’s position is Banton Industries,
Inc. v. Dimatic Die & Tool Co., 801 F.2d 1283 (11th Cir. 1986). In Banton, Dimatic,
a non-resident manufacturer, sold several thousand pulleys to Banton, an Alabama
company. Prior to this particular sale, the parties had conducted transactions in the
same way for a period of four years. Banton alleged that the pulleys were defective,
and sued Dimatic in Alabama for breach of warranty. See id. at 1284. A divided
panel held that the exercise of personal jurisdiction over Dimatic in Alabama would
18
violate the Due Process Clause. Notwithstanding the years of business dealings
between the parties, the majority reasoned that Dimatic did not do business in
Alabama (other than its sales to Banton), that Banton made an unsolicited order for
the pulleys, that the pulleys were delivered to Banton in Nebraska, and that none of
Dimatic’s representatives entered Alabama. See id. at 1284-85. See also Sea-Lift,
Inc. v. Refinadora Costarricense de Petroleo, S.A., 792 F.2d 989, 993-94 (11th Cir.
1986) (Costa Rican corporation, which went to Florida to solicit Florida company for
salvage of barge which had capsized off coast of Costa Rica, and which entered into
standard “no cure - no pay” salvage contract that was accepted by company in Florida
– but was governed by English law – was not subject to personal jurisdiction in
Florida in suit alleging breach of salvage contract).
Borg-Warner and Banton are certainly favorable cases for Eurisol, but they do
not carry the day because they are distinguishable on their facts. Unlike the one-time
transaction at issue in Borg-Warner, this case involves ten orders placed by Eurisol
over a period of several months. Admittedly, Banton cannot be distinguished on this
ground because in that case the parties had a four-year history of business dealings.
But there are other important differences between this case and Borg-Warner and
Banton. After Eurisol placed various orders for slag wool, and after some shipments
were delivered, the Ferrarins visited Sloss’ plant in Alabama on behalf of Eurisol.
19
Unlike the representatives of Lovett & Tharpe in Borg-Warner, the Ferrarins did not
travel to Alabama simply to return merchandise. Instead, while visiting Sloss’ plant,
the Ferrarins discussed Sloss’ manufacturing process and ways to improve the quality
of the slag wool, and proposed (for the second time) that Sloss enter into an exclusive
relationship with Eurisol in the European market. Moreover, at one point Eurisol sent
a sample of slag wool to Sloss. Finally, unlike the non-resident defendants in Borg-
Warner and Banton, Eurisol was involved in the shipment process. For six of the ten
orders it placed, Eurisol had its agent, OWL, send containers into Alabama so that
Sloss could use them to ship the slag wool to France. In light of these differences,
Borg-Warner and Banton do not control. Instead, other more analogous cases
decided before Borg-Warner and Banton convince us that Eurisol could
constitutionally be sued for breach of contract in Alabama.
We begin with Hazen Research, Inc. v. Omega Minerals, Inc., 497 F.2d 151
(5th Cir. 1974), where an Alabama mining company, Omega, contracted with a
Colorado company, Hazen, to develop extraction techniques for graphite deposits.
An Omega representative went to Colorado and chose Hazen to do the work. For two
to three years Omega “shipped books, records, and more than 40 tons of ore, virtually
the entire production of its Alabama property, to Hazen in Colorado for use in
testing.” Id. at 155. Omega made payments to Hazen in Colorado, and on at least one
20
other occasion, an Omega representative met with Hazen’s personnel at a test site in
Colorado. See id. Omega failed to make certain payments, so Hazen sued Omega in
Colorado and obtained a default judgment. When Hazen sought to enforce the
judgment in Alabama, Omega argued that it was not subject to jurisdiction in
Colorado and that, as a result, the Colorado judgment was void. We disagreed, and
held that the exercise of jurisdiction over Omega in Colorado did not offend the Due
Process Clause: “[Omega’s] constitutional objection to Colorado’s assertion of in
personam jurisdiction is little more than frivolous. . . . The record in this case
abounds with evidence of Omega’s affirmative, purposeful decision to enter Colorado
and conduct business there. This deliberate contact conferred on the courts of
Colorado the constitutional authority to referee any bouts which resulted.” Id. at 155-
56 (citing Product Promotions, Inc. v. Cousteau, 495 F.2d 483 (5th Cir. 1974)). We
acknowledge that Hazen Research is not directly on point because Eurisol did not
send any raw materials to Alabama for the manufacturing of the slag wool. But in all
other respects, the facts in Hazen Research are very close to those here.
Also instructive is Southwest Offset, Inc. v. Hudco Publishing Co., 622 F.2d
149 (5th Cir. 1980) (per curiam). That case involved an Alabama publisher which was
sued in Texas by a Texas printer with respect to a series of contracts for the printing
of telephone directories. We held that the district court in Texas could
21
constitutionally exercise personal jurisdiction over the Alabama publisher for a
number of reasons. First, even though the Texas printer solicited the initial order
from the Alabama publisher, the publisher placed another eight orders in writing or
over the phone. Second, although no representative of the publisher visited Texas,
the publisher mailed to the printer in Texas camera-ready copies of its telephone
directories, and, after it received proofs of the directories from the printer, returned
corrected proofs to the printer in Texas. Third, all of the directories were printed in
Texas, and the publisher mailed some payments to Texas. Fourth, Texas law
governed the parties’ contracts. See id. at 150, 151-52. Like the publisher in Hudco
Publishing, Eurisol placed a number of orders and sent a sample of its own slag wool
to Sloss. Eurisol’s other contacts with Alabama went beyond those of the publisher
in Hudco Publishing. Eurisol placed unsolicited orders for the slag wool, and its
representatives (the Ferrarins) visited Alabama, where they inspected Sloss’ plant,
discussed the manufacturing process, and again asked Sloss to enter into an exclusive
relationship in the European market.
Finally, we note the similarity between Eurisol’s contacts and the forum
contacts of one of the non-resident purchasers in Whittaker Corp. v. United Aircraft
Corp., 482 F.2d 1079 (1st Cir. 1973), a case we discussed with approval in Borg-
Warner, 786 F.2d at 1061 & n.3. In Whittaker, the First Circuit held that personal
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jurisdiction could be exercised in Massachusetts over United, a non-resident
purchaser, in a suit brought by Whittaker, a Massachusetts manufacturer. There had
been a prior five-year course of dealing, and United solicited Whittaker (though in
places other than Massachusetts) to try to become a qualified participant in a process
developed by United. United’s representatives had visited Whittaker’s facility five
times while the product was being tested for use in the process, and had sent 16
documents and 20 teletype and phone messages into Massachusetts. United,
moreover, had allegedly made misrepresentations to Whittaker in Massachusetts. See
Whittaker, 482 F.2d at 1082-84. The First Circuit explained that, “[o]n this
background,” United’s participation “seems clearly to rise above that of a purchaser
who simply places an order and sits by until the goods are delivered.” Id. at 1084.
In our view, Eurisol was more than a mere passive purchaser, and the exercise
of specific jurisdiction by the district court did not offend the Due Process Clause.
Not only did Eurisol place ten unsolicited orders during a period of time spanning
several months, thereby establishing a course of dealing, for six of the orders it had
its agent, OWL, send containers to Sloss in Alabama for use in shipment of the slag
wool to France. The Ferrarins also visited Sloss’ plant in Alabama on behalf of
Eurisol, and while there they discussed the manufacturing process and proposed (for
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the second time) that Sloss enter into an exclusive arrangement for the European
market. And, as noted earlier, Eurisol sent Sloss a sample of its own slag wool.
Given these facts, Eurisol purposefully availed itself of the privilege of conducting
activities in Alabama, and reasonably could have anticipated being sued there. See
McGow, 412 F.3d at 1214. See also Pro Axess, Inc. v. Orlux Distribution, Inc., 428
F.3d 1270, 1277-78 (10th Cir. 2005) (French purchaser had sufficient minimum
contacts with Utah and could be sued there under specific jurisdiction theory because
(1) it solicited Utah manufacturer, (2) the contract required a continuing relationship,
(3) the services necessary for the contract were to be performed in Utah, and (4) there
were direct communications between French purchaser and Utah manufacturer). To
the extent that Hazen Research and Hudco Publishing are inconsistent with Borg-
Warner and Banton, we follow the former instead of the latter because they were
decided first. See, e.g., Swann v. Southern Health Partners, Inc., 388 F.3d 834, 837
(11th Cir. 2004) (explaining “prior panel” rule).
D
Having concluded that Eurisol had sufficient minimum contacts with Alabama,
we must now decide whether the exercise of specific jurisdiction would offend
traditional notions of fair play and substantial justice. See Robinson v. Giarmarco &
Bill, P.C., 74 F.3d 253, 259 (11th Cir. 1996). The relevant factors, as adapted to the
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dispute in this case, are the burden on Eurisol, Alabama’s interest in adjudicating the
dispute, Sloss’ interest in obtaining convenient and effective relief, the interests of the
judicial systems of the United States and France in obtaining the most effective
resolution, and the shared interests of the United States and France in furthering
fundamental substantive policies. See Asahi Metal Indus. Co. Ltd. v. Superior Court,
480 U.S. 102, 113-15 (1987); McGow, 412 F.3d at 1215-16. This is essentially a
reasonableness inquiry, see Asahi Metal, 480 U.S. at 113-14, and we conclude that
due process concerns are satisfied.
Starting with the obvious, there are only two places where a contractual dispute
between Sloss and Eurisol as to the slag wool could be adjudicated: Alabama and
France. Alabama is, of course, the most convenient forum for Sloss. It is certainly
inconvenient for Eurisol to defend a suit in Alabama, but it would be just as difficult
for Sloss to have to litigate in France, as neither company does business in, or has a
physical presence in, the other jurisdiction. See id. at 114. The burdens placed on
Eurisol, moreover, would be lessened by the available methods of foreign
transportation and communication, see Mutual Service Ins. Co. v. Frit Indus., Inc.,
358 F.3d 1312, 1320 (11th Cir. 2004), and by the fact that, if Eurisol filed a
counterclaim or interposed a defense based on purported defects in the slag wool –
as it said it would in its motion to set aside the default – Sloss would have to travel
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to France to do some discovery and inspect the tons of product that Eurisol rejected.
Both Alabama and France have a legitimate interest in adjudicating a dispute
between their respective citizens, but given the production of the slag wool in
Alabama and the visit of the Ferrarins to Sloss’ plant, it is not constitutionally
unreasonable to hale Eurisol into federal court in Alabama. It is at least plausible
that Alabama law would apply to Sloss’ breach of contract claim because Sloss
accepted each order in Alabama and because Eurisol’s payments were due in
Alabama. A federal court in Alabama, it seems to us, would be better equipped than
a French court to handle a breach of contract claim arising under Alabama law.
II
The next issue is whether the district court erred in denying Eurisol’s Rule
60(b)(1) motion to set aside the default judgment on the basis of excusable neglect.
The determination of what constitutes excusable neglect is generally an equitable one,
taking into account the totality of the circumstances surrounding the party’s omission.
See, e.g., Pioneer Inv. Services Co. v. Brunswick Assoc. Ltd. Partnership, 507 U.S.
380, 389, 395 (1993) (discussing excusable neglect under Bankruptcy Rule
9006(b)(1)). In order to have the default judgment set aside, Eurisol must show that
it had a meritorious defense, that Sloss would not be prejudiced if the judgment were
26
set aside, and that it had a “good reason” for failing to respond to Sloss’ complaint.
See In re Worldwide Web Systems, Inc. v. Feltman, 328 F.3d 1291, 1295 (11th Cir.
2003). Although there is a “strong policy of determining cases on their merits,” id.,
we review the district court’s decision only for abuse of discretion, see, e.g., Gibbs
v. Air Canada, 810 F.2d 1529, 1537 (11th Cir. 1987), which means that the district
court had a “range of choice” and that we cannot reverse just because we might have
come to a different conclusion had it been our call to make. See United States v.
Frazier, 387 F.3d 1244, 1259 (11th Cir. 2004) (en banc).
We conclude that Eurisol did not show a good reason for failing to respond to
Sloss’ complaint. The district court therefore did not abuse its discretion in refusing
to set aside the default judgment.
Eurisol, which does not have any in-house attorneys, was served with process
through the Hague Convention on April 6, 2005. Three or four days later, Eurisol
forwarded the complaint to Jean Bertrand, a French attorney who was representing
Eurisol and Mr. Ferrarin as outside counsel.
Mr. Ferrarin and Mr. Bertrand discussed whether Eurisol should challenge the
jurisdiction of the court in Alabama or file a counterclaim in the lawsuit. Although
Mr. Bertrand doubted that Eurisol had to respond to the complaint – he believed that
proper jurisdiction existed only in France, where the goods were delivered – “after
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a time of consideration” of unspecified length, Eurisol instructed him to hire an
attorney to represent it (and Mr. Ferrarin) in Sloss’ lawsuit. Mr. Bertrand said he
began looking for an Alabama lawyer, but was unsuccessful, though he did not
indicate when his search for counsel began. Despite his lack of success, he “did not
feel a sense of urgency to respond” to Sloss’ complaint because he still had doubts
about whether Sloss could sue in Alabama and because the rules for responding to a
complaint are different in France (so that, according to Mr. Bertrand, it takes from
four months to a year (and sometimes more) for a responsive pleading to be filed).
Eventually – it is unclear when – Mr. Bertrand contacted an attorney at Carlton Fields
in Orlando, Florida, who agreed to help him find an attorney in Alabama. The
problems in retaining counsel, however, still persisted. The first Alabama firm
contacted, Maynard Cooper & Gale, had a conflict of interest. So did the second
firm, Bradley, Arant, Rose, & White. Mr. Bertrand was finally able to retain Balch
& Bingham, but by then the default judgment had already been entered. According
to Mr. Bertrand, Eurisol did not know about the delay in obtaining Alabama counsel
until after the default judgment had been entered.
One may wonder why there are no dates in the preceding paragraph. After all,
time matters when one seeks to set aside a default, and in analyzing whether a
defaulting defendant has shown good reason for failing to timely respond, it is
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important to know exactly when certain actions were taken, and what delays existed
before or after those actions. The reason there are no dates is that the affidavits of
Mr. Ferrarin and Mr. Bertrand are utterly devoid of chronological specificity. The
affidavits do not say when Eurisol instructed Mr. Bertrand to retain Alabama counsel,
or when Mr. Bertrand first began looking for an Alabama lawyer, or when Mr.
Bertrand contacted Carlton Fields in Orlando, or when Mr. Bertrand or Carlton Fields
made contact with the first two Alabama firms, or when those firms disclosed that
they had conflicts of interest. The affidavits of Mr. Ferrarin and Mr. Bertrand are also
silent as to whether anyone, at any time, checked the docket sheet in the Alabama
district court to find out what (if anything) was going on with the lawsuit and, if so,
how Eurisol reacted (if at all) to the information gleaned from the court file. In other
words, the affidavits say nothing about when Eurisol or its counsel learned about the
initial default judgment on liability or the final default judgment.
This lack of detail is, in our view, fatal to Eurisol’s Rule 60(b)(1) motion. We
recognize that Eurisol is a foreign defendant, but it moved to set aside the default
judgment on July 28, 2005, over three and a half months after it was served with
process, and over one month after the default judgment was entered. The longer a
defendant – even a foreign defendant – delays in responding to a complaint, the
more compelling the reason it must provide for its inaction when it seeks to set aside
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a default judgment. The affidavits Eurisol submitted, given the delay here, were
simply insufficient. Cf. Worldwide Web Systems, 328 F.3d at 1297-98 (defendant
who, after learning of default judgment, waited almost two months to move to set
aside judgment, did not demonstrate “good reason” under Rule 60(b)(1)).
Our Rule 60(b)(1) cases have consistently held that where internal procedural
safeguards are missing, a defendant does not have a “good reason” for failing to
respond to a complaint. See, e.g., Gibbs, 810 F.2d at 1531, 1537-38 (defendant’s
manager left message for solicitor in legal department and sent copy of complaint to
him, message was not returned, complaint was not received, default judgment was
entered eight months later, and defendant moved to set aside judgment two months
afterwards); Davis v. Safeway Stores, Inc., 532 F.2d 489, 490 (5th Cir. 1975) (per
curiam) (defendant promptly sent copy of complaint to insurer, insurer did not retain
counsel or respond to complaint, there were no communications between defendant
and insurer for about three weeks, and default judgment was entered just four weeks
after answer was due). Cf. Baez v. S.S. Kresge Co., 518 F.2d 349, 350 (5th Cir. 1975)
(per curiam) (Rule 60(b)(6) case) (due to postal error, local counsel did not receive
complaint from defendant’s home office, and default judgment was entered). We
have extended this principle to situations where a defendant, knowing that an action
has been filed against him, fails to act diligently in ensuring that his attorney is
30
adequately protecting his interests. See Florida Physician’s Ins. Co., Inc. v. Ehlers,
8 F.3d 780, 784 (11th Cir. 1993) (per curiam).
Eurisol fares no better than the unsuccessful defendants in the cases cited
above. First, as noted earlier, the affidavits of Mr. Ferrarin and Mr. Bertrand are not
specific enough as to what happened during the three and a half months in question.
Second, during this period of time, Eurisol failed to check with Mr. Bertrand to
ensure that someone had been retained to respond to Sloss’ lawsuit, and did not have
any procedures in place to make sure that its interests were being protected. Under
the circumstances, Eurisol cannot simply shift the blame to Mr. Bertrand, its French
attorney, and thereby obtain relief from the default judgment.
III
The district court properly exercised specific personal jurisdiction over Eurisol,
and did not abuse its discretion in refusing to set aside the default judgment.
AFFIRMED.
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