Supreme Court Holds Void Judgments Must Be Attacked Within a ‘Reasonable Time’

Resolving a split of circuits and disagreeing with the leading treatise on federal procedure, the Supreme Court ruled today that a motion under Rule 60(b)(4) to set aside a default judgment for lack of personal jurisdiction must be made within a “reasonable time.”

Although the petitioner had not raised due process as grounds for voiding the judgment, Justice Samuel A. Alito, Jr. held for the Court in his January 20 opinion that a due process violation would not set aside a void judgment unless the due process argument was raised within a “reasonable time.” 

It could now be said that the constitutional guarantee of due process can be overcome by a federal rule of procedure. In other words, a judgment that’s “void” will become valid unless a motion under Rule 60(b)(4) is made within a “reasonable time.” 

Justice Alito did not attempt to define “reasonable time,” because the petitioner did not raise the issue.

The Allegedly Void Judgment

A chapter 11 debtor filed an adversary proceeding to recover some $50,000 in unpaid invoices. When the defendant failed to answer the complaint, the bankruptcy court entered a default judgment. 

After the case converted to chapter 7, the trustee attempted to collect the judgment over the next six years. Among the attempts was a demand letter sent by the trustee to the defendant’s chief executive about a year after the judgment had been entered.

Five years after entry of the default judgment, the chapter 7 trustee attached the defendant’s bank account. Six years after the entry of judgment, the defendant moved under Bankruptcy Rule 9024 and Federal Rule 60(b)(4) to set aside the judgment. The defendant contended that the judgment was void, allegedly because the debtor had not properly served the summons and complaint.

The bankruptcy court never reached the question of whether the judgment was void for insufficiency of service of process. The bankruptcy court denied the motion to void the judgment on the grounds that the delay in filing the Rule 60(b)(4) motion was unreasonable. 

The defendant appealed, but the district court affirmed, and so did the Sixth Circuit, over a dissent. Burton v. Coney Island Auto Parts Unlimited Inc. (In re Vista-Pro Automotive LLC), 109 F.4th 438 (6th Cir. July 26, 2024). To read ABI’s report on the Sixth Circuit decision, click here.

The defendant filed a petition for certiorari, which the Court granted in June. To read ABI’s story, click here. To read ABI’s story about oral argument on November 4, click here.

The Applicable Rules

The outcome turned on the Court’s interpretation of Rules 60(b)(4) and 60(c). As Justice Alito said, 

Federal Rule of Civil Procedure 60 permits a court to “relieve a party . . . from a final judgment, order, or proceeding,” and subdivision (b)(4) specifically authorizes a court to grant relief from a “void” judgment.

Justice Alito went on to say,

Rule 60 also imposes a time limit for such motions. Rule 60(c)(1) provides that a “motion under Rule 60(b) must be made within a reasonable time.”

Justice Alito then held, 

Because a motion for relief from an allegedly void judgment is a “motion under Rule 60(b),” the reasonable-time limit applies.

The Rule’s Plain Language Prevails

Referring to the Wright, Miller & Kane treatise, Justice Alito said that “several Courts of Appeals[] and a prominent treatise nonetheless maintain that Rule 60(c)(1)’s reasonable-time limit does not apply to motions alleging voidness.” He went on to say that “[t]hese authorities acknowledge that their interpretation clashes with Rule 60’s text.” 

While courts finding no time limit “rely[] on the generally accepted maxim that a ‘void judgment is a legal nullity,’” Justice Alito said that those courts believe “that the passage of time cannot turn such a nullity into an enforceable judgment.”

Justice Alito said that the argument for no time limit regarding void judgments “cannot bear the weight that [the defendant] and others have placed on it.” He went on to say that the defendant “would need to show that some principle of law, such as the Due Process Clause, gives a party the right to allege voidness at any time,” because “statutes and rules routinely limit the time during which a party can seek relief from a judgment infected by error.”

However, the defendant did not advance a due process argument. Furthermore, “we cannot divine any principle requiring courts to keep their doors perpetually open to allegations of voidness,” Justice Alito said.

Justice Alito gave examples explaining why a due process denial should not mean there’s no time limit. “[I]f a federal district court erroneously concluded that it possessed subject-matter jurisdiction and proceeded to enter a judgment,” he said that “the adversely affected party could wait as long as it wanted before filing a notice of appeal.”

“It is hard to accept the proposition that due process requires” having no time limit, Justice Alito said.

Although Justice Alito did not attempt to define “reasonable time,” he did say that “it might be reasonable for a defendant not to seek relief before learning about a plaintiff ’s attempted enforcement.”

Justice Alito ended his opinion by holding that a litigant “seeking relief under Rule 60(b)(4) must comply with Rule 60(c)(1) and file a motion within a reasonable time.” Because the defendant had not argued that it acted within a reasonable time, he said that “we need not expound on whether Coney Island’s timing was reasonable.”

Justice Sotomayor’s Concurrence

Not joining the other justices in the opinion of the Court, Justice Sonia Sotomayor concurred in the judgment. She said,

The Court today rightly holds that a Rule 60(b)(4) motion to set aside a default judgment that is void for lack of personal jurisdiction must be made “within a reasonable time.” . . . . Rule 60’s text and structure require that conclusion, as the majority explains.

Justice Sotomayor stopped short of adopting the majority’s belief that a lack of due process will not avoid the “reasonable time” limitation. She observed that the defendant “did not make this argument below and the Sixth Circuit did not pass upon it.” She said, 

This Court does “not generally entertain arguments that were not raised below and are not advanced in this Court by any party.” Burwell v. Hobby Lobby Stores, Inc., 573 U.S. 682, 721 (2014). There is no reason to depart from that practice absent unusual circumstances, which certainly are not present here.

In his footnote 3, Justice Alito addressed Justice Sotomayor’s concurrence, which he characterized as “contend[ing] that we should abstain from addressing any potential due-process considerations.” He said that “the only possible basis for” believing that a due process violation overcomes a time limitation “is a rule of constitutional law that prevents the imposition of the Rule’s reasonable-time requirement.”

Observation

The majority opinion could be read to mean that “reasonable time” begins to run when the defendant is told about the entry of the allegedly void judgment, given how Justice Alito alluded to the fact that the defendant’s CEO had been told in writing about the judgment one year after entry. 

Questions

Are the majority’s statements about due process dicta or holding?

Does the majority’s opinion imply that constitutional principles will be applied less rigorously to the federal rules?