City of New York v. A-1 Jewelry & Pawn, Inc., No. 08-4804 (2d Cir. 2011)
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The City of New York ("City") brought suit against defendants, retail firearms dealers located in South Carolina and Georgia, alleging public nuisance on the theory that they intentionally or negligently sold firearms in a manner susceptible to illegal trafficking to the City. After engaging in litigation with the City for several years, each defendant defaulted and upon entry of default judgment, the district court issued permanent injunctions prohibiting defendants from further violations of the law and required them to undergo supervision by court-appointed special master. At issue was whether a default judgment should have been entered; whether the default judgment was, in any event, void for lack of personal jurisdiction over each defendant; and, in the alternative, that the injunctions violated Federal Rule of Civil Procedure 65(d) or are unconstitutional. The court held that defendants' withdrawal from the district court proceedings justified the entry of default, followed by default judgment; that defendants forfeited their defense of lack of personal jurisdiction; and that the default judgment was not void. The court also held that the injunctions issued by the district court violated Rule 65(d) and therefore vacated the injunctions and remanded for further proceedings.
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08-4804-cv; 09-1345-cv City of New York v. A-1 Jewelry & Pawn, Inc. 1 UNITED STATES COURT OF APPEALS 2 FOR THE SECOND CIRCUIT 3 August Term, 2009 4 5 (Argued: March 11, 2010 Final Submission: Decided: April 20, 2010 May 4, 2011) 6 7 Docket Nos. 08-4804-cv; 09-1345-cv (consolidated for disposition) 8 ------------------------------------- 9 THE CITY OF NEW YORK, 10 Plaintiff-Appellee, 11 - v - 12 MICKALIS PAWN SHOP, LLC, 13 Defendant-Appellant, 14 15 16 17 18 19 20 21 22 A-1 JEWELRY & PAWN, INC., ADVENTURE OUTDOORS, INC., COLE'S GUN SHOP, INC., DUNKELBERGER'S SPORTS OUTFITTERS, GALLERY DISTRIBUTING INC., GREG L. DRIGGERS d/b/a AAA Gun & Pawn Brokers, THE GUN STORE, INC., HAROLD W. BABCOCK, JR. d/b/a Webb's Sporting Goods, JAMES THOMAS FARMER d/b/a Jim's Guns and Whatever, NANCY DAILEY d/b/a Peddler's Post, OLD DOMINION GUNS & TACKLE, INC., PATRIOT SERVICES, INC., WELSH PAWN SHOP, INC. d/b/a Big Tom's Pawn Shop, WOODROW C. HOLMAN III d/b/a Woody's Pawn Shop, VIRGINIA FIREARMS & TRANSFERS, INC., 23 Defendants. 24 ------------------------------------- 25 THE CITY OF NEW YORK, 26 Plaintiff-Appellee, 27 - v - 28 ADVENTURE OUTDOORS, INC., 29 Defendant-Appellant, 1 2 3 4 5 6 7 8 9 A-1 JEWELRY & PAWN, INC., COLE'S GUN SHOP, INC., DUNKELBERGER'S SPORTS OUTFITTERS, GALLERY DISTRIBUTING INC., GREG L. DRIGGERS d/b/a AAA Gun & Pawn Brokers, THE GUN STORE, INC., HAROLD W. BABCOCK, JR. d/b/a Webb's Sporting Goods, JAMES THOMAS FARMER d/b/a Jim's Guns and Whatever, MICKALIS PAWN SHOP, LLC, NANCY DAILEY d/b/a Peddler's Post, OLD DOMINION GUNS & TACKLE, INC., PATRIOT SERVICES, INC., WELSH PAWN SHOP, INC. d/b/a Big Tom's Pawn Shop, WOODROW C. HOLMAN III d/b/a Woody's Pawn Shop, VIRGINIA FIREARMS & TRANSFERS, INC., 10 Defendants.* 11 ------------------------------------SACK and WESLEY, Circuit Judges, and EATON, Judge.** 12 13 14 Before: 15 injunctions entered by the United States District Court for the 16 Eastern District of New York (Jack B. Weinstein, Judge) in favor 17 of the plaintiff-appellee, the City of New York. 18 appellants, Mickalis Pawn Shop, LLC, and Adventure Outdoors, 19 Inc., are retail firearms dealers located in South Carolina and 20 Georgia, respectively. 21 them and other firearms dealers for public nuisance on the theory 22 that they intentionally or negligently sell firearms in a manner 23 susceptible to illegal trafficking to New York City. 24 engaging in litigation with the City for several years, each 25 defendant-appellant defaulted. 26 the district court issued permanent injunctions prohibiting the 27 defendants-appellants from further violations of the law and Appeal from a default judgment and permanent The defendants- The City of New York brought suit against After Upon entry of default judgment, * The Clerk of Court is directed to amend the official captions in these actions as set forth above. ** The Honorable Richard K. Eaton, Judge of the United States Court of International Trade, sitting by designation. 2 1 requiring them to undergo supervision by a court-appointed 2 special master. 3 should not have been entered; that the default judgment is, in 4 any event, void for lack of personal jurisdiction over each 5 defendant; and, in the alternative, that the injunctions violate 6 Federal Rule of Civil Procedure 65(d) or are unconstitutional. 7 We conclude that the defendants-appellants' withdrawal from the 8 district court proceedings justified the entry of default, 9 followed by default judgment; that the defendants forfeited their They appealed, asserting that a default judgment 10 defense of lack of personal jurisdiction; and that the default 11 judgment is not void. 12 however, that the injunctions issued by the district court 13 violate Rule 65(d). 14 remand for further proceedings. 15 16 We agree with the defendants-appellants, We therefore vacate the injunctions and Affirmed in part, vacated and remanded in part. Judge Wesley concurs in a separate opinion. 17 18 19 20 21 22 23 24 25 FREDERICK A. BRODIE (Kenneth W. Taber, of counsel), Pillsbury Winthrop Shaw Pittman, LLP, New York, N.Y.; ERIC PROSHANSKY, Assistant Corporation Counsel (Richard J. Costa, Ari Biernoff, of counsel), for Michael A. Cardozo, Corporation Counsel of the City of New York, New York, N.Y., for PlaintiffAppellee City of New York. 26 27 28 29 30 31 32 33 JUSTIN S. KAHN, Kahn Law Firm, Charleston, S.C., for DefendantAppellant Mickalis Pawn Shop, LLC. JOHN F. RENZULLI (Scott C. Allan, of counsel), Renzulli Law Firm, LLP, White Plains, N.Y., for Defendant-Appellant Adventure Outdoors, Inc. 3 1 SACK, Circuit Judge: These appeals present what appear to be two issues of 2 3 first impression in this Circuit. First, whether a defendant who 4 repeatedly moves to dismiss for lack of personal jurisdiction, 5 but then withdraws from the litigation after those motions are 6 denied, is permitted to attack an ensuing default judgment on the 7 grounds that it is void for lack of personal jurisdiction. 8 Second, whether a federal district court may exercise personal 9 jurisdiction over an out-of-state firearms dealer under the New 10 York long-arm statute, N.Y. C.P.L.R. § 302, based solely on the 11 fact that the dealer's unlawful sales practices have facilitated 12 the trafficking of guns by third parties to New York State, where 13 those guns contribute to a public nuisance. 14 the first question in the negative, we do not reach the second. Because we resolve The City of New York (the "City") instituted this 15 16 lawsuit in May 2006 against fifteen federally licensed retail 17 firearms dealers operating from stores in Georgia, Ohio, 18 Pennsylvania, South Carolina, and Virginia. 19 appellants, Mickalis Pawn Shop, LLC ("Mickalis Pawn") and 20 Adventure Outdoors, Inc. ("Adventure Outdoors") are among those 21 dealers.1 22 single retail store in South Carolina and Georgia, respectively. 23 Each separately moved to dismiss the City's complaint against it The defendants- Mickalis Pawn and Adventure Outdoors each operates a 1 Although there were many defendants in the district court that are not parties to this appeal, for ease of reference we refer to these two defendants-appellants simply as the "defendants." 4 1 on the theory that the district court lacked personal 2 jurisdiction over it. 3 Judge), denying those motions, concluded that the City had made 4 at least a prima facie showing of personal jurisdiction, but left 5 the final determination of personal jurisdiction for trial. 6 The district court (Jack B. Weinstein, After additional rounds of motion practice and varying 7 amounts of discovery, the two defendants each moved to withdraw 8 their respective counsel and announced to the district court that 9 they would proceed no further in the litigation. The district 10 court entered a default against each of them. 11 proceedings before a magistrate judge, the court entered a 12 default judgment and ordered permanent injunctive relief against 13 both defendants. 14 Eventually, after Both defendants now appeal from the default judgment on 15 various grounds.2 16 the litigation did not justify the district court's entry of 17 default or the issuance of a default judgment against them. 18 Second, they contend that the district court lacked personal 19 jurisdiction over them, and therefore that the default judgment 20 is void. 21 injunctions as unconstitutional or as in violation of Federal 22 Rule of Civil Procedure 65(d). First, they assert that their withdrawal from Finally, the defendants challenge the permanent 2 The two defendants' appeals were consolidated for argument on March 11, 2010, before the same panel of this Court. 5 1 We conclude that the district court did not abuse its 2 discretion in entering a default and issuing a default judgment 3 against each of the defendants. 4 defendants forfeited the defense of lack of personal jurisdiction 5 and any other defenses they may have had by willfully abandoning 6 their defense of the litigation. 7 them is therefore not void. 8 defendants that the injunctions issued by the district court 9 violate the requirements of Rule 65(d), we vacate the injunctions We also conclude that the The default judgment against However, because we agree with the 10 and remand to the district court for it to craft appropriate 11 injunctive relief. 12 13 BACKGROUND The facts underlying this litigation are discussed in 14 detail in two lengthy opinions by the district court. See City 15 of New York v. A-1 Jewelry & Pawn, Inc. ("A-1 Jewelry I"), 501 F. 16 Supp. 2d 369 (E.D.N.Y. 2007); City of New York v. A-1 Jewelry & 17 Pawn, Inc. ("A-1 Jewelry II"), 247 F.R.D. 296 (E.D.N.Y. 2007). 18 We repeat them here only insofar as we think it necessary for an 19 understanding of our resolution of these appeals. 20 The Defendants-Appellants 21 Mickalis Pawn is a limited liability company formed 22 under South Carolina law. It operates a single retail store -- a 23 pawn shop in Summerville, South Carolina -- where it sells, among 24 other things, firearms. At all relevant times, Mickalis Pawn's 6 1 revenue has been derived entirely from sales made at its 2 Summerville store to customers who visit the store in person. 3 of 2006, Mickalis Pawn did not offer anything for sale in New 4 York, nor had it ever done so. 5 by mail order, by telephone, or by means of the Internet. 6 As It has never sold any merchandise Adventure Outdoors is a Georgia corporation with its 7 principal place of business in Georgia. It operates a single 8 retail store, located in Smyrna, Georgia, from which it sells 9 sporting goods, hunting and fishing equipment, camping supplies, 10 and firearms and ammunition. 11 derived from sales made at its retail store to customers who 12 visit the store in person. 13 state, nor does it sell firearms at gun shows. 14 Like Mickalis Pawn, its revenue is It does not ship its goods out of Adventure Outdoors has, however, maintained three 15 websites through which customers may initiate the process of 16 purchasing firearms from its store. 17 customer from Georgia or elsewhere in the United States to place 18 a deposit on a firearm through a wholesale distributor and direct 19 the distributor to ship the firearm to Adventure Outdoors. 20 customer must then visit Adventure Outdoors' store in person to 21 complete the sale and retrieve the firearm. 22 concedes that this system would permit a New York resident to 23 purchase a gun from Adventure Outdoors, but only if he or she 24 traveled to Georgia to pick it up. 7 These websites allow a The Adventure Outdoors Adventure Outdoors has sold 1 guns to residents of other states this way, but never to a New 2 York State resident. 3 Proceedings in the District Court 4 On May 15, 2006, the City brought suit against fifteen 5 federally licensed retail firearms dealers located in states 6 other than New York, including Mickalis Pawn and Adventure 7 Outdoors, alleging that they engaged in unlawful sales practices 8 that contribute to a public nuisance in the City.3 The City 3 Mayor Michael Bloomberg announced the filing of this lawsuit at a press conference held on May 15, 2006. In response to certain allegedly defamatory comments made by the mayor at that press conference, Mickalis Pawn and Adventure Outdoors each brought suit for defamation against the mayor, the City of New York, and others, in South Carolina and Georgia state courts, respectively. Following the City's unsuccessful attempt to remove each lawsuit to federal court, see Adventure Outdoors, Inc. v. Bloomberg, 552 F.3d 1290 (11th Cir. 2008) (reversing with instructions to remand to state court); Mickalis Pawn Shop, LLC v. Bloomberg, 482 F. Supp. 2d 707 (D.S.C. 2007) (remanding case to state court), both cases proceeded in state venues. Adventure Outdoors' lawsuit was ultimately dismissed for failure to comply with certain procedural requirements of Georgia law, see Adventure Outdoors, Inc. v. Bloomberg, 705 S.E.2d 241 (Ga. Ct. App. 2010) (affirming dismissal of lawsuit), while Mickalis Pawn's lawsuit survived a motion to dismiss and, after being voluntarily dismissed and then reinstated, appears to remain pending, see Mickalis Pawn Shop, LLC v. Bloomberg, No. 06-CP-081734 (S.C. Ct. C.P. Berkeley County, reinstated Mar. 27, 2009). Neither litigation is at issue in these appeals. The City of New York also brought a separate but related action in December 2006 against twelve other federally licensed retail firearms dealers on similar grounds. See City of New York v. Bob Moates' Sport Shop, Inc., No. 06-CV-6504 (E.D.N.Y.) (complaint filed Dec. 7, 2006). That litigation, which was also before Judge Weinstein, ended in 2008 after all twelve defendants settled or were dismissed. See City of New York v. Bob Moates' Sport Shop, Inc., 253 F.R.D. 237 (E.D.N.Y. 2008) (approving settlement). Like the Georgia and South Carolina state-court 8 1 alleged in its complaint that each of the fifteen firearms 2 dealers engages in "'strawman' purchases" that facilitate the 3 acquisition of firearms by individuals who are prohibited by law 4 from buying or possessing them.4 5 Many of these illegally purchased firearms, the City alleged, are 6 used to commit crimes in the City within a short time after their 7 sale by the defendants. 8 five causes of action -- public nuisance, statutory nuisance, 9 negligence, negligence per se, and negligent entrustment -- and Compl. ¶ 21 (May 15, 2006). The City's initial complaint asserted 10 sought damages, nuisance-abatement costs, and permanent 11 injunctive relief. 12 On August 8, 2006, Mickalis Pawn, Adventure Outdoors, 13 and four other defendant firearms dealers each timely moved to 14 dismiss the complaint as to it for lack of personal jurisdiction. 15 The moving defendants asserted that the requirements of the New 16 York long-arm statute, C.P.L.R. § 302, were not satisfied; that suits, the Bob Moates' lawsuit is not at issue in these appeals. 4 In a "straw" purchase, one individual buys a firearm with the purpose of transferring it to another individual who is prohibited from purchasing it himself. See City of New York v. Beretta U.S.A. Corp., 524 F.3d 384, 391 (2d Cir. 2008), cert. denied, 129 S. Ct. 1579 (2009). The stand-in, rather than the true buyer, completes the official form registering the sale, ATF Form 4473, and submits to the federally mandated background check. See United States v. Robinson, 586 F.3d 540, 541 n.1 (7th Cir. 2009). A seller who knowingly participates in a straw purchase is subject to federal criminal prosecution. See, e.g., Adventure Outdoors, Inc. v. Bloomberg, 552 F.3d 1290, 1300 (11th Cir. 2008) (collecting cases). 9 1 the defendants lacked the constitutionally requisite minimum 2 contacts with New York; and that the defendants never purposely 3 availed themselves of interstate commerce such that they should 4 reasonably anticipate defending a lawsuit in New York. 5 defendants 6 themselves to litigate this action in a state with which they 7 have no connection would violate both New York law and tenets of 8 due process under the Fifth and Fourteenth Amendments. 9 The argued that requiring out-of-state retailers such as On August 15, 2007, following jurisdictional discovery, 10 the district court denied the motions to dismiss in what it 11 characterized as a "case of first impression" applying the New 12 York long-arm statute to public-nuisance suits against out-of- 13 state firearms dealers. 14 The court stated that the City's burden at the pleading stage was 15 not to prove personal jurisdiction conclusively, but to show a 16 "substantial likelihood that all the elements of jurisdiction" 17 could be established at trial. 18 evidence of the defendants' sales of firearms and the recovery of 19 some of those firearms in New York, the court determined that the 20 City had "demonstrated, with a high degree of probability, that 21 [the] defendants' knowing parallel conduct in their individual 22 states, relying on interstate commerce, ha[s] been responsible 23 for the funneling into New York of large quantities of handguns 24 used by local criminals to terrorize significant portions of the A-1 Jewelry I, 501 F. Supp. 2d at 374. Id. at 416. 10 After reviewing 1 City's population." Id. at 374. 2 that these allegations were "sufficient to provide the minimum 3 contacts necessary for an exercise of personal jurisdiction by 4 the State of New York," id. at 428, and to satisfy the 5 requirements of that provision of New York's long-arm statute 6 permitting jurisdiction over a person who "commits a tortious act 7 without the state causing injury to person or property within the 8 state, . . . if he . . . expects or should reasonably expect the 9 act to have consequences in the state and derives substantial The district court concluded 10 revenue from interstate or international commerce." 11 C.P.L.R. § 302(a)(3)(ii). 12 424-29. 13 N.Y. appeal; the district court denied that request. See A-1 Jewelry I, 501 F. Supp. 2d at The defendants sought leave to take an interlocutory 14 On August 29, 2007, the City filed an amended 15 complaint. The City substituted, for the five claims in its 16 original complaint, two claims under N.Y. Penal Law §§ 240.45 and 17 400.05 -- one each for public and statutory nuisance, 18 respectively -- and sought injunctive relief only. 19 Adventure Outdoors and Mickalis Pawn, among others, 20 again moved to dismiss based on, inter alia, lack of personal 21 jurisdiction.5 On December 18, 2007, the district court denied 5 Adventure Outdoors and Mickalis Pawn also sought dismissal for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). In the alternative, they requested a stay of litigation pending appeal in City of New York v. Beretta U.S.A. Corp., 401 F. Supp. 2d 244 (E.D.N.Y. 2005), rev'd in part, 524 11 1 the defendants' renewed motion in its entirety. See A-1 Jewelry 2 II, 247 F.R.D. at 305. 3 discovery schedule and set a trial date of May 27, 2008. The district court ordered an expedited 4 Mickalis Pawn's Default 5 On February 13, 2008, Larry Mickalis, the principal of 6 Mickalis Pawn, was indicted by a federal grand jury in South 7 Carolina for knowingly selling a firearm and ammunition to a 8 convicted felon in violation of 18 U.S.C. §§ 922(d)(1) and 9 924(a)(2).6 On February 27, Mickalis Pawn again moved to stay 10 all litigation with the City pending resolution of the criminal 11 case against Mr. Mickalis; the court denied that motion in early 12 March. 13 CV-2233, 2008 WL 630483, 2008 U.S. Dist. LEXIS 16708 (E.D.N.Y. 14 Mar. 4, 2008). 15 See City of New York v. A-1 Jewelry & Pawn, Inc., No. 06- About one week later, on March 12, 2008, each of the 16 three law firms representing Mickalis Pawn simultaneously moved 17 to withdraw as counsel, citing the indictment of Mr. Mickalis and 18 his decision to concentrate his financial resources on defending 19 himself in the criminal action. Counsel asserted in their F.3d 384 (2d Cir. 2008), cert. denied, 129 S. Ct. 1579 (2009). The district court denied the stay application. A-1 Jewelry II, 247 F.R.D. at 355. 6 By agreement with the government, Mr. Mickalis ultimately pleaded guilty to a less serious offense: failure to properly maintain records in violation of 18 U.S.C. §§ 922(m) and 924(a)(3)(B). 12 1 withdrawal motions that Mickalis Pawn would continue to assert 2 its defense of lack of personal jurisdiction and did not intend 3 to waive that defense. 4 that such withdrawal of counsel would frustrate discovery and 5 substantially delay the proceedings. The City opposed the motions, arguing 6 On March 18, the district court (Cheryl L. Pollak, 7 Magistrate Judge) held a status conference to discuss, among 8 other things, the motions of counsel to withdraw. 9 conference, counsel for Mickalis Pawn confirmed that their client At the 10 consented to their withdrawal. 11 that "Mickalis Pawn has decided that it does not intend to 12 further defend this case." 13 18, 2008). 14 on behalf of Mickalis Pawn, "understands that [default] is an 15 obvious consequence of his decision to no longer defend" the 16 lawsuit. 17 to defend would lead to entry of default judgment and the 18 imposition of injunctive relief, one of Mickalis Pawn's attorneys 19 stated that his client "does understand the consequences." 20 at 15. 21 Counsel also announced, however, Transcript of Proceedings at 14 (Mar. Counsel advised the court that Mr. Mickalis, acting Id. When the City argued that Mickalis Pawn's failure Id. At the suggestion of counsel, Mr. Mickalis then joined 22 the conference before the magistrate judge by telephone. 23 Mickalis confirmed to the court that Mickalis Pawn had no 24 intention of retaining substitute counsel or of further 13 Mr. 1 participating in the litigation. Magistrate Judge Pollak warned 2 Mr. Mickalis: 3 Mickalis Pawn, then the City is going to move for a default and 4 because corporations cannot appear in court without counsel, a 5 default will enter. . . . 6 relief that the City has requested will in all likelihood be 7 granted." 8 this, but nonetheless reaffirmed his desire to withdraw from the 9 case. "[I]f you do not have an attorney to represent Id. at 17. [T]hat means that the injunctive Mr. Mickalis indicated that he understood When Magistrate Judge Pollak suggested that she might not 10 permit all three of Mickalis Pawn's law firms to withdraw, one of 11 Mickalis Pawn's attorneys protested that "[t]here's not a whole 12 lot to defend if [Mr. Mickalis is] prepared to go into default." 13 Id. at 18. 14 Although counsel for Mickalis Pawn conceded that 15 default was the "likely" result of its decision to withdraw, id. 16 at 22, Mickalis Pawn did not expressly consent to entry of a 17 default. 18 Mickalis Pawn confirmed that they had advised their client "that 19 if the motions to withdraw as counsel . . . are granted[,] th[e] 20 defendant will be without counsel" and "the Court will enter 21 default judgment against it." 22 from Renzulli Law Firm, LLP (Mar. 18, 2008). 23 24 But in a March 18 letter to the court, counsel for Letter to Magistrate Judge Pollak As a result of what the City perceived to be Mickalis Pawn's acquiescence to a default, the City agreed to abandon the 14 1 taking of a deposition of Larry Mickalis scheduled to be held 2 shortly thereafter, as well as other pending discovery. 3 advised Magistrate Judge Pollak that it would seek a default 4 judgment if Mickalis Pawn's counsel's motions to withdraw were 5 granted, and the City detailed the precise injunctive relief that 6 it would request. 7 The City On March 27, 2008, the magistrate judge granted the 8 pending motions for withdrawal of counsel. The City then 9 formally requested that a default be entered against Mickalis 10 Pawn pursuant to Federal Rule of Civil Procedure 55(a). 11 Clerk of Court entered the default on April 2, 2008. 12 The Two months later, in June 2008, the City moved for a 13 default judgment against Mickalis Pawn pursuant to Federal Rule 14 of Civil Procedure 55(b)(2). 15 representing itself pro se, opposed the motion by submitting a 16 list of objections. 17 the magistrate judge issued a report and recommendation 18 suggesting that the City's motion be granted and that the City's 19 proposed findings of fact and conclusions of law be adopted in 20 their entirety. 21 B. Weinstein, Judge) adopted the magistrate judge's 22 recommendation and issued the City's proposed findings of fact 23 and conclusions of law as its own. Mickalis Pawn, putatively After reviewing both parties' submissions, On September 19, 2008, the district court (Jack 15 See City of New York v. A-1 1 Jewelry & Pawn, Inc., No. 06-CV-2233, 2008 WL 4298501, 2008 U.S. 2 Dist. LEXIS 87236 (E.D.N.Y. Sept. 19, 2008).7 3 Default judgment against Mickalis Pawn was entered on 4 March 24, 2009. The district court also entered a permanent 5 injunction against Mickalis Pawn. 6 Mickalis Pawn Shop, LLC ("Mickalis Pawn Inj."), No. 06-CV-2233, 7 2009 WL 792042, at *1 (E.D.N.Y. Mar. 23, 2009).8 8 provided for, among other things, the appointment of a special 9 master and the implementation of remedial measures to abate the See City of New York v. The injunction 10 public nuisance created by Mickalis Pawn's illegal firearms 11 sales. See id. 12 Adventure Outdoors' Default 13 Unlike Mickalis Pawn, Adventure Outdoors continued to 14 participate in the lawsuit through the close of discovery. 15 April 29, 2008, all other defendants having either settled or 16 defaulted, Adventure Outdoors moved for summary judgment seeking 17 dismissal based on, inter alia, lack of personal jurisdiction and 18 preemption by the Protection of Lawful Commerce in Arms Act, 15 19 U.S.C. §§ 7901 7903. 7 On The magistrate judge subsequently amended her report and recommendation on January 27, 2009. See City of New York v. Adventure Outdoors, Inc., 644 F. Supp. 2d 201, 203, 218 (E.D.N.Y. 2009) (adopting magistrate judge's amended report and recommendation as to Mickalis Pawn). 8 Not available on Lexis. 16 1 While Adventure Outdoors' summary-judgment motion was 2 pending, the district court issued an order sua sponte directing 3 the parties to make submissions as to whether they were entitled 4 to a trial by jury. 5 district court decided that neither party was so entitled. 6 court announced that it would sit as the finder of fact with the 7 assistance of an advisory jury, as provided by Federal Rule of 8 Civil Procedure 39(c). 9 denied Adventure Outdoors' motion for summary judgment. Following oral argument held on May 21, the The The following day, the district court See City 10 of New York v. A-1 Jewelry & Pawn, Inc. ("A-1 Jewelry III"), 252 11 F.R.D. 130, 131 (E.D.N.Y. 2008). 12 trial begin on May 27, 2008, with the selection of the advisory 13 jury. 14 The court directed that the On June 2, in the midst of jury selection, counsel for 15 Adventure Outdoors moved to withdraw from the case. In a written 16 submission, counsel reported that Adventure Outdoors had "chosen 17 not to engage in the futile exercise of defending itself at a 18 bench trial." 19 ("Renzulli Withdrawal Motion") at 1 (June 2, 2008). 20 asserted that if the district court sat as factfinder, the 21 ultimate outcome of the trial would be a "foregone conclusion" 22 and Adventure Outdoors would "not receive a fair trial." 23 Counsel also adverted to their client's limited financial 24 resources. Motion of Renzulli Law Firm to Withdraw as Counsel 17 Counsel Id. 1 Counsel advised the court that Adventure Outdoors 2 nonetheless intended "to appeal from any default judgment that 3 may be entered against it." 4 declaration by Jay Wallace, the president of Adventure Outdoors, 5 attesting that he had been "informed . . . of the consequences of 6 not participating in the bench trial" and affirming that 7 Adventure Outdoors consented to counsel's withdrawal. 8 Jay Wallace ¶ 3, Ex. 1 to Renzulli Withdrawal Motion. 9 Id. Attached to the motion was a Aff. of The district court, upon hearing argument from the 10 parties, denied Adventure Outdoors' motion to withdraw its 11 counsel in light of the fact that trial was already underway. 12 The court warned that if Adventure Outdoors "refuse[d] to go 13 forward with the case," that course of conduct would "constitute 14 a default" under Federal Rule of Civil Procedure 55. 15 of Proceedings at 7 (June 2, 2008). 16 asked whether the defendant "refuse[d] to go forward with [jury] 17 selection and further proceedings" in the matter, counsel 18 responded that Adventure Outdoors indeed so refused. 19 12. 20 default or default judgment. 21 Transcript When the district court Id. at 10- Counsel declined, however, to consent expressly to entry of In light of Adventure Outdoors' refusal to proceed, the 22 City consented to dismissal of the advisory jury. 23 court then noted Adventure Outdoors' default on the record, 24 conditionally granted the City's motion for default judgment, and 18 The district 1 directed that all further proceedings in the case be held before 2 the magistrate judge.9 3 Thereafter, the City and Adventure Outdoors each made 4 submissions to the magistrate judge regarding the City's motion 5 for default judgment. 6 issued her report and recommendation to the effect that a default 7 judgment be granted and that the City's proposed findings of fact 8 and conclusions of law be adopted. 9 Adventure Outdoors, Inc. ("A-1 Jewelry IV"), 644 F. Supp. 2d 201, On January 27, 2009, the magistrate judge See City of New York v. 10 203-18 (E.D.N.Y. 2009) (reproducing text of magistrate judge's 11 January 27, 2009 report and recommendation). 12 submitted detailed objections to the magistrate judge's report 13 and recommendation. 14 Adventure Outdoors On March 24, 2009, the district court adopted the 15 magistrate judge's report and recommendation in its entirety and 16 entered a default judgment against Adventure Outdoors, 17 simultaneously with the entry of default judgment against 18 Mickalis Pawn. 19 permanent injunction against Adventure Outdoors with terms 20 substantially identical to those of the injunction entered 21 against Mickalis Pawn. Id. at 203. The district court also issued a See City of New York v. Adventure 9 During the conference, the City raised the question whether Adventure Outdoors would be permitted to appeal from the entry of default judgment. The district court properly declined to consider the issue, explaining that the question was not for it to decide. 19 1 Outdoors, Inc. ("Adventure Outdoors Inj."), No. 06-CV-2233, 2009 2 WL 792023 (E.D.N.Y. Mar. 23, 2009).10 3 The defendants appeal. 4 DISCUSSION 5 I. Subject-Matter Jurisdiction 6 Following oral argument, we solicited supplemental 7 briefing from the parties to address the effect of the Protection 8 of Lawful Commerce in Arms Act ("PLCAA"), 15 U.S.C. § 7901 et 9 seq., on these appeals. 10 The PLCAA, enacted by Congress in 2005, provides in 11 pertinent part that "[a] qualified civil liability action may not 12 be brought in any Federal or State court." 13 A "qualified civil liability action" is defined as "a civil 14 action or proceeding . . . brought by any person against a 15 manufacturer or seller of a qualified product[11] . . . [arising] 16 from the criminal or unlawful misuse of a qualified product by 17 the person or a third party." 18 The definition is, however, subject to several statutory 19 exclusions. 20 if it is "an action in which a manufacturer or seller of a 10 15 U.S.C. § 7902(a). Id. § 7903(5)(A) (footnote added). A lawsuit is not barred by the PLCAA, for example, Not available on Lexis. 11 The PLCAA defines the term "qualified product" as "a firearm . . . , including any antique firearm . . . , or ammunition . . . , or a component part of a firearm or ammunition, that has been shipped or transported in interstate or foreign commerce." 15 U.S.C. § 7903(4). 20 1 qualified product knowingly violated a State or Federal statute 2 applicable to the sale or marketing of the product, and the 3 violation was a proximate cause of the harm for which relief is 4 sought." Id. § 7903(5)(A)(iii). 5 We previously had occasion to consider this provision, 6 which has come to be known as the "predicate exception," in City 7 of New York v. Beretta U.S.A. Corp., 524 F.3d 384 (2d Cir. 2008), 8 cert. denied, 129 S. Ct. 1579 (2009). 9 constitutionality of the PLCAA against challenges arising under There we upheld the 10 the Commerce Clause, the First and Tenth Amendments, and the 11 principle of separation of powers. 12 determined, over a dissent, that N.Y. Penal Law § 240.45 was not 13 a "statute applicable to the sale or marketing of firearms" for 14 the purposes of the predicate exception. 15 therefore concluded that dismissal of the plaintiff's public- 16 nuisance suit against various firearms manufacturers arising 17 under section 240.45 was required. 18 expressly consider, however, whether the PLCAA deprived the court 19 of subject-matter jurisdiction over a "qualified civil liability 20 action." 21 See id. at 393-98. We also Id. at 399-404. Id. at 404. We We did not In the instant appeals, we solicited supplemental 22 briefing from the parties on two questions. 23 to address whether the PLCAA deprives a federal court of subject- 24 matter jurisdiction over a "qualified civil liability action," or 21 First, we asked them 1 if instead the PLCAA provides a complete defense against such an 2 action. 3 predicate exception applies only when the plaintiff pleads, as 4 its cause of action, the violation of "a State or Federal statute 5 applicable to the sale or marketing of the product," or if, 6 instead, supporting factual allegations concerning a statutory 7 violation may satisfy the predicate exception even where the 8 plaintiff's cause of action is not directly premised on the 9 identified statutory violation. Second, we asked the parties to address whether the 10 Federal courts have an independent obligation to 11 inquire into the existence of subject-matter jurisdiction. 12 Arbaugh v. Y & H Corp., 546 U.S. 500, 514 (2006). 13 matter jurisdiction, because it involves a court's power to hear 14 a case, can never be forfeited or waived." 15 quotation marks omitted). 16 have subject matter jurisdiction ordinarily precedes our analysis 17 of the merits." 18 Dep't of Health & Human Servs., 607 F.3d 951, 955 (2d Cir. 2010). 19 We review the question of subject-matter jurisdiction de novo.12 "[S]ubject- Id. (internal "Our inquiry to ascertain whether we Jennifer Matthew Nursing & Rehab. Ctr. v. U.S. 12 Although, in the district court proceedings, various defendants asserted that the PLCAA barred suit against them, see A-1 Jewelry II, 247 F.R.D. at 349-53; A-1 Jewelry III, 252 F.R.D. at 132, the district court did not expressly consider the question whether the PLCAA affected its subject-matter jurisdiction. In a related lawsuit, however, Judge Weinstein concluded that the PLCAA did not deprive the court of subjectmatter jurisdiction, and further determined that the Supreme Court's ruling in District of Columbia v. Heller, 554 U.S. 570 22 1 DiTolla v. Doral Dental IPA of N.Y., 469 F.3d 271, 275 (2d Cir. 2 2006). 3 Whether a court possesses subject-matter jurisdiction, 4 and whether a plaintiff can state a claim for relief, "are two 5 questions that are easily, and often, confused." 6 Principal Fin. Grp., 320 F.3d 301, 305 06 (2d Cir. 2003). 7 concept of subject-matter jurisdiction, which relates solely to 8 the court's adjudicatory authority, is analytically distinct from 9 "the essential ingredients of a [plaintiff's] claim for relief." 10 11 Carlson v. The Arbaugh, 546 U.S. at 503. Because "[b]randing a rule as going to a court's 12 subject-matter jurisdiction alters the normal operation of our 13 adversarial system," Henderson ex rel. Henderson v. Shinseki, 131 14 S. Ct. 1197, 1202 (2011), and "[b]ecause the consequences that 15 attach to the jurisdictional label may be so drastic," id., the 16 Supreme Court has endeavored in recent years "to bring some 17 discipline to the use of this term," id. 18 Supreme Court has developed a bright-line test to determine 19 whether a particular statutory restriction is one that deprives a 20 court of subject-matter jurisdiction. 21 22 23 24 To that end, the If the Legislature clearly states that a threshold limitation on a statute's scope shall count as jurisdictional, then courts and litigants will be duly instructed and will not (2008), did not bear on the question. F.R.D. at 241-42. 23 See Bob Moates', 253 1 2 3 4 5 be left to wrestle with the issue. But when Congress does not rank a statutory limitation on coverage as jurisdictional, courts should treat the restriction as nonjurisdictional in character. 6 Arbaugh, 546 U.S. at 515-16 (footnote and citation omitted). 7 Arbaugh represents a "powerful statement[] that courts should be 8 reluctant to make issues jurisdictional . . . unless statutory 9 language requires it." Zhong v. U.S. Dep't of Justice, 489 F.3d 10 126, 134 (2d Cir. 2007) (Calabresi, J., concurring in denial of 11 rehearing en banc). 12 To be sure, the Supreme Court has noted since Arbaugh 13 that "Congress . . . need not use magic words in order to speak 14 clearly," Henderson, 131 S. Ct. at 1203, and that "'[c]ontext, 15 including th[e] [Supreme] Court's interpretation of similar 16 provisions in many years past, is relevant,'" id. (quoting Reed 17 Elsevier, Inc. v. Muchnick, 130 S. Ct. 1237, 1248 (2010)). 18 Nonetheless, the Court has reaffirmed Arbaugh's core holding that 19 Congress must provide a "'clear' indication that [it] want[s] [a] 20 rule to be 'jurisdictional,'" id. (quoting Arbaugh, 546 U.S. at 21 515-16), before we may recognize it as being jurisdictional. 22 Indeed, even rules that are "important and mandatory . . . should 23 not be given the jurisdictional brand" unless Congress has 24 clearly indicated otherwise. 25 v. Bhd. of Locomotive Eng'rs & Trainmen Gen., 130 S. Ct. 584, 596 26 (2009). Id.; see also Union Pac. R.R. Co. 24 1 We conclude that the PLCAA's bar on "qualified civil 2 liability action[s]," 15 U.S.C. § 7902(a), does not deprive 3 courts of subject-matter jurisdiction. 4 "'does not speak in jurisdictional terms or refer in any way to 5 the jurisdiction of the [district courts].'" 6 Ct. at 1204 (quoting Zipes v. Trans World Airlines, Inc., 455 7 U.S. 385, 394 (1982)). 8 qualified civil liability action may not be brought in any 9 Federal or State court." The language of the PLCAA Henderson, 131 S. Instead, it provides only that "[a] 15 U.S.C. § 7902(a). Although the 10 phrase "may not be brought" suggests absence of jurisdiction, the 11 phrase is not equivalent to a clear statement of Congress's 12 intent to limit the power of the courts rather than the rights of 13 litigants. 14 such a clear statement, we must treat the PLCAA as speaking only 15 to the rights and obligations of the litigants, not to the power 16 of the court. 17 (concluding that Copyright Act registration requirement, 17 18 U.S.C. § 411(a), did not implicate subject-matter jurisdiction 19 because the statute did not "clearly state" that the requirement 20 was jurisdictional), with Rockwell Int'l Corp. v. United States, 21 549 U.S. 457, 463, 467-68 (2007) (determining that False Claims 22 Act, former 31 U.S.C. § 3730(e)(4)(A), was jurisdictional insofar 23 as it declared that "[n]o court shall have jurisdiction over an 24 action under this section" unless a specified condition applies), Henderson, 131 S. Ct. at 1203. In the absence of Compare, e.g., Reed Elsevier, 130 S. Ct. at 1245 25 1 superseded by statute, Patient Protection and Affordable Care 2 Act, Pub. L. No. 111-148, § 10104(j)(2) (codified as amended at 3 31 U.S.C. § 3730(e)(4)(A)). 4 did not divest the district court of subject-matter jurisdiction 5 over this dispute.13 We therefore conclude that the PLCAA 6 Having determined that we possess subject-matter 7 jurisdiction, we would, in the ordinary course, proceed to 8 consider whether the City's lawsuit is nonetheless barred by the 9 PLCAA. In this case, however, the defendants did not fully 10 litigate their defenses under the PLCAA, but instead withdrew 11 from the litigation, defaulted, and suffered a default judgment 12 to be entered against them. 13 the City's lawsuit was barred by the PLCAA, but rather, whether 14 the district court abused its discretion in entering a default 15 judgment against the defendants. 16 We accordingly inquire not whether We have considered the parties' other arguments 17 concerning lack of subject-matter jurisdiction and conclude that 18 they are without merit. 13 Subject-matter jurisdiction over this litigation is founded on diversity of citizenship pursuant to 28 U.S.C. § 1332. We note that, although the parties appear to have misapprehended the test for determining the citizenship of a limited-liability company, see Handelsman v. Bedford Vill. Assocs. Ltd. P'ship, 213 F.3d 48, 51-52 (2d Cir. 2000), the record before us supports the conclusion that there is complete diversity of citizenship among the parties to these appeals. 26 1 II. Entry of Default Judgment 2 The procedural posture of these appeals is in some 3 respects unusual. Adventure Outdoors and Mickalis Pawn did not, 4 for example, move before the district court to vacate or set 5 aside the default judgment, as is permitted by Federal Rules of 6 Civil Procedure 55(c) and 60(b).14 7 directly from the entry of judgment. 8 unusual, for defendants to skip the motion to vacate the default 9 judgment and instead directly appeal the entry of a default Instead, they appealed "[I]t is possible, although 10 judgment." Pecarsky v. Galaxiworld.com Ltd., 249 F.3d 167, 170- 11 71 (2d Cir. 2001); see also Swarna v. Al-Awadi, 622 F.3d 123, 140 12 (2d Cir. 2010) ("[A] default judgment, like any other judgment, 13 can be appealed to this Court."). 14 therefore, we review not whether the district court abused its 15 discretion in declining to vacate the default judgment, but 16 whether it abused its discretion in granting a default judgment 17 in the first instance. 18 249 F.3d at 171; cf. Paddington Partners v. Bouchard, 34 F.3d 19 1132, 1147 (2d Cir. 1994) (collecting cases distinguishing As a technical matter, See Swarna, 622 F.3d at 133; Pecarsky, 14 Rule 55(c) provides that "[t]he court may . . . set aside a default judgment under Rule 60(b)." Fed. R. Civ. P. 55(c). Rule 60(b), in turn, identifies six grounds for relief from a final judgment, including mistake or excusable neglect; newly discovered evidence; fraud; voidness; satisfaction of judgment; or "any other reason that justifies relief." Fed. R. Civ. P. 60(b)(1)-(6). 27 1 appellate review of the denial of a Rule 60(b) motion from review 2 of the merits of the underlying judgment itself). 3 "Federal Rule of Civil Procedure 55 is the basic 4 procedure to be followed when there is a default in the course of 5 litigation." 6 241, 246 (2d Cir. 2004). 7 for the entry of judgment against a party who fails to defend: 8 first, the entry of a default, and second, the entry of a default 9 judgment. 10 Vt. Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d Rule 55 provides a "two-step process" New York v. Green, 420 F.3d 99, 104 (2d Cir. 2005). The first step, entry of a default, formalizes a 11 judicial recognition that a defendant has, through its failure to 12 defend the action, admitted liability to the plaintiff. 13 entry of default is governed by Rule 55(a), which provides: 14 15 16 17 18 The When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend, and that failure is shown by affidavit or otherwise, the clerk must enter the party's default. 19 Fed. R. Civ. P. 55(a). Although Rule 55(a) contemplates that 20 entry of default is a ministerial step to be performed by the 21 clerk of court, see Pinaud v. Cnty. of Suffolk, 52 F.3d 1139, 22 1152 n.11 (2d Cir. 1995) (describing "the entry of a default" as 23 "largely a formal matter" (internal quotation marks omitted)), a 24 district judge also possesses the inherent power to enter a 25 default, see Beller & Keller v. Tyler, 120 F.3d 21, 22 n.1 (2d 26 Cir. 1997). The entry of a default, while establishing 28 1 liability, "is not an admission of damages."15 2 Romanowicz, 577 F.3d 79, 83 n.6 (2d Cir. 2009). 3 Finkel v. The second step, entry of a default judgment, converts 4 the defendant's admission of liability into a final judgment that 5 terminates the litigation and awards the plaintiff any relief to 6 which the court decides it is entitled, to the extent permitted 7 by Rule 54(c).16 8 must be entered by the district judge, rather than by the clerk 9 of court, except in certain circumstances provided for by the Under Rule 55(b), a default judgment ordinarily 10 rule and not present here.17 11 Rule 55(b)(2), in the exercise of its discretion, to "conduct 12 hearings or make referrals" as may be necessary, inter alia, to 13 determine the amount of damages or establish the truth of the A district court is empowered under 15 A defaulted defendant may move before the district court to be relieved of its default, and the court "may set aside an entry of default for good cause." Fed. R. Civ. P. 55(c). Because the entry of default is an "interlocutory act and, as such, a non-final order," however, "[i]t is therefore not appealable" directly. Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993). 16 Rule 54(c) provides that "[a] default judgment must not differ in kind from, or exceed in amount, what is demanded in the pleadings." Fed. R. Civ. P. 54(c); see Silge v. Merz, 510 F.3d 157, 161 (2d Cir. 2007). 17 Rule 55(b)(1) permits entry of judgment by the clerk of court, without involvement of a judge, in circumstances where "the plaintiff's claim is for a sum certain and the defendant has failed to appear and is not an infant or incompetent person." Green, 420 F.3d at 104. Rule 55(b)(2) governs "[i]n all other cases," id. (internal quotation marks omitted), including this one. 29 1 plaintiff's allegations. 2 default judgment is a final action by the district court in the 3 litigation [and] one that may be appealed." 4 Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993). 5 Fed. R. Civ. P. 55(b)(2)(B)-(C). "A Enron Oil Corp. v. Because we have "a strong preference for resolving 6 disputes on the merits," and because "a default judgment is the 7 most severe sanction which the court may apply," Green, 420 F.3d 8 at 104 (internal quotation marks omitted), we have characterized 9 a district court's discretion in proceeding under Rule 55 as 10 "circumscribed." 11 St. Bank & Trust Co. v. Inversiones Errazuriz Limitada, 374 F.3d 12 158, 168 (2d Cir. 2004) ("Default judgments 'are generally 13 disfavored and are reserved for rare occasions.'" (quoting Enron 14 Oil Corp., 10 F.3d at 96)), cert. denied, 543 U.S. 1177 (2005). 15 A. 16 Enron Oil Corp., 10 F.3d at 95; see also State Entry of Default Under Rule 55(a) "In an appeal from a default judgment, the court may 17 review both the interlocutory entry of default and the final 18 [default] judgment." 19 Enron Oil Corp., 10 F.3d at 95. The defendants argue that the district court abused its 20 discretion by treating their withdrawal from the litigation as a 21 basis for entering default against them. 22 because over the course of several years they appeared in the 23 litigation, repeatedly moved to dismiss, eventually filed an 24 answer, and vigorously defended themselves in discovery, they did 25 not "fail[] to plead or otherwise defend" within the meaning of 30 They assert that 1 Rule 55(a). 2 and that the City was required to proceed to trial and prove its 3 case, including the existence of personal jurisdiction over the 4 defendants, by a preponderance of the evidence. 5 They argue that Rule 55(a) therefore did not apply, We disagree. To be sure, the "typical Rule 55 case [is 6 one] in which a default has entered because a defendant failed to 7 file a timely answer." 8 Clubs, Inc., 786 F.2d 61, 64 (2d Cir. 1986). 9 district court is also empowered to enter a default against a Brock v. Unique Racquetball & Health Nonetheless, a 10 "defendant [that] has failed to . . . 'otherwise defend.'" 11 (quoting Fed. R. Civ. P. 55(a)). 12 Id. We have embraced a broad understanding of the phrase 13 "otherwise defend." 14 default was properly entered when the defendant, having 15 demonstrated a lack of diligence during pre-trial proceedings, 16 sought and received a mid-trial adjournment, but then failed to 17 appear when the trial resumed. 18 "a trial judge, responsible for the orderly and expeditious 19 conduct of litigation, must have broad latitude to impose the 20 sanction of default for non-attendance occurring after a trial 21 has begun." 22 For example, in Brock, we concluded that a Id. at 63-65. We observed that Id. at 64. Similarly, in Au Bon Pain Corp. v. Artect, Inc., 653 23 F.2d 61 (2d Cir. 1981), we concluded that a defendant's 24 obstructionist litigation tactics, including "failing to appear 25 for a deposition, dismissing counsel, giving vague and 31 1 unresponsive answers to interrogatories, and failing to appear 2 for trial[,] were sufficient to support a finding that [the 3 defendant] had 'failed to plead or otherwise defend' under 4 Federal Rule of Civil Procedure 55." 5 v. Slone, 4 F.3d 176, 179, 181 (2d Cir. 1993) (affirming entry of 6 default judgment against an individual defendant who, following 7 discovery, withdrew his counsel and refused to comply with a 8 court order requiring submission of a pretrial memorandum). 9 Id. at 65; see also Cotton And in Eagle Associates v. Bank of Montreal, 926 F.2d 10 1305 (2d Cir. 1991), we decided that because the defendant, a 11 limited partnership, had willfully disregarded the district 12 court's order that the defendant appear through counsel, the 13 court was justified in imposing default. 14 disregard for a court order is a failure, under Rule 55(a), to 15 'otherwise defend as provided by these rules.'" 16 (internal quotation marks omitted); see also Grace v. Bank Leumi 17 Trust Co. of N.Y., 443 F.3d 180, 192 (2d Cir. 2006) (noting that 18 a default judgment may be entered against a corporation that 19 fails to appear through counsel), cert. denied, 549 U.S. 1114 20 (2007); Dow Chem. Pac. Ltd. v. Rascator Mar. S.A., 782 F.2d 329, 21 334-36 (2d Cir. 1986) (same); SEC v. Research Automation Corp., 22 521 F.2d 585, 589 (2d Cir. 1975) (same); Shapiro, Bernstein & Co. 23 v. Cont'l Record Co., 386 F.2d 426, 427 (2d Cir. 1967) (per 24 curiam) (same). 32 "Such cavalier Id. at 1310 1 We also find persuasive the Third Circuit's analysis in 2 Hoxworth v. Blinder, Robinson & Co., 980 F.2d 912 (3d Cir. 1992). 3 There, the district court entered a default judgment against 4 defendants who had failed to comply with discovery orders and to 5 appear for trial. 6 Adventure Outdoors and Mickalis Pawn do here -- that "Rule 55 7 cannot be used to impose a default against a defendant who has 8 filed an answer and actively litigated during pretrial 9 discovery." 10 On appeal, the defendants protested -- as Id. at 917. The Court of Appeals affirmed. It decided that the 11 plain meaning of the phrase "otherwise defend" was broad enough 12 to support entry of default even after a defendant had filed an 13 answer asserting affirmative defenses. 14 decisions in Brock and Au Bon Pain, as well as similar decisions 15 in three other circuits, the Third Circuit concluded that "the 16 district court's power to maintain an orderly docket justifies 17 the entry of a default against a party who fails to appear at 18 trial" or to "meet other required time schedules." 19 Id. Relying upon our Id. at 918. We similarly conclude that the district court did not 20 abuse its discretion in entering a Rule 55(a) default against 21 either Adventure Outdoors or Mickalis Pawn. 22 First, each defendant affirmatively signaled to the 23 district court its intention to cease participating in its own 24 defense, even after the defendant was clearly warned that a 33 1 default would result. 2 trial places this case squarely within our rulings in Brock and 3 Au Bon Pain. 4 The defendants' refusal to proceed to Second, in the case of Mickalis Pawn, a Rule 55(a) 5 default was also proper under Eagle Associates and like cases 6 insofar as this defendant withdrew its counsel without retaining 7 a substitute. 8 2007) (per curiam) ("[A] limited liability company . . . may 9 appear in federal court only through a licensed attorney."). 10 11 See Lattanzio v. COMTA, 481 F.3d 137, 140 (2d Cir. Finally, both defendants clearly indicated that they were aware that their conduct likely would result in a default. In arguing that the district court nonetheless erred by 12 13 entering a default, both Adventure Outdoors and Mickalis Pawn 14 rely on a Fifth Circuit case from 1949: Bass v. Hoagland, 172 15 F.2d 205 (5th Cir.), cert. denied, 338 U.S. 816 (1949). 16 split panel of the Fifth Circuit decided that a default could not 17 be entered against a defendant who had failed to appear for 18 trial. 19 refer to attacks on the service, or motions to dismiss, or for 20 better particulars, and the like." 21 view, these words did not refer to circumstances in which a 22 defendant filed an answer and only later failed to appear in There, a The court concluded that "[t]he words 'otherwise defend' 34 Id. at 210. In the court's Id. But this interpretation18 of Rule 55 has not been 1 court. 2 embraced by this Court. 3 653 F.2d at 65. Nor has it found favor in a majority of our 4 sister circuits. See, e.g., Goldman, Antonetti, Ferraiuoli, 5 Axtmayer & Hertell v. Medfit Int'l, Inc., 982 F.2d 686, 692-93 6 (1st Cir. 1993); Hoxworth, 980 F.2d at 918 (3d Cir. 1992) See Brock, 786 F.2d at 64; Au Bon Pain, 18 Adventure Outdoors and Mickalis Pawn note that several leading treatises approve of Bass's logic. For example, Wright & Miller, following Bass, counsel that once a defendant has "participated throughout the pretrial process and has filed a responsive pleading," any failure by the defendant to appear thereafter should not result in a concession of liability, but rather, "the court should require plaintiff to present evidence supporting liability . . . and a judgment should be entered in plaintiff's favor only if the evidence supports it." 10A Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice & Procedure § 2682, at 18 (3d ed. 1998). Likewise, Moore's Federal Practice, identifying a circuit split concerning whether a defendant's failure to defend after the pleadings stage can be grounds for a Rule 55(a) default, concludes that "[t]he better view is that Rule 55(a)'s 'otherwise defend' language may not be extended to justify a default once there has been an initial responsive pleading or an initial action that constitutes a defense." 10-55 James Wm. Moore et al., Moore's Federal Practice § 55.11[2][b][iii]; see also Am. Jur. 2d Judgments § 263. However, these authorities do not reflect the law of this Circuit by which we are bound. The defendants also rely on a dictum from our more recent decision in D.H. Blair & Co. v. Gottdiener, 462 F.3d 95 (2d Cir. 2006). There, we reviewed whether it was appropriate for a district court to enter a default judgment against a party who failed to respond to a petition under the Federal Arbitration Act to confirm an arbitration award. We decided that it was not. We observed, in passing, that "Rule 55 is meant to apply to 'civil actions' where only the first step has been taken -- i.e., the filing of a complaint -- and the court thus has only allegations and no evidence before it." Id. at 107. Although this statement supports the view that Rule 55 should not apply after the pleadings stage, it is a dictum and does not -- it cannot -- overrule our existing precedent to the contrary. 35 1 (expressly declining to follow Bass); Home Port Rentals, Inc. v. 2 Ruben, 957 F.2d 126, 133 (4th Cir.), cert. denied, 506 U.S. 821 3 (1992); Ackra Direct Mktg. Corp. v. Fingerhut Corp., 86 F.3d 852, 4 856 (8th Cir. 1996); Ringgold Corp. v. Worrall, 880 F.2d 1138, 5 1141-42 (9th Cir. 1989) (per curiam). 6 v. Eskenazi, 635 F.2d 396, 400 n.2 (5th Cir. 1981) ("Although 7 Bass has been criticized . . . it nevertheless remains as binding 8 precedent in this circuit." (citation omitted)); Solaroll Shade & 9 Shutter Corp. v. Bio-Energy Sys., Inc., 803 F.2d 1130, 1134 (11th But see Seven Elves, Inc. 10 Cir. 1986) ("If the defendant has answered the complaint but 11 fails to appear at trial, issue has been joined, and the court 12 cannot enter a [Rule 55] default judgment."). 13 B. 14 Entry of Default Judgment Under Rule 55(b)(2) Our review of whether the default judgment was properly 15 granted by the district court is for abuse of discretion. 16 Swarna, 622 F.3d at 133; Pecarsky, 249 F.3d at 171. 17 review for abuse of discretion a district court's decision 18 concerning the extent and scope of evidentiary proceedings, if 19 any, held prior to its entry of such a judgment. 20 F.3d at 87; Enron Oil Corp., 10 F.3d at 95; see Fed. R. Civ. P. 21 55(b)(2) (providing that "[t]he court may conduct hearings or 22 make referrals" prior to entering judgment). 23 24 See We also Finkel, 577 The defendants argue that the district court abused its discretion in entering the default judgment for three principal 36 1 reasons. 2 proceedings were beset by procedural irregularities. 3 both defendants argue that the district court erred by failing to 4 make specific factual findings by a preponderance of the evidence 5 that personal jurisdiction existed. 6 request for supplemental briefing, they assert that the 7 plaintiff's claims are barred by the PLCAA. 1. 8 9 First, Mickalis Pawn argues that the Rule 55 Second, Third, in response to our Procedural Irregularities and Rule 55(b)(2). "A default judgment may be considered void if the judgment has been 10 entered in a manner inconsistent with due process of law." 11 Street Bank & Trust Co., 374 F.3d at 178 (internal quotation 12 marks omitted). 13 defendant is nonetheless "entitled . . . to be heard concerning 14 the nature and details of the judgment to be entered." 15 786 F.2d at 65. 16 against whom a default judgment is sought has appeared" at any 17 point in the litigation, that party is entitled to seven days' 18 written notice of the proceeding at which default judgment may be 19 entered. 20 State Even after a defendant has defaulted, the Brock, And Rule 55(b)(2) provides that "[i]f the party Fed. R. Civ. P. 55(b)(2). Mickalis Pawn contends that the Rule 55(b)(2) 21 proceedings were conducted in a manner violative of the Due 22 Process Clause because, it says, the default judgment against it 23 resulted from a "series of ex parte acts." 24 Mickalis Pawn at 8. Opening Br. of It observes that, after its three law firms 37 1 collectively withdrew from the case in March 2008, it no longer 2 was able to receive automatic notification through the electronic 3 case filing system of docket activity in the case. 4 contends that all such filings by the district court or by the 5 City made after March 2008 were "ex parte" to the extent that 6 Mickalis Pawn was not simultaneously sent a copy of those filings 7 by mail, as the district court had previously ordered must be 8 done. 9 Mickalis Pawn But Mickalis Pawn does not assert that it was deprived 10 of actual notice as to any of these filings. 11 the record reflects that both Mickalis Pawn and Adventure 12 Outdoors not only had notice of, but actively participated in, 13 each stage of the Rule 55 proceedings before the district court. 14 For example, they each filed objections to the City's proposed 15 findings of fact and to the magistrate judge's successive reports 16 recommending that the City's motions for default judgment be 17 granted.19 18 those submissions even though Mickalis Pawn -- a limited 19 liability company which cannot appear except through counsel, see 20 Lattanzio, 481 F.3d at 140 -- purported to file them in a pro se To the contrary, In Mickalis Pawn's case, the district court accepted 19 Adventure Outdoors filed its own proposed findings of fact and conclusions of law in opposition to those submitted by the City. The magistrate judge considered Adventure Outdoors' submissions in preparing her report and recommendation. See A-1 Jewelry IV, 644 F. Supp. 2d at 208-09 (describing Adventure Outdoors' proposed findings and conclusions). 38 1 capacity. 2 Mickalis Pawn did not deprive it of notice and an opportunity to 3 be heard, we conclude that the district court did not abuse its 4 discretion in entering a default judgment pursuant to Rule 5 55(b)(2), notwithstanding Mickalis Pawn's complaints concerning 6 inconsistencies in the methods of service employed.20 7 Because the alleged irregularities relied upon by 2. Personal Jurisdiction and Rule 55(b)(2). The 8 defendants argue that the district court erred by failing to make 9 findings, based on a preponderance of the evidence, that the 10 court had personal jurisdiction over each defendant. Both 11 defendants contend that such findings are a procedural 12 prerequisite to entering default judgment under Rule 55(b)(2). 13 And Mickalis Pawn argues that it was "a per se abuse of 14 discretion" not to have done so. 15 24-25. 16 abandon their objections to the district court's exercise of 17 personal jurisdiction upon their default. 18 they continued to press their jurisdictional defense in their Reply Br. of Mickalis Pawn at The defendants also assert that they did not intend to 20 They point out that We also reject Mickalis Pawn's contention that the proceedings were procedurally improper because the City, after having indicated to Mickalis Pawn that it would seek a default judgment under Rule 55(b)(2), instead first sought entry of default under Rule 55(a). Because Rule 55 contemplates a "twostep process" beginning with entry of default under Rule 55(a), Green, 420 F.3d at 104, the City acted properly in first seeking entry of default before moving for default judgment. 39 1 submissions to the district court and magistrate judge throughout 2 the Rule 55 proceedings. 3 "[B]efore a court grants a motion for default judgment, 4 it may first assure itself that it has personal jurisdiction over 5 the defendant." 6 Corp., 619 F.3d 207, 213 (2d Cir. 2010). 7 open the question "whether a district court must investigate its 8 personal jurisdiction over defendant before entering a default 9 judgment." Sinoying Logistics Pte Ltd. v. Yi Da Xin Trading We have, however, left Id. at 213 n.7 (emphasis in original). But see 10 Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 154 11 (2d Cir. 1999) (vacating default judgment and instructing 12 district court to determine whether the plaintiffs could "prove 13 the jurisdictional facts by a preponderance of the evidence"). 14 Several of our sister circuits appear to impose such a 15 requirement. 16 (D.C. Cir. 2005); Sys. Pipe & Supply, Inc. v. M/V Viktor 17 Kurnatovskiy, 242 F.3d 322, 324 (5th Cir. 2001); In re Tuli, 172 18 F.3d 707, 712 (9th Cir. 1999); Dennis Garberg & Assocs., Inc. v. 19 Pack-Tech Int'l Corp., 115 F.3d 767, 772 (10th Cir. 1997). See, e.g., Mwani v. bin Laden, 417 F.3d 1, 6-7 20 Personal jurisdiction, unlike subject-matter 21 jurisdiction, can, however, be purposely waived or inadvertently 22 forfeited. 23 represents first of all an individual right, it can, like other 24 such rights, be waived." "Because the requirement of personal jurisdiction Ins. Corp. of Ireland v. Compagnie des 40 1 Bauxites de Guinee, 456 U.S. 694, 703 (1982); see also id. at 706 2 (cautioning that there is nothing "unique about the requirement 3 of personal jurisdiction, which prevents it from being 4 established or waived like other rights"); Sinoying Logistics, 5 619 F.3d at 213; "R" Best Produce, Inc. v. DiSapio, 540 F.3d 115, 6 123 (2d Cir. 2008); Transaero, Inc. v. La Fuerza Aerea Boliviana, 7 162 F.3d 724, 729 (2d Cir. 1998), cert. denied, 526 U.S. 1146 8 (1999). 9 jurisdiction sua sponte when a defendant has appeared and Therefore, "a district court should not raise personal 10 consented, voluntarily or not, to the jurisdiction of the court." 11 Sinoying Logistics, 619 F.3d at 213 (emphasis in original). 12 "[I]n determining whether waiver or forfeiture of 13 objections to personal jurisdiction has occurred, 'we consider 14 all of the relevant circumstances.'" 15 Club.com, 310 F.3d 293, 307 (2d Cir. 2002) (quoting Hamilton v. 16 Atlas Turner, Inc., 197 F.3d 58, 61 (2d Cir. 1999), cert. denied, 17 530 U.S. 1244 (2000)). 18 forfeits its defense of lack of personal jurisdiction by failing 19 timely to raise the defense in its initial responsive pleading. 20 See Fed. R. Civ. P. 12(h). 21 reasons a defendant may be estopped from raising the issue." 22 Ins. Corp. of Ireland, 456 U.S. at 704. 23 through implied consent, personal jurisdiction over a defendant 24 if "[t]he actions of the defendant [during the litigation] . . . Mattel, Inc. v. Barbie- It is well established that a party But there are "various [additional] 41 A court will obtain, 1 amount to a legal submission to the jurisdiction of the court, 2 whether voluntary or not." 3 Highland Music, Inc., 140 F.3d 1313, 1318 (9th Cir.) ("Most 4 defenses, including the defense of lack of personal jurisdiction, 5 may be waived as a result of the course of conduct pursued by a 6 party during litigation."), cert. denied, 525 U.S. 983 (1998). 7 For example, we have held that a defendant that asserted a 8 jurisdictional defense in its answer, but failed actively to 9 litigate that defense until four years later, forfeited the Id. at 704-05; see also Peterson v. 10 defense by forgoing the opportunity to raise it sooner. 11 Hamilton, 197 F.3d at 60-62; accord Cont'l Bank, N.A. v. Meyer, 12 10 F.3d 1293, 1297 (7th Cir. 1993); Yeldell v. Tutt, 913 F.2d 13 533, 538-39 (8th Cir. 1990). 14 In addition, other circuits have held that a defendant 15 who unsuccessfully raises a jurisdictional objection at the 16 outset, but later creates the impression that he has abandoned 17 it, may not seek to renew his jurisdictional argument on appeal 18 following an adverse determination on the merits. 19 Nova Biomed. Corp., 38 F.3d 909, 914-15 (7th Cir. 1994), cert. 20 denied, 514 U.S. 1111 (1995); see also Peterson, 140 F.3d at 1318 21 (9th Cir.) (describing this strategy as "sandbagging"). 22 See Rice v. We find the analysis of the Seventh Circuit in e360 23 Insight v. Spamhaus Project, 500 F.3d 594 (7th Cir. 2007), 24 helpful. There, the defendant removed the lawsuit from state 42 1 court and then filed an answer asserting, among other defenses, 2 lack of personal jurisdiction. 3 status conference, it moved to withdraw its answer and to 4 withdraw its counsel from the litigation. 5 through counsel, that it "want[ed] to participate in the defense 6 no further" and would "do absolutely nothing" in the litigation. 7 Id. at 596. 8 would "have to defend the case," otherwise it would lose by 9 default. One month later, at a pre-trial It also announced, The district court responded that the defendant Id. The defendant's counsel represented that his 10 client had "been fully informed of the fact that . . . default 11 judgment is a real possibility," and that it was "aware of that 12 and [was] prepared to take that risk." 13 the understanding that counsel had informed the defendant that 14 "it was a dead-bang certainty that default [was] going to be 15 entered," granted the defendant's motions to withdraw its answer 16 and withdraw counsel. 17 default, and upon the plaintiff's motion, granted a default 18 judgment three weeks later. 19 Id. at 597. Id. The court, acting on The court then entered a Id. The defendant timely moved to vacate the judgment 20 pursuant to Rule 60(b). The motion was denied. 21 then appealed, arguing that the district court had acted 22 improperly by not inquiring into the existence of personal 23 jurisdiction prior to entering judgment. 43 The defendant Id. at 598. 1 The Seventh Circuit rejected the defendant's argument 2 and affirmed the entry of a default judgment. 3 reason to require the district court to raise sua sponte 4 affirmative defenses, which may, of course, be waived or 5 forfeited, on behalf of an appearing party who elects not to 6 pursue those defenses for itself." 7 continued: 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 It "s[aw] no Id. at 599. The court We perceive no error in the district court's conclusion that [the defendant] Spamhaus intentionally elected to abandon its available defenses when it withdrew those defenses from consideration by the court and indicated that it was prepared to accept a default. Spamhaus' then-counsel confirmed that it wished to "participate in the defense no further" and "do absolutely nothing." It was not erroneous to treat this kind of voluntary abandonment of defenses, raised but not pursued, as a waiver. Based on its conduct before the court, we have no doubt that Spamhaus understood the defenses available to it, consistently asserted those defenses in the early stages of those proceedings and then affirmatively elected to abandon those defenses before the district court. We see no reason to allow Spamhaus to escape the consequences of that decision in the later stages of this proceeding. 29 Id. at 600 (citations omitted). The court concluded that 30 "[b]ecause the jurisdictional challenges Spamhaus now seeks to 31 raise have been waived and neither the district court nor this 32 court has the duty to resurrect them, the district court did not 33 abuse its discretion in entering judgment of liability nor in 34 denying the motion for Rule 60(b) relief." 44 Id. at 602. 1 Similarly, in this case, Adventure Outdoors and 2 Mickalis Pawn initially litigated their jurisdictional defense, 3 but later changed course, announcing to the district court that 4 they would cease defending even though a default would likely 5 result. 6 proposition that a defendant forfeits its jurisdictional defense 7 if it appears before a district court to press that defense but 8 then willfully withdraws from the litigation and defaults, even 9 after being warned of the consequences of doing so. Spamhaus Project is persuasive authority for the We, like the 10 Seventh Circuit, "see no reason to require the district court to 11 raise sua sponte" the defense of lack of personal jurisdiction on 12 behalf of parties who have "elect[ed] not to pursue those 13 defenses for [themselves]."21 Id. at 599. 21 The defendants attempt to distinguish Spamhaus Project on two bases. First, Adventure Outdoors argues that default judgments are not disfavored in the Seventh Circuit, as they are here, citing Pretzel & Stouffer, Chartered v. Imperial Adjusters, Inc., 28 F.3d 42, 47 (7th Cir. 1994). But nothing in Spamhaus Project suggests that its reasoning concerning forfeiture depended on whether default judgments were or were not disfavored. And there is some question as to whether that attitude, if it existed in 1994, prevails today. See Sun v. Bd. of Trustees of Univ. of Ill., 473 F.3d 799, 811 (7th Cir.), cert. denied, 127 S. Ct. 2941 (2007). Second, the defendants point out that in Spamhaus Project, the defendant withdrew its answer before defaulting, whereas in the instant case, neither defendant withdrew its answer or had it stricken by the district court. Again, nothing in Spamhaus Project suggests that the ministerial step of withdrawing the answer was relevant to the court's finding of forfeiture. Neither does anything in our own precedent suggest that a district court must "strike" a defendant's answer before declaring that defendant to be in default. Cf., e.g., Cotton, 4 F.3d at 178-79; Brock, 786 F.2d at 64; Au Bon Pain, 653 F.2d at 45 1 Arguing otherwise, the defendants rely on D.H. Blair & 2 Co. v. Gottdiener, 462 F.3d 95 (2d Cir. 2006). There, the 3 district court entered a Rule 55 default judgment against a group 4 of defendants who, after removing to federal court the 5 plaintiff's petition to confirm in part and vacate in part an 6 arbitral award, failed to answer the petition. 7 judgment and remanded, instructing the district court to decide 8 whether the plaintiff was entitled to the relief it sought 9 notwithstanding the defendants' failure to answer the petition. We vacated the 10 We decided that "[w]hen a court has before it [an extensive 11 evidentiary] record, rather than only the allegations of one 12 party found in complaints, the judgment the court enters should 13 be based on the record." 14 Id. at 109. The defendants argue by analogy that the district court 15 should not have granted the City's motion for default judgment 16 here without first determining that sufficient evidence existed 17 in the record to sustain a finding of personal jurisdiction by a 18 preponderance of the evidence. 19 Blair concerned a unique, quasi-appellate proceeding: a petition 20 to confirm or vacate an arbitration award pursuant to the Federal 21 Arbitration Act. The analogy does not hold. D.H. See 9 U.S.C. § 9 (permitting parties to an 65 (all upholding default judgments entered against an appearing defendant, without noting if the defendant's answer had been stricken prior to entry of default). 46 1 arbitration to "apply to the court . . . for an order confirming 2 the award"); id. § 10(a) (permitting parties to petition for 3 vacatur of an arbitral award). 4 confirm or vacate an arbitral award, a district court typically 5 has at its disposal the full evidentiary record from the 6 underlying arbitration. 7 judgments in confirmation/vacatur proceedings are generally 8 inappropriate," D.H. Blair, 462 F.3d at 109, and therefore held 9 that district courts should instead treat a petitioner's In considering a petition to We concluded in D.H. Blair that "default 10 application to confirm or vacate an arbitral award as "akin to a 11 motion for summary judgment," id. 12 does not concern proceedings under the Federal Arbitration Act, 13 nor does it concern a scenario in which a court is presented with 14 a complete evidentiary record from a prior proceeding. This case, unlike D.H. Blair, 15 Adventure Outdoors also asserts that our decision in 16 Brock demonstrates that a plaintiff seeking a default judgment 17 must prove its case -- including the existence of personal 18 jurisdiction -- by a preponderance of the evidence, even after a 19 defendant has defaulted. 20 appear at trial following a two-week adjournment. 21 court entered a default against the defendants, but then opted to 22 complete the trial record by taking testimony from the 23 plaintiff's witnesses. 24 judgment accompanied by findings of fact and conclusions of law. 25 On appeal, we vacated and remanded for further proceedings. In Brock, the defendants failed to reThe district The court eventually entered a default 47 See 1 Brock, 786 F.2d at 63. 2 should be read as requiring that a trial be held prior to entry 3 of default judgment. Adventure Outdoors contends that Brock Although Brock did result in the vacatur of a default 4 5 judgment on appeal, it does not support Adventure Outdoors' 6 argument. 7 adjudicate the merits of the defendants' defenses, but to permit 8 the defendants to be heard concerning the "nature and details of 9 the judgment to be entered in light of th[e] trial record" and There, we remanded not for the district court to Id. at 65. 10 the scope of the relief requested by the plaintiff. 11 Although it is true that the district court in Brock had opted to 12 continue the trial proceedings following the defendants' default, 13 nothing in our decision on appeal ratified the district court's 14 decision in that respect.22 See id. 22 Although the parties do not advert to it, we have also reviewed our decision in Credit Lyonnais Securities (USA), Inc. v. Alcantara, 183 F.3d 151 (2d Cir. 1999). In that case, the defendant failed to answer the complaint but later contested the entry of default judgment against it, and we held that the district court was bound to inquire into personal jurisdiction before entering judgment. The defendants' appearance and withdrawal from the proceedings in this case, by contrast, forfeited their defense. Through that forfeiture, the defendants implicitly, if unwittingly, established the jurisdiction of the district court. Accordingly, the district court did not err by failing to make a final finding of jurisdiction by a preponderance of the evidence. See, e.g., Sinoying, 619 F.3d at 213 ("[A] district court should not raise personal jurisdiction sua sponte when a defendant has appeared and consented, voluntarily or not, to the jurisdiction of the court."). We therefore do not find Credit Lyonnais helpful to the defendants here. 48 1 3. The PLCAA. The defendants appear to argue, 2 belatedly in their supplemental briefing, that the district court 3 should not have entered a default judgment because the City's 4 claims were barred by the PLCAA. It is an "ancient common law axiom" that a defendant 5 6 who defaults thereby admits all "well-pleaded" factual 7 allegations contained in the complaint. 8 F.3d at 246. 9 "need not agree that the alleged facts constitute a valid cause Vt. Teddy Bear Co., 373 However, it is also true that a district court 10 of action." Au Bon Pain, 653 F.2d at 65. 11 recently suggested that, prior to entering default judgment, a 12 district court is "required to determine whether the 13 [plaintiff's] allegations establish [the defendant's] liability 14 as a matter of law."23 Indeed, we have Finkel, 577 F.3d at 84. Most of our sister circuits appear to have held expressly that a district court may not enter a default judgment unless the plaintiff's complaint states a valid facial claim for relief. See, e.g., Conetta v. Nat'l Hair Care Ctrs., Inc., 236 F.3d 67, 75-76 (1st Cir. 2001); Ryan v. Homecomings Fin. Network, 253 F.3d 778, 780 (4th Cir. 2001); Nishimatsu Constr. Co. v. Houston Nat'l Bank, 515 F.2d 1200, 1206 (5th Cir. 1975); Gen. Conf. Corp. of Seventh-Day Adventists v. McGill, 617 F.3d 402, 407 (6th Cir.), cert. denied, __ S. Ct. __, 2011 WL 1457562 (U.S. Apr. 18, 2011); Black v. Lane, 22 F.3d 1395, 1399 (7th Cir. 1994); Marshall v. Baggett, 616 F.3d 849, 852 (8th Cir. 2010); DIRECTV, Inc. v. Hoa Huynh, 503 F.3d 847, 854 (9th Cir. 2007), cert. denied, 129 S. Ct. 40 (2008); Bixler v. Foster, 596 F.3d 751, 762 (10th Cir. 2010); Cotton v. Mass. Mut. Life Ins. Co., 402 F.3d 1267, 1278 (11th Cir. 2005). According to these circuits, "[e]ntry of default judgment does not preclude a party from challenging the sufficiency of the complaint on appeal." Marshall, 616 F.3d at 852; see id. (collecting cases). 23 49 1 We recognize that there is some uncertainty whether the 2 City's claims were legally sufficient, in light of their possible 3 preemption by the PLCAA. 4 district court abused its discretion in entering a default 5 judgment, because the defendants have forfeited this defense on 6 appeal. 7 brief, and Adventure Outdoors raised it only by way of footnote. 8 See Opening Br. of Adventure Outdoors at 32 n.12. 9 deem an argument to be forfeited where it has not been But we need not decide whether the Mickalis Pawn did not address the PLCAA in its opening We ordinarily 10 "sufficiently argued in the briefs," Norton v. Sam's Club, 145 11 F.3d 114, 117 (2d Cir.), cert. denied, 525 U.S. 1001 (1998), such 12 as when it is only addressed in a footnote: 13 14 15 16 17 18 19 20 21 We do not consider an argument mentioned only in a footnote to be adequately raised or preserved for appellate review. The enormous volume of briefs and arguments pressed on each panel of this court at every sitting precludes our scouring through footnotes in search of some possibly meritorious point that counsel did not consider of sufficient importance to include as part of the argument. 22 United States v. Restrepo, 986 F.2d 1462, 1463 (2d Cir.), cert. 23 denied, 510 U.S. 843 (1993). 24 To be sure, the doctrine of forfeiture is prudential 25 and may be disregarded in our discretion. 26 Networks Corp. Sec. Litig., 539 F.3d 129, 133 (2d Cir. 2008). 27 ourselves asked the parties for supplemental submissions 28 concerning the applicability of the PLCAA. 50 See In re Nortel But we do not think We 1 that our doing so constituted a decision by the Court on any 2 issue in the case. 3 on this issue without thereby conceding that forfeiture is 4 inappropriate. 5 the unusual action by the Court of ignoring the forfeiture is 6 unwarranted here. 7 We must be free to seek additional briefing Having reviewed the submissions, we conclude that We have considered the remainder of defendants' 8 arguments concerning the City's purported failure to plead a 9 cause of action sufficient to support entry of default judgment, 10 and we conclude that those arguments are without merit. 11 III. Voidness for Lack of Personal Jurisdiction 12 The defendants contend that even if the district court 13 did not commit any procedural error in its entry of default 14 judgment during the Rule 55(b)(2) proceedings, the default 15 judgment is nonetheless "void" because the district court lacked 16 personal jurisdiction ab initio. 17 a correct application of the New York long-arm statute, C.P.L.R. 18 § 302(a)(3)(ii), and principles of constitutional due process 19 under the Fifth and Fourteenth Amendments require us to hold that 20 personal jurisdiction was absent here, even as a prima facie 21 matter, and that the district court's repeated determinations to 22 the contrary were in error. 23 defendants forfeited their jurisdictional defense, and therefore The defendants assert that both Because we conclude that the 51 1 the district court's assertion of personal jurisdiction over them 2 was proper, we reject the defendants' voidness argument. 3 A. Governing Law 4 A default judgment is "void" if it is rendered by a 5 court that lacks jurisdiction over the parties. 6 Produce, 540 F.3d at 123 (citing In re Texlon Corp., 596 F.2d 7 1092, 1099 (2d Cir. 1979)); Covington Indus., Inc. v. Resintex 8 A.G., 629 F.2d 730, 732 (2d Cir. 1980). 9 See "R" Best Had the defendants asserted their voidness argument 10 before the district court in the first instance, they might have 11 done so pursuant to Rule 60(b)(4). 12 motion and just terms, the court may relieve a party . . . from a 13 final judgment . . . [if] the judgment is void." 14 60(b)(4); see "R" Best Produce, 540 F.3d at 122-23 (explaining 15 that a defendant seeking to challenge a default judgment for lack 16 of personal jurisdiction may proceed under Rule 60(b)(4)). 17 therefore find it appropriate to consider our precedent governing 18 Rule 60(b)(4) motions. 19 That rule provides: "On Fed. R. Civ. We "A judgment is void under Rule 60(b)(4) of the Federal 20 Rules of Civil Procedure . . . 'if the court that rendered it 21 lacked jurisdiction of the subject matter, or of the parties, or 22 if it acted in a manner inconsistent with due process of law.'" 23 Grace, 443 F.3d at 193 (quoting In re Texlon Corp., 596 F.2d at 24 1099). "'Whereas we generally review motions pursuant to the 52 1 provisions of Rule 60(b) for abuse of discretion, we review de 2 novo a district court's denial of a Rule 60(b)(4) motion.'" 3 Burda Media, Inc. v. Viertel, 417 F.3d 292, 298 (2d Cir. 2005) 4 (quoting State St. Bank & Trust Co., 374 F.3d at 178). 5 because, if the underlying judgment is void for lack of 6 jurisdiction, "it is a per se abuse of discretion for a district 7 court to deny a movant's motion to vacate the judgment under Rule 8 60(b)(4)." 9 Spamhaus Project, 500 F.3d at 598. That is Id. (internal quotation marks omitted); accord "'[T]he judgment is either 10 void or it is not.'" 11 F.3d 186, 189 (2d Cir. 2003) (quoting Recreational Props., Inc. 12 v. Sw. Mortg. Serv. Corp., 804 F.2d 311, 314 (5th Cir. 1986)). 13 B. 14 Cent. Vt. Pub. Serv. Corp. v. Herbert, 341 Analysis The procedural history of this case is dispositive of 15 our voidness analysis. The district court may have erred in its 16 determination that the City had made a prima facie showing of 17 personal jurisdiction over each of the defendants, for the 18 reasons discussed in Judge Wesley's concurring opinion. 19 have already concluded that by appearing, litigating, and then 20 intentionally withdrawing from the proceedings, the defendants 21 forfeited their jurisdictional defense. 22 defendants submitted to the jurisdiction of the district court. 23 The default judgment that the court rendered was thus supported 24 by personal jurisdiction and is not void. 53 But we As a result, the 1 The defendants appear to assume that a default judgment 2 is void for lack of personal jurisdiction even where a 3 defendant's litigation tactics before the district court were 4 inconsistent with the preservation of its jurisdictional defense. 5 The defendants also appear to rely on the well-established 6 principle that a defendant who does not answer a complaint in the 7 first instance, and later suffers a default judgment to be 8 entered against it, may subsequently challenge the default 9 judgment as void for lack of personal jurisdiction. 10 The defendants overlook the critical distinction 11 between defendants who "appear" in court -- even if only to 12 challenge the court's jurisdiction -- and those who do not. 13 Sinoying Logistics, 619 F.3d at 213. 14 does not, by defaulting, forfeit its right to challenge any 15 ensuing default judgment for lack of personal jurisdiction. 16 defendant is always free to ignore the judicial proceedings, risk 17 a default judgment, and then challenge that judgment on 18 jurisdictional grounds in a collateral proceeding." 19 of Ireland, 456 U.S. at 706; see also "R" Best Produce, 540 F.3d 20 at 123; Norex Petroleum Ltd. v. Access Indus., Inc., 416 F.3d 21 146, 160 (2d Cir. 2005), cert. denied, 547 U.S. 1175 (2006); 22 Transaero, 162 F.3d at 729; Restatement (Second) of Judgments § 23 65 cmt. b. See A non-appearing defendant "A Ins. Corp. In such a case, "voidness of a judgment for lack of 54 1 personal jurisdiction can be asserted on a collateral challenge" 2 pursuant to Rule 60(b)(4). "R" Best Produce, 540 F.3d at 123. 3 But "when a defendant appears and challenges 4 jurisdiction," we interpret that to constitute "it[s] agree[ment] 5 to be bound by the court's determination on the jurisdictional 6 issue." 7 456 U.S. at 706 ("By submitting to the jurisdiction of the court 8 for the limited purpose of challenging jurisdiction, the 9 defendant agrees to abide by that court's determination on the 10 issue of jurisdiction."); cf. SEC v. Ross, 504 F.3d 1130, 1150 11 (9th Cir. 2007) (defendant-intervener does not, through Rule 12 24(a) intervention, consent to personal jurisdiction, but does 13 "consent[] to have the district court determine all issues in the 14 case, including issues of jurisdiction"). 15 defendant may, if it disagrees with the district court's 16 threshold ruling on personal jurisdiction, seek reversal of that 17 ruling on appeal, the defendant must properly preserve its 18 defense for appellate review. 19 Transaero, 162 F.3d at 729; see Ins. Corp. of Ireland, Although an appearing Both Adventure Outdoors and Mickalis Pawn were 20 "appearing" defendants. Both retained counsel who filed notices 21 of appearance on their behalf. 22 pleadings with two rounds of Rule 12(b) motions. 23 Outdoors continued to litigate the case through summary judgment; 24 Mickalis Pawn, though it withdrew prior to the close of 25 discovery, nonetheless "appeared [and] defended vigorously" over Both challenged the City's 55 Adventure 1 the course of "about two years of active litigation." Opening 2 Br. of Mickalis Pawn at 4. 3 the district court to decide the question of personal 4 jurisdiction -- but then withdrawing from the proceedings, rather 5 than litigating the case to final judgment -- the defendants 6 failed to preserve their jurisdictional defense for review on 7 appeal. 8 acquiesced to the jurisdiction of the district court, and the 9 resulting judgment of that court is not void.24 By submitting to the jurisdiction of And because they failed to preserve that defense, they We recognize that even where a defense has been 10 11 forfeited, appellate review is not necessarily foreclosed. 12 "[T]his Court has discretion to decide the merits of a forfeited 13 claim or defense where the issue is purely legal and there is no 24 Some of the parties' submissions on appeal assume that our review of the defendants' challenge to the default judgment is governed by a three-factor balancing test. To be sure, district and appellate courts considering whether to grant relief from a default judgment under Rule 60(b) ordinarily consider three criteria: "'(1) whether the default was willful, (2) whether the defendant demonstrates the existence of a meritorious defense, and (3) whether, and to what extent, vacating the default will cause the nondefaulting party prejudice.'" Green, 420 F.3d at 108 (quoting State St. Bank & Trust Co., 374 F.3d at 166-67). But that framework assumes that the defendant in question seeks to be restored to its pre-default position, thereby permitting the resolution of the dispute on its merits. Here, by contrast, the defendants seek not to re-open this case for further litigation; rather, they urge that this lawsuit be dismissed altogether. See Opening Br. of Mickalis Pawn at 30 (requesting that "the matter [be] dismissed"); Opening Br. of Adventure Outdoors at 61 (urging that this case be remanded "with instructions to dismiss"). Moreover, the "voidness" vel non of a judgment is not a matter subject to discretion. We conclude that these considerations render inapposite the standard three-factor discretionary test in this instance. 56 1 need for additional fact-finding or where consideration of this 2 issue is necessary to avoid manifest injustice." 3 Balsamico, 440 F.3d 104, 112 (2d Cir. 2006) (internal quotation 4 marks omitted). 5 forfeiture in this instance, where there is every indication that 6 the defendants' default was not the product of inadvertence, but 7 a deliberate tactic instead. 8 "escape the consequences" of their strategic decisions simply 9 because they have proven to be disadvantageous to them. 10 Project, 500 F.3d at 600; cf. LNC Invs., Inc. v. Nat'l 11 Westminster Bank, 308 F.3d 169, 176 n.8 (2d Cir. 2002) (noting 12 that "[i]t would be particularly unusual" to "address an argument 13 despite its abandonment on appeal . . . . where the abandonment 14 appears, as it does here, to be a strategic choice rather than an 15 inadvertent error"), cert. denied, 538 U.S. 1033 (2003). 16 Patterson v. However, we will not excuse the defendants' We will not allow the defendants to Spamhaus Our decision not to excuse the forfeiture is also 17 informed by our respect for the limits of our own jurisdiction -- 18 limits that the defendants sought to evade through their 19 strategic decisions to default. 20 The core of our appellate jurisdiction is to review 21 "final decisions" of the district courts. 22 With limited exceptions, see generally Myers v. Hertz Corp., 624 23 F.3d 537, 552 (2d Cir. 2010), only final orders and judgments may 24 be appealed, see Cruz v. Ridge, 383 F.3d 62, 64 (2d Cir. 2004) 57 See 28 U.S.C. § 1291. 1 (per curiam). 2 to a single appeal, to be deferred until final judgment has been 3 entered." 4 (2009) (internal quotation marks omitted). 5 "[T]he general rule [is] that a party is entitled Mohawk Indus., Inc. v. Carpenter, 130 S. Ct. 599, 605 In including a requirement of finality in defining the 6 scope of our jurisdiction under 28 U.S.C. § 1291, Congress 7 "'express[ed] a preference that some erroneous trial court 8 rulings go uncorrected until the appeal of a final judgment, 9 rather than having litigation punctuated by piecemeal appellate 10 review of trial court decisions which do not terminate the 11 litigation.'" 12 F.3d 169, 178 (2d Cir. 2008) (quoting Richardson-Merrell, Inc. v. 13 Koller, 472 U.S. 424, 430 (1985)). 14 motions are therefore not ordinarily appealable on an 15 interlocutory basis. 16 600 F.3d 168, 170 (2d Cir. 2010) (per curiam). 17 In re World Trade Ctr. Disaster Site Litig., 521 Denials of dispositive See, e.g., Napoli v. Town of New Windsor, We cannot permit the defendants to short-circuit the 18 normal litigation process by withdrawing, inducing a default 19 judgment to be entered against them, and then obtaining de facto 20 interlocutory review over otherwise non-appealable decisions. 21 have observed, with respect to similar strategic conduct by 22 plaintiffs: 23 24 25 26 [I]f a litigant could refuse to proceed whenever a trial judge ruled against him, wait for the court to enter a dismissal for failure to prosecute, and then obtain review of the 58 We 1 2 3 4 5 6 judge's interlocutory decision, the policy against piecemeal litigation and review would be severely weakened. This procedural technique would in effect provide a means to avoid the finality rule embodied in 28 U.S.C. § 1291. 7 8 9 10 11 12 13 14 15 16 Moreover, if a party who was disappointed by an interlocutory ruling could obtain an appeal of that ruling by simply refusing to prosecute his or her lawsuit, adherence to the merger rule[25] would reward that party for dilatory and bad faith tactics. Such a result would conflict with the purpose of a Rule 41(b) dismissal for failure to prosecute, which is to penalize dilatoriness and harassment of defendants. 17 Shannon v. Gen. Elec. Co., 186 F.3d 186, 192 (2d Cir. 1999) 18 (brackets, ellipsis, citations, and internal quotation marks 19 omitted; footnote added); see also Rabbi Jacob Joseph Sch. v. 20 Province of Mendoza, 425 F.3d 207, 210-11 (2d Cir. 2005); Martens 21 v. Thomann, 273 F.3d 159, 183 (2d Cir. 2001). 22 The same concerns arise here. To overlook the 23 defendants' forfeiture would be to "permit[] . . . an end-run 24 around the final judgment rule."26 Palmieri v. Defaria, 88 F.3d 25 The "merger rule" holds that "[w]hen a district court enters a final judgment in a case, interlocutory orders rendered in the case . . . merge with the judgment," thereby rendering them amenable to appellate review. Shannon, 186 F.3d at 192. Mickalis Pawn's default also prejudiced the City's ability to obtain further discovery related to personal jurisdiction. Cf. Ins. Corp. of Ireland, 456 U.S. at 707-09; S. New Eng. Tel. Co. v. Global NAPs Inc., 624 F.3d 123, 146 (2d Cir. 2010) (observing "that it does not violate due process for a district court to impose under Rule 37(b) an order subjecting a party to personal jurisdiction in that court as a sanction for the party's failure to comply with a discovery order seeking to establish facts relating to the court's personal jurisdiction 26 59 1 136, 140 (2d Cir. 1996). But see Savin v. Ranier, 898 F.2d 304, 2 307 (2d Cir. 1990) (reviewing, on appeal from default judgment, 3 the merits of appearing defendant's jurisdictional defense, where 4 plaintiff did not claim that defendant had forfeited that defense 5 by defaulting). We also decline to overlook the defendants' forfeiture 6 7 based on their assertion that they suffered grave financial 8 hardship by being forced to defend a lawsuit in New York. 9 defendants appear to contend that it would be unfair to expect The 10 them to have waited until after trial to seek appellate review of 11 the district court's adverse interlocutory decisions concerning 12 personal jurisdiction. 13 Elecs. Imps., Inc., 740 F.2d 1499 (11th Cir. 1984), they urge 14 that the district court's decision to delay final adjudication of 15 their jurisdictional defense until trial "put [them] in the 16 uncomfortable position of having to prepare for a full-blown 17 trial even if [they] might eventually prevail on the 18 jurisdictional claim," id. at 1511. 19 Citing Gulf Coast Fans, Inc. v. Midwest We are not without sympathy for these sentiments, nor 20 do we necessarily disagree with Judge Wesley's conclusion that 21 the district court erred in its jurisdictional analysis. 22 Supreme Court has made clear that "the possibility that a ruling 23 may be erroneous and may impose additional litigation expense" is over it"). 60 But the 1 not a sufficient basis for affording appellate review over 2 interlocutory decisions. 3 IV. 4 We review the district court's issuance of a permanent Richardson-Merrell, 472 U.S. at 436. The Injunctions 5 injunction for abuse of discretion. See Third Church of Christ, 6 Scientist v. City of New York, 626 F.3d 667, 669 (2d Cir. 2010). 7 A. The Terms of the Injunctions 8 Simultaneously with entry of a default judgment, the 9 district court imposed separate, but substantively identical, 10 permanent injunctions to "abate the public nuisance" caused by 11 Adventure Outdoors and Mickalis Pawn. 12 WL 792042, ¶ 1; Adventure Outdoors Inj., 2009 WL 792023, ¶ 1 13 (same). 14 master (the "Special Master") to implement, and monitor the 15 defendants' compliance with, certain remedial measures 16 contemplated by the injunctions. 17 792042, ¶ 2. 18 19 20 21 22 23 24 25 26 27 28 Mickalis Pawn Inj., 2009 The injunctions provide for the appointment of a special Mickalis Pawn Inj., 2009 WL Paragraph 3 of each injunction provides, with respect to the duties of the Special Master: It will be the responsibility of the Special Master to ensure, to the fullest extent practicable, that from the effective date of this [injunction] forward, firearms sales by [the defendant] are made in full conformity with applicable laws pertaining to firearms and that [the defendant] adopts appropriate prophylactic measures to prevent violation of the firearms laws. 61 1 Id. ¶ 3.27 [the defendant] shall adopt those practices that in the opinion of the Special Master serve to prevent in whole or in part[28] the illegal sale of firearms. [The defendant] shall also adopt those prophylactic practices that in the opinion of the Special Master will serve to prevent the movement of guns into the illegal market. 2 3 4 5 6 7 8 9 10 Paragraph 7 of each injunction mandates that Id. ¶ 7 (footnote added). The injunctions contemplate several ways by which the 11 12 defendants may become subject to penalties. 13 participation by the defendants in a "straw purchase" -- or any 14 sale "otherwise in violation of Federal, State, or local law or 15 regulation," as determined by the Special Master -- constitutes a 16 violation punishable by a fine that increases with each 17 successive violation.29 18 defined as including "[a] sale . . . made to an investigator 19 conducting a 'Simulated Straw Purchase,' which shall mean a 20 purchase in a form substantially as described in the Amended 21 Complaint filed in this action, for example, in paragraph 188." Id. ¶ 12. First, any The term "straw purchase" is 27 The injunctions specify certain methods to be used in monitoring the defendants' compliance, including in-store observation, videotape surveillance, records monitoring, "random and repeated integrity testing," inventory inspections, and instructional training for the defendants' employees. Mickalis Pawn Inj., 2009 WL 792042, ¶ 4. 28 The phrase "in whole or in part" appears only in the Mickalis Pawn injunction. Compare Mickalis Pawn Inj., 2009 WL 792042, ¶ 7, with Adventure Outdoors Inj., 2009 WL 792023, ¶ 7. 29 The injunctions require each defendant to post a $ 25,000 bond with the district court; any monetary penalties imposed for violations of the injunctions would be drawn from this sum. Mickalis Pawn Inj., 2009 WL 792042, ¶¶ 11-12. 62 1 Id. ¶ 13(iii). The injunctions also provide, more generally, 2 that any other "[a]ction[] . . . by which [the defendant] seeks 3 to evade any of the requirement[s]" of the injunction constitutes 4 a violation. 5 "to cooperate with the Special Master," as determined by the 6 Special Master himself, constitutes a violation. Id. ¶ 8. Finally, any failure by the defendants Id. 7 If the defendants fully comply with the foregoing 8 terms, each injunction terminates automatically after three 9 years. Id. ¶ 17. Any violation of the injunction, however -- or 10 any "violation of an applicable firearms law or regulation" 11 certified to have occurred by the Special Master -- "will re- 12 commence the running of the three-year Compliance Period from the 13 date of the violation." 14 B. Id. ¶ 18. Governing Law 15 The defendants did not, by defaulting, forfeit the 16 right to challenge the lawfulness of the injunctions. 17 Finkel, 577 F.3d at 83 n.6; Brock, 786 F.2d at 65; see also 18 Spamhaus Project, 500 F.3d at 603-04 (vacating permanent 19 injunction imposed after default judgment as violative of Rule 20 65(d)); SEC v. Mgmt. Dynamics, Inc., 515 F.2d 801, 814 (2d Cir. 21 1975) (vacating permanent injunction imposed after default 22 judgment). 23 See In appealing the injunctions entered against them, the 24 defendants principally argue that the injunctions are 25 unconstitutionally vague and that they violate the requirements 63 1 of Federal Rule of Civil Procedure 65(d). We review de novo 2 whether the injunctions comply with Rule 65(d). 3 Yonkers Sch. Dist., 561 F.3d 97, 103 (2d Cir. 2009). See Garcia v. Rule 65(d) provides that "[e]very order granting an 4 5 injunction . . . must: (A) state the reasons why it issued; (B) 6 state its terms specifically; and (C) describe in reasonable 7 detail -- and not by referring to the complaint or other document 8 -- the act or acts restrained or required." 9 65(d)(1). Fed. R. Civ. P. We have interpreted Rule 65(d) as requiring that "an 10 injunction . . . be specific and definite enough to apprise those 11 within its scope of the conduct that is being proscribed." 12 Johnson & Son, Inc. v. Clorox Co., 241 F.3d 232, 240-41 (2d Cir. 13 2001) (internal quotation marks omitted). 14 explained: S.C. The Supreme Court has [T]he specificity provisions of Rule 65(d) are no mere technical requirements. The Rule was designed to prevent uncertainty and confusion on the part of those faced with injunctive orders, and to avoid the possible founding of a contempt citation on a decree too vague to be understood. Since an injunctive order prohibits conduct under threat of judicial punishment, basic fairness requires that those enjoined receive explicit notice of precisely what conduct is outlawed. 15 16 17 18 19 20 21 22 23 24 25 26 Schmidt v. Lessard, 414 U.S. 473, 476 (1974) (footnotes and 27 citations omitted). 28 enjoined party can ascertain from the four corners of the order 29 precisely what acts are forbidden or required." 30 White, 533 F.3d 110, 114 (2d Cir. 2008) (internal quotation marks 31 omitted). Rule 65(d) is satisfied "only if the 64 Petrello v. Rule 65(d) is said to serve two general purposes: "to 1 2 prevent uncertainty and confusion on the part of those to whom 3 the injunction is directed," and to ensure "that the appellate 4 court knows precisely what it is reviewing." 5 241 F.3d at 241 (internal quotation marks omitted); see also 6 Schmidt, 414 U.S. at 476-77; Lau v. Meddaugh, 229 F.3d 121, 123 7 (2d Cir. 2000) (per curiam), cert. denied, 534 U.S. 833 (2001). 8 We have cautioned that injunctions that do not satisfy the 9 requirements of Rule 65(d) "will not withstand appellate S.C. Johnson & Son, Corning Inc. v. PicVue Elecs., Ltd., 365 F.3d 156, 10 scrutiny." 11 158 (2d Cir. 2004) (per curiam) (internal quotation marks 12 omitted). 13 In addition to complying with Rule 65(d)'s specificity 14 requirements, district courts must take care to ensure that 15 injunctive relief is not overbroad. 16 has "a wide range of discretion in framing an injunction in terms 17 it deems reasonable to prevent wrongful conduct," it is 18 nonetheless "the essence of equity jurisdiction" that a court is 19 only empowered "to grant relief no broader than necessary to cure 20 the effects of the harm caused by the violation." 21 Grp., Inc. v. Arrow Trading Co., 124 F.3d 402, 406 (2d Cir. 1997) 22 (internal quotation marks omitted). 23 injunctive relief should be "narrowly tailored to fit specific 24 legal violations," Peregrine Myanmar Ltd. v. Segal, 89 F.3d 41, 25 50 (2d Cir. 1996) (internal quotation marks omitted), and that 26 the court must "mould each decree to the necessities of the 65 Although a district court Forschner We have instructed that 1 particular case," Forschner Grp., 124 F.3d at 406 (internal 2 quotation marks omitted); see also Patsy's Brand, Inc. v. I.O.B. 3 Realty, Inc., 317 F.3d 209, 220 (2d Cir. 2003); Brooks v. 4 Giuliani, 84 F.3d 1454, 1467 (2d Cir.), cert. denied, 519 U.S. 5 992 (1996); Waldman Publ'g Corp. v. Landoll, Inc., 43 F.3d 775, 6 785 (2d Cir. 1994). 7 breaches of the law.'" 8 Prods., Inc., 588 F.2d 24, 30 (2d Cir. 1978) (quoting Hartford- 9 Empire Co. v. United States, 323 U.S. 386, 410 (1945)). 10 11 C. An injunction may not "enjoin 'all possible John B. Hull, Inc. v. Waterbury Petroleum Analysis We agree with the defendants that several portions of 12 the injunctions are insufficiently specific or overbroad, or 13 otherwise violate Rule 65(d). 14 First, the injunctions impose on defendants an 15 obligation to act "in full conformity with applicable laws 16 pertaining to firearms," and to "adopt[] appropriate prophylactic 17 measures to prevent violation" of those laws, without specifying 18 which laws are "applicable" or identifying the ways in which the 19 defendants must alter their behavior to comply with those laws. 20 Mickalis Pawn Inj., 2009 WL 792042, ¶ 3; see also id. ¶ 17 21 (requiring "full compliance" with "applicable firearms laws and 22 regulations"). 23 does not "describe in reasonable detail . . . the act or acts 24 restrained or required," Fed. R. Civ. P. 65(d)(1), nor does it 25 provide "explicit notice of precisely what conduct is outlawed," 26 Schmidt, 414 U.S. at 476. A directive to undertake "appropriate" measures Indeed, we have said that to comply 66 1 with Rule 65(d), "an injunction must be more specific than a 2 simple command that the defendant obey the law." 3 Myanmar Ltd., 89 F.3d at 51. Peregrine 4 Second, it appears that the injunctions, fairly read, 5 prohibit not only "straw purchases" -- the sole kind of illegal 6 practice identified in the City's amended complaint -- but other, 7 unidentified types of sales practices as well. 8 overbroad when it seeks to restrain the defendants from engaging 9 in legal conduct, or from engaging in illegal conduct that was An injunction is See Lineback v. Spurlino 10 not fairly the subject of litigation. 11 Materials, LLC, 546 F.3d 491, 504 (7th Cir. 2008) (noting that an 12 injunction is overbroad if it results in a "likelihood of 13 unwarranted contempt proceedings for acts unlike or unrelated to 14 those originally judged unlawful" (internal quotation marks 15 omitted)); Spamhaus Project, 500 F.3d at 604 (vacating injunction 16 that "fail[ed] to comply with the rule requiring courts to tailor 17 injunctive relief to the scope of the violation found" (internal 18 quotation marks omitted)). 19 The injunctions are also problematic because of the 20 extent to which they vest the Special Master with discretion to 21 determine the terms of the injunctions themselves. 22 of each injunction requires the defendants to "adopt those 23 practices that in the opinion of the Special Master serve to 24 prevent in whole or in part the illegal sale of firearms" and 25 "adopt those prophylactic practices that in the opinion of the 26 Special Master will serve to prevent the movement of guns into 67 Paragraph 7 1 the illegal market." Mickalis Pawn Inj., 2009 WL 792042, ¶ 7 2 (emphases added). 3 Special Master" constitutes a violation. 4 injunctions provide that any dispute as to whether a violation 5 has occurred, or any disagreements concerning decisions made by 6 the Special Master, are to be resolved by the Special Master 7 himself in the first instance. 8 appeal "any decision or practice of the Special Master" to the 9 district court, the Special Master's decisions are made subject A defendant's "failure to cooperate with the Id. ¶ 8. Id. ¶ 9. Moreover, the Although a party may 10 only to "arbitrary and capricious" review. 11 further specify that if a defendant is unsuccessful in 12 challenging the Special Master's decision, the defendant "shall 13 pay the Special Master's costs and attorneys' fees." 14 Id. The injunctions Id. ¶ 10. "The power of the federal courts to appoint special 15 masters to monitor compliance with their remedial orders is well 16 established," United States v. Yonkers Bd. of Educ., 29 F.3d 40, 17 44 (2d Cir. 1994), cert. denied, 515 U.S. 1157 (1995), and a 18 special master possesses some power to "determine the scope of 19 his own authority," Bridgeport Guardians, Inc. v. Delmonte, 537 20 F.3d 214, 219 (2d Cir. 2008). 21 warned that "[t]he use of masters is to aid judges in the 22 performance of specific judicial duties, as they may arise in the 23 progress of a cause, and not to displace the court." 24 Howes Leather Co., 352 U.S. 249, 256 (1957) (citation and 25 internal quotation marks omitted). But the Supreme Court has also 68 La Buy v. Serious constitutional 1 questions arise when a master is delegated broad power to 2 determine the content of an injunction as well as effectively 3 wield the court's powers of contempt. 4 significant decisions without careful review by the trial judge, 5 judicial authority is effectively delegated to an official who 6 has not been appointed pursuant to article III of the 7 Constitution." 8 1986). 9 "If the master makes Meeropol v. Meese, 790 F.2d 942, 961 (D.C. Cir. Constitutional questions aside, we conclude that, at 10 the very least, the injunctions' sweeping delegations of power to 11 the Special Master violate Rule 65(d). 12 frame its orders so that those who must obey them will know what 13 the court intends to forbid." 14 Ltd., 626 F.2d 1108, 1111 (2d Cir. 1980) (emphasis added); see 15 also United States v. Microsoft Corp., 147 F.3d 935, 954 (D.C. 16 Cir. 1998) (concluding that injunction was improper insofar as 17 "the parties' rights must be determined, not merely enforced," by 18 special master). 19 "A court is required to Diapulse Corp. of Am. v. Carba, Finally, Paragraph 13(iii) of each injunction prohibits 20 certain conduct by reference to the amended complaint. 21 drafting technique, however efficient, is expressly prohibited by 22 Rule 65(d), which provides that "[e]very order granting an 23 injunction" must "describe in reasonable detail -- and not by 24 referring to the complaint or other document -- the act or acts 69 This 1 restrained or required." 2 Fed. R. Civ. P. 65(d)(1)(C) (emphasis added). The City defends the injunctions principally on the 3 4 basis that "[t]wenty other firearms dealers have entered into 5 negotiated settlement agreements with the City under virtually 6 the same terms." 7 Appeal) at 58; see also Opening Br. of City (Mickalis Pawn's 8 Appeal) at 57. 9 settlement agreements, which are voluntary contracts freely Opening Br. of City (Adventure Outdoors' But there is an obvious difference between 10 negotiated between parties, and injunctions, which are unilateral 11 directives backed by a court's powers of contempt. 12 consent to settlement terms that would otherwise, if imposed 13 unilaterally, violate Rule 65(d) or a defendant's due process 14 rights. 15 1450, 1479 (2d Cir. 1996), cert. denied, 522 U.S. 812 (1997); 16 Stauble v. Warrob, Inc., 977 F.2d 690, 698 (1st Cir. 1992). 17 fact that other defendants were willing to settle voluntarily 18 with the City on essentially the same terms as those included in 19 the injunctions does not tend to prove, let alone itself 20 establish, that the injunctions comply with the Federal Rules and 21 comport with due process.30 Parties may See, e.g., SEC v. First Jersey Sec., Inc., 101 F.3d 30 The We reject, however, the defendants' argument that the injunctions violate principles of state sovereignty, comity, and federalism. To be sure, "[t]he court's discretion to frame equitable relief is limited by considerations of federalism," Knox v. Salinas, 193 F.3d 123, 129-30 (2d Cir. 1999) (internal 70 1 We have carefully considered the other arguments made 2 by the parties concerning the injunctions and find them to be 3 without merit. 4 5 CONCLUSION For the foregoing reasons, we affirm the entry of 6 default judgment against Mickalis Pawn and Adventure Outdoors, 7 but vacate the injunctions issued against them and remand the 8 matter to the district court for further proceedings. quotation marks omitted), and "[a] State cannot punish a defendant for conduct that may have been lawful where it occurred," State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 421 (2003). However, it is also true that "[t]he federal court sitting as a court of equity having personal jurisdiction over a party has power to enjoin him from committing acts elsewhere." Bano v. Union Carbide Corp., 361 F.3d 696, 716 (2d Cir. 2004) (internal quotation marks omitted); see also Steele v. Bulova Watch Co., 344 U.S. 280, 289 (1952) ("[T]he District Court in exercising its equity powers may command persons properly before it to cease or perform acts outside its territorial jurisdiction."); New Jersey v. City of New York, 283 U.S. 473, 482 (1931). Here, the defendants have identified no authority for the proposition that a court in New York may not restrain a defendant in Georgia or South Carolina from violating U.S. federal firearms laws, which are of course binding in both jurisdictions. Nor have the defendants demonstrated that Georgia and South Carolina law is materially different than New York law in relevant respects. 71 1 2 WESLEY, Circuit Judge, concurring: I join the majority s opinion in full. I write 3 separately to express concerns with the jurisdictional 4 analysis conducted by the court below. 5 with the majority s conclusion that this affirmative defense 6 was waived, I am concerned that others might embrace the 7 district court s jurisdictional analysis. 8 would be a mistake because the district court s 9 jurisdictional analysis has no basis in New York law. 10 While I fully agree In my view, that The claims brought by the City of New York against 11 defendants Mickalis Pawn Shop, LLC and Adventure Outdoors, 12 Inc. were pled as torts under New York law. 13 Law §§ 240.45, 400.05(1). 14 matter jurisdiction was grounded in 28 U.S.C. § 1332(a)(1). 15 Therefore, the court was permitted to exercise personal 16 jurisdiction to the same extent as the courts of general 17 jurisdiction in the State of New York. 18 Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 124 19 (2d Cir. 2002). 20 that has no basis in the New York statute governing long-arm 21 jurisdiction.1 1 See N.Y. Penal The district court s subject Bank Brussels And yet, the district court devised a test See N.Y. C.P.L.R. § 302(a)(3)(ii). In my This appeal concerns only two defendants among many implicated by a series of civil cases brought by the City 1 view, the court had no authority to apply a novel 2 jurisdictional test that created an unwarranted expansion of 3 the meaning of personal jurisdiction under New York law. 4 The district court termed this case one of first 5 impression and created, out of whole cloth, a seven-factor 6 test for determining whether personal jurisdiction exists 7 over retail gun establishments. 8 Jewelry & Pawn, Inc., 501 F. Supp. 2d 369, 374, 424 9 (E.D.N.Y. 2007) (Weinstein, J.). City of New York v. A-1 This case, however, is not 10 one of first impression. In fact, this particular federal 11 judge has decided a number of other cases involving the 12 firearms industry in which he has declined to apply the 13 long-arm statute as interpreted by the New York Court of 14 Appeals. 15 383, 397 (E.D.N.Y. 2004) (Weinstein, J.); N.A.A.C.P. v. A.A. 16 Arms, Inc., Nos. 99 Civ. 3999, 99 Civ. 7037, 2003 WL 17 21242939, at *4 (E.D.N.Y. Apr. 1, 2003) (Weinstein, J.). 18 And, in any event, federally licensed out-of-state firearms 19 distributors, such as defendants in this case, are governed See, e.g., Johnson v. Bryco Arms, 304 F. Supp. 2d of New York before this district court. City of N.Y. v. Bob Moates Sport Shop, Inc., 253 F.R.D. 237, 238 (E.D.N.Y. 2008) (Weinstein, J.). -2- 1 by the same long-arm statute as are all other out-of-state 2 defendants alleged to have committed a tortious act outside 3 of New York that causes injury in the State of New York. 4 On August 8, 2006, following limited discovery, 5 defendants moved to dismiss the complaint against them for 6 lack of personal jurisdiction. 7 2007, the district court denied defendants motion to 8 dismiss. 9 declining to grant defendants motion to dismiss, the By an order dated August 15, A-1 Jewelry & Pawn, 501 F. Supp. 2d at 374. In 10 district court applied a test to assess whether defendants 11 were properly subject to personal jurisdiction not 12 previously employed by a New York court. 13 appears to be of the view that there should be no limits on 14 the exercise of personal jurisdiction over a defendant 15 except those of reasonable forum (venue) and a rational 16 state interest in the litigation. 2 2 The district judge Jack B. Weinstein, Mass Judge Weinstein has acknowledged in his academic writing that New York s long-arm statute, unlike that of most states, has not been interpreted as going to the constitutional limit[]. Jack B. Weinstein, Mass Tort Jurisdiction and Choice of Law in a Multinational World Communicating by Extraterrestrial Satellites, 37 Willamette L. Rev. 145, 148 (2001). Judge Weinstein is, however, critical of New York s long-arm statute because, in his view, it inhibit[s] the expansion of personal jurisdiction to its full potential and its limitations should be -3- 1 Tort Jurisdiction and Choice of Law in a Multinational World 2 Communicating by Extraterrestrial Satellites, 37 Willamette 3 L. Rev. 145, 146 (2001). 4 concluded that defendants knowing cumulative illegal 5 parallel conduct outside New York causing widespread injury 6 in New York made them amenable to suit in New York. 7 Supp. 2d at 374. 8 combined harm could provide a basis for the exercise of 9 personal jurisdiction over each individual defendant, even 10 if the allegedly illegal out-of-state conduct of a single 11 defendant would not suffice to establish jurisdiction. 12 at 422. 13 defendant deals in [] inherently dangerous products, a 14 lesser showing than is ordinarily required will support 15 jurisdiction. 16 omitted). Specifically, the district court 501 F. The court asserted that the extent of the Id. The district court took the view that [w]here a Id. at 420 (internal quotation marks 17 Prior to defendants default, the City filed an amended 18 complaint, which sought injunctive relief against defendants 19 for the creation of a public nuisance. 20 §§ 400.05(1), 240.45. eliminated. See N.Y. Penal Law Defendants then made a renewed motion Id. at 149. -4- 1 to dismiss in which they reasserted their objection to the 2 exercise of personal jurisdiction to no avail.3 3 N.Y. v. A-1 Jewelry & Pawn, Inc., 247 F.R.D. 296, 338 4 (E.D.N.Y. 2007). 5 dismiss, the district court again relied, in part, on the 6 allegedly knowing parallel conduct of the defendants. 7 at 336. 8 different standard for assessing personal jurisdiction was 9 warranted because jurisdiction was sought . . . not simply 10 to vindicate an individual right or to resolve an individual 11 commercial dispute but rather was sought to protect the 12 safety of an entire community. 13 City of In denying defendants renewed motion to Id. The district court implied that, perhaps, a Id. at 339. While the district judge below may take issue with the 14 limitations placed on New York s long-arm statute as an 15 academic matter, these limitations were deliberately 16 inserted to keep the provision well within constitutional 17 bounds, Ingraham v. Carroll, 90 N.Y.2d 592, 597 (1997), and 18 a federal district court is not free to read them out of the 19 statute. In addition, the exercise of personal jurisdiction 3 Defendant Adventure Outdoors also filed an unsuccessful motion for summary judgment based in part on its contention that it was not properly subject to the district court s exercise of personal jurisdiction. -5- 1 over these defendants does not, in my view, comport[] with 2 the requirements of due process. 3 Robertson-Ceco Corp., 84 F.3d 560, 567 (2d Cir. 1996) 4 (citing Savin v. Ranier, 898 F.2d 304, 306 (2d Cir. 1990)). 5 Met. Life Ins. Co. v. In evaluating whether personal jurisdiction exists as 6 to a particular defendant the court must examine the 7 quality and nature of the defendant s contacts with the 8 forum. 9 (2d Cir. 2007). Best Van Lines, Inc. v. Walker, 490 F.3d 239, 242-43 Here, the defendants connection to the 10 forum was tenuous at best.4 11 any business within the state or contract[] . . . to supply 12 goods . . . in the state, N.Y. C.P.L.R. § 302(a)(1), and 13 defendants did not commit any tortious act in New York 14 State, id. § 302(a)(2). 15 record supports the conclusion that they conducted or 16 solicited business in New York or that they engage[d] in 17 any other persistent course of conduct, or derive[d] 18 substantial revenue from goods used . . . in the state. 19 Id. § 302(a)(3)(i). Defendants did not transact[] More to the point, nothing in the 4 As characterized by the City, defendant Adventure Outdoors is a storefront establishment in Smyrna, Georgia and defendant Mickalis Pawn Shop is a store in Summerville, South Carolina. -6- 1 There is nothing in the record that supports the 2 conclusion that defendants knew or should have known that 3 sales of guns in their home states were having consequences 4 in New York. 5 302(a)(3)(ii) provides that in order to form the basis for 6 the exercise of personal jurisdiction over a non- 7 domiciliary, the defendant must know (or be deemed to know) 8 of the consequences of its conduct and derive[] substantial 9 revenue from interstate or international commerce. Id. § 302(a)(3)(ii). Moreover, section Id. 10 Here, even if we were to impute knowledge to the defendants, 11 the record does not reveal anything approaching substantial 12 revenue that could be said to have resulted from guns that 13 made their way to New York. 14 present in section 302(a)(3)(ii) could be understood to be 15 constitutionally mandated. 16 explained, foreseeability alone has never been a sufficient 17 benchmark for personal jurisdiction. 18 Corp. v. Woodson, 444 U.S. 286, 295 (1980) (internal 19 quotation marks omitted). 20 awareness that the stream of commerce may or will sweep the 21 product into the forum State does not convert the mere act 22 of placing the product into the stream into an act The conjunctive requirement As the Supreme Court has World-Wide Volkswagen To the contrary, a defendant s -7- 1 purposefully directed toward the forum State. 2 Indus. v. California, 480 U.S. 102, 112 (1987). 3 Asahi Metal The district court concluded that when a defendant 4 deals in inherently dangerous products a lesser showing is 5 required in order to establish personal jurisdiction. 6 However, neither the New York Court of Appeals nor this 7 Court have ever so held.5 8 requirements of [section 302(a)(3)(ii)] on so attenuated a 9 consequence of defendant[s ] act[s] as has been accepted by If the City could satisfy the 10 the court[] below, it would burden unfairly non-residents 11 whose connection with the state is remote. 12 Inc. v. Standard Importing Co., 49 N.Y.2d 317, 327 (1980). 13 A particularly troubling aspect of the jurisdictional Fantis Foods, 14 analysis conducted below is the reliance on what the 15 district judge termed the defendants cumulative parallel 16 conduct as a basis for establishing personal jurisdiction. 5 As a substantive matter, the New York Court of Appeals has rejected the argument that a general duty of care arises out of [a] gun manufacturer[ s] ability to reduce the risk of illegal gun trafficking through control of the marketing and distribution of [its] products. Hamilton v. Beretta U.S.A. Corp., 96 N.Y.2d 222, 235 (2001). The hazardous materials doctrine, which is based on a products liability theory, id., does not support the loosening of the requirements for establishing personal jurisdiction. -8- 1 According to the district court s theory, although the out- 2 of-state activities of a single defendant alone may not 3 suffice to establish jurisdiction, because of knowing 4 parallel conduct, the extent of the combined harm may 5 provide a basis for jurisdiction over each one. 6 Supp. 2d at 422. 7 adopted a theory pursuant to which combined or parallel 8 conduct may be relied upon to establish a basis for the 9 exercise of personal jurisdiction over a defendant when 10 501 F. The New York Court of Appeals has never jurisdiction does not otherwise exist. 11 The New York Court of Appeals has instructed that [t]o 12 determine whether a non-domiciliary may be sued in New York, 13 [the court must] first determine whether [New York s] long- 14 arm statute . . . confers jurisdiction over [the non- 15 domiciliary] in light of its contacts with [New York] State. 16 If the defendant s relationship with New York falls within 17 the terms of [section 302(a)(3)(ii)], [the court must then] 18 determine whether the exercise of jurisdiction comports with 19 due process. 20 214 (2000). 21 York Court of Appeals, the district court created a seven- 22 factor test for analyzing whether long-arm jurisdiction LaMarca v. Pak-Mor Mfg. Co., 95 N.Y.2d 210, Rather than follow the instructions of the New -9- 1 exists over retail gun establishments. 6 2 at 424. 3 501 F. Supp. 2d The district court determined that an inflexible 4 application of a traditional jurisdictional analysis that 5 fails to take account of unique practical commercial factors 6 does not effectively insure the fair and orderly 7 administration of the law. 8 preferred to adopt what it termed a reality-based pragmatic Id. at 419. The court 6 As announced by the district court, these factors are as follows: 1) Number of trace handguns linked to criminal investigations in New York and elsewhere that are attributable to the defendant; 2) Distribution practices and their possible effects on crimes in New York; 3) Time-to-crime of the retailer s guns recovered in New York . . .; 4) Sales price, type of gun and the intended use of the retailer s handguns . . .; 5) Crimes committed in New York with the retailer s handguns; 6) Total number of handguns the retailer . . . sold in the United States and retailer s total revenue from the United States and New York markets; and 7) Actions of regulatory authorities related to the retailer s distribution practices . . . . 501 F. Supp. 2d at 424-25. -10- 1 jurisdictional analysis. Id. However, the district court 2 was not free to depart from traditional jurisdictional 3 analysis in order to hold defendants subject to suit in New 4 York. 5 best achieved by applying the same standards to all 6 litigants and by adherence to well-defined legal principles. 7 The district court s jurisdictional analysis undermines The fair and orderly administration of the law is 8 the protection afforded to out-of-state defendants by 9 section 302(a)(3)(ii). As both this Court and the New York 10 Court of Appeals have previously explained, this provision 11 is intended to ensure some link between a defendant and New 12 York State to make it reasonable to require a defendant to 13 come to New York to answer for tortious conduct committed 14 elsewhere. 15 N.Y.2d at 598). 16 specifically designed to . . . preclude the exercise of 17 jurisdiction over nondomiciliaries who might cause direct, 18 foreseeable injury within the State but whose business 19 operations are of a local character. 20 Ingraham, 90 N.Y.2d at 599). 21 defendants businesses are of a local character. 22 LaMarca, 95 N.Y.2d at 215 (quoting Ingraham, 90 The relevant long-arm provision is Id. (quoting Here, it is indisputable that The district court also asserted that [t]here is no -11- 1 specific dollar threshold at which revenue becomes 2 substantial for purposes of [section] 302(a)(3)(ii). 7 3 F. Supp. 2d at 417. 4 excuse the City from making any showing that defendants 5 derived substantial revenue from interstate commerce. 6 Bensusan Rest. Corp. v. King, 126 F.3d 25, 29 (2d Cir. 7 1997). 8 play and substantial justice to subject a non-domiciliary 9 defendant to jurisdiction when that defendant does not have 501 Even if this is so, it was error to See Indeed, it offend[s] traditional notions of fair 10 the requisite minimum contacts with the forum state. 11 LaMarca, 95 N.Y.2d at 216 (quoting Int l Shoe Co. v. 12 Washington, 326 U.S. 310, 316 (1945)). 13 case is devoid of information that would allow anyone to 7 The record in this Other courts have sensibly held that [w]hether revenue is substantial under New York law is determined on both relative and absolute scales. Ronar, Inc. v. Wallace, 649 F. Supp. 310, 316 (S.D.N.Y. 1986); see also Vecchio v. S & T Mfg. Co., 601 F. Supp. 55, 57 (E.D.N.Y. 1984); Allen v. Canadian Gen. Elec. Co., 410 N.Y.S.2d 707, 708-09 (3d Dep t 1978). Adventure Outdoors asserts that uncontroverted evidence demonstrates that over the six year period preceding the institution of this action, [it] derived an average of $3,619.89 from interstate or international commerce, constituting a paltry 0.36% of its overall revenue. Mickalis Pawn Shop denies receiving any revenue from interstate sales and asserts that the City never alleged, or showed and the trial court never found a sum certain amount of revenue it allegedly derived from interstate commerce. -12- 1 conclude that defendants had meaningful contacts, ties, or 2 relations with New York. 3 471 U.S. 462, 472 (1985) (quoting Int l Shoe, 326 U.S. at 4 319)). Burger King Corp. v. Rudzewicz, 5 The seven-factor test for personal jurisdiction relies 6 heavily on alleged conduct by third parties specifically, 7 straw purchasers of handguns in establishing a basis for 8 the assertion of jurisdiction. 9 activity of those who claim some relationship with a However, the unilateral 10 nonresident defendant cannot satisfy the requirement of 11 contact with the forum State. 12 quotation marks omitted); see also World-Wide Volkswagen, 13 444 U.S. at 298. 14 be some act by which the defendant purposefully avails 15 itself of the privilege of conducting activities within the 16 forum State, thus invoking the benefits and protections of 17 its laws. 18 marks omitted). 19 any evidence that defendants purposefully established any 20 meaningful contacts with New York state. 21 22 Id. at 474 (internal Rather, it is essential . . . that there Burger King, 471 U.S. at 475 (internal quotation Here, the City did not come forward with The district court maintained that New York City has a strong interest in adjudicating this case, and that [b]y -13- 1 enacting strong gun control laws to protect its citizens 2 from gun-related crimes New York has expressed a special 3 public policy interest in the subject matter of this 4 litigation. 5 indisputable that New York has a strong interest in the 6 safety of its residents and territory from handgun 7 violence. 8 F.3d 75 (2d Cir. 2005). 9 regulat[e] the illegal flow of handguns into its 501 F. Supp. 2d at 428, 429. It is Id. at 429; see generally Bach v. Pataki, 408 However, the City s efforts to 10 territory, 501 F. Supp. 2d at 429, cannot violate the due 11 process rights of defendants it alleges played some 12 attenuated role in the presence of illegal guns in New York 13 City. 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 As the Supreme Court has explained: [The limits on the exercise of personal jurisdiction over a defendant] are more than a guarantee of immunity from inconvenient or distant litigation. They are a consequence of territorial limitations on the power of the respective States. . . . Even if the defendant would suffer minimal or no inconvenience from being forced to litigate before the tribunals of another State; even if the forum State has a strong interest in applying its law to the controversy; even if the forum State is the most convenient location for litigation, the Due Process Clause, acting as an instrument of interstate federalism, may sometimes act to divest the State of its power to render a -14- 1 2 3 World-Wide Volkswagen, 444 U.S. at 294. 4 defendants are federally licensed to sell firearms, they are 5 small-town [stores that have] no on-going contacts with New 6 York and [their] interstate activities [if any] are not the 7 sort which make [them] generally equipped to handle 8 litigation away from [their business] location[s]. 9 v. Anderson, 531 F.2d 634, 637 (2d Cir. 1976) (internal 10 valid judgment. Here, although Markham quotation marks omitted). 11 In sum, the district court s analysis with respect to 12 defendants affirmative defense based on lack of personal 13 jurisdiction was a substantial and unjustified deviation 14 from well-known and easily understood principles of New York 15 law. 16 below appears to be based on one federal judge s view of how 17 the law of New York ought to be constructed, rather than on 18 how it is clearly delineated by statute and in the decisions 19 of the state and federal courts. 20 The jurisdictional analysis performed by the court By virtue of their default prior to trial, defendants 21 waived their defense based on lack of personal jurisdiction. 22 See Transaero, Inc. v. La Fuerza Aera Boliviana, 162 F.3d 23 724, 729 (2d Cir. 1998). Therefore, I join the majority s -15- 1 well-written opinion. But an affirmance here is not an 2 endorsement of the jurisdictional analysis conducted below. 3 One s agreement or disagreement with the policies that 4 animate liability rules for firearms retailers cannot bear 5 on jurisdictional analysis. 6 apply New York s long-arm statute, as clearly interpreted by 7 the New York Court of Appeals. 8 so in this case. The district court was bound to The court below did not do -16-
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