Commercial Litigation and Arbitration

Which Party Bears the Burden of Proof of Establishing Personal Jurisdiction on a Rule 60(b) Motion to Lift a Default Judgment? — Circuit Split

Frenkel v. Klein, 2016 U.S. Dist. LEXIS 35826 (E.D. Pa. Mar. 21, 2016):

Leon Frenkel sued Defendants Bruce Klein and Victory Partners LLC ("VPLLC") in 2014 for breach of contract, and on August 11, 2014, this Court entered a default judgment against Defendants. More than a year later, Defendants filed a Motion to Set Aside the Default Judgment under Federal Rule of Civil Procedure 60(b)(4),1 arguing that they had never been properly served with the Summons and Complaint. For the reasons that follow, the Court grants Defendants' motion and sets aside the default judgment.

The Third Circuit has not resolved which party bears the burden of proof of establishing personal jurisdiction in a Rule 60(b) motion. Arpaio, 527 F. App'x at 113 n.4 (acknowledging that there is a circuit split but declining to address the issue). Generally, the party asserting the validity of service bears the burden of proof. Grand Entm't Grp., Ltd., 988 F.2d at 488. However, several circuits use a burden-shifting framework in which a defendant who had actual notice of the proceeding prior to the entry of default judgment bears the [*7]  burden of proving improper service of process. See S.E.C. v. Internet Sols. for Bus. Inc., 509 F.3d 1161, 1165 (9th Cir. 2007) (collecting cases). Another circuit leaves the burden with the plaintiff. Oldfield v. Pueblo de Bahia Lora, S.A., 558 F.3d 1210, 1217 (11 Cir. 2009).

This Court need not resolve the circuit split. The circuits that shift the burden to the defendant do so only when the evidence shows that the defendant had notice of the proceeding prior to the entry of default judgment and nonetheless delayed in asserting improper service until after judgment had been entered. See Myers v. Moore, Civ. A. No. 12-597, 2014 WL 7271348, at *4 (E.D. Pa. Dec. 22, 2014). Here, Frenkel has not presented evidence that Defendants actually knew about this proceeding prior to the August 11, 2014 entry of default judgment. The earliest direct evidence of Klein's knowledge of this case is Fitzgerald's testimony that she informed him of the default judgment in November 2014. (Tr. at 116.) An earlier divorce court document that Klein may or may not have seen also listed the default judgment after it had been entered. (Tr. at 81-83.) While Frenkel makes much of the fact that Klein knew about the judgment long before bringing this motion, he does not identify any evidence that Klein knew about the proceeding prior to the entry of the default judgment. Therefore, Frenkel has the burden of proving proper service. [*8]  See Myers, 2014 WL 7271348, at *5.

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