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Foreign Contractor Lacked Minimum Contacts to Support Jurisdiction

A district court's order vacating a default judgment against a foreign contractor was affirmed by the Court of Appeals for the Eleventh Circuit because the contractor lacked minimum contacts sufficient to support the exercise of personal jurisdiction. The plaintiffs brought a tort suit under state law, seeking damages for the death of their son, a soldier, who was killed in a traffic collision with a truck operated by the contractor. The contractor refused delivery of the complaint and summons, but after the court entered a default judgment against it, the contractor entered an appearance in the case by filing a motion to set aside the judgment under Federal Rule of Civil Procedure 60(b)(4). After a hearing, the court determined the contractor lacked minimum contacts with the state to establish personal jurisdiction over the contractor under the state's long-arm statute.

Required Analysis

On appeal, the plaintiffs argued the contractor waived its personal jurisdiction defense through its "lawyerly gamesmanship" in ignoring valid service, retaining local counsel, and monitoring the court proceedings. However, a defendant is free to ignore judicial proceedings, risk a default judgment, and then challenge that judgment on jurisdictional grounds in a collateral proceeding. The plaintiffs further argued the contractor waived its jurisdiction defense by entering into government contracts with the government that contained the contract clause at FAR 52.228-8. According to the plaintiffs, the clause, which requires contractors to maintain liability insurance "to indemnify and hold harmless the [g]overnment against" third-party personal injury claims, waives the contractor's personal jurisdiction defense. The clause, however, makes no mention of a waiver of personal jurisdiction and does not alter the required constitutional analysis for minimum contacts a court must consider in lawfully asserting jurisdiction. (Baragona, et al. v. Kuwait Gulf Link Transport Co., et al., CA-11, 54 CCF ¶79,254)

(The news featured above is a selection from the news covered in the Government Contracts Report Letter, which is published weekly and distributed to subscribers of the Government Contracts Reporter. )

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