The U.S. Supreme Court has recently engaged in deliberations concerning whether there is a temporal restriction on challenging judgments deemed void from the outset. This legal issue was highlighted during the examination of Coney Island Auto Parts Unlimited, Inc. v. Burton, a case that emerged following Vista-Pro Automotive, LLC’s bankruptcy proceedings in Tennessee back in 2014. Despite a judgment being issued against it, Coney Island remained passive until 2021, when the bankruptcy judgment was registered in New York, resulting in its bank account being frozen.
The crux of the matter revolves around Coney Island’s claim that the initial complaint was improperly served, thus rendering the Tennessee bankruptcy court’s default judgment void due to lack of jurisdiction. Nonetheless, both a U.S. District Court and a New York bankruptcy court refused to intervene, prompting Coney Island to seek redress from the Tennessee bankruptcy court. Their motion was subsequently denied on the grounds that the intervention fell outside the “reasonable time” framework stipulated in Federal Rule of Civil Procedure 60, which has been interpreted to apply to such challenges.
During an oral session lasting under 40 minutes, justices reflected on the implications of imposing a time constraint on contesting potentially void judgments. While some justices expressed interest in allowing litigants ample time for challenges, others highlighted the potential inequity this could pose to other parties involved. Justice Ketanji Brown Jackson outlined the distinction between reviving a judgment deemed void and enforcing a procedural time limitation, emphasizing that these limitations simply dictate the duration in which the judgment can be revisited.
Daniel Ginzburg, representing Coney Island, argued that a truly void judgment should not be bound by temporal restrictions. He maintained that such limitations would infringe on the Constitution’s due process clause. Meanwhile, Lisa Blatt, representing the trustee Burton, backed the prevailing practice among several courts, arguing against a blanket exemption for void judgments from the “reasonable time” rule. She proposed that courts could take into account specific circumstances when considering delays, particularly in cases where parties lacked the necessary legal sophistication or resources.
The arguments suggested that while the justices are open to applying the “reasonable time” standard, they might allow flexibility for different circumstances. Observers anticipate that the court’s decision on this matter could be forthcoming ahead of its typical schedule, potentially before the end of the current term in late June or early July. For extended insights and additional developments in the case, review the comprehensive coverage available on SCOTUSblog.