Bruce M. Foster v.  Arletty 3 Sarl; Patrick Abadie

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
 BRUCE M. FOSTER,
Plaintiff-Appellant,
v. No. 00-2540 
ARLETTY 3 SARL; PATRICK ABADIE,
Defendants-Appellees. 
Appeal from the United States District Court
for the District of South Carolina, at Greenville.
Henry M. Herlong, Jr., District Judge.
(CA-99-2961-6-20)
Argued: October 30, 2001
Decided: January 25, 2002
Before WILKINSON, Chief Judge, MOTZ, Circuit Judge, and
Malcolm J. HOWARD, United States District Judge for the
Eastern District of North Carolina, sitting by designation.
Affirmed by published opinion. Judge Howard wrote the opinion, in
which Chief Judge Wilkinson and Judge Motz joined.
COUNSEL
ARGUED: Frank Langston Eppes, EPPES & PLUMBLEE, P.A.,
Greenville, South Carolina, for Appellant. William Stevens Brown,
V, NELSON, MULLINS, RILEY & SCARBOROUGH, L.L.P.,
Greenville, South Carolina, for Appellees. ON BRIEF: Lawrence W.
Newman, Rafael E. Castilla, BAKER & MCKENZIE, New York,

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New York, for Appellant. Rivers S. Stilwell, NELSON, MULLINS,
RILEY & SCARBOROUGH, L.L.P., Greenville, South Carolina;
Peter F. Felfe, Leon Medzhibovsky, FULBRIGHT & JAWORSKI,
L.L.P., New York, New York, for Appellees.
OPINION
HOWARD, District Judge:
Plaintiff-appellant Bruce Foster challenges the district court’s
determination that the French company with which Foster contracted
did not have sufficient contacts with South Carolina to support the
assertion of personal jurisdiction over this company and one of its
officers. Because the exercise of jurisdiction over these appellees does
not comport with "traditional notions of fair play and substantial jus-
tice," International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945)
(quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)), we affirm the
district court’s holding.
I.
Bruce Foster, a dual citizen of the United States and France resid-
ing in Greenville, South Carolina, entered into a series of business
transactions with a variety of French companies.1 These transactions
included several contracts designed to allow the French companies to
obtain licenses for entertainment programs they hoped to promote
over the internet. Foster, as a dual citizen, served as the French com-
panies’ contact in the United States and helped secure the rights to the
licenses. The contract at the heart of this dispute was negotiated,
1The companies and individuals involved in these transactions with
Foster include: Sierra Madre Phone S.A.R.L. ("Sierra Madre"), a French
limited liability company; BSF Phone S.A. ("BSF"), a French corpora-
tion; Bernard de Sentenac ("Sentenac"), Foster’s cousin and business
partner; Arletty, a French company; and Abadie, an officer of Arletty.
Foster owned fifty percent of Sierra Madre’s shares and forty percent of
BSF’s shares before these companies went bankrupt. Sentenac, Foster’s
business partner, also owned substantial portions of Sierra Madre and
BSF.
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drafted, and executed in France and called for Foster to obtain the
license in exchange for a fee based on the gross revenues of the com-
panies’ use of those licenses. Foster eventually obtained the licenses
in the name of two French companies partially owned by Foster,
Sierra Madre and BSF. The appellees, Arletty 3 S.A.R.L. ("Arletty"),
a French corporation, and Abadie, an officer of Arletty, assert a right
to the programs covered by the licenses.
The gravamen of the dispute concerns Foster’s contractual entitle-
ment to fees. Foster contends that he is entitled to continuing fees for
his work in obtaining the licenses. Appellees counter that Foster has
been paid all that he is owed and that any rights Sierra Madre and
BSF had to the licenses were voided on December 19, 1995, when a
French court ordered the liquidation of Sierra Madre and BSF. After
this liquidation and the subsequent French bankruptcy of Sierra
Madre and BSF, appellees renegotiated rights to the licenses. As a
result of this renegotiation and the voidance of Sierra Madre and
BSF’s rights, appellees assert that Foster is not entitled to continuing
fees.
On September 1, 1999, Foster filed suit against Arletty and Abadie
in United States District Court in Greenville, South Carolina, alleging
breach of contract and unjust enrichment.2 Arletty and Abadie were
served copies of the summons and complaint in both French and
English pursuant to the Hague Convention. When appellees did not
answer the complaint, the district court clerk filed an entry of default
on January 18, 2000. Thereafter, the district court granted Foster’s
motion for a default judgment pursuant to Fed. R. Civ. P. 55.
Foster then filed an action to enforce the judgment in France.
Arletty and Abadie appeared in a French court on July 4, 2000,
attacking both the jurisdiction of the district court and the underlying
merits of the claim. On August 10, 2000, Arletty and Abadie made
2More than two years earlier, on April 10, 1998, Foster filed a com-
plaint with the Commercial Court of Toulouse, France, alleging the same
cause of action for breach of contract that Foster filed with the district
court. The French court eventually ordered Foster to pay Arletty 3 ten
thousand French francs, a judgment later affirmed on appeal by the
French Court of Appeals.
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an appearance before South Carolina’s district court and moved to set
aside the default judgment, arguing that it was void for want of per-
sonal jurisdiction. See Fed. R. Civ. P. 60(b)(4). On October 3, 2000,
the district court granted the appellees’ Rule 60(b) motion and voided
the earlier default judgment, concluding that the court did not have
personal jurisdiction over the appellees. It is this order Foster appeals.
In his appeal, Foster raises two main assignments of error: (1) that
the district court wrongly determined that the appellees did not waive
their personal jurisdiction defense; and (2) that the district court
wrongly determined that it lacked personal jurisdiction over the
appellees.
II.
A. Waiver
The requirement that a court have personal jurisdiction is grounded
in the Due Process Clause. Insurance Corp. of Ireland v. Compagnie
des Bauxites de Guinee, 456 U.S. 694, 702 (1982). As with other due
process rights, this requirement is subject to waiver. Id., 456 U.S. at
703. Thus, a defendant may consent to a court’s exercise of jurisdic-
tion either implicitly or explicitly, and "[a] variety of legal arrange-
ments have been taken to represent" this consent. Id. For example,
"when a defendant appears and challenges jurisdiction, it agrees to be
bound by the court’s determination on the jurisdictional issue." Trans-
aero, Inc. v. La Fuerza Aerea Boliviana, 162 F.3d 724, 729 (2nd Cir.
1998). However, "[a] defendant is always free to ignore the judicial
proceedings, risk a default judgment, and then challenge that judg-
ment on jurisdictional grounds in a collateral proceeding." Insurance
Corp. of Ireland, 456 U.S. at 706.
Foster contends that appellees’ appearance in the French court con-
testing enforcement of the default judgment constitutes an appearance
sufficient to waive their personal jurisdiction defense. Foster conflates
the concepts of waiver of a personal jurisdiction defense and res judi-
cata. If the French court had reached a final decision on the merits,
res judicata, not waiver, would have applied.3 See Meekins v. United
3The court declines to consider whether comity would require this
court to give preclusive effect to a French court ruling on personal juris-
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Transp. Union, 946 F.2d 1054, 1057 (4th Cir. 1991). Because the
French court never reached a final determination, res judicata is inap-
plicable.
In a related argument, Foster asserts that appellees waived their
right to assert their personal jurisdiction defense under Fed. R. Civ.
P. 12(h)(1) because they failed to contest personal jurisdiction after
receiving notice. Rule 12(h) contemplates an implied waiver of a per-
sonal jurisdiction defense by defendants who appear before a court to
deny the allegations of a complaint, but who fail to make personal
jurisdiction objections at the time of their appearance. See, e.g., Beth-
lehem Steel Corp. v. Devers, 389 F.2d 44, 46 (4th Cir. 1968). Appel-
lees did not appear in the South Carolina action prior to filing their
motion to vacate judgment and, as a result, have not waived their per-
sonal jurisdiction defense.
Finally, Foster argues that appellees’ motion for relief of judgment
pursuant to Rule 60(b)(4) was not filed within the "reasonable time"
required under the rule. Fed. R. Civ. P. 60(b); McLawhorn v. John W.
Daniel & Co., Inc., 924 F.2d 535, 538 (4th Cir. 1991). As evidence
that appellees did not file their 60(b)(4) motion within a reasonable
time, Foster cites the four-month delay between the district court’s
default judgment and the appellees’ motion to vacate. The court finds
Foster’s argument unpersuasive. Given the international status of the
parties, the multiple and duplicative lawsuits filed by Foster against
appellees, and the fact that the motion was based on a void judgment,
the court is unwilling to deem the four-month delay unreasonable.
Other circuit courts addressing the issue have concluded that a motion
to vacate a void judgment pursuant to Rule 60(b)(4) contains little, if
any, time limit. See Precision Etchings & Findings, Inc. v. LGP Gem,
LTD., 953 F.2d 21, 23 (1st Cir. 1992) ("A default judgment entered
by a court which lacks jurisdiction over the person of the appellee is
void and may be set aside at any time pursuant to Fed. R. Civ. P.
60(b)(4)." (internal citation omitted)); see also Briley v. Hidalgo, 981
F.2d 246, 249 (5th Cir. 1993); Rodd v. Region Constr. Co., 783 F.2d
diction. See Guiness PLC v. Ward, 955 F.2d 875, 883 (4th Cir. 1992)
("The effect to be given foreign judgments has . . . historically been
determined by . . . principles of comity.").
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89, 91 (7th Cir. 1986); V.T.A., Inc. v. Airco, Inc., 597 F.2d 220, 224
(10th Cir. 1979). We therefore reject Foster’s argument that res judi-
cata or waiver barred reconsideration under Rule 60.
B. Personal Jurisdiction
Stripped to its essence, this case presents the question whether for-
eign appellees who negotiated, drafted, and executed a contract in
France with a dual United States and French citizen residing in South
Carolina had such minimum contacts with the forum state to make the
exercise of jurisdiction over those appellees consistent with "tradi-
tional notions of fair play and substantial justice." International Shoe
Co., 326 U.S. at 316 (quoting Milliken, 311 U.S. at 463). Because
South Carolina has interpreted its long-arm statute to extend personal
jurisdiction to the constitutional limits imposed by federal due pro-
cess, Sheppard v. Jacksonville Marine Supply, Inc., 877 F. Supp. 260,
265 (D.S.C. 1995), our inquiry must focus on due process. In assess-
ing whether the exertion of personal jurisdiction over appellees
exceeds the limits of federal due process, the court recognizes that
"[t]he unique burdens placed upon one who must defend oneself in
a foreign legal system should have significant weight in assessing the
reasonableness of stretching the long arm of personal jurisdiction over
national borders." Asahi Metal Ind. Co. v. Superior Court, 480 U.S.
102, 114 (1987). We conclude that these unique burdens faced by
appellees counsel against the assertion of personal jurisdiction over
them.4
The Supreme Court has made clear that defendants’ contacts with
the forum state must be "purposeful" to support jurisdiction. Burger
King Corp. v. Rudzewicz, 471 U.S. 462, 474 (1985). This "purpose-
ful" requirement rests on the basic premise that traditional notions of
fair play and substantial justice are offended by requiring a non-
4The court will treat the appellees as one for the purpose of establish-
ing personal jurisdiction. While separate legal analyses are generally
required when personal jurisdiction is challenged, the instant case
involves numerous factual disputes concerning Abadie’s activities in the
transactions here involved. Because the court ultimately affirms the dis-
trict court ruling that personal jurisdiction does not lie, Abadie is not
prejudiced by this joint analysis.
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resident to defend itself in a forum when the non-resident never pur-
posefully availed itself of the privilege of conducting activities within
the forum, thus never invoking the benefits and protections of its
laws. See Hanson v. Denckla, 357 U.S. 235, 253 (1958). Appellees
did little to purposefully avail themselves of the privilege of conduct-
ing activities within South Carolina. They merely contacted a French
citizen residing in South Carolina for assistance in securing licenses.
Appellees have no offices, agents, or employees in South Carolina
and do not advertise in South Carolina. Cf. Asahi, 480 U.S. at 112-13
(examining a foreign defendant’s purposeful availment of the privi-
leges of conducting business in a forum state by examining, inter alia,
the location of defendant’s offices, advertisement, property, employ-
ees, and solicitation). While Foster alleges some fleeting communica-
tion by telephone and fax between the appellees and Foster while
Foster was in South Carolina,5 such attenuated contacts with a forum
state are insufficient, standing alone, to establish jurisdiction.
Moreover, appellees’ conduct and connections with the forum state
are not such that the appellee should reasonably anticipate being haled
into court in South Carolina. See World-Wide Volkswagen Corp. v.
Woodson, 444 U.S. 286, 297 (1980). A review of the facts and cir-
cumstances surrounding the contracts reveals both the minimal nature
and limited degree of South Carolina’s relationship to both the appel-
lees and the transactions. All the parties to the contracts are French
citizens; most of the contracts are written in French; the contracts
were made operative by final signatures obtained in France; the con-
tracts are governed by French law and even contained arbitration
clauses requiring the parties to arbitrate disputes in France; and, the
central contract calls for performance in France and other European
countries. Indeed, the only South Carolina contact appellees availed
themselves of was the assistance of a dual citizen residing in South
5The court is mindful that the mere absence of physical contacts in a
state cannot defeat personal jurisdiction there and that "a substantial
amount of business is transacted solely by mail and wire communications
across state lines." Burger King Corp., 471 U.S. at 476. Nevertheless,
appellees’ purposefully established contacts, even if meeting the minimal
threshold mandated by due process, must still "be considered in light of
other factors" to determine whether personal jurisdiction is appropriate.
Id.
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Carolina. Under such circumstances, it is hardly reasonable for the
appellees to anticipate South Carolina courts’ exercise of jurisdiction
over them.
Finally, even assuming the requisite minimum contacts between
South Carolina and appellees, notions of fair play and substantial jus-
tice counsel against jurisdiction. Because all the relevant documents
received final signature in France, a federal district court in South
Carolina would be charged with applying French law if Foster’s argu-
ment prevails. Such an application would hardly further the "efficient
resolution of controversies." Asahi Metal Ind. Co., 480 U.S. at 113
(quoting World-Wide Volkswagen Corp., 444 U.S. at 292). Moreover,
the burden on the appellees of litigating this dispute in South Carolina
is substantial. By contrast, Foster has dual citizenship, speaks fluent
French, and owned substantial portions of two French companies that
were parties to the disputed contracts. As a result, Foster would not
be heavily burdened by traveling to France to litigate this dispute. The
court also notes that Foster chose to file his case originally in French
court. It was only after losing in France that Foster sought relief in
the South Carolina district court. Foster’s decision to litigate his claim
in France substantially diminishes his interest in a South Carolina
forum. While South Carolina undoubtedly has an interest in providing
its citizens with a forum in which they can litigate their grievances,
Foster’s initial choice of a French forum, coupled with the heavy bur-
den appellees would face in litigating this dispute in South Carolina,
outweighs the forum state’s interests. Considering the lack of pur-
poseful contacts by appellees, the heavy burden on the alien appel-
lees, and the limited interests of Foster and the forum state, the
exercise of personal jurisdiction by a South Carolina court over appel-
lees with only tangential connection to the forum state exceeds the
bounds of due process. Accordingly, we affirm the judgment of the
district court.
C. Attorney’s Fees
Foster also argues that the district court abused its discretion in
denying appellees’ request for attorney’s fees and costs. A trial court
abuses its discretion only if its conclusions are based on mistaken
legal principles or clearly erroneous factual findings. Westberry v.
Gislaved Gummi AB, 178 F.3d 257, 261 (4th Cir. 1999). Finding no
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abuse of discretion, we affirm the district court’s denial of attorney’s
fees.
AFFIRMED
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