SAREGAMA INDIA LTD v. AIYER ASV (2023)

ORDER

Over ten years ago, this Court entered an eleven million dollar default judgment in favor of Plaintiff Saregama India, Ltd. (“Saregama”) against Defendants Bharath, Anand, and Subramanian Aiyer. Bharath now moves [40] to set aside that judgment.

I. Background

On June 12, 2009, Saregama, one of the largest music recording and publishing companies in India, filed this action against Bharath Aiyer, Anand Aiyer, Subramanian Aiyer, V. Subramanian, and S. Devaki, all individually and doing business as ASV Cyber Solutions, Inc. (“ASV”) and MusicIndiaOnline, asserting claims for direct and vicarious copyright infringement, violations of the Lanham Act, and common-law unjust enrichment.

The complaint avers that the individual Defendants, through their business ASV, operate the website musicindiaonline.com, which makes available for streaming and downloading sound recordings from a collection of Indian music. Saregama alleges that it owns roughly thirty-five percent of the content available on the website and that it has not licensed its musical recordings or compositions for such dissemination and use.¹

When the lawsuit was brought, Defendants did not live in the United States.² After Saregama made multiple, unsuccessful attempts to serve process upon Bharath, Subramanian (Bharath's father), and Anand (Bharath's brother) pursuant to the Hague Convention, it sought permission to serve them by email and priority mail. In support, it provided evidence of pre-suit email correspondence between its counsel, Bharath, and Subramanian.³

On April 19, 2011, the Court granted Saregama's motion for alternate service by email and priority mail. In doing so, the Court found that Defendants Bharath, Anand, and Subramanian Aiyer “do business as ASV Cyber Solutions, Inc. and MusicIndiaOnline at 541 10th Street NW #330, Atlanta, GA 30318-5713.” [15] at 2. Subramanian, Bharath, and Anand were served by email on April 26 and by priority mail on April 29. They failed to answer or file a responsive pleading, and on Saregama's motion, the Clerk entered default against them.

Saregama subsequently moved for default judgment. On September 7, 2011, the Court entered default judgment in favor of Saregama against Subramanian, Bharath, and Anand, jointly and severally, in the amount of $11,120,000—the statutory maximum for the 556 instances of copyright infringement. See 17 U.S.C. § 504. The Court also permanently enjoined Defendants from future infringement.⁴

The judgment has remained unsatisfied. In 2019, Bharath moved back to the United States, and in July 2021, Saregama served him with a petition for a writ of scire facias.

On September 29, 2021, Bharath filed a motion to set aside the default judgment on the grounds that it is void for lack of personal jurisdiction. In his supporting declaration, he swears that he did not learn of the lawsuit or the default judgment until July 2021, and he disavows any connection to ASV or musicindiaonline.com. The Court dismissed this motion without prejudice in order for the parties to conduct jurisdictional discovery.

Now, after Bharath filed a renewed motion to set aside on January 17, 2023, the motion is ripe for this Court to review.

II. Legal Standard

Federal Rule of Civil Procedure 60(b)(4) permits a defendant to move for relief from a final judgment on grounds that the judgment is void. “A final judgment is void against any defendant over which the Court lacks personal jurisdiction.” Baragona v. Kuwait & Gulf Link Transp. Co., 691 F. Supp. 2d 1351, 1357 (N.D. Ga. 2009) (citing Sloss Indus. Corp. v. Eurisol, 488 F.3d 922, 924 (11th Cir. 2007)), aff'd, 594 F.3d 852 (11th Cir. 2010). Rule 60(b)(4) thus “allows a litigant—even one who does not initially appear—to collaterally attack a judgment on the ground that it is void due to lack of personal jurisdiction.” Sloss Indus. Corp., 488 F.3d at 924.

“Federal courts considering Rule 60(b)(4) motions that assert a judgment is void because of a jurisdictional defect generally have reserved relief only for the exceptional case in which the court that rendered judgment lacked even an ‘arguable basis’ for jurisdiction.” United Student Aid Funds v. Espinosa, 559 U.S. 260, 271, 130 S.Ct. 1367, 176 L.Ed.2d 158 (2010) (quoting Nemaizer v. Baker, 793 F.2d 58, 65 (2d Cir. 1986)). Although a district court's ruling on a Rule 60(b) motion ordinarily is reviewed under an abuse of discretion standard, a ruling under Rule 60(b)(4) is subject to de novo review because “a district court's failure to vacate a void judgment is per se an abuse of discretion.” Oldfield v. Pueblo De Bahia Lora, S.A., 558 F.3d 1210, 1217 (11th Cir. 2009) (citing Burke v. Smith, 252 F.3d 1260, 1263 (11th Cir. 2001)).

Though the defendant generally bears the burden of proof in a Rule 60(b)(4) motion, In re Worldwide Web Systems, Inc., 328 F.3d 1291, 1298-99 (11th Cir. 2003), it is well settled that “where the defendant challenges the court's exercise of jurisdiction over its person, the plaintiff bears the ultimate burden of establishing that personal jurisdiction is present,” Oldfield, 558 F.3d at 1217 (citing Stubbs v. Wyndham Nassau Resort & Crystal Palace Casino, 447 F.3d 1357, 1360 (11th Cir. 2006)). This is true even where, as here, the defendant defaults and subsequently challenges personal jurisdiction through a Rule 60(b)(4) motion to set aside default judgment. Baragona, 691 F. Supp. 2d at 1358 (citing Oldfield, 558 F.3d at 1217).

To establish personal jurisdiction over a defendant, the plaintiff bears the initial burden of pleading “sufficient facts to make out a prima facie case of jurisdiction.” Diamond Crystal Brands, Inc. v. Food Movers Int'l, Inc., 593 F.3d 1249, 1257 (11th Cir. 2010) (quoting United Techs. Corp. v. Mazer, 556 F.3d 1260, 1274 (11th Cir. 2009)).

In determining whether the plaintiff has proven a prima facie case of personal jurisdiction, the Court must draw all reasonable inferences arising from the proof and resolve all factual disputes in the plaintiff's favor. Trintec Indus., Inc. v. Pedre Promotional Prods., Inc., 395 F.3d 1275, 1283 (Fed. Cir. 2005); see also Madara v. Hall, 916 F.2d 1510, 1514 (11th Cir. 1990). “A prima facie case is established if the Plaintiff presents enough evidence to withstand a motion for directed verdict.” Consol. Dev. Corp. v. Sherritt, Inc., 216 F.3d 1286, 1291 (11th Cir. 2000).

If, however, the defendant submits evidence challenging personal jurisdiction, the plaintiff may not rest on his allegations but must instead produce evidence supporting jurisdiction. Consol. Dev. Corp., 216 F.3d at 1291 (quoting United Techs., 556 F.3d at 1274); accord Meier ex rel. Meier v. Sun Int'l Hotels, Ltd., 288 F.3d 1264, 1269 (11th Cir. 2002); Future Tech. Today, Inc. v. OSF Healthcare Sys., 218 F.3d 1247, 1249 (11th Cir. 2000). Where there are conflicts between the parties’ evidence, the court makes all reasonable inferences in favor of the plaintiff. Diamond Crystal, 593 F.3d at 1257 (quoting Meier, 288 F.3d at 1269); see also Morris v. SSE, Inc., 843 F.2d 489, 492 (11th Cir. 1988).

III. Analysis

Saregama contends that Bharath's motion should be denied as untimely.

Generally, motions under Rule 60(b) must be made within a “reasonable time.” Fed. R. Civ. P. 60(c)(1). However, the Eleventh Circuit has held that motions under Rule 60(b)(4) are exempt from this reasonableness requirement, “at least when the motion is based on non-waivable jurisdictional defects.” Caison v. Sec'y, Dep't of Corr., 766 F. App'x 870, 874 n.2 (11th Cir. 2019) (per curiam) (emphasis added) (citations omitted).

That said, “[i]t is manifestly not the case that a Rule 60(b)(4) motion can be raised at any time under any circumstances.” A & F Bah. LLC v. World Venture Grp., 796 F. App'x 657, 661 (11th Cir. 2020) (per curiam). Indeed, the Eleventh Circuit has suggested that a reasonable-time limitation may apply to Rule 60(b)(4) motions premised on lack of personal jurisdiction because objections to personal jurisdiction are waivable.

For example, in Stansell v. Revolutionary Armed Forces of Colombia, 771 F.3d 713, 737 (11th Cir. 2014), the Eleventh Circuit held that a defendant who “knowingly sat on his rights for nine months” before filing anything with the district court waived his right to object to any defects in service of process under Rule 60(b)(4). Similarly in A & F Bahamas, the defendant filed his Rule 60(b)(4) motion eleven months after being made aware of the judgment, but the Eleventh Circuit held that the defendant sat on his rights and waived his right to object on grounds of insufficient service of process and lack of personal jurisdiction.

Ultimately, “Rule 60(b)(4) does not provide a license for litigants to sleep on their rights.” Espinosa, 559 U.S. at 275, 130 S.Ct. 1367; see also Gill v. Wells, 610 F. App'x 809, 812 (11th Cir. 2015) (per curiam) (“[I]t is not error for a district court to deny a Rule 60(b)(4) motion where the party seeking relief ‘knowingly sat on his rights,’ and ‘does not give an acceptable reason for this delay.’ ” (quoting Stansell, 771 F.3d at 736–38)).

To that end, the Court will consider whether Bharath diligently pursued his rights.

Bharath's basis for the timeliness of his motion turns on his declaration that prior to “July 2021 when [he] was served by mail with Plaintiff's Petition for Scire Facias at my home in California,” he “did not know that [he] had been sued in this case or that a default judgment had been granted against [him].” [30] ¶¶ 4–5. He retained counsel and filed his initial motion to set aside the default judgment on September 29, 2021.

That Bharath was not aware of this lawsuit or the judgment entered against him until 2021 strains credulity.

Bharath does not argue that service of process was insufficient. That being the case, he argues that his sworn declaration disavowing any knowledge of the suit is sufficient to contradict the parties exchange of pre-suit correspondence and Saregama's service of the complaint, summons, and motion for default judgment. This is not persuasive in either respect.

First, Bharath admits to receiving “a demand letter and email from Saregama's counsel in early 2009,” [46] at 7, which Saregama attached [12-13] in its motion for substituted service of process. In this email thread, Saregama notified Bharath that it would be filing suit for copyright infringement and stated that Bharath could “find a copy of the Summons and Complaint that is out for service as we speak.” Id. at 3-4. Bharath responded by acknowledging his receipt of “repeated emails as well as the letter that [Saregama] sent via post.” Id. at 3. He noted that—with Saregama “[h]aving full knowledge that [he was] with NDTV,” an Indian media organization—Saregama should beware that “the lawyers at NDTV will also have something to say.” Id.

Second, copies of the summons and complaint—as well as the motion for default judgment—were emailed and mailed to the same addresses where Bharath acknowledged receiving Saregama's pre-suit correspondence. No mailed or emailed document was returned as undelivered, and the Court explicitly granted Saregama's motion to serve Bharath in this manner.

Considering that Saregama ultimately served Bharath at the same email address and address at NDTV as Bharath discussed, the Court has no trouble finding Bharath had notice of the lawsuit since 2011. Regardless, apart from the service of the complaint, summons, and motion for default judgment, the email thread between Bharath and Saregama is alone sufficient to find that Bharath had actual knowledge of Saregama's impending lawsuit.⁵

Putting aside Bharath's knowledge of the lawsuit, he argues that Saregama never served him with the final default judgment. Bharath contends that this is fatal to Saregama's untimeliness argument because—without citing to any case law on point—Rule 60(b)(4) requires service of the final judgment.

Because Saregama does not introduce evidence as to this point, the Court will assume that Bharath never received a copy of the final default judgment. But that does not mean that Bharath did not sit on his rights by not objecting to the suit after having actual knowledge of it, including receipt of the complaint, summons, and motion for default judgment.

For example, in Zeron v. C&C Dry wall Corp., No. 09-cv-60861, 2020 WL 13420869, at *1 (S.D. Fla. Mar. 16, 2020), a defendant moved to vacate a default judgment under Rule 60(b)(4) as void for insufficient service of process. While the defendant argued that he lacked actual notice of the lawsuit filed over ten years ago, the court found that a signed retainer agreement between the defendant and his attorney after the initiation of the lawsuit in question proved the contrary.

Citing Stansell and A & F Bahamas, the court held that the defendant was “more than nine years too late” where “the Eleventh Circuit has held that nine and eleven months exceeded Rule 60(b)(4)’s very generous timing considerations.” Id. at *2 (quotation omitted). Similar to this case, the court recognized that

[the defendant] had probably long since forgotten about this case when he suddenly discovered that his wages were subject to a continuing writ of garnishment. Nevertheless, the record establishes that [the defendant] had notice of this action on July 6, 2009, when he signed a written retainer agreement from [his attorney]. That notice was sufficient to start the clock on [the defendant's] rights under Rule 60(b)(4).

Id. at *3. See also Espinosa, 559 U.S. at 276, 130 S.Ct. 1367 (stating, in a bankruptcy context, that where “a party is notified of a plan's contents and fails to object to confirmation of the plan before the time for appeal expires, that party has been afforded a full and fair opportunity to litigate, and the party's failure to avail itself of that opportunity will not justify Rule 60(b)(4).”); Shamrock Navigation Corp. v. Industria Naval Do Ceara S/A, No. 10-cv-61886, 2012 WL 1021822, at *3 (S.D. Fla. Mar. 27, 2012) (finding—on similar facts to Zeron—that a defendant company waived its right to object to service of process under Rule 60(b)(4) “because it knew of the lawsuit and still failed to object”).⁶

The crux of this line of cases is that a defendant cannot do nothing once he knows about a lawsuit and later move to set aside a judgment entered against him.

Consider this case. Bharath received a complaint, summons, and motion for default judgment, and he acknowledged receipt of pre-suit correspondence about the pending lawsuit. This all occurred more than a decade ago. Now, facing the implications of the default judgment after returning to the United States, Bharath seeks to respond and assert his waivable personal jurisdiction defense. In this circumstance, any holding other than denying Bharath's motion to set aside for untimeliness would render moot any limitation on Rule 60(b)(4) motions, the requirement that defendants not knowingly sit on their rights, and the distinction between waivable and non-waivable defenses.⁷

The Court therefore finds that Bharath knowingly sat on his rights with no acceptable justification, and it will deny his motion to set aside. Because his motion is untimely, the Court need not discuss the merits of the motion.⁸

IV. Conclusion

For the foregoing reasons, Bharath Aiyer's motion [40] to set aside default judgment is DENIED.

IT IS SO ORDERED this 8th day of May, 2023.

FOOTNOTES

1.   Saregama filed suit in the Northern District of Georgia because after searching the publicly available information online, it identified that ASV was the company behind the musicindiaonline.com website. ASV had a mailing address in Atlanta, and the server data for the musicindiaonline.com domain indicated that its IP location was Atlanta, Georgia.

2.   In 1998, Bharath moved from Hong Kong to Atlanta, Georgia to attend the Georgia Institute of Technology. He graduated in 2002 and worked in Atlanta until 2004, when he moved back to Hong Kong. In 2009, he was living in Mumbai, India.

3.   On November 17, 2008, Saregama sent a letter before action by email to Bharath and Anand. Saregama sent a follow-up email on December 5. On December 8, Subramanian responded to the email to Anand and stated that he was in touch with Saregama regarding licensing issues (as assertion that Saregama disputes). His signature line indicates that he was “Director” of musicindiaonline.com. [12-11] at 3. He also insisted that Bharath and Anand were not involved with the website.In another email dated February 24, 2009, Bharath acknowledged receipt of several emails and a mailed letter from Saregama's counsel but disavowed any connection to musicindiaonline.com. Saregama's counsel responded that on ASV's website, Bharath was listed as the company's vice president of marketing and business development—and ASVs website also stated that the company owned and operated musicindiaonline.com. Bharath did not reply. The link to the ASV website was subsequently disabled. [12-13].

4.   The action was dismissed without prejudice with respect to the remaining Defendants for Saregama's failure to effect service of process.

5.   Fleetingly, Bharath argues that his alleged lack of knowledge is supported by his decision to block all emails from Saregama. That is, he now argues he never received Saregama's emailed service of process. But, even if true, this does not help Bharath: purposefully blocking emails demonstrates a bad-faith effort to skirt liability and undermines any argument that he diligently pursued his rights. See, e.g., Stansell, 771 F.3d at 737 (analyzing whether a defendant diligently pursued his rights by questioning whether his reason was “acceptable”).

6.   The Eleventh Circuit has not directly addressed this issue. However, in Sanderford v. Prudential Insurance Co. of America, 902 F.2d 897, 901 (11th Cir. 1990), the court used a similar line of reasoning when addressing whether insufficient process was prejudicial to a defendant by holding that hewas the recipient of a multitude of notices—not only through service of the summons and complaint, but also by service of motions, pleadings and an order of the court—yet he chose to remain silent. He chose to remain silent and, with full knowledge of what was taking place, elected to do nothing as the court entered the first stage of default judgment. He did the same as the court proceeded to enter final default judgment.

7.   This holding by no means restricts a defendant's ability to respond to suit. Here, Bharath could have retained counsel upon receiving pre-suit correspondence; he could have filed an answer when he received service of process; he could have filed a motion to dismiss for lack of personal jurisdiction; he could have filed a motion to set aside the clerk's entry of default; he could have inquired after receiving these documents to see whether a final judgment was entered; and he could have filed a motion under Rule 60(b) to set aside the judgment for lack of personal jurisdiction months (and maybe even a few years) after the judgment was entered. This holding only restricts a defendant from objecting to a judgment on the grounds that the Court lacked personal jurisdiction over him and then waiting a decade to complain about the judgment.

8.   Saregama fleetingly requests attorney's fees under 17 U.S.C. § 505, but without more explanation this request will be denied.

Timothy C. Batten, Sr., Chief United States District Judge