Petition for Writ of Certiorari — King Law Group, PLLC, et al., Petitioners v. M2 Technology, Incorporated

Supreme Court briefJan 4, 2019

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In the Supreme Court of the United States

—————

KING LAW GROUP, PLLC, ET AL.

Petitioners,

M2 TECHNOLOGY, INCORPORATED

Respondent.

—————

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

—————

PETITION FOR A WRIT OF CERTIORARI

—————

RICHARD C. KING JR.

Counsel of Record

KING LAW GROUP, PLLC

1326 West Highway 290, Suite A

Dripping Springs, TX 78620

rking@kinglitigationgroup.com

(512) 263-8212

Counsel for Petitioners

QUESTION PRESENTED

In Steel Co. v. Citizens for a Better Environment,

523 U.S. 83, 101, 118 S. Ct. 1003 (1998), this Court

emphasized that a federal court must first establish as

“an antecedent” matter that it has jurisdiction. The

circuits are split, however, as to how to handle situations

where jurisdictional and merits facts overlap. The

Fourth and Fifth Circuits interpret Bell v. Hood, 327

U.S. 678, 66 S. Ct. 773 (1946) to support a general rule

that a federal court must assume (without deciding)

jurisdiction and proceed to the merits. The majority

circuits interpret Steel Co. more strictly to require

determination of jurisdiction first, but even they

disagree as to whether a federal court should apply a

lower standard of proof for the jurisdictional

determination (as the Third Circuit holds), or whether

the standard should vary based upon the stage of the case

(as the First Circuit holds). The question presented is:

In light of the Steel Co. rule that jurisdiction

must be determined as “an antecedent” matter,

what is the proper procedure for handling situations

in which jurisdictional and merits facts overlap.

PARTIES TO THE PROCEEDING

AND RULE 29.6 STATEMENT

Petitioners King Law Group, PLLC, Richard C. King

Jr., and Mary Ellen King, were the appellants in the Fifth

Circuit proceedings. M2 Software, Inc. was the declaratory

defendant in the district court proceedings in the Eastern

District of Texas.

Respondent M2 Technology, Inc. was the appellee in

the Fifth Circuit proceedings and the declaratory plaintiff

in the district court proceedings in the Eastern District of

Texas.

Pursuant to Rule 29.6, neither the petitioners nor the

defendant has a parent company, and no publicly-held

company owns 10% or more of the stock of any petitioner,

or of the defendant.

iii

TABLE OF CONTENTS

QUESTION PRESENTED.................................................... i

PARTIES TO THE PROCEEDING AND RULE

29.6 STATEMENT ................................................................... ii

TABLE OF AUTHORITIES................................................. v

OPINIONS BELOW................................................................ 1

JURISDICTION....................................................................... 1

CONSTITUTIONAL AND STATUTORY

PROVISIONS ............................................................................ 3

STATEMENT............................................................................ 3

REASONS FOR GRANTING THE WRIT..................... 12

The Court Should Grant Certiorari to Resolve

the Intractable Split among the Circuits as to

the Proper Procedure for Handling Situations

in Which Jurisdictional and Merits Facts

Overlap ...................................................................... 13

II. The Fifth Circuit’s Decision Is Erroneous ......... 21

III. This Case Delivers a Rare and Exceptional

Vehicle to Resolve a Recurring Issue.................. 28

CONCLUSION........................................................................ 32

***

TABLE OF CONTENTS –– APPENDIX

Appendix A

Court of appeals opinion filed,

August 31, 2018................................. 1a

Appendix B

Court of appeals order filed,

October 12, 2018................................ 7a

Appendix C

District court’s final order filed,

March 30, 2017 .................................. 8a

Appendix D

District court’s order denying

Rule 60(b) motion to set aside

default and default judgment,

and granting sanctions filed,

March 4, 2016 ..................................15a

Appendix E

U.S. Patent & Trademark

Office electronic records of

status and title of registered

trademarks (excerpt) .....................27a

Appendix F

U.S. Patent & Trademark

Office electronic records of July

12, 2012 assignment (excerpt) ....30a

***

TABLE OF AUTHORITIES

CASES

Adams v. Bain, 697 F.2d 1213 (4th Cir. 1982) ................ 17

Aetna Life Insirance Company v. Haworth, 300 U.S. 227, 57

S. Ct. 461 (1937).................................................................. 2

Already, LLC v. Nike, Inc., 568 U.S. 85, 133 S. Ct. 721

(2013).................................................................................. 1

American Telecom Company, LLC v. Republic of Lebanon,

501 F.3d 534 (6th Cir. 2007) ............................................. 19

Arizonans for Official English v. Arizona, 520 U.S. 43

(1997).................................................................................. 2

BASF Plant Science, LP v. Nuseed Americas Inc., No. 17421, 2017 WL 3573811 (D. Del. Aug. 17, 2017)................. 26

Bass Anglers Sportsman Society of America, Inc. v. Bass

Pro Lures, Inc., 200 USPQ 819 (TTAB 1978)................ 27

Bender v. Williamsport Area School District, 475 U.S.

534 (1986)........................................................................... 2

Boit v. Gar-Tec Products, Inc., 967 F.2d 671 (1st Cir.

1992) ................................................................................. 19

Certainteed Corporation v. Knauf Insulation, SPRL, 849

F.Supp.2d 67 (D.D.C. 2012)........................................... 26

Chance v. Zinke, 898 F.3d 1025 (10th Cir. 2018)............. 19

CNA v. United States, 535 F.3d 132 (3d Cir. 2008), as

amended (Sept. 29, 2008) ............................................ 13, 18

Escamilla v. M2 Tech., Inc., No. 4:11CV516, 2012 WL

4506081 (E.D. Tex. Jul. 6, 2012), report and

recommendation adopted in part, rejected in part,

2012 WL 4501644 (E.D. Tex. Sep. 28, 2012) .................. 6

Escamilla v. M2 Technology, Inc., 536 F. App’x 417 (5th

Cir. 2013) ........................................................................... 5

Escamilla v. M2 Technology, Inc., 581 F. App’x 449 (5th

Cir. 2014), cert. denied, 135 S. Ct. 1895 (2015) .............. 6

Ex parte McCardle, 7 Wall. 506 (1869) ............................ 22

Flu Shots of Texas, Ltd. v. Lopez, No. 3:13-cv-133-O, 2014

L 1327706 (N.D. Tex. 2014) ........................................... 26

Friends of the Everglades v. United States Environmental

Protection Agency, 699 F.3d 1280 (11th Cir. 2012), cert.

denied, 134 S. Ct. 421 (2013) ............................................ 19

Grayson v. Anderson, 816 F.3d 262 (4th Cir. 2016) ....... 17

Houston Refining, L.P. v. United Steel, Paper and

Forestry, Rubber, Manufacturing, 765 F.3d 396 (5th

Cir. 2014) ......................................................................... 23

Insurance Corporation of Ireland, Ltd. v. Compagnie

des Bauxites de Guinee, 456 U.S. 694, 102 S. Ct. 2099

(1982)................................................................................ 24

Jakks Pacific, Inc. v. Accasevek, LLC, 270 F.Supp.3d 191

(D.D.C. 2017)................................................................... 25

Kaplan v. Central Bank of the Islamic Republic of Iran,

896 F.3d 501 (D.C. Cir. 2018) ........................................ 20

Kerns v. U.S., 585 F.3d 187 (4th Cir. 2009)...........16, 17, 18

Kokkoken v. Gardian Life Insurance Company, 511 U.S.

375 (1994)......................................................................... 12

M2 Technology, Inc. v. M2 Software, Inc., 2016 WL

6996169 (E.D. Tex., Mar. 04, 2016) .................................. 9

M2 Technology, Inc. v. M2 Software, Inc., 2017 WL

1197118 (E.D. Tex., Mar. 30, 2017)................................ 10

vii

M2 Technology, Inc. v. M2 Software, Inc., 589 F. App’x

671, 676 (5th Cir. 2014), cert. denied sub nom.,

Escamilla v. M2 Technology, Inc., 135 S. Ct. 1895

(2015), reh’g denied, 135 S. Ct. 2854 (2015) ............. 8, 15

M2 Technology, Inc. v. M2 Software, Inc., ---Fed. App’x---,

2018 WL 4191098 (5th Cir. 2018)...................................... 1

M2 Technology, Inc. v. M2 Software, Inc., sub nom.

Escamilla v. M2 Technology, Inc., 657 F. App’x 318

(5th Cir. 2016), cert. denied 137 S. Ct. 2194 (2017) 10, 15

Major League Baseball Players Association v. Garvey,

532 U.S. 504 (2001) ......................................................... 31

Mary Ann Pensiero, Inc. v. Lingle, 847 F.2d 90 (3d Cir.

1988) ................................................................................. 31

McNutt v. General Motors Acceptance Corp., 298 U.S.

178 (1936)......................................................................... 25

MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 S.

Ct. 764 (2007)..................................................................... 1

Meyers v. Oneida Tribe of Indians of Wisconsin, 836

F.3d 818 (7th Cir. 2016) ................................................. 19

Newdow v. Lefevre, 598 F.3d 638 (9th Cir. 2010)................. 20

Public School Retirement System of Missouri v. State

Street Bank and Trust, 640 F.3d 821 (8th Cir. 2011) . 19

Reynolds v. International Amateur Athletic Federation,

23 F.3d 1110 (6th Cir.1994)............................................ 24

Schreiber Foods, Inc. v. Beatrice Cheese, Inc., 402 F. 3d

1198 (Fed. Cir. 2005) ...................................................... 27

Steel Company v. Citizens for a Better Environment, 523

U.S. 83, 118 S. Ct. 1003 (1998)............i, 2, 4, 13, 14, 18, 19

Union Pacific Railroad Company v. Brotherhood of

Locomotive Engineers and Trainmen General

Committee of Adjustment, 558 U.S. 67 (2009) ............ 25

viii

Virginia Military Institute v. U.S., 508 U.S. 946 (1993)..31

Vuyyuru v. Jadhav, 555 F.3d 337 (4th Cir. 2009)........... 17

Williamson v. Tucker, 645 F.2d 404 (5th Cir. 1981), cert.

denied, 102 S. Ct. 396 ..........................................15, 17, 22

Yazoo County Industrial Development Corporation v.

Suthoff, 454 U.S. 1157 (1982)......................................... 23

CONSTITUTIONAL PROVISIONS

United States Constitution, Article III................1, 3, 20, 21

STATUTES

28 U.S.C. § 1254(1) ................................................................. 2

Declaratory Judgment Act, 28 U.S.C. § 2201 ................. 1, 3

RULES

37 C.F.R. § 2.122(d)(1) ....................................................... 12

37 C.F.R. § 2.135.................................................................. 27

FED. R. CIV. P. 12(b)(1) ............................................... 17, 18

FED. R. CIV. P. 60(b)...................................................... 9, 12

FED. R. CIV. P. 60(b)(4) ..................................................... 25

TBMP § 602.01 .................................................................... 27

OTHER AUTHORITIES

2 James Wm. Moore et al., MOORE’S FEDERAL PRACTICE

§ 12.30(1) (Matthew Bender 3d ed. 1997) .................... 22

Brendan J. O’Rourke, Lawrence I. Weinstein, Celia

Cohen, SCOTUS Opts Not To Remand Case Raising

Preclusion Question Answered In B&B Hardware,

NATIONAL LAW REVIEW (May 2, 2015), online at

http://www.natlawreview.com/article/scotus-opts-not-toremand-case-raising-preclusion-question-answered-bbhardware ......................................................................... 32

John Elwood, Relist Watch, ScotusBlog May 25, 2018,

available at http://www.scotusblog.com/2018/05/relistwatch-126/........................................................................ 30

Joshua S. Stillman, Hypothetical Statutory Jurisdiction

and the Limits of Federal Judicial Power, 68 Ala. L.

Rev. 493 (2016)................................................................ 29

PETITION PROCEEDINGS, U.S. SUPREME COURT

Dallas Mexican Consulate General v. Box, 2015 WL

9474281 (Petition, U.S. Dec. 23, 2015) ......................... 31

Vitol S.A. v. Autoridad de Energia Electrica de

Puerto Rico, No. 17-951, 2018 WL 1806998 (Response,

U.S. Apr. 30, 2018) ......................................................... 30

Vitol S.A. v. Autoridad de Energia Electrica de

Puerto Rico, No. 17-951, 2018 WL 2018450 (Reply,

U.S. Apr. 30, 2018) ......................................................... 30

Vitol S.A. v. Autoridad de Energia Electrica de

Puerto Rico, No. 17-951, 2018 WL 300631 (Petition,

U.S. Apr. 30, 2018) ......................................................... 31

RESTATEMENT (SECOND) OF JUDGMENTS § 65 (1982) ... 25

William H. Pate, To Sanction or Not to Sanction: Why

Arguing Against the Court's Precedent is Not an

Automatic Rule 11 Violation according to Hunter v.

Earth-Grains Co. Bakery, 25 CAMPBELL L. REV. 115

(2002)................................................................................ 28

***

INTRODUCTION

—————

Petitioners respectfully petition for a writ of certiorari.

OPINIONS BELOW

The opinion of the U.S. Court of Appeals for the Fifth

Circuit is available at M2 Technology, Inc. v. M2 Software,

Inc., ---Fed. App’x---, 2018 WL 4191098 (5th Cir. 2018), and

is reproduced at App. 1a–6a. The order of the Fifth Circuit

denying rehearing en banc is reproduced at App. 7a. The

final order of the district court is available at 2017 WL

1197118 (App. 8a–14a), and the corresponding initial order

is available at 2016 WL 6996169 (App. 15a–26a).

JURISDICTION

This petition raises factual challenges to subjectmatter jurisdiction (including Article III justiciability),

and to personal jurisdiction. These challenges were

bypassed by the district court and by the Court of

Appeals, under contested procedures that divide the

circuits. The Court of Appeals entered judgment on

August 31, 2018 (App. 1a), and denied a petition for

rehearing en banc on October 12, 2018. (App. 3a).

Under Article III of the Constitution, federal courts

are limited to adjudication of “Cases” or “Controversies.”

U.S. Const. art. III, § 2; Already, LLC v. Nike, Inc., 568

U.S. 85, 90, 133 S. Ct. 721 (2013). The Declaratory

Judgment Act requires “a case of actual controversy.” 28

U.S.C. § 2201. “[T]he phrase ‘case of actual controversy’

in the [Declaratory Judgment] Act refers to the type of

‘Cases’ and ‘Controversies’ that are justiciable under

Article III.” MedImmune, Inc. v. Genentech, Inc., 549

U.S. 118, 127 S. Ct. 764 (2007), citing Aetna Life Ins. Co.

v. Haworth, 300 U.S. 227, 240, 57 S. Ct. 461 (1937). The

controversy must be “definite and concrete” (Id.) and based

upon a “present right” by “established facts,” not upon a

hypothetical basis. Ashcroft v. Mattis, 431 U.S. 171, 172

(1977), quoting Aetna Life Ins., 300 U.S. at 242. See Already,

568 U.S. at 97–99 (applying rule in context of a trademark

declaratory action).

Here, Petitioners presented an uncontroverted factual

record demonstrating that there was no justiciable

controversy based upon any present right. The declaratory

defendant was not the trademark owner. The defendant

had also expressly divested all causes of action and rights

to sue for past, present, or future infringement.

Without a justiciable controversy, the federal courts

lacked Article III subject-matter jurisdiction. The federal

courts also lacked personal jurisdiction, where the out-ofstate defendant was never formally served. The postjudgment record demonstrated that, instead, Respondent

had executed a fraud on the court to capture a default,

when its counsel falsified a declaration of service filed with

the district court clerk. ROA.565 ¶ 15.

When a lower federal court “‘lack[s] jurisdiction, we

have jurisdiction on appeal, not of the merits but merely for

the purpose of correcting the error of the lower court in

entertaining the suit.’” Steel Co. v. Citizens for a Better

Environment, 523 U.S. 83, 95, 118 S. Ct. 1003 (1998), citing

United States v. Corrick, 298 U.S. 435, 440, 56 S. Ct. 829

(1936) and Arizonans for Official English v. Arizona, 520

U.S. 43, 73 (1997), and quoting Bender v. Williamsport

Area School Dist., 475 U.S. 534, 541 (1986) (brackets in

original)). By the foregoing rule, this Court has jurisdiction

to grant certiorari pursuant to 28 U.S.C. § 1254(1).

CONSTITUTIONAL AND

STATUTORY PROVISIONS

1. Article III, Section 2, Clause 1 of The Constitution

of the United States of America, provides, in relevant part:

The judicial power shall extend to all cases, in

law and equity, arising under this Constitution,

the laws of the United States . . . to controversies

. . . between citizens of different states . . . .

2. The Declaratory Judgment Act, 28 U.S.C. § 2201 et

seq. provides, in relevant part:

(a) In a case of actual controversy within its

jurisdiction, . . . any court of the United States, upon

the filing of an appropriate pleading, may declare

the rights and other legal relations of any interested

party seeking such declaration, whether or not

further relief is or could be sought. Any such

declaration shall have the force and effect of a final

judgment or decree and shall be reviewable as such.

STATEMENT

This is a declaratory judgment action filed under the

Declaratory Judgment Act, 28 U.S.C. § 2201, in which

Respondent sought a declaration of non-infringement of

registered federal trademarks, but failed to name the

federal trademark owner. Despite the lack of a justiciable

controversy, the Fifth Circuit affirmed an Article III

default judgment and a denial of a motion to set it aside

without ever reaching Petitioners’ factual challenges to

jurisdiction, under contested procedures of the minority

circuits in a circuit split that is subject of this petition.

On July 20, 2012, Respondent M2 Technology, Inc.

(“Respondent”) filed a declaratory action that erroneously

named as the only declaratory defendant a non-exclusive

licensee, M2 Software, Inc. (“M2 Software”). ROA.12;

ROA.568–76. M2 Software holds no legally cognizable

interest in the subject federal trademarks and, moreover,

had already expressly relinquished all causes of action and

any rights to sue or counterclaim. ROA.572. The sole party

that did hold such rights, the federal trademark owner, was

not named in this action. ROA.568–76.

The petitioners are Richard C. King Jr., Mary Ellen

King, and King Law Group, PLLC (hereinafter

“Petitioners”), counsel that submitted factual challenges to

jurisdiction and who were sanctioned under Rule 11(b)(2)

for making such argument––even though that argument

was supported by decisions of the majority circuits within a

circuit split, and by the established precedent of this Court.

The Fifth Circuit is joined by the Fourth Circuit for the

minority circuit view. Both circuits rely upon a contested

interpretation of Bell v. Hood, 327 U.S. 678, 682, 66 S. Ct.

773 (1946), to apply a general rule that when jurisdictional

and merits facts overlap, a federal court must assume

(without deciding) jurisdiction to proceed to the merits or

contested issues of law.

Petitioners contend that Bell was not intended to

permit the ultra vires determination reached here.

Instead, the procedures applied by the minority circuits

are squarely in conflict with this Court’s rule set forth in

Steel Co., that a court must first establish jurisdiction as

“an antecedent” matter. Steel Co., 523 U.S. at 94.

This case delivers to the Court an ideal vehicle to

address the issue presented and to resolve the circuit split.

Under the procedural posture here, not only was

jurisdiction not determined as “an antecedent” matter, it

was not determined at all. This matter presented a

situation that tested, and broke, the limits of the

procedures applied in the minority circuits that are

squarely in conflict with Steel Co.

Course of Proceedings and Disposition Below

The proceedings pertinent to the issue presented are as

follows.

Respondent filed the present declaratory action on

July 20, 2012 and named only a non-owner, M2 Software.

ROA.12. Respondent pursued the action against a

non-owner even while the appropriate coercive action by

the actual federal trademark owner was proceeding. The

present action lacked a justiciable controversy without the

owner named, and instead was a calculated attempt by the

Respondent to increase litigation costs as a part of a

“strategy of attrition that they’re trying to undergo.”1

In an earlier coercive action involving a district court

record that pre-dated the assignment described below,

the Fifth Circuit had held that “the owner of a trademark

is a required party to an infringement suit concerning the

mark.” Escamilla v. M2 Tech., Inc., 536 F. App’x 417, 419

(5th Cir. 2013) (“Escamilla I”) (emphasis added, citations

omitted). It thus had affirmed a district court’s dismissal

without prejudice, “[b]ecause the district court could not

proceed to the merits without an indispensable party[.]”

Escamilla I, 536 F. App’x at 423 (emphasis added).

Escamilla I, 536 F. App’x at 423 n. 5. The Court of Appeals

inexplicably assigned the pronoun contraction “they’re” to mean the

speaker’s own company, Id., but the term’s reference to Respondent

is clear from the subsequent transcript context.

After the original decision subject of the foregoing

appeal, David Escamilla (the original founder of M2

Software and former co-owner of the trademarks) acquired

a full assignment of the entire rights, title, and interest,

and associated goodwill, in the subject federal trademarks.

ROA.572. The July 12, 2012 trademark assignment

addressed a July 6, 2012 report and recommendation

requiring that the infringement action not proceed until

either Mr. Escamilla “show sole standing as to the claims

raised or [M2 Software] represents itself through

counsel.”2 The assignment timely and diligently fulfilled the

first option provided by the court’s directive.3

The Fifth Circuit appropriately recognized the

assignment as “ostensibly negating any need for M2

Software’s joinder,” Escamilla I, 536 F. App’x at 423, and

then correctly recognized Mr. Escamilla as the federal

trademark owner. Escamilla v. M2 Tech., Inc., 581 F.

App’x 449, 450 (5th Cir. 2014) (“Escamilla II”) (recognizing

“David Escamilla” as “owner of a trademark for M2”), cert.

denied, 135 S. Ct. 1895 (2015).

Nevertheless, by a strategy of attrition by which

Respondent sought to leverage its significant financial

advantage in litigation, Respondent filed the present

duplicative action and named only the corporate nonowner. To falsely assert jurisdiction, Respondent attached

Escamilla v. M2 Tech., Inc., No. 4:11CV516, 2012 WL 4506081, at *5

(E.D. Tex. Jul. 6, 2012) (emphasis added), report and recommendation

adopted in part, rejected in part on other grounds, 2012 WL

4501644 (E.D. Tex. Sep. 28, 2012).

A later panel of the Court of Appeals overlooked the disjunction

“or” in misconstruing the order as an order to obtain counsel. See

M2 Tech. 2014, 589 F. App’x at 677. An earlier panel, however, had

gotten it right, more correctly noting that M2 Software had never

even been a party. Escamilla I, 536 F. App’x at 423 n. 6.

to its complaint an undated registration record from 2010

trademark office proceedings, listing M2 Software from a

time period prior to the assignment. ROA.14; ROA.21–23

(undated and inaccurate complaint attachment). Compare

ROA.568–76 (the true federal registration, lodged by

Petitioners on the post-judgment record).

Knowing that, absent a default, it would be precluded

from bringing this action due to its prior loss by a final

judgment of the Trademark Trial and Appeal Board

(TTAB) (sustaining allegations of “likelihood-of-confusion”

and priority involving materially the same marks and

usages), Respondent rushed to the district court clerk to

obtain entry of default. ROA.51. As post-judgment

challenges would later show, Respondent executed a

fraud on the court to obtain the default, entering a false

declaration by its counsel that “service” had been effected

on an “authorized agent” (Id.), when such counsel had

instead only directed that an envelope be mailed to a

corporate address not addressed to any natural person.

ROA.605; ROA.546; ROA.565 ¶ 15. Default judgment

entered, and M2 Software appealed. ROA.462.

With no record available on the default, M2 Software

challenged jurisdiction in the original proceeding appeal by

relying upon the record of a related appeal, including a

request for judicial notice of publicly available records of

the United States Patent and Trademark Office (USPTO).

Such records demonstrated that Respondent had attached

outdated trademark office records to its complaint, and

that the actual federal trademark owner was not named in

this action. The records for which judicial notice was

sought further demonstrated that by an assignment

recorded at the USPTO, the named defendant, M2

Software, had already expressly relinquished all causes of

action and lacked any rights to sue or counterclaim. Notes

6 through 9, infra (post-judgment records). With no actual

controversy, no Article III jurisdiction existed. See, e.g.,

Already, 568 U.S. at 90–93.

Nevertheless, under contested procedures that divide

the circuit courts, the Fifth Circuit elected to bypass the

factual challenges to jurisdiction. See M2 Tech., Inc. v. M2

Software, Inc., 589 F. App’x 671, 676 (5th Cir. 2014), cert.

denied sub nom., Escamilla v. M2 Tech., Inc., 135 S. Ct.

1895 (2015), reh’g denied, 135 S. Ct. 2854 (2015) (“M2 Tech.

2014”). Instead, by a vague suggestion that jurisdictional

facts overlapped the merits, the Fifth Circuit found that it

need only conduct a prima facie test (taking all

jurisdictional allegations as true) for it to assume, without

deciding, jurisdiction and proceed to the merits or

contested issues of law:

M2 Technology alleged that M2 Software owned

the M2 mark . . . . had M2 Technology failed to

prove M2 Software’s ownership, and had the

Lanham Act not provided standing for a nonexclusive licensee (a question we need not decide

today), M2 Technology would have lost on the

merits, not for lack of jurisdiction.

M2 Tech. 2014, 589 F. App’x at 676 (emphasis added),

citing Bell, 327 U.S. at 682.

The Fifth Circuit thus applied a hypothetical approach

that it treats as the “general rule” when jurisdictional and

merits facts overlap. Montez v. Department of the Navy,

382 F.3d 147, 150 (5th Cir. 2004) (holding “the proper

course of action for the district court . . . is to find that

jurisdiction exists and deal with the objection as a direct

attack on the merits of the plaintiff's case”), citing Bell, 327

U.S. at 682. As set forth herein, the approach applied by

the Fifth Circuit as a general rule squarely conflicts with

the established law of this Court, and with the majority of

other Courts of Appeals.

II.

After the original default judgment was affirmed and

a petition for certiorari denied, Petitioners properly filed

a Rule 60(b) motion to set aside the default and default

judgment, and to dismiss (the “Rule 60(b) Motion”).

ROA.537. In light of the default judgment, the Rule 60(b)

Motion filed by Petitioners relied upon a post-judgment

record that was M2 Software’s first factual record in this

case. See, e.g., ROA.555–56, ROA.560 ¶ 2, ROA.568–75.

The district court declined to reach the factual

challenges to jurisdiction. App. 21a.4 It instead held, under

the Fifth Circuit’s view, that the earlier examination of

jurisdictional allegations in original proceedings

precluded any post-judgment factual challenge to

jurisdiction. Id. The district court also conflated

Respondent’s fraud on the court with jurisdictional matters

“already considered” (App. 21a), an erroneous conflation

that allowed Respondent’s brazen fraud on the court in

obtaining the default to escape any examination at any

stage by any court.

Several decisions of the district court and the Court of

Appeals followed. All relied upon the earlier prima facie

test that simply examined jurisdictional allegations, under

the Fifth Circuit’s view, to assume hypothetical jurisdiction

(without reaching factual challenges) and proceed to

contested issues of law. See, e.g., M2 Tech., Inc. v. M2

M2 Tech., Inc. v. M2 Software, Inc., 2016 WL 6996169, at *3 (E.D.

Tex., Mar. 04, 2016).

Software, Inc., sub nom. Escamilla v. M2 Tech., Inc., 657

F. App’x 318, 319 (5th Cir. 2016), cert. denied, 137 S. Ct.

2194 (2017) (“M2 Tech. 2016”) (a consolidated decision

addressing this case in paragraph “2”).

On March 30, 2017, the district court assessed Rule

11(b)(2) sanctions against Petitioners by finding that the

Rule 60(b) Motion “lack[ed] merit” under the procedures

applied in the Fifth Circuit. App. 12a, 13a, 21a, 22a–26a.

Although Petitioners factually challenged jurisdiction, the

district court found such challenges foreclosed by the Fifth

Circuit’s prior facial analysis in original proceedings, under

jurisdictional procedures that divide the regional circuits.

On May 1, 2017, Petitioners appealed. ROA.1426. In the

appeal, Petitioners again submitted factual challenges to

jurisdiction––challenging jurisdiction directly in the

jurisdictional statement, and in argument to demonstrate

that Petitioners’ factual challenges to jurisdiction at the

district court had easily met the standards for “legal

plausibility” and, as such, the Rule 11(b)(2) sanctions

should never have issued against counsel.

On August 31, 2018, the Fifth Circuit again declined to

reach factual jurisdictional challenges, by a three-judge

panel that included an intersecting member of the M2

Tech. 2016 panel that had authored the decision upon which

the district court relied in its final order subject of this

appeal. App. 1a, 13a.5 Although Article III jurisdiction is

required at all case phases (and subject to challenge at any

time), the Fifth Circuit again bypassed factual challenges

to jurisdiction and found the issue of jurisdiction to have

been “addressed” by the original proceedings–––

M2 Tech., Inc. v. M2 Software, Inc., 2017 WL 1197118, *3 at n. 1

(E.D. Tex., Mar. 30, 2017), citing M2 Tech. 2016, 657 F. App’x at 319.

proceedings that had only examined the jurisdictional

allegations to assume, without deciding, jurisdiction. See

App. 4a, citing M2 Tech. 2014, supra, 589 F. App’x at 676

(which, in turn, relies upon Bell, 327 U.S. at 682).

Petitioners timely filed a petition for rehearing en banc,

pointing out the conflict between the Fifth Circuit’s faulty

procedures and this Court’s directive in Steel Co., and the

conflict with the majority of the federal circuits. The en

banc petition was denied on October 12, 2018 (App. 7a).

As a result of the minority circuit procedures subject

of the circuit split, at no point in this multi-year litigation

have Petitioners’ factual objections to federal court

jurisdiction ever been reached, yet this case is now at final

disposition. This petition for certiorari follows.

B. Factual Background

The facts pertinent to the issue presented are concise:

1. Pursuant to a July 12, 2012 trademark assignment,

M2 Software assigned all rights, title, and interest, and

associated goodwill, in the subject marks (including all

trademarks, service marks and trade names) to David

Escamilla, the original founder of M2 Software who was

previously a co-owner of the marks.6 With the assignment

duly executed and notarized,7 M2 Software expressly

relinquished “all causes of action (in law or equity) and

rights to sue, counterclaim, and/or recover for past,

present, and future infringement . . . [and] all rights

corresponding to the foregoing throughout the world.”8

ROA.572 ¶ 1.1; ROA.560–66, 568–75, 619–20, 642–43.

ROA.574.

ROA.572.

2. David Escamilla is the sole federal trademark

owner.9 The Rule 60(b) record included authenticated

records of registrations from the United States Patent and

Trademark Office (USPTO), in the form approved for

submission into evidence in federal trademark practice at

the USPTO, 37 C.F.R. § 2.122(d)(1), showing current

status and title and independently verifiable on a public

government electronic database.10

3. Appellee’s incorrect suggestion in its complaint of

M2 Software’s status as the federal trademark owner,

relied upon by the facial analysis of M2 Tech. 2014 adopted

by the Court of Appeals, was supported by a reference to

“Exh. A” in Appellee’s complaint.11 “Exhibit A” was a twopage copy of obsolete trademark registration data, showing

prior information, but bearing no dates of status.12 As

evidence that 37 C.F.R. § 2.122(d)(1) would properly reject

as undated, such document failed to raise even a genuine

issue of fact to contradict Petitioners’ accurate factual

challenge demonstrating that the indispensable federal

trademark owner was not named in this action.

REASONS FOR GRANTING THE WRIT

Federal courts are courts of limited jurisdiction,

“possess[ing] only that power authorized by Constitution

and statute . . . .” Kokkoken v. Gardian Life Ins. Co., 511

U.S. 375, 377 (1994) (citations omitted). “It is to be

presumed that a cause lies outside this limited jurisdiction

. . . the burden of establishing the contrary rests upon the

ROA.568–75.

Id.

ROA.14 ¶ 12.

ROA.21–23.

party asserting jurisdiction.” Id. Accordingly, a federal

court must establish, as “an antecedent” matter, that it

actually holds jurisdiction. Steel Co., 523 U.S. at 94.

In practical operation of the Steel Co. directive, real

difficulties arise “whenever a jurisdictional determination

entails similar facts as those on the merits”

––for example, as to how to reconcile an early jurisdictional

factual determination with the right to a jury, and as to

preclusive effects. See, e.g., Kevin M. Clermont,

Jurisdictional Fact, 91 Cornell L. Rev. 973, 990 (2006)

(Clermont). In the two decades since this Court decided

Steel Co., the circuits have become deeply entrenched in a

split from an overall attempt to address these difficulties:

A split among our sister courts of appeals has

emerged on the proper procedure for handling

situations in which jurisdiction is intertwined

with the merits.

CNA v. United States, 535 F.3d 132, 143 (3d Cir. 2008)

(emphasis added), as amended (Sept. 29, 2008), citing Montez,

382 F.3d at 150. As set forth below, this case presents an

ideal vehicle by which to resolve the split, on an issue of

fundamental daily importance to the federal courts.

I. The Court Should Grant Certiorari to Resolve the

Intractable Split among the Circuits as to the

Proper Procedure for Handling Situations in

Which Jurisdictional and Merits Facts Overlap

Consistent treatment of procedures where jurisdictional

and merits facts overlap is critical to preserving due

process, and to ensuring adherence to the Constitutional

limitations of Article III. This Court has “admonished itself

and other federal courts for being ‘less than meticulous’ in

classifying issues as jurisdictional or merits-based.” CNA,

535 F.3d at 144 n. 8, quoting Arbaugh v. Y & H Corp., 546

U.S. 500, 515, 126 S. Ct. 1235 (2006). That laxity is

attributed, in part, to a lack of established guidance on the

correct procedure for a federal court to follow when

jurisdictional and merits facts overlap, in light of the Steel

Co. directive that jurisdiction be determined first.

The result has been a wide divergence of procedures

applied by the regional federal circuits. The majority

circuits interpret Steel Co. to strictly require determination

of jurisdiction as an antecedent matter. Steel Co., 523 U.S.

at 101. The Fourth and Fifth Circuits have adopted a

minority view, applying an exception to the Steel Co. rule in

situations where jurisdictional and merits facts overlap.

The Third Circuit, acknowledging the split, has adopted

a middle position, finding it necessary to determine

jurisdiction first under Steel Co., but directing that a lower

standard of proof should be applied to the jurisdictional

determination. The First Circuit applies a mixed standard

of proof, depending upon stage of the case.

The matter has percolated in the federal circuit courts

in the two decades since this Court decided Steel Co., and

the circuit split is now ripe for review on certiorari.

The Fourth and Fifth Circuits Rely upon Bell

for Their General Rule That Federal Courts

Must Assume (Without Deciding) Jurisdiction

1. The Fifth Circuit applies its own exception to the

Steel Co. rule repudiating the practice of assuming (without

deciding) jurisdiction to reach contested issues of law:

However, where issues of fact are central both to

subject matter jurisdiction and the claim on the

merits, we have held that the trial court must

assume jurisdiction and proceed to the merits.

Montez, 392 F. 3d at 159 (emphasis added), citing

Williamson v. Tucker, 645 F.2d 404, 415 (5th Cir. 1981),

cert. denied, 454 U.S. 897 (1981), and Daigle v. Opelousas

Health Care, Inc., 774 F.2d 1344, 1347 (5th Cir. 1985). The

Fifth Circuit describes this procedure as its “general rule.”

Id. at 150.

The Fifth Circuit decided Montez in 2004, which served

to provide an exception within the Fifth Circuit to this

Court’s 1998 Steel Co. decision. To support the circuitcreated exception, the Fifth Circuit relied, at source, upon

Bell. The Montez decision cites Williamson, and Daigle,

supra, which in turn, each cite Bell, 327 U.S. at 682.

The Fifth Circuit similarly relied upon Bell, at source,

in the present case. App. 4a (finding jurisdiction issue

“addressed” in M2 Tech. 2014, 589 F. App’x at 676–77

which, in turn, cites Bell, 327 U.S. at 682). By its

interpretation of Bell, the Fifth Circuit bypassed all factual

challenges to jurisdiction filed by Petitioners, at several

stages of this multi-year litigation:

i) in assuming (without deciding) jurisdiction

after a prima facie test that addressed only facial

allegations, while refusing to reach factual

jurisdictional challenges during appeal of the

original proceedings (a default judgment);13

ii) in refusing to reach the factual jurisdictional

challenges on review of the Rule 60(b) Motion;14

iii) in affirming Rule 11(b)(2) sanctions for

counsel’s factual jurisdictional challenges (App.

4a.), and refusing to reach the direct factual

M2 Tech. 2014, 589 F. App’x at 676–77.

M2 Tech. 2016, 657 F. App’x at 319 (categorizing Petitioners’ new

factual jurisdictional challenge as within a jurisdiction argument that

had “already been considered and rejected by this court,” but

referencing the facial-only analysis of M2 Tech. 2014).

jurisdictional

Appeals.15

challenges

the

Court

The Fifth Circuit’s “general rule” is tested at its limits

here, because the Circuit was forced to apply its divergent

hypothetical approach to assume jurisdiction to affirm a

default judgment (and, similarly, to affirm an order

denying a Rule 60(b) motion to set it aside and for

sanctions). With a default judgment, there is not a trial

stage to which a federal court might defer a jurisdictional

challenge when a direct factual attack is submitted under

Rule 60(b). On the case posture presented here, by the

Fifth Circuit’s circuit-dividing procedures, jurisdiction was

not simply deferred (itself a violation of Steel Co.), but it

was never reached.

This matter is now at final disposition. The result is that

an Article III judgment affecting the Constitutional rights

of multiple parties, both party and non-party, has now been

entered and affirmed by the Fifth Circuit, without ever

establishing subject-matter jurisdiction (including Article

III justiciability) or personal jurisdiction.

2. Recognizing the split among its sister circuits, and

without guidance from this Court on this issue, the Fourth

Circuit aligned with the Fifth Circuit when it announced

the “proper legal framework” for those situations where

“the jurisdictional facts are inextricably intertwined with

those central to the merits.” See Kerns v. U.S., 585 F.3d

187, 192 (4th Cir. 2009). The Fourth Circuit thus found:

A district court should assume jurisdiction and

assess the merits of the claim when the relevant

Appellants’ Jt. Br. at 1, 36–42, M2 Tech. 2016, 2017 WL 2877055

(5th Cir. Jun. 27, 2017) (No. 17-40476); Appellants’ Jt. Rep. Br. at

14–17, M2 Tech. 2016, 2017 WL 3866739 (5th Cir. Aug. 10, 2017)

(No. 17-40476).

facts—for jurisdictional and merits purposes—

are inextricably intertwined.

Kerns, 585 F.3d at 195, citing Adams v. Bain, 697 F.2d

1213, 1219 (4th Cir. 1982) (decided prior to Steel Co.) and

Vuyyuru v. Jadhav, 555 F.3d 337, 348 (4th Cir. 2009)

(decided post-Steel Co.). See Grayson v. Anderson, 816

F.3d 262, 267 (4th Cir. 2016) (holding that a court must

proceed to the merits when a material jurisdictional fact

“overlaps with a fact that needs to be resolved on the

merits”), citing Adams, 697 F.2d at 1219.

To support its view, the Fourth Circuit relied upon a

Fifth Circuit decision, Williamson, and the Fifth Circuit’s

interpretation of Bell:

Thus, when the jurisdictional facts and the facts

central to a tort claim are inextricably

intertwined, the trial court should ordinarily

assume jurisdiction and proceed to the

intertwined merits issues. . . . As the Supreme

Court has explained . . . a trial court should

dismiss under Rule 12(b)(1) only when the

jurisdictional allegations are “clearly . . .

immaterial, made solely for the purpose of

obtaining jurisdiction or where such a claim is

wholly unsubstantial and frivolous.”

Kerns, 585 F.3d at 193, citing Williamson, 645 F.2d at 415,

quoting Bell, 327 U.S. at 682.

B. The Third Circuit Applies a Lower Standard

of Jurisdictional Proof

The rule applied in the Fourth and Fifth Circuits

attempts to address the difficulties described above after

Steel Co., when an early jurisdictional fact determination is

made in circumstances of jurisdictional and merits facts

overlap. See, e.g., Clermont, supra, 91 Cornell L. Rev. at

990. The Third Circuit similarly recognizes these

difficulties, but has taken a different approach to the issue.

The Third Circuit attempts to follow the Steel Co.

requirement that jurisdiction be determined as an

antecedent matter, but it tries to address the complications

arising with a jurisdictional and merits facts overlap by

applying a lower standard of proof to the jurisdictional

determination. See CNA, 535 F.3d at 144 (noting that “a

district court must take care not to reach the merits of a

case” when “jurisdiction is intertwined with the merits”).

As the Third Circuit explains, by lowering the standard

of proof, it seeks to “ensure that defendants are not

allowed to use Rule 12(b)(1) to resolve the merits too early

in litigation.” Id. “By requiring less of a factual showing

than would be required to succeed at trial, district courts

ensure that they do not prematurely grant Rule 12(b)(1)

motions to dismiss claims in which jurisdiction is

intertwined with the merits and could be established, along

with the merits, given the benefit of discovery.” Id.

Cementing the circuit split described in this petition,

the Fourth Circuit directly examined, and rejected, the

Third Circuit’s approach. See Kerns, 585 F.3d at 195 n. 7

(“We lack confidence in the efficacy of the less-stringent

Rule 12(b)(1) standard espoused by the Third Circuit[,]”

referencing CNA, 535 F.3d at 145 in which the Third

Circuit “conclud[ed] that plaintiffs are adequately

protected because district courts require ‘less of a factual

showing than would be required to succeed at trial.’”).

The First Circuit Varies the Standard Based

Upon the Stage of the Case

Like the Third Circuit, the First Circuit recognizes that

a lower standard of jurisdictional proof might present a

compromise to address the difficulties presented by

overlapping jurisdictional and merits facts. However, the

First Circuit holds that the jurisdictional standard of proof

should vary, based upon the stage of the case. See Boit v.

Gar-Tec Prods., Inc., 967 F.2d 671, 675–78 (1st Cir. 1992)

(addressing lower standards of proof on pretrial motions

that would not apply at trial).

D. The Majority Circuits Interpret Steel Co. More

Strictly to Require Jurisdiction to Be

Determined as an Antecedent Matter

Notwithstanding the various attempts by the foregoing

circuits to address the difficulties inherent in an early

jurisdictional fact determination, at least seven Circuit

Courts comprise the majority circuits that interpret Steel

Co. more strictly to require determination of jurisdiction as

an antecedent matter. See e.g., Chance v. Zinke, 898 F.3d

1025, 1029 (10th Cir. 2018) (“Thus, the district court

couldn’t assume it had jurisdiction . . . And we can’t make

that assumption either”); Meyers v. Oneida Tribe of

Indians of Wisconsin, 836 F.3d 818, 821 (7th Cir. 2016) (“a

court may not decide the merits of a case without subject

matter jurisdiction even if the parties have not themselves

raised it”); Public Sch. Ret. Sys. v. State St. Bank & Tr.

Co., 640 F.3d 821, 825–27 (8th Cir. 2011) (“Instead, we have

noted that ‘jurisdiction is a threshold question and must be

answered before all other questions.’”) (citation omitted);

Am. Telecom Co., LLC v. Republic of Lebanon, 501 F.3d

534, 537 (6th Cir. 2007) (“[s]ubject matter jurisdiction is

always a threshold determination”). The Ninth and

Eleventh Circuits both altered their prior positions in light

of Steel Co. See, e.g., Friends of the Everglades v. U.S. EPA,

699 F.3d 1280, 1289 (11th Cir. 2012) (“[w]e cannot exercise

hypothetical jurisdiction any more than we can issue a

hypothetical judgment,” citing Steel Co.), cert. denied, 134 S.

Ct. 421 (2013); Newdow v. Lefevre, 598 F.3d 638, 645–46 (9th

Cir. 2010) (“After Steel Co., a court cannot do what [cited]

court did: address the merits of a case without ensuring it

has jurisdiction over the case.”).16

The majority circuits nonetheless remain in a sub-split

on a related question summoned by the issue presented in

this petition, namely, whether the Steel Co. requirement

for antecedent determination of jurisdiction applies only to

Article III jurisdiction, or to both Article III and statutory

jurisdiction. The D.C. Circuit recently found that this

Court’s later decision in Sinochem supports the latter

interpretation. See Kaplan v. Central Bank of the Islamic

Rep. of Iran, 896 F.3d 501 (D.C. Cir. 2018):

Rather than assuming (without deciding)

jurisdiction and going on to address the merits,

Steel Co. explained, a court must first establish

as “an antecedent” matter that it has jurisdiction.

. . . Insofar as those [cited circuit] decisions

interpreted Steel Co.’s prohibition against

“hypothetical jurisdiction” to be confined solely

to questions of Article III jurisdiction, they

would be in tension with the broader

interpretation established in Sinochem.

The CNA description of circuit groupings within the split (CNA,

535 F.3d at 143) was based upon the 2008 status, and contains slight

differences from that presented in this petition. These differences

are due in part to the subsequent 2009 decision in Kerns, in which

the Fourth Circuit aligned with the Fifth Circuit, and the Eleventh

Circuit’s vacillation on the issue. See Friends of the Everglades, 699

F.3d at 1289 (in 2012, holding a court “cannot exercise hypothetical

jurisdiction” in line with majority circuits, but applying exception to Steel

Co. if there is a “substantial overlap” of jurisdiction and merits); compare

Morrison v. Amway Corp., 323 F.3d 920, 925 (11th Cir. 2003)

(bypassing factual challenges if jurisdictional facts “implicate” the

merits), citing Williamson, 645 F.2d at 415–16.

Id., at 510-11, citing Sinochem Int’l Co. v. Malaysia Int’l

Shipping Corp., 549 U.S. 422, 430-31, 127 S. Ct. 1184

(2007).

Should this Court apply its discretion to reach this subsplit, it may ultimately find (as did the concurring opinion

in Kaplan) that any “distinction between statutory

limitations on subject-matter jurisdiction and other Article

III jurisdictional limitations is tenuous, as both limitations

arise from Article III.” Id. at 517–18 (Edwards, J.,

concurring). See Id. (the rule that a court without

jurisdiction lacks power to adjudicate a case “applies

equally, whether jurisdiction is lacking because there is no

case or controversy, or because Congress has declined to

grant a lower court jurisdiction over a category of cases.”).

A grant of certiorari on the issue presented will provide

the Court an opportunity to further complete the mosaic of

controlling law in this area after Steel Co.

II. The Fifth Circuit’s Decision Is Erroneous

A grant of certiorari is also supported because the Fifth

Circuit’s decision is erroneous, and squarely conflicts with

the established precedent of this Court.

The Minority Circuits’ Interpretation of Bell

Conflicts with the Steel Co. Rule

This Court directed in Steel Co. that jurisdiction must

“be established as a threshold matter,” presenting this rule

as “inflexible and without exception.” Steel Co., 523 U.S. at

93. Steel Co. rejected the developing practices of lower

courts that had found it “proper to proceed immediately to

the merits question, despite jurisdictional objections” in the

interests of expediency. Id. This Court criticized

hypothetical jurisdiction, describing it as a doctrine “that

enables a court to resolve contested questions of law when

its jurisdiction is in doubt.” Id. at 101. “Without jurisdiction

the court cannot proceed at all in any cause.” Id. at 94,

quoting Ex parte McCardle, 7 Wall. 506, 514 (1869).

The contested procedures applied by the minority

circuits squarely conflict with the foregoing rules. In

circumstances where jurisdictional and merits fact overlap,

if “the proper course of action for the district court . . . is to

find that jurisdiction exists and deal with the objection as a

direct attack on the merits of the plaintiff's case” (Montez,

392 F.3d at 150, quoting Williamson, 645 F.2d at 415), then

a court is proceeding ultra vires from the point at which it

elects to bypass jurisdictional factual challenges.

All of the minority circuits’ decisions rely, at source,

upon Bell, 327 U.S. at 682, to support their view that

jurisdiction may be assumed. However, Bell has been

criticized for a lack of clarity, including in relation to the

Fifth Circuit’s interpretation––a defect that has caused a

number of courts to “erroneously conflate the question of

subject matter jurisdiction with the question of whether

the plaintiff can prove that the statute actually applies to

the defendant or the defendant’s conduct.” 2 James Wm.

Moore et al., MOORE’S FEDERAL PRACTICE § 12.30(1)

(Matthew Bender 3d ed. 1997) (MOORE). “This distinction

is important,” because jurisdictional challenges are subject

to materially different procedural rules. Id.

Applying its interpretation of Bell, the Fifth Circuit has

resisted treating jurisdictional issues as threshold.17

See, e.g., M2 Tech. 2014, 589 F. App’x at 676 n. 5. The Fifth Circuit

imprecisely refers to “certain issues” submitted as “threshold” that

it resisted treating as such. Id. The briefing shows the issues

submitted as “threshold” had included factual challenges to subjectmatter jurisdiction (including Article III justiciability) and personal

jurisdiction. Appellants’ Br. at 3, 7, 10–15, 33, M2 Tech., Inc. v. M2

Software, Inc., 589 F. App’x 671 (5th Cir. 2014), (Nos. 13-41060, 1440192), 2014 WL 7642904 at *3, *7, *10–15, *33.

Former Justice Rehnquist acknowledged the lack of clarity

of Bell when he addressed the Fifth Circuit’s possible

misinterpretation:

Instead, [the Fifth Circuit] proceeded to step on

what is, in my opinion, a legal landmine when it

elaborated on the meaning of Bell . . . . The Court

of Appeals obviously recognized its obligation to

follow the dictates of that case as best it could,

and because to me the decision in Bell is one of

the most cryptic in the recent history of this

Court's jurisprudence, I have nothing but

sympathy for those who seek to divine its

meaning.

Yazoo County Indus. Dev. Corp. v. Suthoff, 454 U.S. 1157–

61 (1982) (Rehnquist, J., dissenting). Justice Rehnquist

authored this dissent shortly after Williamson was

decided––a case in which the Fifth Circuit relied upon Bell,

and a case that creates the fundamental underpinnings of

the Fifth Circuit’s post-Steel Co. precedent of Montez at

the heart of the circuit split. CNA, 535 F.3d at 143.

The circuit split stemming from the circuits’ colliding

interpretations of Bell and Steel Co., is ripe for a grant of

certiorari. The Fifth Circuit declined to convene en banc to

reconsider its precedent (App. 7a), though it is aware that

its procedures are not followed by most circuits. At least

one judge on that court, Judge Garza, shortly before his

retirement, opined that the Fifth Circuit’s procedures may

be in conflict with Steel Co. See Houston Ref., L.P. v.

United Steel, Paper & Forestry, Rubber, Mfg., 765 F.3d

396, 407 n. 20 (5th Cir. 2014) (Garza, J.) (expressing “doubt

about whether a court can ever assume jurisdiction and

proceed to the merits, Montez, 392 F.3d at 150,” in light of

Steel Co.).

Absent en banc review, which the Fifth Circuit has

already declined, this Court is the last avenue by which the

circuit split can be resolved without further delay. See

Davis v. Ft. Bend County, 893 F.3d 300, 305 (5th Cir. 2018)

(describing “rule of orderliness” whereby only a grant of

certiorari by this Court can overrule a prior panel absent

en banc review, without an intervening change in law).

B. The Majority Circuits Would Reach the

Opposite Result

The split in the circuits has resulted in the inconsistent

application of federal law. Here, the opposite result would

have been achieved in a majority circuit, with factual

challenges to jurisdiction addressed first. In the majority

circuits, this case would have been properly dismissed (in

the original proceedings) or the default judgment would

have been set aside as void for lack of jurisdiction (on a

direct attack).

The different outcome here stemmed in part from the

Fifth Circuit’s conflict with the broader precedent of this

Court. For example, while the Fifth Circuit found a direct

attack foreclosed by original proceedings, this Court holds

that a direct attack on personal jurisdiction is appropriate

after (as here) a default judgment.18 The Restatement

(Second) of Judgments similarly advises that a direct

attack on subject-matter jurisdiction is appropriate for a

See, e.g., Ins. Corp. of Ireland, Ltd. v. Compagnie des Bauxites de

Guinee, 456 U.S. 694, 706, 102 S. Ct. 2099 (1982) (a defendant is

“always free to ignore . . . judicial proceedings, risk a default

judgment, then challenge that judgment on jurisdictional grounds in

a collateral proceeding.”); Reynolds v. Int’l Amateur Athletic Fed.,

23 F.3d 1110, 1121 (6th Cir. 1994) (“defects in personal jurisdiction

are not waived by default”).

default judgment. FED. R. CIV. P. 60(b)(4).19 A defaulting

defendant is always entitled mount a direct attack on a

default judgment by reliance upon a new record submitted

with a Rule 60(b) motion. See Standard Oil Co. of Cal. v.

United States, 429 U.S. 17, 18 (1976).

This Court also holds that Article III jurisdiction must

be extant at all stages of a case, and may be challenged at

any time. See Union Pac. R.R. Co. v. Bhd. of Locomotive

Eng’rs & Trainmen Gen. Comm. of Adjustment, 558 U.S.

67, 81 (2009). This Court has expressly held that it is

improper for a federal court to assert jurisdiction on the

basis of mere allegations, in the face of a factual challenge:

Here, the allegation . . . as to jurisdictional amount

was traversed by the answer. The court made no

adequate finding upon that issue of fact, and the

record contains no evidence to support the

allegation. There was thus no showing that the

District Court had jurisdiction and the bill

should have been dismissed on that ground.

McNutt v. Gen. Motors Acceptance Corp., 298 U.S. 178,

189–90 (1936) (emphasis added). The foregoing rules of this

Court cannot be reconciled with the minority circuits’

procedures on the issue presented. App. 1a.

See RESTATEMENT (SECOND) OF JUDGMENTS § 65 (1982) (“Invalid

Default Judgment: Lack of Subject Matter or Territorial

Jurisdiction or Adequate Notice,” “Except as stated in § 66, a

judgment by default may be avoided if it was rendered without

compliance with the requirements stated in § 1.”). See, e.g., Jakks

Pacific, Inc. v. Accasevek, LLC, 270 F.Supp.3d 191, 199 (D.D.C.

2017) (“Although Rule 60(b)(4) says “the court may relieve a party ...

from a final judgment,” there is no discretion if the court lacked

subject-matter jurisdiction . . . the mere presence of a default

judgment does not itself provide an arguable basis to assume

subject-matter jurisdiction.”) (emphasis in original, citations omitted).

Under the different procedures of the majority circuits,

in similar declaratory actions where factually-erroneous

allegations of ownership have formed an artificial basis for

jurisdiction, factual challenges to jurisdiction have been

reached first. See, e.g., BASF Plant Science, LP v. Nuseed

Americas Inc., No. 17-421, 2017 WL 3573811, at *7 (D. Del.

Aug. 17, 2017), and Certainteed Corp. v. Knauf Insul.,

SPRL, 849 F.Supp.2d 67, 73 (D.D.C. 2012). In the majority

circuits, cases presenting precisely this defect––––a

factually-erroneous allegation of ownership–––are properly

reviewed on factual challenge and dismissed for lack of a

justiciable controversy as to the named parties. Id.

In federal trademark infringement actions, the absence

of the federal trademark owner alone requires dismissal

for lack of standing, or failure to join an indispensable

party.20 The additional fact presented here–––that the

non-owner named as the sole declaratory defendant had

also already expressly relinquished all causes of action and

any rights to sue for past, present, or future infringement

(Notes 6–9, supra)–––rendered moot the question of

standing. Regardless of whether standing of the non-owner

could be proven by Respondent, no justiciable controversy

remained. See, e.g., Already, 568 U.S. at 90–93 (in

trademark declaratory action where there was no question

See, e.g., Flu Shots of Texas, Ltd. v. Lopez, No. 3:13-cv-133-O, 2014

L 1327706, at *5, *11 (N.D. Tex. 2014) (dismissing all claims where

the federal trademark owner was not named: “Plaintiffs’ federal and

common law trademark-based claims (Counts I, III, and IV) . . . and

claim for violations of the ACPA (Count IX) are dismissed without

prejudice for lack of standing. . . . Section 43(a) Lanham Act claim

for unfair competition (Count II) is dismissed without prejudice for

failure to join an indispensable party and for lack of standing.”).

the defendant had standing to sue, finding no justiciable

controversy after covenant not to sue).21

The Minority Circuits’ Unconstitutional

Procedures Affect Not Only the Parties, but

Also Third Parties and the Public

The minority circuits’ procedures by which jurisdiction

is regularly assumed, without determining whether the

named parties even present a justiciable controversy,

adversely affect not only the parties named, but also third

parties who are blind-sided by decisions entered in an

overreach of Article III powers. Here, before securing its

conflicting default judgment in this matter in which

jurisdiction was lacking, the Respondent had already lost

in a TTAB final judgment,22 and in decisions of the United

States Commissioner for Trademarks, on many of the

same issues that Respondent sought to relitigate here.23

When a federal court simply assumes hypothetical

jurisdiction (despite no owner present, and no actual

jurisdiction), and proceeds to an Article III determination

of contested issues of law, it may hamper the proper

See, e.g., Schreiber Foods, Inc. v. Beatrice Cheese, Inc., 402 F. 3d

1198, 1202 (Fed. Cir. 2005) (finding no justiciable controversy:

“[t]hough an assignment of a patent does not ordinarily include the

right to sue for past infringement . . . the assignment . . . explicitly

included an assignment of all causes of action.”) (citation omitted).

A TTAB final judgment that, as here, sustained allegations of

likelihood of confusion and priority under a 37 C.F.R. § 2.135

abandonment or default at that late stage of registration proceedings

carries full issue preclusive effect, for which “it is well settled, has the

same effect as a judgment on the merits.” See Bass Anglers Sportsman

Soc. of Am., Inc. v. Bass Pro Lures, Inc., 200 USPQ 819, 822 (TTAB

1978). See Trademark Board Manual of Procedure (TBMP) § 602.01,

citing Bass Anglers, 200 USPQ at 822 (“Collateral estoppel is an

effective bar to relitigation of those issues.”).

ROA.837–888, 889–94; 896–99; ROA.917.

enforcement of rights by the owner. Here, Respondent

holds no authorization from the trademark owner, who was

not a party to this case, and the USPTO has already

expressly determined that Respondent’s uses are creating

a “likelihood of confusion” in the public.24

By the Fifth Circuit’s jurisdictional overreach, it let

stand an ultra vires judgment affecting the public, the

named defendant, the federal trademark owner (M2 Tech.

2016, 657 F. App’x at 318–19), and now even counsel.

Petitioners were sanctioned simply on the basis of an

argument that presented factual challenges that would

have been sustained in the majority circuits, but were not

under the minority circuits’ view. See William H. Pate, To

Sanction or Not to Sanction: Why Arguing Against the

Court's Precedent is Not an Automatic Rule 11 Violation

according to Hunter v. Earth-Grains Co. Bakery, 25

CAMPBELL L. REV. 115, 127 (2002).

III. This Case Delivers a Rare and Exceptional

Vehicle to Resolve a Recurring Issue

The procedural posture of this case––involving a

default judgment and denial of a Rule 60(b) motion to set it

aside, with counsel sanctioned simply for arguing a view

subject of a circuit split––simplifies and isolates the

recurring issue presented, and creates a rare and

exceptional vehicle for this Court’s resolution.

Unlike the Circumstance for Most Cases

Involving the Issue Presented, Here a Grant of

Certiorari Will Change the Outcome

First, this case is unlike the vast majority of cases

presenting the issue where lower courts may have

overreached in assuming jurisdiction under a rationale of

ROA.1124–32, 1206–14; ROA.1133–1205, 1215–93.

judicial efficiency, where the outcome would not change

even if the matter were to be reviewed by this Court. That

ordinary scenario (where “the prevailing party on the

merits would be the same as the prevailing party were

jurisdiction denied,” Steel Co., 523 U.S. at 92) is not this

case. In the present matter, the overreach of jurisdiction

resulted in a judgment against the very party whose

jurisdictional challenges were bypassed. As such, a rare

and favorable vehicle is presented for certiorari.

Legal commentators have recognized that the

foregoing “affected prevailing party” dynamic is a factor

delaying the resolution by this Court of jurisdictional

procedural issues, including the sub-split described above:

Yet, despite the existence of a circuit split, the

issue of the doctrine’s constitutionality is unlikely

to be presented to the Court by litigants. In most

cases, the losing plaintiff would likely not seek

certiorari review of this issue since the best it

could hope for is a jurisdictional dismissal.

Similarly, in most cases, the winning defendant

would prefer to keep its merits victory.

Joshua S. Stillman, Hypothetical Statutory Jurisdiction

and the Limits of Federal Judicial Power, 68 Ala. L. Rev.

493, 549 (2016).

Just last term, on a (relisted) petition for certiorari that

raised a similar question, a respondent had argued that the

case was the wrong one for a grant of certiorari because

the petitioner would lose “either way”––either on the

merits (as the Court of Appeals had already held after

assuming jurisdiction), or because the Court of Appeals

would hold it lacks jurisdiction.25 That respondent’s

See John Elwood, Relist Watch, ScotusBlog May 25, 2018 (“The

power authority argues that Vitol will lose either way . . . . They may

argument essentially advocates for grant of certiorari, now,

in the present case:

If the Court is interested in the question

presented, it should wait to decide it in a case

where the outcome could be affected.26

The present petition delivers a case in which the outcome

could be affected, and certiorari is now appropriate.

B. Certiorari Is Necessary Because Lower Courts

Have No Incentive to Address an Issue Whose

Resolution Would Constrain Their Flexibility

Second, the Courts of Appeals are not likely to resolve

the split on their own, as shown in part by the Fifth

Circuit’s denial of en banc review. That is because there is

no incentive for a lower court to clarify procedural rules,

where such a resolution could hamper its flexibility:

Given the lower courts’ strong incentives to

preserve maximum flexibility, likely only the

Supreme Court can put an end to hypothetical

statutory jurisdiction.

Stillman, 68 Ala. L. Rev. at 549. See Id. (“until the

courts of appeals correct their course, or the Supreme

Court is presented with the rare opportunity to settle

the issue,” the limits placed upon federal courts’

jurisdiction are likely to be disregarded or evaded.)

Multiple petitions for certiorari have been filed recently

have a point.”), available at http://www.scotusblog.com/2018/05/relistwatch-126/ (as viewed January 2, 2019).

Vitol S.A. v. Autoridad de Energia Electrica de Puerto Rico, No.

17-951, 2018 WL 1806998, *1 (Response, U.S. Apr. 30, 2018). The

petitioner replied that this suggestion might, “as a practical matter,

. . . prevent this Court from ever resolving the important Question

Presented.” Vitol S.A. v. Autoridad de Energia Electrica de Puerto

Rico, No. 17-951, 2018 WL 2018450, *10 (Reply, U.S. Apr. 30, 2018).

on this or similar issues.27 This is a recurring issue, and

a grant of certiorari is appropriate.

This Case Is Now at Final Disposition

Third, this case has now reached final disposition.

Although this petition for certiorari after the final order

arrives bifurcated from that of the direct appeal of the Rule

60(b) motion denial, that should not dissuade the Court

from granting certiorari. Indeed, the Third Circuit even

has a supervisory rule would have avoided the present

circumstance of a fragmented appeal. See Mary Ann

Pensiero, Inc. v. Lingle, 847 F.2d 90, 92 (3d Cir. 1988)

(holding “[s]wift disposition of a Rule 11 motion is essential

so that any ensuing challenge to it might be included with

the appeal on the merits.”).

Had the Third Circuit’s rule existed in the Fifth Circuit,

it would have eliminated the earlier potential impediment

to this Court’s review. This Court has recognized its

preference to deny certiorari where further proceedings

may obviate the need for review, or where further

proceedings are likely to alter or refine the issues. See, e.g.,

Virginia Military Inst. v. U.S., 508 U.S. 946 (1993) (Scalia,

J.); Major League Baseball Players Ass’n v. Garvey, 532

U.S. 504, 508 n. 1 (2001) (per curiam) (noting “authority to

consider questions determined in earlier stages of the

See, e.g., Vitol S.A. v. Autoridad de Energia Electrica de Puerto

Rico, No. 17-951, 2018 WL 300631, at *i (Petition, U.S. Apr. 30,

2018) (question presented of whether an Article III court can

exercise “hypothetical” statutory jurisdiction to dispose of a case);

Dallas Mexican Cons. Gen. v. Box, 2015 WL 9474281, at *9

(Petition, U.S. Dec. 23, 2015) (seeking certiorari in a matter in which

the Fifth Circuit’s refusal to examine jurisdictional facts resulted in

holding a party to a default judgment “for which no jurisdiction

could possibly exist”).

litigation where certiorari is sought from the most recent of

the judgments of the Court of Appeals”).

At an earlier phase of this case, legal experts opined that

this Court had “surprisingly denied” certiorari.28 Until the

present petition, however, lower court proceedings were

still ongoing that might have altered or refined the issues.

See Id. Final disposition has now entered, and the matter

is ripe. A grant of certiorari is appropriate.

CONCLUSION

For the foregoing reasons, the petition for writ of

certiorari should be granted.

Respectfully submitted,

RICHARD C. KING JR.

Counsel of Record

KING LAW GROUP, PLLC

1326 West Highway 290, Suite A

Dripping Springs, TX 78620

rking@kinglitigationgroup.com

(512) 263-8212

Counsel for Petitioners

JANUARY 2019

Brendan J. O’Rourke, Lawrence I. Weinstein, Celia Cohen,

SCOTUS Opts Not To Remand Case Raising Preclusion Question

Answered In B&B Hardware, NATIONAL LAW REVIEW (May 2,

2015), available online at: http://www.natlawreview.com/article/scotusopts-not-to-remand-case-raising-preclusion-question-answered-bbhardware (as viewed January 2, 2019).

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.