Coney Island Auto Parts, Inc. v. Burton

Coney Island Auto Parts, a company that lost a lawsuit by default for not appearing in court, is asking the Supreme Court to rule that it can challenge that judgment at any time. The company argues the original court never had the power—or “personal jurisdiction”—over it, making the judgment a legal nullity from its inception. The creditor trying to collect the debt argues that a federal rule requires any such challenge to be made within a “reasonable time,” and that waiting years is unreasonable.

The core of the dispute is whether a “void” judgment is a special category of error that can never be legitimized by the passage of time. Coney Island’s lawyers contend that a judgment from a court without jurisdiction is not just flawed; it is a legal fiction that never truly existed. To them, applying a time limit is like saying a counterfeit bill becomes real money if you don't spot it quickly enough. They argue this protects a fundamental due process right, allowing a person to ignore a lawsuit from a court with no authority over them without fear that their inaction will make an illegitimate judgment permanent.

The creditor, represented by a bankruptcy trustee, counters that the legal system needs finality. The text of the relevant federal rule, Rule 60, explicitly says a motion to set aside a void judgment must be made in a “reasonable time.” They argue “reasonable” cannot mean “infinite.” Allowing endless challenges would create chaos, as people who win lawsuits could never be certain the matter is truly closed. In this instance, the trustee spent years and significant funds trying to collect the debt, only for the company to raise this objection at the last minute, which the creditor argues is fundamentally unfair.

This concern was at the heart of the Supreme Court's debate over time limits for challenging certain court judgments. The petitioner, Coney Island Auto Parts, argued that if a strict time limit applies, individuals and small businesses could be victimized by judgments from courts that have no legal authority over them. Their position is that people should not be forced to constantly monitor every court in the country or hire lawyers to fight lawsuits in places with which they have no connection, just to avoid an improper judgment becoming permanent through a procedural technicality.

During arguments, Justice Alito posed a direct hypothetical to test this scenario: what about a person in New York who has never been to Montana, receives a judgment from a Montana court, and simply ignores it because it's obviously wrong? This question explored whether that person should lose their right to object if they don't act fast enough. The petitioner’s argument is that such a person should be able to wait until a creditor actually tries to seize their bank account and then raise the defense that the Montana court never had power in the first place.

The creditor’s response is that the “reasonable time” standard is flexible enough to protect such individuals. Their attorney argued that what is “reasonable” would depend on the facts. A court could decide that a long delay was reasonable for an unsophisticated person who was justifiably confused. However, for a company like Coney Island that was repeatedly notified that a trustee was trying to collect a debt, waiting over five years to object was not reasonable. The challenge for the Supreme Court is to create a rule that provides finality for valid judgments without unfairly trapping people who are targeted by lawsuits in courts that have no legitimate power over them.

This question of interpretation is the central legal puzzle in a dispute over a default judgment against Coney Island Auto Parts. The company argues that when a judgment is “void” because the court lacked authority, the time to challenge it is infinite, because a legal nullity cannot be transformed into a valid judgment by the mere passage of time. In their view, for this specific type of fundamental error, a “reasonable time” can mean any time, even decades later.

The creditor argues this interpretation defies common sense and the plain text of Federal Rule of Civil Procedure 60. The rule states that a motion to vacate a void judgment must be filed “within a reasonable time.” The creditor’s position is that if the rule’s authors had meant for there to be no time limit, they would have said so explicitly. By including the phrase “reasonable time,” they clearly intended for there to be some deadline, preventing legal disputes from lingering forever and ensuring finality.

During oral arguments, justices explored this tension. Justice Jackson focused on the idea that procedural rules often exist independently of the underlying merit of a claim. Her questions suggested that even if a judgment is truly void, a defendant might still be required to follow the proper procedure—including timing—to have it officially erased. This separates the process of challenging a judgment from the substance of the challenge, which poses a significant problem for the petitioner’s argument that a void judgment is a special case exempt from normal procedural deadlines.

The creditor in a case against Coney Island Auto Parts argues that it would. Their central argument is that the legal system depends on finality—the principle that once a case is decided, it stays decided. They contend that allowing a company to wait years before challenging a default judgment as “void” would undermine this stability. In this specific dispute, a bankruptcy trustee relied on the validity of the judgment and spent years and thousands of dollars trying to collect the debt. The creditor argues it is fundamentally unfair to allow the defendant to sit silently, watch the trustee incur these costs, and only then emerge to nullify the entire proceeding.

This position suggests that if the Supreme Court sides with Coney Island, anyone holding a default judgment would live in a state of permanent uncertainty. A person who won a lawsuit could see their victory erased five, ten, or even fifty years later. This could make it harder for creditors to collect legitimate debts and could complicate legal processes like bankruptcy, where trustees need to know which assets are real and collectible.

The petitioner, Coney Island, counters that the real chaos comes from enforcing judgments that were never legitimate to begin with. They argue that a court acting without proper authority over a person is a violation of due process, and the only just outcome is to erase that judgment, no matter how much time has passed. In their view, the burden should be on the plaintiff to sue in the correct court in the first place, rather than on the defendant to police every court in the nation. The Supreme Court must weigh the need for finality against the constitutional principle that a court's power is not unlimited.

This question, raised by Chief Justice Roberts during oral arguments, highlights a potential inconsistency in the legal framework for undoing judgments. The rule at issue, Federal Rule of Civil Procedure 60, lists several reasons a party can ask a court to set aside a judgment. For some reasons, like newly discovered evidence or fraud, the rule imposes a strict one-year deadline. For others, including the claim that the judgment is “void,” it requires the request be made within a “reasonable time.”

The petitioner, Coney Island Auto Parts, argues that a void judgment is a more fundamental defect than a fraudulent one. A fraudulent judgment is issued by a court that has proper authority but was misled by one of the parties. In contrast, a void judgment comes from a court that never had the power to act in the first place, making it a legal nullity from its inception. From this perspective, a void judgment is a constitutional due process violation that cannot be cured by a deadline, whereas fraud is a flaw in the proceedings that can be subject to a time limit.

However, the Chief Justice’s question suggests skepticism toward this distinction. It implies that from a common-sense standpoint, a judgment obtained through deliberate deception seems at least as serious as one resulting from a procedural error over a court’s authority. By pointing out that the rule gives less time to correct a malicious act like fraud, he questioned the logic of giving unlimited time to correct a jurisdictional mistake. This line of reasoning supports the creditor's argument that the rule’s time limits should be read consistently and that no single type of error should get a special, infinite window for challenges.