Everything Yogurt Brands, LLC v. Bianco

Background

The plaintiffs moved for reconsideration of the court’s July 22, 2024 order denying their motion for default judgment. A default judgment is a judgment entered when a defendant does not defend the case. The plaintiffs argued that the court should not have examined personal jurisdiction—the court’s authority over the defendants—before denying default judgment because the defendants had not appeared.

Court’s analysis

The court explained that reconsideration is allowed only when the moving party identifies a change in controlling law, new evidence, or a clear error or manifest injustice. The court concluded that the plaintiffs had not identified a reason to reconsider its earlier decision.

The court rejected the plaintiffs’ argument that it should not have considered personal jurisdiction. Although the Second Circuit does not require district courts to make that determination before entering default judgment, it permits courts to consider personal jurisdiction first. The court had exercised that discretion because the plaintiffs’ submissions clearly indicated that personal jurisdiction was absent and because resolving the issue first promoted judicial efficiency.

The court also rejected the plaintiffs’ argument that it should not have relied on state law. It explained that the relevant issue was personal jurisdiction, not whether state or federal arbitration law applied, and that federal courts look to state law when analyzing personal jurisdiction.

Disposition

The court ordered that the case be dismissed without prejudice for lack of personal jurisdiction and directed the clerk to close the case. The opinion does not separately state a formal disposition using the word “denied” for the reconsideration motion, but its reasoning leaves the earlier denial of default judgment undisturbed.