State Ex Rel. New Mexico Office of the Attorney General v. Grand River Enterprises Six Nations, Ltd.

2014 NMCA 073, 6 N.M. 383
CourtNew Mexico Court of Appeals
DecidedApril 15, 2014
DocketDocket 32,091
StatusPublished
Cited by3 cases

This text of 2014 NMCA 073 (State Ex Rel. New Mexico Office of the Attorney General v. Grand River Enterprises Six Nations, Ltd.) is published on Counsel Stack Legal Research, covering New Mexico Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Ex Rel. New Mexico Office of the Attorney General v. Grand River Enterprises Six Nations, Ltd., 2014 NMCA 073, 6 N.M. 383 (N.M. Ct. App. 2014).

Opinion

OPINION

FRY, Judge.

{1} Defendant Grand River Enterprises Six Nations, Ltd., a tobacco company, appeals the district court’s denial of its motion to set aside a default judgment entered against it in an action brought by the State to force Grand River to contribute money into New Mexico’s tobacco escrow fund. On appeal, Grand River argues that the default judgment must be set aside because (1) the State failed to comply with the rules governing the service of process on foreign corporations; and (2) the district court did not have personal jurisdiction over Grand River when it entered the default judgment. Because we agree with Grand River that the district court lacked personal jurisdiction, we conclude that the district court’s default judgment is void and must be set aside.

BACKGROUND

{2} Grand River manufactures tobacco products, including Opal brand cigarettes. Grand River is incorporated in Canada, with its principal place of business in Ohsweken, Ontario, and operates exclusively on the Six Nation Indian Reserve. During the time material to this litigation, Grand River was not registered to do business in New Mexico, did not have an agent for the service of process in New Mexico, and did not directly engage in business activity in New Mexico.

{3} In early 2005, Grace’s Smoke Shop in Deming, New Mexico allegedly sold approximately 19,540 Opal cigarettes. Grace’s Smoke Shop purchased the cigarettes from wholesale distributor Snow Mountain Wholesale, located in Las Vegas, Nevada. According to the affidavit of Grand River’s President, Grand River did not have any contact or a contractual arrangement with either Snow Mountain Wholesale or Grace’s Smoke Shop regarding the sale of the cigarettes in New Mexico.

{4} In 2007, the Attorney General filed suit against Grand River for failing to comply with the Tobacco Escrow Fund Act, NMSA 1978, Sections 6-4-14 to -24 (2003, as amended through 2009). The Act requires some tobacco companies to contribute money into an escrow account according to the amount of individual cigarettes they have sold in the state. NMSA 1978, § 6-4-13(C) (2004). The Attorney General alleged that Grand River owed approximately $327.37 to the State for the 19,540 Opal cigarettes Grace’s Smoke Shop sold in 2005.

{5} The Attorney General mailed Grand River a copy of the summons and complaint by certified mail. See Rule 1-004(N) NMRA (service of process on foreign corporations). Grand River did not respond to the Attorney General’s complaint. The Attorney General subsequently sought and was granted a default judgment. Grand River then moved to set aside the default judgment, arguing that the judgment was void because the Attorney General failed to properly serve Grand River with process and because the district court lacked personal jurisdiction. Rule 1-060(B)(4) NMRA (providing that the court may relieve a party from a final judgment on the grounds that the judgment is void). The district court denied Grand River’s motion. Grand River appeals.

DISCUSSION

{6} Under Rule 1-060(B)(4), the district court is required to set aside a void judgment. Nesbit v. City of Albuquerque, 1977-NMSC-017, ¶ 12, 91 N.M. 455, 575 P.2d 1340. In this case, Grand River argued that the default judgment was void because the district court lacked personal jurisdiction. See Alvarez v. County of Bernalillo, 1993-NMCA-034, ¶ 10, 115 N.M. 328, 850 P.2d 1031 (noting that a judgment entered against a party over whom the court lacks personal jurisdiction is a void judgment). The parties stipulated below that New Mexico does not have general personal jurisdiction over Grand River. See Sproul v. Rob & Charlies, Inc., 2013-NMCA-072, ¶ 14, 304 P.3d 18 (“[Tjhe flow of a manufacturer’s goods into the forum state alone does not create sufficient ties with that state to give it general jurisdiction over the manufacturer.”). W e therefore limit our analysis to the determination of whether New Mexico can exercise specific personal jurisdiction under the facts in this case. Because we conclude that New Mexico cannot exercise personal jurisdiction over Grand River in this case, we do not consider Grand River’s additional argument that service of process was improper.

Standard of Review

{7} Generally, we review a district court’s denial of a motion to set aside a default judgment for abuse of discretion. Rodriguez v. Conant, 1987-NMSC-040, ¶ 20, 105 N.M. 746, 737 P.2d 527. However, a district court has no discretion to refuse to set aside a void judgment under Rule 1-060(B)(4). Chavez v. County of Valencia, 1974-NMSC-035, ¶ 16, 86 N.M. 205, 521 P.2d 1154. “The determination of whether the district court has personal jurisdiction [over a nonresident defendant] is a question of law that we review de novo.” Sublett v. Wallin, 2004-NMCA-089, ¶ 11, 136 N.M. 102, 94 P.3d 845. We review “the pleadings and affidavits ... in the light most favorable to the party asserting jurisdiction.” Santa Fe Technologies, Inc. v. Argus Networks, Inc., 2002-NMCA-030, ¶ 12, 131 N.M. 772, 42 P.3d 1221 (internal quotation marks and citation omitted).

Specific Personal Jurisdiction and the Stream of Commerce Theory

{8} The State asserted that personal jurisdiction existed pursuant to New Mexico’s long-arm statute. NMSA 1978, § 38-1-16 (1971). Because we consider the long-arm statute “as being coextensive with the requirements of due process,” we no longer require a determination that the defendant committed one of the acts enumerated by the statute but rather “undertake a single search for the outer limits of what due process permits.” M.R. v. SereniCare Funeral Home, L.L.C., 2013-NMCA-022, ¶ 8, 296 P.3d 492 (internal quotation marks and citation omitted), cert denied, 2013-NMCERT-001, 299 P.3d 862. “Due process is satisfied only when a defendant has sufficient minimum contacts with the forum state so that the assertion of jurisdiction over the defendant will not violate traditional notions of fair play and substantial justice,” Sproul, 2013-NMCA-072, ¶ 9 (internal quotation marks and citation omitted). The “minimum contacts” required to establish jurisdiction depend on “whether the jurisdiction asserted is general (all-purpose) or specific (case-linked).” Id. In the context of specific personal jurisdiction, the “central feature of minimum contacts . . . is the requirement of purposeful availment.” Id. ¶ 16; see also F.D.I.C. v. Hiatt, 1994-NMSC-044, ¶ 8, 117 N.M. 461, 872 P.2d 879 (“[Tjhere [must] be some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum [s]tate, thus invoking the benefits and protections of its laws.” (internal quotation marks and citation omitted)). Specific personal jurisdiction is “confined to adjudication of [the] issues deriving from, or connected with, the very controversy that establishes jurisdiction” and is “decided on a case-by-case basis.” Sproul, 2013-NMCA-072, ¶ 17 (internal quotation marks and citation omitted).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

State ex rel. Human Services Dep't v. Ysco
New Mexico Court of Appeals, 2015
Fabara v. Gofit, LLC
308 F.R.D. 380 (D. New Mexico, 2015)
State ex rel. Att'y Gen. v. Grand River Enters. Six Nations, Ltd.
2014 NMCA 73 (New Mexico Court of Appeals, 2014)

Cite This Page — Counsel Stack

Bluebook (online)
2014 NMCA 073, 6 N.M. 383, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-new-mexico-office-of-the-attorney-general-v-grand-river-nmctapp-2014.