After Default: What State Process is Due?

Abstract

This article previews the issues and arguments in Peralta v. Heights Medical Center, on the Supreme Court’s 1987-88 appellate docket. The parties in this appeal agree that the central question before the Supreme Court is whether Texas may constitutionally require a defaulting party to present a meritorious defense to the underlying action as a prerequisite to relief from the default judgment. In addition, Peralta presents the question of whether a state may, consistent with Fourteenth Amendment due process requirements, enforce a judgment obtained without personal jurisdiction over or notice to the defendant.

Heights Medical Center disputes this issue formulation, insisting that the sole legal question before the -Supreme Court relates to the bill of review procedure for judgments involved in this case, without any regard to subsequent enforcement.

It is well-established that constitutional due process requires not only that a court have proper jurisdiction over the parties and claims in dispute, but also that the defendant receive notice of the action. The theory underlying this reasonable notice requirement is that no party should be held accountable for its actions or deprived of property unless it first had knowledge of the claims against it, as well as an opportunity to defend. Thus, the Supreme Court has stated that "an elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections." Courts have construed this principle to require notice and an opportunity to be heard "at a meaningful time and in a meaningful manner."

A number of cases have explored federal and state notice schemes to determine whether available procedures comport with articulated constitutional standards of due process and fair play. The central focus of this inquiry has concerned the validity of a judgment where alleged defective notice preceded the litigation. However, the Court has paid scant attention to due process requirements when a defendant fails to respond altogether and consequently suffers a default.

In Peralta, the Supreme Court will examine the Texas state statutory scheme controlling relief from default judgments, and will determine whether that statutory scheme adequately protects the liberty and property interests of defaulting parties. While Peralta's predicament is factually compelling, the Supreme Court will probably consider the entire Texas statutory scheme for direct and collateral attack, rather than examine the bill of review procedure in isolation. If the Court adopts this approach, it may well reach the conclusion that the array of available procedures affords a litigant multiple avenues of relief and therefore does not offend constitutional due process notions.

If the Supreme Court looks to federal practice, however, it will find mixed support for the Texas meritorious defense requirement. In general, under federal practice, a federal court in its discretion may require a party in default to show a meritorious defense to have a default judgment set aside. Yet, there is also federal authority for the proposition that no defense (meritorious or otherwise) need be shown when a judgment is void. Indeed, at least one court has held that when a default judgment is void because of insufficiency of service of process, the existence of a meritorious defense to the underlying action is not relevant to vacating the default judgment.