     08-4804-cv; 09-1345-cv
     City of New York v. A-1 Jewelry & Pawn, Inc.


 1                        UNITED STATES COURT OF APPEALS

 2                            FOR THE SECOND CIRCUIT

 3                                August Term, 2009

 4   (Argued:    March 11, 2010            Final Submission:   April 20, 2010
 5                            Decided:    May 4, 2011)

 6                     Docket Nos. 08-4804-cv; 09-1345-cv
 7                       (consolidated for disposition)
 8                   -------------------------------------

 9                             THE CITY OF NEW YORK,
10                              Plaintiff-Appellee,
11                                       - v -

12                           MICKALIS PAWN SHOP, LLC,

13                              Defendant-Appellant,

14     A-1 JEWELRY & PAWN, INC., ADVENTURE OUTDOORS, INC., COLE'S GUN
15          SHOP, INC., DUNKELBERGER'S SPORTS OUTFITTERS, GALLERY
16   DISTRIBUTING INC., GREG L. DRIGGERS d/b/a AAA Gun & Pawn Brokers,
17   THE GUN STORE, INC., HAROLD W. BABCOCK, JR. d/b/a Webb's Sporting
18    Goods, JAMES THOMAS FARMER d/b/a Jim's Guns and Whatever, NANCY
19     DAILEY d/b/a Peddler's Post, OLD DOMINION GUNS & TACKLE, INC.,
20      PATRIOT SERVICES, INC., WELSH PAWN SHOP, INC. d/b/a Big Tom's
21        Pawn Shop, WOODROW C. HOLMAN III d/b/a Woody's Pawn Shop,
22                   VIRGINIA FIREARMS & TRANSFERS, INC.,

23                                   Defendants.

24                   -------------------------------------

25                             THE CITY OF NEW YORK,

26                              Plaintiff-Appellee,

27                                       - v -

28                           ADVENTURE OUTDOORS, INC.,

29                              Defendant-Appellant,
 1    A-1 JEWELRY & PAWN, INC., COLE'S GUN SHOP, INC., DUNKELBERGER'S
 2     SPORTS OUTFITTERS, GALLERY DISTRIBUTING INC., GREG L. DRIGGERS
 3       d/b/a AAA Gun & Pawn Brokers, THE GUN STORE, INC., HAROLD W.
 4      BABCOCK, JR. d/b/a Webb's Sporting Goods, JAMES THOMAS FARMER
 5      d/b/a Jim's Guns and Whatever, MICKALIS PAWN SHOP, LLC, NANCY
 6     DAILEY d/b/a Peddler's Post, OLD DOMINION GUNS & TACKLE, INC.,
 7      PATRIOT SERVICES, INC., WELSH PAWN SHOP, INC. d/b/a Big Tom's
 8         Pawn Shop, WOODROW C. HOLMAN III d/b/a Woody's Pawn Shop,
 9                    VIRGINIA FIREARMS & TRANSFERS, INC.,

10                              Defendants.*

11                 -------------------------------------

12   Before:   SACK and WESLEY, Circuit Judges, and EATON, Judge.**
13
14             Appeal from a default judgment and permanent

15   injunctions entered by the United States District Court for the
16   Eastern District of New York (Jack B. Weinstein, Judge) in favor
17   of the plaintiff-appellee, the City of New York.   The defendants-

18   appellants, Mickalis Pawn Shop, LLC, and Adventure Outdoors,

19   Inc., are retail firearms dealers located in South Carolina and

20   Georgia, respectively.   The City of New York brought suit against

21   them and other firearms dealers for public nuisance on the theory

22   that they intentionally or negligently sell firearms in a manner

23   susceptible to illegal trafficking to New York City.   After

24   engaging in litigation with the City for several years, each

25   defendant-appellant defaulted.   Upon entry of default judgment,
26   the district court issued permanent injunctions prohibiting the
27   defendants-appellants from further violations of the law and



          *
            The Clerk of Court is directed to amend the official
     captions in these actions as set forth above.
          **
            The Honorable Richard K. Eaton, Judge of the United
     States Court of International Trade, sitting by designation.

                                      2
 1   requiring them to undergo supervision by a court-appointed

 2   special master.   They appealed, asserting that a default judgment

 3   should not have been entered; that the default judgment is, in

 4   any event, void for lack of personal jurisdiction over each

 5   defendant; and, in the alternative, that the injunctions violate

 6   Federal Rule of Civil Procedure 65(d) or are unconstitutional.

 7   We conclude that the defendants-appellants' withdrawal from the

 8   district court proceedings justified the entry of default,

 9   followed by default judgment; that the defendants forfeited their
10   defense of lack of personal jurisdiction; and that the default

11   judgment is not void.   We agree with the defendants-appellants,

12   however, that the injunctions issued by the district court

13   violate Rule 65(d).   We therefore vacate the injunctions and

14   remand for further proceedings.

15             Affirmed in part, vacated and remanded in part.    Judge

16   Wesley concurs in a separate opinion.

17                             FREDERICK A. BRODIE (Kenneth W. Taber,
18                             of counsel), Pillsbury Winthrop Shaw
19                             Pittman, LLP, New York, N.Y.; ERIC
20                             PROSHANSKY, Assistant Corporation
21                             Counsel (Richard J. Costa, Ari Biernoff,
22                             of counsel), for Michael A. Cardozo,
23                             Corporation Counsel of the City of New
24                             York, New York, N.Y., for Plaintiff-
25                             Appellee City of New York.

26                             JUSTIN S. KAHN, Kahn Law Firm,
27                             Charleston, S.C., for Defendant-
28                             Appellant Mickalis Pawn Shop, LLC.
29
30                             JOHN F. RENZULLI (Scott C. Allan, of
31                             counsel), Renzulli Law Firm, LLP, White
32                             Plains, N.Y., for Defendant-Appellant
33                             Adventure Outdoors, Inc.




                                       3
 1   SACK, Circuit Judge:

 2               These appeals present what appear to be two issues of

 3   first impression in this Circuit.     First, whether a defendant who

 4   repeatedly moves to dismiss for lack of personal jurisdiction,

 5   but then withdraws from the litigation after those motions are

 6   denied, is permitted to attack an ensuing default judgment on the

 7   grounds that it is void for lack of personal jurisdiction.

 8   Second, whether a federal district court may exercise personal

 9   jurisdiction over an out-of-state firearms dealer under the New
10   York long-arm statute, N.Y. C.P.L.R. § 302, based solely on the

11   fact that the dealer's unlawful sales practices have facilitated

12   the trafficking of guns by third parties to New York State, where

13   those guns contribute to a public nuisance.    Because we resolve

14   the first question in the negative, we do not reach the second.

15               The City of New York (the "City") instituted this

16   lawsuit in May 2006 against fifteen federally licensed retail

17   firearms dealers operating from stores in Georgia, Ohio,

18   Pennsylvania, South Carolina, and Virginia.    The defendants-

19   appellants, Mickalis Pawn Shop, LLC ("Mickalis Pawn") and
20   Adventure Outdoors, Inc. ("Adventure Outdoors") are among those

21   dealers.1   Mickalis Pawn and Adventure Outdoors each operates a

22   single retail store in South Carolina and Georgia, respectively.

23   Each separately moved to dismiss the City's complaint against it


          1
            Although there were many defendants in the district court
     that are not parties to this appeal, for ease of reference we
     refer to these two defendants-appellants simply as the
     "defendants."


                                       4
 1   on the theory that the district court lacked personal

 2   jurisdiction over it.   The district court (Jack B. Weinstein,

 3   Judge), denying those motions, concluded that the City had made

 4   at least a prima facie showing of personal jurisdiction, but left

 5   the final determination of personal jurisdiction for trial.

 6              After additional rounds of motion practice and varying

 7   amounts of discovery, the two defendants each moved to withdraw

 8   their respective counsel and announced to the district court that

 9   they would proceed no further in the litigation.   The district

10   court entered a default against each of them.   Eventually, after

11   proceedings before a magistrate judge, the court entered a

12   default judgment and ordered permanent injunctive relief against

13   both defendants.

14              Both defendants now appeal from the default judgment on

15   various grounds.2   First, they assert that their withdrawal from

16   the litigation did not justify the district court's entry of

17   default or the issuance of a default judgment against them.

18   Second, they contend that the district court lacked personal

19   jurisdiction over them, and therefore that the default judgment

20   is void.   Finally, the defendants challenge the permanent

21   injunctions as unconstitutional or as in violation of Federal

22   Rule of Civil Procedure 65(d).



          2
            The two defendants' appeals were consolidated for argument
     on March 11, 2010, before the same panel of this Court.


                                      5
 1             We conclude that the district court did not abuse its

 2   discretion in entering a default and issuing a default judgment

 3   against each of the defendants.    We also conclude that the

 4   defendants forfeited the defense of lack of personal jurisdiction

 5   and any other defenses they may have had by willfully abandoning

 6   their defense of the litigation.       The default judgment against

 7   them is therefore not void.    However, because we agree with the

 8   defendants that the injunctions issued by the district court

 9   violate the requirements of Rule 65(d), we vacate the injunctions

10   and remand to the district court for it to craft appropriate

11   injunctive relief.

12                                 BACKGROUND

13             The facts underlying this litigation are discussed in

14   detail in two lengthy opinions by the district court.      See City

15   of New York v. A-1 Jewelry & Pawn, Inc. ("A-1 Jewelry I"), 501 F.

16   Supp. 2d 369 (E.D.N.Y. 2007); City of New York v. A-1 Jewelry &

17   Pawn, Inc. ("A-1 Jewelry II"), 247 F.R.D. 296 (E.D.N.Y. 2007).

18   We repeat them here only insofar as we think it necessary for an

19   understanding of our resolution of these appeals.

20             The Defendants-Appellants

21             Mickalis Pawn is a limited liability company formed

22   under South Carolina law.   It operates a single retail store -- a

23   pawn shop in Summerville, South Carolina -- where it sells, among

24   other things, firearms.   At all relevant times, Mickalis Pawn's



                                        6
 1   revenue has been derived entirely from sales made at its

 2   Summerville store to customers who visit the store in person.    As

 3   of 2006, Mickalis Pawn did not offer anything for sale in New

 4   York, nor had it ever done so.   It has never sold any merchandise

 5   by mail order, by telephone, or by means of the Internet.

 6             Adventure Outdoors is a Georgia corporation with its

 7   principal place of business in Georgia.   It operates a single

 8   retail store, located in Smyrna, Georgia, from which it sells

 9   sporting goods, hunting and fishing equipment, camping supplies,

10   and firearms and ammunition.   Like Mickalis Pawn, its revenue is

11   derived from sales made at its retail store to customers who

12   visit the store in person.   It does not ship its goods out of

13   state, nor does it sell firearms at gun shows.

14             Adventure Outdoors has, however, maintained three

15   websites through which customers may initiate the process of

16   purchasing firearms from its store.   These websites allow a

17   customer from Georgia or elsewhere in the United States to place

18   a deposit on a firearm through a wholesale distributor and direct

19   the distributor to ship the firearm to Adventure Outdoors.     The

20   customer must then visit Adventure Outdoors' store in person to

21   complete the sale and retrieve the firearm.   Adventure Outdoors

22   concedes that this system would permit a New York resident to

23   purchase a gun from Adventure Outdoors, but only if he or she

24   traveled to Georgia to pick it up.    Adventure Outdoors has sold



                                      7
1   guns to residents of other states this way, but never to a New

2   York State resident.

3             Proceedings in the District Court

4             On May 15, 2006, the City brought suit against fifteen

5   federally licensed retail firearms dealers located in states

6   other than New York, including Mickalis Pawn and Adventure

7   Outdoors, alleging that they engaged in unlawful sales practices

8   that contribute to a public nuisance in the City.3   The City


         3
            Mayor Michael Bloomberg announced the filing of this
    lawsuit at a press conference held on May 15, 2006. In response
    to certain allegedly defamatory comments made by the mayor at
    that press conference, Mickalis Pawn and Adventure Outdoors each
    brought suit for defamation against the mayor, the City of New
    York, and others, in South Carolina and Georgia state courts,
    respectively. Following the City's unsuccessful attempt to
    remove each lawsuit to federal court, see Adventure Outdoors,
    Inc. v. Bloomberg, 552 F.3d 1290 (11th Cir. 2008) (reversing with
    instructions to remand to state court); Mickalis Pawn Shop, LLC
    v. Bloomberg, 482 F. Supp. 2d 707 (D.S.C. 2007) (remanding case
    to state court), both cases proceeded in state venues. Adventure
    Outdoors' lawsuit was ultimately dismissed for failure to comply
    with certain procedural requirements of Georgia law, see
    Adventure Outdoors, Inc. v. Bloomberg, 705 S.E.2d 241 (Ga. Ct.
    App. 2010) (affirming dismissal of lawsuit), while Mickalis
    Pawn's lawsuit survived a motion to dismiss and, after being
    voluntarily dismissed and then reinstated, appears to remain
    pending, see Mickalis Pawn Shop, LLC v. Bloomberg, No. 06-CP-08-
    1734 (S.C. Ct. C.P. Berkeley County, reinstated Mar. 27, 2009).
    Neither litigation is at issue in these appeals.

            The City of New York also brought a separate but related
    action in December 2006 against twelve other federally licensed
    retail firearms dealers on similar grounds. See City of New York
    v. Bob Moates' Sport Shop, Inc., No. 06-CV-6504 (E.D.N.Y.)
    (complaint filed Dec. 7, 2006). That litigation, which was also
    before Judge Weinstein, ended in 2008 after all twelve defendants
    settled or were dismissed. See City of New York v. Bob Moates'
    Sport Shop, Inc., 253 F.R.D. 237 (E.D.N.Y. 2008) (approving
    settlement). Like the Georgia and South Carolina state-court


                                    8
 1   alleged in its complaint that each of the fifteen firearms

 2   dealers engages in "'strawman' purchases" that facilitate the

 3   acquisition of firearms by individuals who are prohibited by law

 4   from buying or possessing them.4       Compl. ¶ 21 (May 15, 2006).

 5   Many of these illegally purchased firearms, the City alleged, are

 6   used to commit crimes in the City within a short time after their

 7   sale by the defendants.   The City's initial complaint asserted

 8   five causes of action -- public nuisance, statutory nuisance,

 9   negligence, negligence per se, and negligent entrustment -- and

10   sought damages, nuisance-abatement costs, and permanent

11   injunctive relief.

12             On August 8, 2006, Mickalis Pawn, Adventure Outdoors,

13   and four other defendant firearms dealers each timely moved to

14   dismiss the complaint as to it for lack of personal jurisdiction.

15   The moving defendants asserted that the requirements of the New

16   York long-arm statute, C.P.L.R. § 302, were not satisfied; that



     suits, the Bob Moates' lawsuit is not at issue in these appeals.
          4
            In a "straw" purchase, one individual buys a firearm with
     the purpose of transferring it to another individual who is
     prohibited from purchasing it himself. See City of New York v.
     Beretta U.S.A. Corp., 524 F.3d 384, 391 (2d Cir. 2008), cert.
     denied, 129 S. Ct. 1579 (2009). The stand-in, rather than the
     true buyer, completes the official form registering the sale, ATF
     Form 4473, and submits to the federally mandated background
     check. See United States v. Robinson, 586 F.3d 540, 541 n.1 (7th
     Cir. 2009). A seller who knowingly participates in a straw
     purchase is subject to federal criminal prosecution. See, e.g.,
     Adventure Outdoors, Inc. v. Bloomberg, 552 F.3d 1290, 1300 (11th
     Cir. 2008) (collecting cases).


                                        9
 1   the defendants lacked the constitutionally requisite minimum

 2   contacts with New York; and that the defendants never purposely

 3   availed themselves of interstate commerce such that they should

 4   reasonably anticipate defending a lawsuit in New York.    The

 5   defendants    argued that requiring out-of-state retailers such as

 6   themselves to litigate this action in a state with which they

 7   have no connection would violate both New York law and tenets of

 8   due process under the Fifth and Fourteenth Amendments.

 9                On August 15, 2007, following jurisdictional discovery,

10   the district court denied the motions to dismiss in what it

11   characterized as a "case of first impression" applying the New

12   York long-arm statute to public-nuisance suits against out-of-

13   state firearms dealers.    A-1 Jewelry I, 501 F. Supp. 2d at 374.

14   The court stated that the City's burden at the pleading stage was

15   not to prove personal jurisdiction conclusively, but to show a

16   "substantial likelihood that all the elements of jurisdiction"

17   could be established at trial.    Id. at 416.   After reviewing

18   evidence of the defendants' sales of firearms and the recovery of

19   some of those firearms in New York, the court determined that the

20   City had "demonstrated, with a high degree of probability, that

21   [the] defendants' knowing parallel conduct in their individual

22   states, relying on interstate commerce, ha[s] been responsible

23   for the funneling into New York of large quantities of handguns

24   used by local criminals to terrorize significant portions of the



                                       10
 1   City's population."    Id. at 374.     The district court concluded

 2   that these allegations were "sufficient to provide the minimum

 3   contacts necessary for an exercise of personal jurisdiction by

 4   the State of New York," id. at 428, and to satisfy the

 5   requirements of that provision of New York's long-arm statute

 6   permitting jurisdiction over a person who "commits a tortious act

 7   without the state causing injury to person or property within the

 8   state, . . . if he . . . expects or should reasonably expect the

 9   act to have consequences in the state and derives substantial

10   revenue from interstate or international commerce."      N.Y.

11   C.P.L.R. § 302(a)(3)(ii).    See A-1 Jewelry I, 501 F. Supp. 2d at

12   424-29.   The defendants sought leave to take an interlocutory

13   appeal; the district court denied that request.

14                On August 29, 2007, the City filed an amended

15   complaint.    The City substituted, for the five claims in its

16   original complaint, two claims under N.Y. Penal Law §§ 240.45 and

17   400.05 -- one each for public and statutory nuisance,

18   respectively -- and sought injunctive relief only.

19                Adventure Outdoors and Mickalis Pawn, among others,

20   again moved to dismiss based on, inter alia, lack of personal

21   jurisdiction.5    On December 18, 2007, the district court denied


          5
            Adventure Outdoors and Mickalis Pawn also sought dismissal
     for failure to state a claim pursuant to Federal Rule of Civil
     Procedure 12(b)(6). In the alternative, they requested a stay of
     litigation pending appeal in City of New York v. Beretta U.S.A.
     Corp., 401 F. Supp. 2d 244 (E.D.N.Y. 2005), rev'd in part, 524


                                       11
 1   the defendants' renewed motion in its entirety.   See A-1 Jewelry

 2   II, 247 F.R.D. at 305.   The district court ordered an expedited

 3   discovery schedule and set a trial date of May 27, 2008.

 4              Mickalis Pawn's Default

 5              On February 13, 2008, Larry Mickalis, the principal of

 6   Mickalis Pawn, was indicted by a federal grand jury in South

 7   Carolina for knowingly selling a firearm and ammunition to a

 8   convicted felon in violation of 18 U.S.C. §§ 922(d)(1) and

 9   924(a)(2).6   On February 27, Mickalis Pawn again moved to stay

10   all litigation with the City pending resolution of the criminal

11   case against Mr. Mickalis; the court denied that motion in early

12   March.   See City of New York v. A-1 Jewelry & Pawn, Inc., No. 06-

13   CV-2233, 2008 WL 630483, 2008 U.S. Dist. LEXIS 16708 (E.D.N.Y.

14   Mar. 4, 2008).

15              About one week later, on March 12, 2008, each of the

16   three law firms representing Mickalis Pawn simultaneously moved

17   to withdraw as counsel, citing the indictment of Mr. Mickalis and

18   his decision to concentrate his financial resources on defending

19   himself in the criminal action.    Counsel asserted in their



     F.3d 384 (2d Cir. 2008), cert. denied, 129 S. Ct. 1579 (2009).
     The district court denied the stay application. A-1 Jewelry II,
     247 F.R.D. at 355.
          6
            By agreement with the government, Mr. Mickalis ultimately
     pleaded guilty to a less serious offense: failure to properly
     maintain records in violation of 18 U.S.C. §§ 922(m) and
     924(a)(3)(B).


                                       12
 1   withdrawal motions that Mickalis Pawn would continue to assert

 2   its defense of lack of personal jurisdiction and did not intend

 3   to waive that defense.     The City opposed the motions, arguing

 4   that such withdrawal of counsel would frustrate discovery and

 5   substantially delay the proceedings.

 6                On March 18, the district court (Cheryl L. Pollak,

 7   Magistrate Judge) held a status conference to discuss, among

 8   other things, the motions of counsel to withdraw.    At the

 9   conference, counsel for Mickalis Pawn confirmed that their client

10   consented to their withdrawal.    Counsel also announced, however,

11   that "Mickalis Pawn has decided that it does not intend to

12   further defend this case."    Transcript of Proceedings at 14 (Mar.

13   18, 2008).    Counsel advised the court that Mr. Mickalis, acting

14   on behalf of Mickalis Pawn, "understands that [default] is an

15   obvious consequence of his decision to no longer defend" the

16   lawsuit.   Id.    When the City argued that Mickalis Pawn's failure

17   to defend would lead to entry of default judgment and the

18   imposition of injunctive relief, one of Mickalis Pawn's attorneys

19   stated that his client "does understand the consequences."     Id.

20   at 15.

21                At the suggestion of counsel, Mr. Mickalis then joined

22   the conference before the magistrate judge by telephone.      Mr.

23   Mickalis confirmed to the court that Mickalis Pawn had no

24   intention of retaining substitute counsel or of further



                                       13
 1   participating in the litigation.       Magistrate Judge Pollak warned

 2   Mr. Mickalis:    "[I]f you do not have an attorney to represent

 3   Mickalis Pawn, then the City is going to move for a default and

 4   because corporations cannot appear in court without counsel, a

 5   default will enter. . . .    [T]hat means that the injunctive

 6   relief that the City has requested will in all likelihood be

 7   granted."    Id. at 17.   Mr. Mickalis indicated that he understood

 8   this, but nonetheless reaffirmed his desire to withdraw from the

 9   case.   When Magistrate Judge Pollak suggested that she might not

10   permit all three of Mickalis Pawn's law firms to withdraw, one of

11   Mickalis Pawn's attorneys protested that "[t]here's not a whole

12   lot to defend if [Mr. Mickalis is] prepared to go into default."

13   Id. at 18.

14                Although counsel for Mickalis Pawn conceded that

15   default was the "likely" result of its decision to withdraw, id.

16   at 22, Mickalis Pawn did not expressly consent to entry of a

17   default.    But in a March 18 letter to the court, counsel for

18   Mickalis Pawn confirmed that they had advised their client "that

19   if the motions to withdraw as counsel . . . are granted[,] th[e]

20   defendant will be without counsel" and "the Court will enter

21   default judgment against it."    Letter to Magistrate Judge Pollak

22   from Renzulli Law Firm, LLP (Mar. 18, 2008).

23                As a result of what the City perceived to be Mickalis

24   Pawn's acquiescence to a default, the City agreed to abandon the



                                       14
 1   taking of a deposition of Larry Mickalis scheduled to be held

 2   shortly thereafter, as well as other pending discovery.    The City

 3   advised Magistrate Judge Pollak that it would seek a default

 4   judgment if Mickalis Pawn's counsel's motions to withdraw were

 5   granted, and the City detailed the precise injunctive relief that

 6   it would request.

 7             On March 27, 2008, the magistrate judge granted the

 8   pending motions for withdrawal of counsel.   The City then

 9   formally requested that a default be entered against Mickalis

10   Pawn pursuant to Federal Rule of Civil Procedure 55(a).    The

11   Clerk of Court entered the default on April 2, 2008.

12             Two months later, in June 2008, the City moved for a

13   default judgment against Mickalis Pawn pursuant to Federal Rule

14   of Civil Procedure 55(b)(2).   Mickalis Pawn, putatively

15   representing itself pro se, opposed the motion by submitting a

16   list of objections.   After reviewing both parties' submissions,

17   the magistrate judge issued a report and recommendation

18   suggesting that the City's motion be granted and that the City's

19   proposed findings of fact and conclusions of law be adopted in

20   their entirety.   On September 19, 2008, the district court (Jack

21   B. Weinstein, Judge) adopted the magistrate judge's

22   recommendation and issued the City's proposed findings of fact

23   and conclusions of law as its own.   See City of New York v. A-1




                                     15
 1   Jewelry & Pawn, Inc., No. 06-CV-2233, 2008 WL 4298501, 2008 U.S.

 2   Dist. LEXIS 87236 (E.D.N.Y. Sept. 19, 2008).7

 3               Default judgment against Mickalis Pawn was entered on

 4   March 24, 2009.     The district court also entered a permanent

 5   injunction against Mickalis Pawn.       See City of New York v.

 6   Mickalis Pawn Shop, LLC ("Mickalis Pawn Inj."), No. 06-CV-2233,

 7   2009 WL 792042, at *1 (E.D.N.Y. Mar. 23, 2009).8      The injunction

 8   provided for, among other things, the appointment of a special

 9   master and the implementation of remedial measures to abate the

10   public nuisance created by Mickalis Pawn's illegal firearms

11   sales.    See id.

12               Adventure Outdoors' Default

13               Unlike Mickalis Pawn, Adventure Outdoors continued to

14   participate in the lawsuit through the close of discovery.        On

15   April 29, 2008, all other defendants having either settled or

16   defaulted, Adventure Outdoors moved for summary judgment seeking

17   dismissal based on, inter alia, lack of personal jurisdiction and

18   preemption by the Protection of Lawful Commerce in Arms Act, 15

19   U.S.C. §§ 7901–7903.




          7
            The magistrate judge subsequently amended her report and
     recommendation on January 27, 2009. See City of New York v.
     Adventure Outdoors, Inc., 644 F. Supp. 2d 201, 203, 218 (E.D.N.Y.
     2009) (adopting magistrate judge's amended report and
     recommendation as to Mickalis Pawn).
          8
              Not available on Lexis.


                                        16
 1                While Adventure Outdoors' summary-judgment motion was

 2   pending, the district court issued an order sua sponte directing

 3   the parties to make submissions as to whether they were entitled

 4   to a trial by jury.    Following oral argument held on May 21, the

 5   district court decided that neither party was so entitled.      The

 6   court announced that it would sit as the finder of fact with the

 7   assistance of an advisory jury, as provided by Federal Rule of

 8   Civil Procedure 39(c).    The following day, the district court

 9   denied Adventure Outdoors' motion for summary judgment.      See City

10   of New York v. A-1 Jewelry & Pawn, Inc. ("A-1 Jewelry III"), 252

11   F.R.D. 130, 131 (E.D.N.Y. 2008).       The court directed that the

12   trial begin on May 27, 2008, with the selection of the advisory

13   jury.

14                On June 2, in the midst of jury selection, counsel for

15   Adventure Outdoors moved to withdraw from the case.       In a written

16   submission, counsel reported that Adventure Outdoors had "chosen

17   not to engage in the futile exercise of defending itself at a

18   bench trial."    Motion of Renzulli Law Firm to Withdraw as Counsel

19   ("Renzulli Withdrawal Motion") at 1 (June 2, 2008).      Counsel

20   asserted that if the district court sat as factfinder, the

21   ultimate outcome of the trial would be a "foregone conclusion"

22   and Adventure Outdoors would "not receive a fair trial."      Id.

23   Counsel also adverted to their client's limited financial

24   resources.



                                       17
 1              Counsel advised the court that Adventure Outdoors

 2   nonetheless intended "to appeal from any default judgment that

 3   may be entered against it."    Id.    Attached to the motion was a

 4   declaration by Jay Wallace, the president of Adventure Outdoors,

 5   attesting that he had been "informed . . . of the consequences of

 6   not participating in the bench trial" and affirming that

 7   Adventure Outdoors consented to counsel's withdrawal.     Aff. of

 8   Jay Wallace ¶ 3, Ex. 1 to Renzulli Withdrawal Motion.

 9              The district court, upon hearing argument from the

10   parties, denied Adventure Outdoors' motion to withdraw its

11   counsel in light of the fact that trial was already underway.

12   The court warned that if Adventure Outdoors "refuse[d] to go

13   forward with the case," that course of conduct would "constitute

14   a default" under Federal Rule of Civil Procedure 55.     Transcript

15   of Proceedings at 7 (June 2, 2008).     When the district court

16   asked whether the defendant "refuse[d] to go forward with [jury]

17   selection and further proceedings" in the matter, counsel

18   responded that Adventure Outdoors indeed so refused.     Id. at 10-

19   12.   Counsel declined, however, to consent expressly to entry of

20   default or default judgment.

21              In light of Adventure Outdoors' refusal to proceed, the

22   City consented to dismissal of the advisory jury.     The district

23   court then noted Adventure Outdoors' default on the record,

24   conditionally granted the City's motion for default judgment, and



                                      18
 1   directed that all further proceedings in the case be held before

 2   the magistrate judge.9

 3             Thereafter, the City and Adventure Outdoors each made

 4   submissions to the magistrate judge regarding the City's motion

 5   for default judgment.    On January 27, 2009, the magistrate judge

 6   issued her report and recommendation to the effect that a default

 7   judgment be granted and that the City's proposed findings of fact

 8   and conclusions of law be adopted.    See City of New York v.

 9   Adventure Outdoors, Inc. ("A-1 Jewelry IV"), 644 F. Supp. 2d 201,

10   203-18 (E.D.N.Y. 2009) (reproducing text of magistrate judge's

11   January 27, 2009 report and recommendation).   Adventure Outdoors

12   submitted detailed objections to the magistrate judge's report

13   and recommendation.

14             On March 24, 2009, the district court adopted the

15   magistrate judge's report and recommendation in its entirety and

16   entered a default judgment against Adventure Outdoors,

17   simultaneously with the entry of default judgment against

18   Mickalis Pawn.   Id. at 203.   The district court also issued a

19   permanent injunction against Adventure Outdoors with terms

20   substantially identical to those of the injunction entered

21   against Mickalis Pawn.   See City of New York v. Adventure


          9
            During the conference, the City raised the question
     whether Adventure Outdoors would be permitted to appeal from the
     entry of default judgment. The district court properly declined
     to consider the issue, explaining that the question was not for
     it to decide.


                                      19
 1   Outdoors, Inc. ("Adventure Outdoors Inj."), No. 06-CV-2233, 2009

 2   WL 792023 (E.D.N.Y. Mar. 23, 2009).10

 3              The defendants appeal.

 4                                 DISCUSSION

 5              I.    Subject-Matter Jurisdiction

 6              Following oral argument, we solicited supplemental

 7   briefing from the parties to address the effect of the Protection

 8   of Lawful Commerce in Arms Act ("PLCAA"), 15 U.S.C. § 7901 et

 9   seq., on these appeals.

10              The PLCAA, enacted by Congress in 2005, provides in

11   pertinent part that "[a] qualified civil liability action may not

12   be brought in any Federal or State court."     15 U.S.C. § 7902(a).

13   A "qualified civil liability action" is defined as "a civil

14   action or proceeding . . . brought by any person against a

15   manufacturer or seller of a qualified product[11] . . . [arising]

16   from the criminal or unlawful misuse of a qualified product by

17   the person or a third party."    Id. § 7903(5)(A) (footnote added).

18   The definition is, however, subject to several statutory

19   exclusions.     A lawsuit is not barred by the PLCAA, for example,

20   if it is "an action in which a manufacturer or seller of a


          10
               Not available on Lexis.
          11
            The PLCAA defines the term "qualified product" as "a
     firearm . . . , including any antique firearm . . . , or
     ammunition . . . , or a component part of a firearm or
     ammunition, that has been shipped or transported in interstate or
     foreign commerce." 15 U.S.C. § 7903(4).


                                         20
 1   qualified product knowingly violated a State or Federal statute

 2   applicable to the sale or marketing of the product, and the

 3   violation was a proximate cause of the harm for which relief is

 4   sought."   Id. § 7903(5)(A)(iii).

 5              We previously had occasion to consider this provision,

 6   which has come to be known as the "predicate exception," in City

 7   of New York v. Beretta U.S.A. Corp., 524 F.3d 384 (2d Cir. 2008),

 8   cert. denied, 129 S. Ct. 1579 (2009).   There we upheld the

 9   constitutionality of the PLCAA against challenges arising under

10   the Commerce Clause, the First and Tenth Amendments, and the

11   principle of separation of powers.   See id. at 393-98.   We also

12   determined, over a dissent, that N.Y. Penal Law § 240.45 was not

13   a "statute applicable to the sale or marketing of firearms" for

14   the purposes of the predicate exception.   Id. at 399-404.      We

15   therefore concluded that dismissal of the plaintiff's public-

16   nuisance suit against various firearms manufacturers arising

17   under section 240.45 was required.   Id. at 404.   We did not

18   expressly consider, however, whether the PLCAA deprived the court

19   of subject-matter jurisdiction over a "qualified civil liability

20   action."

21              In the instant appeals, we solicited supplemental

22   briefing from the parties on two questions.   First, we asked them

23   to address whether the PLCAA deprives a federal court of subject-

24   matter jurisdiction over a "qualified civil liability action," or



                                     21
 1   if instead the PLCAA provides a complete defense against such an

 2   action.   Second, we asked the parties to address whether the

 3   predicate exception applies only when the plaintiff pleads, as

 4   its cause of action, the violation of "a State or Federal statute

 5   applicable to the sale or marketing of the product," or if,

 6   instead, supporting factual allegations concerning a statutory

 7   violation may satisfy the predicate exception even where the

 8   plaintiff's cause of action is not directly premised on the

 9   identified statutory violation.

10              Federal courts have an independent obligation to

11   inquire into the existence of subject-matter jurisdiction.

12   Arbaugh v. Y & H Corp., 546 U.S. 500, 514 (2006).   "[S]ubject-

13   matter jurisdiction, because it involves a court's power to hear

14   a case, can never be forfeited or waived."   Id. (internal

15   quotation marks omitted).   "Our inquiry to ascertain whether we

16   have subject matter jurisdiction ordinarily precedes our analysis

17   of the merits."   Jennifer Matthew Nursing & Rehab. Ctr. v. U.S.

18   Dep't of Health & Human Servs., 607 F.3d 951, 955 (2d Cir. 2010).

19   We review the question of subject-matter jurisdiction de novo.12


          12
            Although, in the district court proceedings, various
     defendants asserted that the PLCAA barred suit against them, see
     A-1 Jewelry II, 247 F.R.D. at 349-53; A-1 Jewelry III, 252 F.R.D.
     at 132, the district court did not expressly consider the
     question whether the PLCAA affected its subject-matter
     jurisdiction. In a related lawsuit, however, Judge Weinstein
     concluded that the PLCAA did not deprive the court of subject-
     matter jurisdiction, and further determined that the Supreme
     Court's ruling in District of Columbia v. Heller, 554 U.S. 570


                                       22
 1   DiTolla v. Doral Dental IPA of N.Y., 469 F.3d 271, 275 (2d Cir.

 2   2006).

 3             Whether a court possesses subject-matter jurisdiction,

 4   and whether a plaintiff can state a claim for relief, "are two

 5   questions that are easily, and often, confused."   Carlson v.

 6   Principal Fin. Grp., 320 F.3d 301, 305–06 (2d Cir. 2003).     The

 7   concept of subject-matter jurisdiction, which relates solely to

 8   the court's adjudicatory authority, is analytically distinct from

 9   "the essential ingredients of a [plaintiff's] claim for relief."

10   Arbaugh, 546 U.S. at 503.

11             Because "[b]randing a rule as going to a court's

12   subject-matter jurisdiction alters the normal operation of our

13   adversarial system," Henderson ex rel. Henderson v. Shinseki, 131

14   S. Ct. 1197, 1202 (2011), and "[b]ecause the consequences that

15   attach to the jurisdictional label may be so drastic," id., the

16   Supreme Court has endeavored in recent years "to bring some

17   discipline to the use of this term," id.   To that end, the

18   Supreme Court has developed a bright-line test to determine

19   whether a particular statutory restriction is one that deprives a

20   court of subject-matter jurisdiction.

21             If the Legislature clearly states that a
22             threshold limitation on a statute's scope
23             shall count as jurisdictional, then courts and
24             litigants will be duly instructed and will not


     (2008), did not bear on the question.   See Bob Moates', 253
     F.R.D. at 241-42.


                                    23
 1             be left to wrestle with the issue. But when
 2             Congress does not rank a statutory limitation
 3             on coverage as jurisdictional, courts should
 4             treat the restriction as nonjurisdictional in
 5             character.

 6   Arbaugh, 546 U.S. at 515-16 (footnote and citation omitted).

 7   Arbaugh represents a "powerful statement[] that courts should be

 8   reluctant to make issues jurisdictional . . . unless statutory

 9   language requires it."   Zhong v. U.S. Dep't of Justice, 489 F.3d

10   126, 134 (2d Cir. 2007) (Calabresi, J., concurring in denial of

11   rehearing en banc).

12             To be sure, the Supreme Court has noted since Arbaugh

13   that "Congress . . . need not use magic words in order to speak

14   clearly," Henderson, 131 S. Ct. at 1203, and that "'[c]ontext,

15   including th[e] [Supreme] Court's interpretation of similar

16   provisions in many years past, is relevant,'" id. (quoting Reed

17   Elsevier, Inc. v. Muchnick, 130 S. Ct. 1237, 1248 (2010)).

18   Nonetheless, the Court has reaffirmed Arbaugh's core holding that

19   Congress must provide a "'clear' indication that [it] want[s] [a]

20   rule to be 'jurisdictional,'" id. (quoting Arbaugh, 546 U.S. at

21   515-16), before we may recognize it as being jurisdictional.

22   Indeed, even rules that are "important and mandatory . . . should

23   not be given the jurisdictional brand" unless Congress has

24   clearly indicated otherwise.   Id.; see also Union Pac. R.R. Co.

25   v. Bhd. of Locomotive Eng'rs & Trainmen Gen., 130 S. Ct. 584, 596

26   (2009).



                                     24
 1                We conclude that the PLCAA's bar on "qualified civil

 2   liability action[s]," 15 U.S.C. § 7902(a), does not deprive

 3   courts of subject-matter jurisdiction.    The language of the PLCAA

 4   "'does not speak in jurisdictional terms or refer in any way to

 5   the jurisdiction of the [district courts].'"    Henderson, 131 S.

 6   Ct. at 1204 (quoting Zipes v. Trans World Airlines, Inc., 455

 7   U.S. 385, 394 (1982)).    Instead, it provides only that "[a]

 8   qualified civil liability action may not be brought in any

 9   Federal or State court."    15 U.S.C. § 7902(a).   Although the

10   phrase "may not be brought" suggests absence of jurisdiction, the

11   phrase is not equivalent to a clear statement of Congress's

12   intent to limit the power of the courts rather than the rights of

13   litigants.    Henderson, 131 S. Ct. at 1203.   In the absence of

14   such a clear statement, we must treat the PLCAA as speaking only

15   to the rights and obligations of the litigants, not to the power

16   of the court.    Compare, e.g., Reed Elsevier, 130 S. Ct. at 1245

17   (concluding that Copyright Act registration requirement, 17

18   U.S.C. § 411(a), did not implicate subject-matter jurisdiction

19   because the statute did not "clearly state" that the requirement

20   was jurisdictional), with Rockwell Int'l Corp. v. United States,

21   549 U.S. 457, 463, 467-68 (2007) (determining that False Claims

22   Act, former 31 U.S.C. § 3730(e)(4)(A), was jurisdictional insofar

23   as it declared that "[n]o court shall have jurisdiction over an

24   action under this section" unless a specified condition applies),



                                       25
 1   superseded by statute, Patient Protection and Affordable Care

 2   Act, Pub. L. No. 111-148, § 10104(j)(2) (codified as amended at

 3   31 U.S.C. § 3730(e)(4)(A)).   We therefore conclude that the PLCAA

 4   did not divest the district court of subject-matter jurisdiction

 5   over this dispute.13

 6               Having determined that we possess subject-matter

 7   jurisdiction, we would, in the ordinary course, proceed to

 8   consider whether the City's lawsuit is nonetheless barred by the

 9   PLCAA.    In this case, however, the defendants did not fully

10   litigate their defenses under the PLCAA, but instead withdrew

11   from the litigation, defaulted, and suffered a default judgment

12   to be entered against them.   We accordingly inquire not whether

13   the City's lawsuit was barred by the PLCAA, but rather, whether

14   the district court abused its discretion in entering a default

15   judgment against the defendants.

16               We have considered the parties' other arguments

17   concerning lack of subject-matter jurisdiction and conclude that

18   they are without merit.




          13
             Subject-matter jurisdiction over this litigation is
     founded on diversity of citizenship pursuant to 28 U.S.C. § 1332.
     We note that, although the parties appear to have misapprehended
     the test for determining the citizenship of a limited-liability
     company, see Handelsman v. Bedford Vill. Assocs. Ltd. P'ship, 213
     F.3d 48, 51-52 (2d Cir. 2000), the record before us supports the
     conclusion that there is complete diversity of citizenship among
     the parties to these appeals.



                                      26
 1                II.   Entry of Default Judgment

 2                The procedural posture of these appeals is in some

 3   respects unusual.     Adventure Outdoors and Mickalis Pawn did not,

 4   for example, move before the district court to vacate or set

 5   aside the default judgment, as is permitted by Federal Rules of

 6   Civil Procedure 55(c) and 60(b).14      Instead, they appealed

 7   directly from the entry of judgment.      "[I]t is possible, although

 8   unusual, for defendants to skip the motion to vacate the default

 9   judgment and instead directly appeal the entry of a default

10   judgment."    Pecarsky v. Galaxiworld.com Ltd., 249 F.3d 167, 170-

11   71 (2d Cir. 2001); see also Swarna v. Al-Awadi, 622 F.3d 123, 140

12   (2d Cir. 2010) ("[A] default judgment, like any other judgment,

13   can be appealed to this Court.").       As a technical matter,

14   therefore, we review not whether the district court abused its

15   discretion in declining to vacate the default judgment, but

16   whether it abused its discretion in granting a default judgment

17   in the first instance.     See Swarna, 622 F.3d at 133; Pecarsky,

18   249 F.3d at 171; cf. Paddington Partners v. Bouchard, 34 F.3d

19   1132, 1147 (2d Cir. 1994) (collecting cases distinguishing




          14
            Rule 55(c) provides that "[t]he court may . . . set aside
     a default judgment under Rule 60(b)." Fed. R. Civ. P. 55(c).
     Rule 60(b), in turn, identifies six grounds for relief from a
     final judgment, including mistake or excusable neglect; newly
     discovered evidence; fraud; voidness; satisfaction of judgment;
     or "any other reason that justifies relief." Fed. R. Civ. P.
     60(b)(1)-(6).


                                        27
 1   appellate review of the denial of a Rule 60(b) motion from review

 2   of the merits of the underlying judgment itself).

 3               "Federal Rule of Civil Procedure 55 is the basic

 4   procedure to be followed when there is a default in the course of

 5   litigation."    Vt. Teddy Bear Co. v. 1-800 Beargram Co., 373 F.3d

 6   241, 246 (2d Cir. 2004).    Rule 55 provides a "two-step process"

 7   for the entry of judgment against a party who fails to defend:

 8   first, the entry of a default, and second, the entry of a default

 9   judgment.    New York v. Green, 420 F.3d 99, 104 (2d Cir. 2005).

10               The first step, entry of a default, formalizes a

11   judicial recognition that a defendant has, through its failure to

12   defend the action, admitted liability to the plaintiff.      The

13   entry of default is governed by Rule 55(a), which provides:

14               When a party against whom a judgment for
15               affirmative relief is sought has failed to
16               plead or otherwise defend, and that failure is
17               shown by affidavit or otherwise, the clerk
18               must enter the party's default.

19   Fed. R. Civ. P. 55(a).    Although Rule 55(a) contemplates that

20   entry of default is a ministerial step to be performed by the

21   clerk of court, see Pinaud v. Cnty. of Suffolk, 52 F.3d 1139,

22   1152 n.11 (2d Cir. 1995) (describing "the entry of a default" as

23   "largely a formal matter" (internal quotation marks omitted)), a

24   district judge also possesses the inherent power to enter a

25   default, see Beller & Keller v. Tyler, 120 F.3d 21, 22 n.1 (2d

26   Cir. 1997).    The entry of a default, while establishing



                                      28
 1   liability, "is not an admission of damages."15    Finkel v.

 2   Romanowicz, 577 F.3d 79, 83 n.6 (2d Cir. 2009).

 3             The second step, entry of a default judgment, converts

 4   the defendant's admission of liability into a final judgment that

 5   terminates the litigation and awards the plaintiff any relief to

 6   which the court decides it is entitled, to the extent permitted

 7   by Rule 54(c).16   Under Rule 55(b), a default judgment ordinarily

 8   must be entered by the district judge, rather than by the clerk

 9   of court, except in certain circumstances provided for by the

10   rule and not present here.17   A district court is empowered under

11   Rule 55(b)(2), in the exercise of its discretion, to "conduct

12   hearings or make referrals" as may be necessary, inter alia, to

13   determine the amount of damages or establish the truth of the



          15
            A defaulted defendant may move before the district court
     to be relieved of its default, and the court "may set aside an
     entry of default for good cause." Fed. R. Civ. P. 55(c).
     Because the entry of default is an "interlocutory act and, as
     such, a non-final order," however, "[i]t is therefore not
     appealable" directly. Enron Oil Corp. v. Diakuhara, 10 F.3d 90,
     95 (2d Cir. 1993).
          16
            Rule 54(c) provides that "[a] default judgment must not
     differ in kind from, or exceed in amount, what is demanded in the
     pleadings." Fed. R. Civ. P. 54(c); see Silge v. Merz, 510 F.3d
     157, 161 (2d Cir. 2007).
          17
            Rule 55(b)(1) permits entry of judgment by the clerk of
     court, without involvement of a judge, in circumstances where
     "the plaintiff's claim is for a sum certain and the defendant has
     failed to appear and is not an infant or incompetent person."
     Green, 420 F.3d at 104. Rule 55(b)(2) governs "[i]n all other
     cases," id. (internal quotation marks omitted), including this
     one.


                                      29
 1   plaintiff's allegations.   Fed. R. Civ. P. 55(b)(2)(B)-(C).    "A

 2   default judgment is a final action by the district court in the

 3   litigation [and] one that may be appealed."   Enron Oil Corp. v.

 4   Diakuhara, 10 F.3d 90, 95 (2d Cir. 1993).

 5             Because we have "a strong preference for resolving

 6   disputes on the merits," and because "a default judgment is the

 7   most severe sanction which the court may apply," Green, 420 F.3d

 8   at 104 (internal quotation marks omitted), we have characterized

 9   a district court's discretion in proceeding under Rule 55 as

10   "circumscribed."   Enron Oil Corp., 10 F.3d at 95; see also State

11   St. Bank & Trust Co. v. Inversiones Errazuriz Limitada, 374 F.3d

12   158, 168 (2d Cir. 2004) ("Default judgments 'are generally

13   disfavored and are reserved for rare occasions.'" (quoting Enron

14   Oil Corp., 10 F.3d at 96)), cert. denied, 543 U.S. 1177 (2005).

15   A.   Entry of Default Under Rule 55(a)

16             "In an appeal from a default judgment, the court may

17   review both the interlocutory entry of default and the final

18   [default] judgment."   Enron Oil Corp., 10 F.3d at 95.

19             The defendants argue that the district court abused its

20   discretion by treating their withdrawal from the litigation as a

21   basis for entering default against them.    They assert that

22   because over the course of several years they appeared in the

23   litigation, repeatedly moved to dismiss, eventually filed an

24   answer, and vigorously defended themselves in discovery, they did

25   not "fail[] to plead or otherwise defend" within the meaning of


                                     30
 1   Rule 55(a).   They argue that Rule 55(a) therefore did not apply,
 2   and that the City was required to proceed to trial and prove its

 3   case, including the existence of personal jurisdiction over the

 4   defendants, by a preponderance of the evidence.

 5             We disagree.     To be sure, the "typical Rule 55 case [is

 6   one] in which a default has entered because a defendant failed to

 7   file a timely answer."     Brock v. Unique Racquetball & Health
 8   Clubs, Inc., 786 F.2d 61, 64 (2d Cir. 1986).      Nonetheless, a

 9   district court is also empowered to enter a default against a

10   "defendant [that] has failed to . . . 'otherwise defend.'"     Id.

11   (quoting Fed. R. Civ. P. 55(a)).

12             We have embraced a broad understanding of the phrase

13   "otherwise defend."   For example, in Brock, we concluded that a

14   default was properly entered when the defendant, having

15   demonstrated a lack of diligence during pre-trial proceedings,

16   sought and received a mid-trial adjournment, but then failed to

17   appear when the trial resumed.    Id. at 63-65.   We observed that

18   "a trial judge, responsible for the orderly and expeditious

19   conduct of litigation, must have broad latitude to impose the

20   sanction of default for non-attendance occurring after a trial

21   has begun."   Id. at 64.

22             Similarly, in Au Bon Pain Corp. v. Artect, Inc., 653

23   F.2d 61 (2d Cir. 1981), we concluded that a defendant's

24   obstructionist litigation tactics, including "failing to appear

25   for a deposition, dismissing counsel, giving vague and


                                       31
 1   unresponsive answers to interrogatories, and failing to appear

 2   for trial[,] were sufficient to support a finding that [the

 3   defendant] had 'failed to plead or otherwise defend' under
 4   Federal Rule of Civil Procedure 55."   Id. at 65; see also Cotton

 5   v. Slone, 4 F.3d 176, 179, 181 (2d Cir. 1993) (affirming entry of

 6   default judgment against an individual defendant who, following

 7   discovery, withdrew his counsel and refused to comply with a

 8   court order requiring submission of a pretrial memorandum).

 9             And in Eagle Associates v. Bank of Montreal, 926 F.2d

10   1305 (2d Cir. 1991), we decided that because the defendant, a

11   limited partnership, had willfully disregarded the district

12   court's order that the defendant appear through counsel, the

13   court was justified in imposing default.   "Such cavalier

14   disregard for a court order is a failure, under Rule 55(a), to

15   'otherwise defend as provided by these rules.'"   Id. at 1310

16   (internal quotation marks omitted); see also Grace v. Bank Leumi

17   Trust Co. of N.Y., 443 F.3d 180, 192 (2d Cir. 2006) (noting that

18   a default judgment may be entered against a corporation that

19   fails to appear through counsel), cert. denied, 549 U.S. 1114

20   (2007); Dow Chem. Pac. Ltd. v. Rascator Mar. S.A., 782 F.2d 329,

21   334-36 (2d Cir. 1986) (same); SEC v. Research Automation Corp.,

22   521 F.2d 585, 589 (2d Cir. 1975) (same); Shapiro, Bernstein & Co.

23   v. Cont'l Record Co., 386 F.2d 426, 427 (2d Cir. 1967) (per
24   curiam) (same).




                                    32
 1             We also find persuasive the Third Circuit's analysis in

 2   Hoxworth v. Blinder, Robinson & Co., 980 F.2d 912 (3d Cir. 1992).

 3   There, the district court entered a default judgment against

 4   defendants who had failed to comply with discovery orders and to

 5   appear for trial.   On appeal, the defendants protested -- as

 6   Adventure Outdoors and Mickalis Pawn do here -- that "Rule 55

 7   cannot be used to impose a default against a defendant who has

 8   filed an answer and actively litigated during pretrial

 9   discovery."   Id. at 917.

10             The Court of Appeals affirmed.   It decided that the

11   plain meaning of the phrase "otherwise defend" was broad enough

12   to support entry of default even after a defendant had filed an

13   answer asserting affirmative defenses.   Id.   Relying upon our

14   decisions in Brock and Au Bon Pain, as well as similar decisions

15   in three other circuits, the Third Circuit concluded that "the

16   district court's power to maintain an orderly docket justifies

17   the entry of a default against a party who fails to appear at

18   trial" or to "meet other required time schedules."    Id. at 918.

19             We similarly conclude that the district court did not

20   abuse its discretion in entering a Rule 55(a) default against

21   either Adventure Outdoors or Mickalis Pawn.

22             First, each defendant affirmatively signaled to the

23   district court its intention to cease participating in its own

24   defense, even after the defendant was clearly warned that a



                                     33
 1   default would result.   The defendants' refusal to proceed to

 2   trial places this case squarely within our rulings in Brock and

 3   Au Bon Pain.

 4              Second, in the case of Mickalis Pawn, a Rule 55(a)

 5   default was also proper under Eagle Associates and like cases

 6   insofar as this defendant withdrew its counsel without retaining

 7   a substitute.   See Lattanzio v. COMTA, 481 F.3d 137, 140 (2d Cir.

 8   2007) (per curiam) ("[A] limited liability company . . . may

 9   appear in federal court only through a licensed attorney.").

10              Finally, both defendants clearly indicated that they

11   were aware that their conduct likely would result in a default.

12              In arguing that the district court nonetheless erred by

13   entering a default, both Adventure Outdoors and Mickalis Pawn
14   rely on a Fifth Circuit case from 1949: Bass v. Hoagland, 172

15   F.2d 205 (5th Cir.), cert. denied, 338 U.S. 816 (1949).   There, a

16   split panel of the Fifth Circuit decided that a default could not

17   be entered against a defendant who had failed to appear for

18   trial.   The court concluded that "[t]he words 'otherwise defend'

19   refer to attacks on the service, or motions to dismiss, or for

20   better particulars, and the like."   Id. at 210.   In the court's

21   view, these words did not refer to circumstances in which a

22   defendant filed an answer and only later failed to appear in




                                     34
1   court.    Id.   But this interpretation18 of Rule 55 has not been

2   embraced by this Court.     See Brock, 786 F.2d at 64; Au Bon Pain,

3   653 F.2d at 65.     Nor has it found favor in a majority of our

4   sister circuits.     See, e.g., Goldman, Antonetti, Ferraiuoli,

5   Axtmayer & Hertell v. Medfit Int'l, Inc., 982 F.2d 686, 692-93

6   (1st Cir. 1993); Hoxworth, 980 F.2d at 918 (3d Cir. 1992)



         18
           Adventure Outdoors and Mickalis Pawn note that several
    leading treatises approve of Bass's logic. For example, Wright &
    Miller, following Bass, counsel that once a defendant has
    "participated throughout the pretrial process and has filed a
    responsive pleading," any failure by the defendant to appear
    thereafter should not result in a concession of liability, but
    rather, "the court should require plaintiff to present evidence
    supporting liability . . . and a judgment should be entered in
    plaintiff's favor only if the evidence supports it." 10A Charles
    Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice &
    Procedure § 2682, at 18 (3d ed. 1998). Likewise, Moore's Federal
    Practice, identifying a circuit split concerning whether a
    defendant's failure to defend after the pleadings stage can be
    grounds for a Rule 55(a) default, concludes that "[t]he better
    view is that Rule 55(a)'s 'otherwise defend' language may not be
    extended to justify a default once there has been an initial
    responsive pleading or an initial action that constitutes a
    defense." 10-55 James Wm. Moore et al., Moore's Federal Practice
    § 55.11[2][b][iii]; see also Am. Jur. 2d Judgments § 263.
    However, these authorities do not reflect the law of this Circuit
    by which we are bound.
              The defendants also rely on a dictum from our more
    recent decision in D.H. Blair & Co. v. Gottdiener, 462 F.3d 95
    (2d Cir. 2006). There, we reviewed whether it was appropriate
    for a district court to enter a default judgment against a party
    who failed to respond to a petition under the Federal Arbitration
    Act to confirm an arbitration award. We decided that it was not.
    We observed, in passing, that "Rule 55 is meant to apply to
    'civil actions' where only the first step has been taken -- i.e.,
    the filing of a complaint -- and the court thus has only
    allegations and no evidence before it." Id. at 107. Although
    this statement supports the view that Rule 55 should not apply
    after the pleadings stage, it is a dictum and does not -- it
    cannot -- overrule our existing precedent to the contrary.


                                      35
 1   (expressly declining to follow Bass); Home Port Rentals, Inc. v.

 2   Ruben, 957 F.2d 126, 133 (4th Cir.), cert. denied, 506 U.S. 821

 3   (1992); Ackra Direct Mktg. Corp. v. Fingerhut Corp., 86 F.3d 852,

 4   856 (8th Cir. 1996); Ringgold Corp. v. Worrall, 880 F.2d 1138,

 5   1141-42 (9th Cir. 1989) (per curiam).   But see Seven Elves, Inc.

 6   v. Eskenazi, 635 F.2d 396, 400 n.2 (5th Cir. 1981) ("Although

 7   Bass has been criticized . . . it nevertheless remains as binding

 8   precedent in this circuit." (citation omitted)); Solaroll Shade &

 9   Shutter Corp. v. Bio-Energy Sys., Inc., 803 F.2d 1130, 1134 (11th

10   Cir. 1986) ("If the defendant has answered the complaint but

11   fails to appear at trial, issue has been joined, and the court

12   cannot enter a [Rule 55] default judgment.").

13   B.   Entry of Default Judgment Under Rule 55(b)(2)

14             Our review of whether the default judgment was properly

15   granted by the district court is for abuse of discretion.    See

16   Swarna, 622 F.3d at 133; Pecarsky, 249 F.3d at 171.   We also

17   review for abuse of discretion a district court's decision

18   concerning the extent and scope of evidentiary proceedings, if

19   any, held prior to its entry of such a judgment.   Finkel, 577

20   F.3d at 87; Enron Oil Corp., 10 F.3d at 95; see Fed. R. Civ. P.

21   55(b)(2) (providing that "[t]he court may conduct hearings or

22   make referrals" prior to entering judgment).

23             The defendants argue that the district court abused its

24   discretion in entering the default judgment for three principal



                                    36
 1   reasons.   First, Mickalis Pawn argues that the Rule 55

 2   proceedings were beset by procedural irregularities.   Second,

 3   both defendants argue that the district court erred by failing to

 4   make specific factual findings by a preponderance of the evidence

 5   that personal jurisdiction existed.    Third, in response to our

 6   request for supplemental briefing, they assert that the

 7   plaintiff's claims are barred by the PLCAA.

 8              1.   Procedural Irregularities and Rule 55(b)(2).   "A

 9   default judgment may be considered void if the judgment has been

10   entered in a manner inconsistent with due process of law."     State

11   Street Bank & Trust Co., 374 F.3d at 178 (internal quotation

12   marks omitted).   Even after a defendant has defaulted, the

13   defendant is nonetheless "entitled . . . to be heard concerning

14   the nature and details of the judgment to be entered."    Brock,
15   786 F.2d at 65.    And Rule 55(b)(2) provides that "[i]f the party

16   against whom a default judgment is sought has appeared" at any

17   point in the litigation, that party is entitled to seven days'

18   written notice of the proceeding at which default judgment may be

19   entered.   Fed. R. Civ. P. 55(b)(2).

20               Mickalis Pawn contends that the Rule 55(b)(2)

21   proceedings were conducted in a manner violative of the Due

22   Process Clause because, it says, the default judgment against it

23   resulted from a "series of ex parte acts."    Opening Br. of

24   Mickalis Pawn at 8.    It observes that, after its three law firms




                                      37
 1   collectively withdrew from the case in March 2008, it no longer

 2   was able to receive automatic notification through the electronic

 3   case filing system of docket activity in the case.    Mickalis Pawn

 4   contends that all such filings by the district court or by the

 5   City made after March 2008 were "ex parte" to the extent that

 6   Mickalis Pawn was not simultaneously sent a copy of those filings

 7   by mail, as the district court had previously ordered must be

 8   done.

 9                But Mickalis Pawn does not assert that it was deprived

10   of actual notice as to any of these filings.    To the contrary,

11   the record reflects that both Mickalis Pawn and Adventure

12   Outdoors not only had notice of, but actively participated in,

13   each stage of the Rule 55 proceedings before the district court.

14   For example, they each filed objections to the City's proposed

15   findings of fact and to the magistrate judge's successive reports

16   recommending that the City's motions for default judgment be

17   granted.19    In Mickalis Pawn's case, the district court accepted

18   those submissions even though Mickalis Pawn -- a limited

19   liability company which cannot appear except through counsel, see

20   Lattanzio, 481 F.3d at 140 -- purported to file them in a pro se



             19
            Adventure Outdoors filed its own proposed findings of
     fact and conclusions of law in opposition to those submitted by
     the City. The magistrate judge considered Adventure Outdoors'
     submissions in preparing her report and recommendation. See A-1
     Jewelry IV, 644 F. Supp. 2d at 208-09 (describing Adventure
     Outdoors' proposed findings and conclusions).


                                       38
 1   capacity.   Because the alleged irregularities relied upon by

 2   Mickalis Pawn did not deprive it of notice and an opportunity to

 3   be heard, we conclude that the district court did not abuse its

 4   discretion in entering a default judgment pursuant to Rule

 5   55(b)(2), notwithstanding Mickalis Pawn's complaints concerning

 6   inconsistencies in the methods of service employed.20

 7               2.   Personal Jurisdiction and Rule 55(b)(2).    The

 8   defendants argue that the district court erred by failing to make

 9   findings, based on a preponderance of the evidence, that the

10   court had personal jurisdiction over each defendant.      Both

11   defendants contend that such findings are a procedural

12   prerequisite to entering default judgment under Rule 55(b)(2).

13   And Mickalis Pawn argues that it was "a per se abuse of

14   discretion" not to have done so.       Reply Br. of Mickalis Pawn at

15   24-25.    The defendants also assert that they did not intend to

16   abandon their objections to the district court's exercise of

17   personal jurisdiction upon their default.      They point out that

18   they continued to press their jurisdictional defense in their




          20
            We also reject Mickalis Pawn's contention that the
     proceedings were procedurally improper because the City, after
     having indicated to Mickalis Pawn that it would seek a default
     judgment under Rule 55(b)(2), instead first sought entry of
     default under Rule 55(a). Because Rule 55 contemplates a "two-
     step process" beginning with entry of default under Rule 55(a),
     Green, 420 F.3d at 104, the City acted properly in first seeking
     entry of default before moving for default judgment.


                                       39
 1   submissions to the district court and magistrate judge throughout

 2   the Rule 55 proceedings.

 3                "[B]efore a court grants a motion for default judgment,

 4   it may first assure itself that it has personal jurisdiction over

 5   the defendant."    Sinoying Logistics Pte Ltd. v. Yi Da Xin Trading

 6   Corp., 619 F.3d 207, 213 (2d Cir. 2010).    We have, however, left

 7   open the question "whether a district court must investigate its

 8   personal jurisdiction over defendant before entering a default

 9   judgment."    Id. at 213 n.7 (emphasis in original).   But see

10   Credit Lyonnais Sec. (USA), Inc. v. Alcantara, 183 F.3d 151, 154

11   (2d Cir. 1999) (vacating default judgment and instructing

12   district court to determine whether the plaintiffs could "prove

13   the jurisdictional facts by a preponderance of the evidence").

14   Several of our sister circuits appear to impose such a

15   requirement.    See, e.g., Mwani v. bin Laden, 417 F.3d 1, 6-7

16   (D.C. Cir. 2005); Sys. Pipe & Supply, Inc. v. M/V Viktor

17   Kurnatovskiy, 242 F.3d 322, 324 (5th Cir. 2001); In re Tuli, 172

18   F.3d 707, 712 (9th Cir. 1999); Dennis Garberg & Assocs., Inc. v.

19   Pack-Tech Int'l Corp., 115 F.3d 767, 772 (10th Cir. 1997).

20                Personal jurisdiction, unlike subject-matter

21   jurisdiction, can, however, be purposely waived or inadvertently

22   forfeited.    "Because the requirement of personal jurisdiction

23   represents first of all an individual right, it can, like other

24   such rights, be waived."    Ins. Corp. of Ireland v. Compagnie des



                                       40
 1   Bauxites de Guinee, 456 U.S. 694, 703 (1982); see also id. at 706

 2   (cautioning that there is nothing "unique about the requirement

 3   of personal jurisdiction, which prevents it from being

 4   established or waived like other rights"); Sinoying Logistics,

 5   619 F.3d at 213; "R" Best Produce, Inc. v. DiSapio, 540 F.3d 115,

 6   123 (2d Cir. 2008); Transaero, Inc. v. La Fuerza Aerea Boliviana,

 7   162 F.3d 724, 729 (2d Cir. 1998), cert. denied, 526 U.S. 1146

 8   (1999).   Therefore, "a district court should not raise personal

 9   jurisdiction sua sponte when a defendant has appeared and

10   consented, voluntarily or not, to the jurisdiction of the court."

11   Sinoying Logistics, 619 F.3d at 213 (emphasis in original).

12              "[I]n determining whether waiver or forfeiture of

13   objections to personal jurisdiction has occurred, 'we consider

14   all of the relevant circumstances.'"   Mattel, Inc. v. Barbie-

15   Club.com, 310 F.3d 293, 307 (2d Cir. 2002) (quoting Hamilton v.

16   Atlas Turner, Inc., 197 F.3d 58, 61 (2d Cir. 1999), cert. denied,

17   530 U.S. 1244 (2000)).   It is well established that a party

18   forfeits its defense of lack of personal jurisdiction by failing

19   timely to raise the defense in its initial responsive pleading.

20   See Fed. R. Civ. P. 12(h).   But there are "various [additional]

21   reasons a defendant may be estopped from raising the issue."

22   Ins. Corp. of Ireland, 456 U.S. at 704.   A court will obtain,

23   through implied consent, personal jurisdiction over a defendant

24   if "[t]he actions of the defendant [during the litigation] . . .



                                     41
 1   amount to a legal submission to the jurisdiction of the court,

 2   whether voluntary or not."   Id. at 704-05; see also Peterson v.

 3   Highland Music, Inc., 140 F.3d 1313, 1318 (9th Cir.) ("Most

 4   defenses, including the defense of lack of personal jurisdiction,

 5   may be waived as a result of the course of conduct pursued by a

 6   party during litigation."), cert. denied, 525 U.S. 983 (1998).

 7   For example, we have held that a defendant that asserted a

 8   jurisdictional defense in its answer, but failed actively to

 9   litigate that defense until four years later, forfeited the

10   defense by forgoing the opportunity to raise it sooner.

11   Hamilton, 197 F.3d at 60-62; accord Cont'l Bank, N.A. v. Meyer,

12   10 F.3d 1293, 1297 (7th Cir. 1993); Yeldell v. Tutt, 913 F.2d

13   533, 538-39 (8th Cir. 1990).

14              In addition, other circuits have held that a defendant

15   who unsuccessfully raises a jurisdictional objection at the

16   outset, but later creates the impression that he has abandoned

17   it, may not seek to renew his jurisdictional argument on appeal

18   following an adverse determination on the merits.   See Rice v.

19   Nova Biomed. Corp., 38 F.3d 909, 914-15 (7th Cir. 1994), cert.

20   denied, 514 U.S. 1111 (1995); see also Peterson, 140 F.3d at 1318

21   (9th Cir.) (describing this strategy as "sandbagging").

22              We find the analysis of the Seventh Circuit in e360

23   Insight v. Spamhaus Project, 500 F.3d 594 (7th Cir. 2007),

24   helpful.   There, the defendant removed the lawsuit from state



                                     42
 1   court and then filed an answer asserting, among other defenses,

 2   lack of personal jurisdiction.    One month later, at a pre-trial

 3   status conference, it moved to withdraw its answer and to

 4   withdraw its counsel from the litigation.     It also announced,

 5   through counsel, that it "want[ed] to participate in the defense

 6   no further" and would "do absolutely nothing" in the litigation.

 7   Id. at 596.   The district court responded that the defendant

 8   would "have to defend the case," otherwise it would lose by

 9   default.   Id.   The defendant's counsel represented that his

10   client had "been fully informed of the fact that . . . default

11   judgment is a real possibility," and that it was "aware of that

12   and [was] prepared to take that risk."      Id.   The court, acting on

13   the understanding that counsel had informed the defendant that

14   "it was a dead-bang certainty that default [was] going to be

15   entered," granted the defendant's motions to withdraw its answer

16   and withdraw counsel.     Id. at 597.   The court then entered a

17   default, and upon the plaintiff's motion, granted a default

18   judgment three weeks later.     Id.

19              The defendant timely moved to vacate the judgment

20   pursuant to Rule 60(b).    The motion was denied.     The defendant

21   then appealed, arguing that the district court had acted

22   improperly by not inquiring into the existence of personal

23   jurisdiction prior to entering judgment.      Id. at 598.




                                       43
 1                The Seventh Circuit rejected the defendant's argument

 2   and affirmed the entry of a default judgment.     It "s[aw] no

 3   reason to require the district court to raise sua sponte

 4   affirmative defenses, which may, of course, be waived or

 5   forfeited, on behalf of an appearing party who elects not to

 6   pursue those defenses for itself."     Id. at 599.   The court

 7   continued:

 8                We perceive no error in the district court's
 9                conclusion that [the defendant] Spamhaus
10                intentionally elected to abandon its available
11                defenses when it withdrew those defenses from
12                consideration by the court and indicated that
13                it   was  prepared   to   accept  a   default.
14                Spamhaus' then-counsel confirmed that it
15                wished to "participate in the defense no
16                further" and "do absolutely nothing." It was
17                not erroneous to treat this kind of voluntary
18                abandonment of defenses, raised but not
19                pursued, as a waiver.    Based on its conduct
20                before the court, we have no doubt that
21                Spamhaus understood the defenses available to
22                it, consistently asserted those defenses in
23                the early stages of those proceedings and then
24                affirmatively   elected    to  abandon   those
25                defenses before the district court. We see no
26                reason to allow Spamhaus to escape the
27                consequences of that decision in the later
28                stages of this proceeding.

29   Id. at 600 (citations omitted).     The court concluded that

30   "[b]ecause the jurisdictional challenges Spamhaus now seeks to

31   raise have been waived and neither the district court nor this

32   court has the duty to resurrect them, the district court did not

33   abuse its discretion in entering judgment of liability nor in
34   denying the motion for Rule 60(b) relief."     Id. at 602.




                                       44
 1              Similarly, in this case, Adventure Outdoors and

 2   Mickalis Pawn initially litigated their jurisdictional defense,

 3   but later changed course, announcing to the district court that

 4   they would cease defending even though a default would likely

 5   result.   Spamhaus Project is persuasive authority for the

 6   proposition that a defendant forfeits its jurisdictional defense

 7   if it appears before a district court to press that defense but

 8   then willfully withdraws from the litigation and defaults, even

 9   after being warned of the consequences of doing so.   We, like the

10   Seventh Circuit, "see no reason to require the district court to

11   raise sua sponte" the defense of lack of personal jurisdiction on

12   behalf of parties who have "elect[ed] not to pursue those

13   defenses for [themselves]."21   Id. at 599.

          21
            The defendants attempt to distinguish Spamhaus Project on
     two bases. First, Adventure Outdoors argues that default
     judgments are not disfavored in the Seventh Circuit, as they are
     here, citing Pretzel & Stouffer, Chartered v. Imperial Adjusters,
     Inc., 28 F.3d 42, 47 (7th Cir. 1994). But nothing in Spamhaus
     Project suggests that its reasoning concerning forfeiture
     depended on whether default judgments were or were not
     disfavored. And there is some question as to whether that
     attitude, if it existed in 1994, prevails today. See Sun v. Bd.
     of Trustees of Univ. of Ill., 473 F.3d 799, 811 (7th Cir.), cert.
     denied, 127 S. Ct. 2941 (2007).
            Second, the defendants point out that in Spamhaus Project,
     the defendant withdrew its answer before defaulting, whereas in
     the instant case, neither defendant withdrew its answer or had it
     stricken by the district court. Again, nothing in Spamhaus
     Project suggests that the ministerial step of withdrawing the
     answer was relevant to the court's finding of forfeiture.
     Neither does anything in our own precedent suggest that a
     district court must "strike" a defendant's answer before
     declaring that defendant to be in default. Cf., e.g., Cotton, 4
     F.3d at 178-79; Brock, 786 F.2d at 64; Au Bon Pain, 653 F.2d at


                                      45
 1             Arguing otherwise, the defendants rely on D.H. Blair &

 2   Co. v. Gottdiener, 462 F.3d 95 (2d Cir. 2006).   There, the

 3   district court entered a Rule 55 default judgment against a group

 4   of defendants who, after removing to federal court the

 5   plaintiff's petition to confirm in part and vacate in part an

 6   arbitral award, failed to answer the petition.   We vacated the

 7   judgment and remanded, instructing the district court to decide

 8   whether the plaintiff was entitled to the relief it sought

 9   notwithstanding the defendants' failure to answer the petition.

10   We decided that "[w]hen a court has before it [an extensive

11   evidentiary] record, rather than only the allegations of one

12   party found in complaints, the judgment the court enters should

13   be based on the record."   Id. at 109.

14             The defendants argue by analogy that the district court

15   should not have granted the City's motion for default judgment

16   here without first determining that sufficient evidence existed

17   in the record to sustain a finding of personal jurisdiction by a

18   preponderance of the evidence.   The analogy does not hold.     D.H.

19   Blair concerned a unique, quasi-appellate proceeding: a petition

20   to confirm or vacate an arbitration award pursuant to the Federal

21   Arbitration Act.   See 9 U.S.C. § 9 (permitting parties to an



     65 (all upholding default judgments entered against an appearing
     defendant, without noting if the defendant's answer had been
     stricken prior to entry of default).



                                      46
 1   arbitration to "apply to the court . . . for an order confirming

 2   the award"); id. § 10(a) (permitting parties to petition for

 3   vacatur of an arbitral award).    In considering a petition to

 4   confirm or vacate an arbitral award, a district court typically

 5   has at its disposal the full evidentiary record from the

 6   underlying arbitration.    We concluded in D.H. Blair that "default

 7   judgments in confirmation/vacatur proceedings are generally

 8   inappropriate," D.H. Blair, 462 F.3d at 109, and therefore held

 9   that district courts should instead treat a petitioner's

10   application to confirm or vacate an arbitral award as "akin to a

11   motion for summary judgment," id.      This case, unlike D.H. Blair,

12   does not concern proceedings under the Federal Arbitration Act,

13   nor does it concern a scenario in which a court is presented with

14   a complete evidentiary record from a prior proceeding.

15             Adventure Outdoors also asserts that our decision in

16   Brock demonstrates that a plaintiff seeking a default judgment

17   must prove its case -- including the existence of personal

18   jurisdiction -- by a preponderance of the evidence, even after a
19   defendant has defaulted.    In Brock, the defendants failed to re-
20   appear at trial following a two-week adjournment.      The district

21   court entered a default against the defendants, but then opted to

22   complete the trial record by taking testimony from the

23   plaintiff's witnesses.     The court eventually entered a default

24   judgment accompanied by findings of fact and conclusions of law.

25   On appeal, we vacated and remanded for further proceedings.      See



                                       47
 1   Brock, 786 F.2d at 63.   Adventure Outdoors contends that Brock

 2   should be read as requiring that a trial be held prior to entry

 3   of default judgment.

 4               Although Brock did result in the vacatur of a default

 5   judgment on appeal, it does not support Adventure Outdoors'

 6   argument.    There, we remanded not for the district court to

 7   adjudicate the merits of the defendants' defenses, but to permit

 8   the defendants to be heard concerning the "nature and details of

 9   the judgment to be entered in light of th[e] trial record" and
10   the scope of the relief requested by the plaintiff.   Id. at 65.
11   Although it is true that the district court in Brock had opted to

12   continue the trial proceedings following the defendants' default,

13   nothing in our decision on appeal ratified the district court's

14   decision in that respect.22   See id.




          22
             Although the parties do not advert to it, we have also
     reviewed our decision in Credit Lyonnais Securities (USA), Inc.
     v. Alcantara, 183 F.3d 151 (2d Cir. 1999). In that case, the
     defendant failed to answer the complaint but later contested the
     entry of default judgment against it, and we held that the
     district court was bound to inquire into personal jurisdiction
     before entering judgment.
            The defendants' appearance and withdrawal from the
     proceedings in this case, by contrast, forfeited their defense.
     Through that forfeiture, the defendants implicitly, if
     unwittingly, established the jurisdiction of the district court.
     Accordingly, the district court did not err by failing to make a
     final finding of jurisdiction by a preponderance of the evidence.
     See, e.g., Sinoying, 619 F.3d at 213 ("[A] district court should
     not raise personal jurisdiction sua sponte when a defendant has
     appeared and consented, voluntarily or not, to the jurisdiction
     of the court."). We therefore do not find Credit Lyonnais
     helpful to the defendants here.


                                      48
 1             3.    The PLCAA.   The defendants appear to argue,

 2   belatedly in their supplemental briefing, that the district court

 3   should not have entered a default judgment because the City's

 4   claims were barred by the PLCAA.

 5             It is an "ancient common law axiom" that a defendant

 6   who defaults thereby admits all "well-pleaded" factual

 7   allegations contained in the complaint.    Vt. Teddy Bear Co., 373

 8   F.3d at 246.    However, it is also true that a district court

 9   "need not agree that the alleged facts constitute a valid cause

10   of action."    Au Bon Pain, 653 F.2d at 65.   Indeed, we have

11   recently suggested that, prior to entering default judgment, a

12   district court is "required to determine whether the

13   [plaintiff's] allegations establish [the defendant's] liability

14   as a matter of law."23   Finkel, 577 F.3d at 84.




          23
            Most of our sister circuits appear to have held expressly
     that a district court may not enter a default judgment unless the
     plaintiff's complaint states a valid facial claim for relief.
     See, e.g., Conetta v. Nat'l Hair Care Ctrs., Inc., 236 F.3d 67,
     75-76 (1st Cir. 2001); Ryan v. Homecomings Fin. Network, 253 F.3d
     778, 780 (4th Cir. 2001); Nishimatsu Constr. Co. v. Houston Nat'l
     Bank, 515 F.2d 1200, 1206 (5th Cir. 1975); Gen. Conf. Corp. of
     Seventh-Day Adventists v. McGill, 617 F.3d 402, 407 (6th Cir.),
     cert. denied, __ S. Ct. __, 2011 WL 1457562 (U.S. Apr. 18, 2011);
     Black v. Lane, 22 F.3d 1395, 1399 (7th Cir. 1994); Marshall v.
     Baggett, 616 F.3d 849, 852 (8th Cir. 2010); DIRECTV, Inc. v. Hoa
     Huynh, 503 F.3d 847, 854 (9th Cir. 2007), cert. denied, 129 S.
     Ct. 40 (2008); Bixler v. Foster, 596 F.3d 751, 762 (10th Cir.
     2010); Cotton v. Mass. Mut. Life Ins. Co., 402 F.3d 1267, 1278
     (11th Cir. 2005). According to these circuits, "[e]ntry of
     default judgment does not preclude a party from challenging the
     sufficiency of the complaint on appeal." Marshall, 616 F.3d at
     852; see id. (collecting cases).


                                       49
 1              We recognize that there is some uncertainty whether the

 2   City's claims were legally sufficient, in light of their possible

 3   preemption by the PLCAA.   But we need not decide whether the

 4   district court abused its discretion in entering a default

 5   judgment, because the defendants have forfeited this defense on

 6   appeal.   Mickalis Pawn did not address the PLCAA in its opening

 7   brief, and Adventure Outdoors raised it only by way of footnote.

 8   See Opening Br. of Adventure Outdoors at 32 n.12.    We ordinarily

 9   deem an argument to be forfeited where it has not been

10   "sufficiently argued in the briefs," Norton v. Sam's Club, 145

11   F.3d 114, 117 (2d Cir.), cert. denied, 525 U.S. 1001 (1998), such

12   as when it is only addressed in a footnote:

13              We do not consider an argument mentioned only
14              in a footnote to be adequately raised or
15              preserved for appellate review. The enormous
16              volume of briefs and arguments pressed on each
17              panel of this court at every sitting precludes
18              our scouring through footnotes in search of
19              some possibly meritorious point that counsel
20              did not consider of sufficient importance to
21              include as part of the argument.

22   United States v. Restrepo, 986 F.2d 1462, 1463 (2d Cir.), cert.

23   denied, 510 U.S. 843 (1993).

24              To be sure, the doctrine of forfeiture is prudential

25   and may be disregarded in our discretion.    See In re Nortel

26   Networks Corp. Sec. Litig., 539 F.3d 129, 133 (2d Cir. 2008).       We

27   ourselves asked the parties for supplemental submissions

28   concerning the applicability of the PLCAA.    But we do not think



                                     50
 1   that our doing so constituted a decision by the Court on any

 2   issue in the case.   We must be free to seek additional briefing

 3   on this issue without thereby conceding that forfeiture is

 4   inappropriate.   Having reviewed the submissions, we conclude that

 5   the unusual action by the Court of ignoring the forfeiture is

 6   unwarranted here.

 7             We have considered the remainder of defendants'

 8   arguments concerning the City's purported failure to plead a

 9   cause of action sufficient to support entry of default judgment,

10   and we conclude that those arguments are without merit.

11             III.   Voidness for Lack of Personal Jurisdiction

12             The defendants contend that even if the district court

13   did not commit any procedural error in its entry of default

14   judgment during the Rule 55(b)(2) proceedings, the default

15   judgment is nonetheless "void" because the district court lacked

16   personal jurisdiction ab initio.     The defendants assert that both

17   a correct application of the New York long-arm statute, C.P.L.R.

18   § 302(a)(3)(ii), and principles of constitutional due process

19   under the Fifth and Fourteenth Amendments require us to hold that

20   personal jurisdiction was absent here, even as a prima facie

21   matter, and that the district court's repeated determinations to

22   the contrary were in error.   Because we conclude that the

23   defendants forfeited their jurisdictional defense, and therefore




                                     51
 1   the district court's assertion of personal jurisdiction over them

 2   was proper, we reject the defendants' voidness argument.

 3   A.   Governing Law

 4              A default judgment is "void" if it is rendered by a

 5   court that lacks jurisdiction over the parties.    See "R" Best

 6   Produce, 540 F.3d at 123 (citing In re Texlon Corp., 596 F.2d

 7   1092, 1099 (2d Cir. 1979)); Covington Indus., Inc. v. Resintex

 8   A.G., 629 F.2d 730, 732 (2d Cir. 1980).
 9              Had the defendants asserted their voidness argument

10   before the district court in the first instance, they might have

11   done so pursuant to Rule 60(b)(4).   That rule provides:   "On

12   motion and just terms, the court may relieve a party . . . from a

13   final judgment . . . [if] the judgment is void."   Fed. R. Civ.

14   60(b)(4); see "R" Best Produce, 540 F.3d at 122-23 (explaining

15   that a defendant seeking to challenge a default judgment for lack

16   of personal jurisdiction may proceed under Rule 60(b)(4)).   We

17   therefore find it appropriate to consider our precedent governing

18   Rule 60(b)(4) motions.

19              "A judgment is void under Rule 60(b)(4) of the Federal

20   Rules of Civil Procedure . . . 'if the court that rendered it

21   lacked jurisdiction of the subject matter, or of the parties, or

22   if it acted in a manner inconsistent with due process of law.'"

23   Grace, 443 F.3d at 193 (quoting In re Texlon Corp., 596 F.2d at

24   1099).   "'Whereas we generally review motions pursuant to the




                                     52
 1   provisions of Rule 60(b) for abuse of discretion, we review de

 2   novo a district court's denial of a Rule 60(b)(4) motion.'"

 3   Burda Media, Inc. v. Viertel, 417 F.3d 292, 298 (2d Cir. 2005)

 4   (quoting State St. Bank & Trust Co., 374 F.3d at 178).     That is

 5   because, if the underlying judgment is void for lack of

 6   jurisdiction, "it is a per se abuse of discretion for a district

 7   court to deny a movant's motion to vacate the judgment under Rule

 8   60(b)(4)."    Id. (internal quotation marks omitted); accord

 9   Spamhaus Project, 500 F.3d at 598.     "'[T]he judgment is either

10   void or it is not.'"    Cent. Vt. Pub. Serv. Corp. v. Herbert, 341

11   F.3d 186, 189 (2d Cir. 2003) (quoting Recreational Props., Inc.

12   v. Sw. Mortg. Serv. Corp., 804 F.2d 311, 314 (5th Cir. 1986)).

13   B.   Analysis

14                The procedural history of this case is dispositive of

15   our voidness analysis.     The district court may have erred in its

16   determination that the City had made a prima facie showing of

17   personal jurisdiction over each of the defendants, for the
18   reasons discussed in Judge Wesley's concurring opinion.       But we

19   have already concluded that by appearing, litigating, and then

20   intentionally withdrawing from the proceedings, the defendants

21   forfeited their jurisdictional defense.    As a result, the

22   defendants submitted to the jurisdiction of the district court.

23   The default judgment that the court rendered was thus supported

24   by personal jurisdiction and is not void.




                                       53
 1                The defendants appear to assume that a default judgment

 2   is void for lack of personal jurisdiction even where a

 3   defendant's litigation tactics before the district court were

 4   inconsistent with the preservation of its jurisdictional defense.

 5   The defendants also appear to rely on the well-established

 6   principle that a defendant who does not answer a complaint in the

 7   first instance, and later suffers a default judgment to be

 8   entered against it, may subsequently challenge the default

 9   judgment as void for lack of personal jurisdiction.

10                The defendants overlook the critical distinction

11   between defendants who "appear" in court -- even if only to

12   challenge the court's jurisdiction -- and those who do not.     See

13   Sinoying Logistics, 619 F.3d at 213.     A non-appearing defendant

14   does not, by defaulting, forfeit its right to challenge any

15   ensuing default judgment for lack of personal jurisdiction.     "A

16   defendant is always free to ignore the judicial proceedings, risk

17   a default judgment, and then challenge that judgment on

18   jurisdictional grounds in a collateral proceeding."     Ins. Corp.

19   of Ireland, 456 U.S. at 706; see also "R" Best Produce, 540 F.3d

20   at 123; Norex Petroleum Ltd. v. Access Indus., Inc., 416 F.3d

21   146, 160 (2d Cir. 2005), cert. denied, 547 U.S. 1175 (2006);

22   Transaero, 162 F.3d at 729; Restatement (Second) of Judgments §

23   65 cmt. b.    In such a case, "voidness of a judgment for lack of




                                       54
 1   personal jurisdiction can be asserted on a collateral challenge"

 2   pursuant to Rule 60(b)(4).   "R" Best Produce, 540 F.3d at 123.

 3              But "when a defendant appears and challenges

 4   jurisdiction," we interpret that to constitute "it[s] agree[ment]

 5   to be bound by the court's determination on the jurisdictional

 6   issue."   Transaero, 162 F.3d at 729; see Ins. Corp. of Ireland,

 7   456 U.S. at 706 ("By submitting to the jurisdiction of the court

 8   for the limited purpose of challenging jurisdiction, the

 9   defendant agrees to abide by that court's determination on the

10   issue of jurisdiction."); cf. SEC v. Ross, 504 F.3d 1130, 1150

11   (9th Cir. 2007) (defendant-intervener does not, through Rule

12   24(a) intervention, consent to personal jurisdiction, but does

13   "consent[] to have the district court determine all issues in the

14   case, including issues of jurisdiction").   Although an appearing

15   defendant may, if it disagrees with the district court's

16   threshold ruling on personal jurisdiction, seek reversal of that

17   ruling on appeal, the defendant must properly preserve its

18   defense for appellate review.

19             Both Adventure Outdoors and Mickalis Pawn were

20   "appearing" defendants.   Both retained counsel who filed notices

21   of appearance on their behalf.   Both challenged the City's

22   pleadings with two rounds of Rule 12(b) motions.   Adventure

23   Outdoors continued to litigate the case through summary judgment;

24   Mickalis Pawn, though it withdrew prior to the close of

25   discovery, nonetheless "appeared [and] defended vigorously" over


                                      55
 1   the course of "about two years of active litigation."   Opening

 2   Br. of Mickalis Pawn at 4.   By submitting to the jurisdiction of

 3   the district court to decide the question of personal

 4   jurisdiction -- but then withdrawing from the proceedings, rather

 5   than litigating the case to final judgment -- the defendants

 6   failed to preserve their jurisdictional defense for review on

 7   appeal.   And because they failed to preserve that defense, they

 8   acquiesced to the jurisdiction of the district court, and the

 9   resulting judgment of that court is not void.24

10              We recognize that even where a defense has been

11   forfeited, appellate review is not necessarily foreclosed.

12   "[T]his Court has discretion to decide the merits of a forfeited

13   claim or defense where the issue is purely legal and there is no


          24
            Some of the parties' submissions on appeal assume that
     our review of the defendants' challenge to the default judgment
     is governed by a three-factor balancing test. To be sure,
     district and appellate courts considering whether to grant relief
     from a default judgment under Rule 60(b) ordinarily consider
     three criteria: "'(1) whether the default was willful, (2)
     whether the defendant demonstrates the existence of a meritorious
     defense, and (3) whether, and to what extent, vacating the
     default will cause the nondefaulting party prejudice.'" Green,
     420 F.3d at 108 (quoting State St. Bank & Trust Co., 374 F.3d at
     166-67). But that framework assumes that the defendant in
     question seeks to be restored to its pre-default position,
     thereby permitting the resolution of the dispute on its merits.
     Here, by contrast, the defendants seek not to re-open this case
     for further litigation; rather, they urge that this lawsuit be
     dismissed altogether. See Opening Br. of Mickalis Pawn at 30
     (requesting that "the matter [be] dismissed"); Opening Br. of
     Adventure Outdoors at 61 (urging that this case be remanded "with
     instructions to dismiss"). Moreover, the "voidness" vel non of a
     judgment is not a matter subject to discretion. We conclude that
     these considerations render inapposite the standard three-factor
     discretionary test in this instance.


                                     56
 1   need for additional fact-finding or where consideration of this

 2   issue is necessary to avoid manifest injustice."   Patterson v.

 3   Balsamico, 440 F.3d 104, 112 (2d Cir. 2006) (internal quotation

 4   marks omitted).   However, we will not excuse the defendants'

 5   forfeiture in this instance, where there is every indication that

 6   the defendants' default was not the product of inadvertence, but

 7   a deliberate tactic instead.   We will not allow the defendants to

 8   "escape the consequences" of their strategic decisions simply

 9   because they have proven to be disadvantageous to them.    Spamhaus

10   Project, 500 F.3d at 600; cf. LNC Invs., Inc. v. Nat'l

11   Westminster Bank, 308 F.3d 169, 176 n.8 (2d Cir. 2002) (noting

12   that "[i]t would be particularly unusual" to "address an argument

13   despite its abandonment on appeal . . . . where the abandonment

14   appears, as it does here, to be a strategic choice rather than an

15   inadvertent error"), cert. denied, 538 U.S. 1033 (2003).

16             Our decision not to excuse the forfeiture is also

17   informed by our respect for the limits of our own jurisdiction --

18   limits that the defendants sought to evade through their

19   strategic decisions to default.

20             The core of our appellate jurisdiction is to review

21   "final decisions" of the district courts.   See 28 U.S.C. § 1291.

22   With limited exceptions, see generally Myers v. Hertz Corp., 624

23   F.3d 537, 552 (2d Cir. 2010), only final orders and judgments may

24   be appealed, see Cruz v. Ridge, 383 F.3d 62, 64 (2d Cir. 2004)



                                       57
 1   (per curiam).    "[T]he general rule [is] that a party is entitled

 2   to a single appeal, to be deferred until final judgment has been

 3   entered."     Mohawk Indus., Inc. v. Carpenter, 130 S. Ct. 599, 605

 4   (2009) (internal quotation marks omitted).

 5               In including a requirement of finality in defining the

 6   scope of our jurisdiction under 28 U.S.C. § 1291, Congress

 7   "'express[ed] a preference that some erroneous trial court

 8   rulings go uncorrected until the appeal of a final judgment,

 9   rather than having litigation punctuated by piecemeal appellate

10   review of trial court decisions which do not terminate the

11   litigation.'"    In re World Trade Ctr. Disaster Site Litig., 521

12   F.3d 169, 178 (2d Cir. 2008) (quoting Richardson-Merrell, Inc. v.

13   Koller, 472 U.S. 424, 430 (1985)).     Denials of dispositive

14   motions are therefore not ordinarily appealable on an

15   interlocutory basis.    See, e.g., Napoli v. Town of New Windsor,

16   600 F.3d 168, 170 (2d Cir. 2010) (per curiam).

17               We cannot permit the defendants to short-circuit the

18   normal litigation process by withdrawing, inducing a default

19   judgment to be entered against them, and then obtaining de facto

20   interlocutory review over otherwise non-appealable decisions.      We

21   have observed, with respect to similar strategic conduct by

22   plaintiffs:

23               [I]f a litigant could refuse to proceed
24               whenever a trial judge ruled against him, wait
25               for the court to enter a dismissal for failure
26               to prosecute, and then obtain review of the


                                       58
 1             judge's interlocutory decision, the policy
 2             against piecemeal litigation and review would
 3             be severely weakened.        This procedural
 4             technique would in effect provide a means to
 5             avoid the finality rule embodied in 28 U.S.C.
 6             § 1291.

 7             Moreover, if a party who was disappointed by
 8             an interlocutory ruling could obtain an appeal
 9             of that ruling by simply refusing to prosecute
10             his or her lawsuit, adherence to the merger
11             rule[25] would reward that party for dilatory
12             and bad faith tactics. Such a result would
13             conflict with the purpose of a Rule 41(b)
14             dismissal for failure to prosecute, which is
15             to penalize dilatoriness and harassment of
16             defendants.

17   Shannon v. Gen. Elec. Co., 186 F.3d 186, 192 (2d Cir. 1999)

18   (brackets, ellipsis, citations, and internal quotation marks

19   omitted; footnote added); see also Rabbi Jacob Joseph Sch. v.

20   Province of Mendoza, 425 F.3d 207, 210-11 (2d Cir. 2005); Martens

21   v. Thomann, 273 F.3d 159, 183 (2d Cir. 2001).

22             The same concerns arise here.   To overlook the

23   defendants' forfeiture would be to "permit[] . . . an end-run

24   around the final judgment rule."26   Palmieri v. Defaria, 88 F.3d


          25
            The "merger rule" holds that "[w]hen a district court
     enters a final judgment in a case, interlocutory orders rendered
     in the case . . . merge with the judgment," thereby rendering
     them amenable to appellate review. Shannon, 186 F.3d at 192.
          26
            Mickalis Pawn's default also prejudiced the City's
     ability to obtain further discovery related to personal
     jurisdiction. Cf. Ins. Corp. of Ireland, 456 U.S. at 707-09; S.
     New Eng. Tel. Co. v. Global NAPs Inc., 624 F.3d 123, 146 (2d Cir.
     2010) (observing "that it does not violate due process for a
     district court to impose under Rule 37(b) an order subjecting a
     party to personal jurisdiction in that court as a sanction for
     the party's failure to comply with a discovery order seeking to
     establish facts relating to the court's personal jurisdiction


                                     59
 1   136, 140 (2d Cir. 1996).    But see Savin v. Ranier, 898 F.2d 304,

 2   307 (2d Cir. 1990) (reviewing, on appeal from default judgment,

 3   the merits of appearing defendant's jurisdictional defense, where

 4   plaintiff did not claim that defendant had forfeited that defense

 5   by defaulting).

 6                We also decline to overlook the defendants' forfeiture

 7   based on their assertion that they suffered grave financial

 8   hardship by being forced to defend a lawsuit in New York.     The

 9   defendants appear to contend that it would be unfair to expect

10   them to have waited until after trial to seek appellate review of

11   the district court's adverse interlocutory decisions concerning
12   personal jurisdiction.     Citing Gulf Coast Fans, Inc. v. Midwest

13   Elecs. Imps., Inc., 740 F.2d 1499 (11th Cir. 1984), they urge

14   that the district court's decision to delay final adjudication of

15   their jurisdictional defense until trial "put [them] in the

16   uncomfortable position of having to prepare for a full-blown

17   trial even if [they] might eventually prevail on the

18   jurisdictional claim," id. at 1511.

19             We are not without sympathy for these sentiments, nor

20   do we necessarily disagree with Judge Wesley's conclusion that

21   the district court erred in its jurisdictional analysis.    But the

22   Supreme Court has made clear that "the possibility that a ruling

23   may be erroneous and may impose additional litigation expense" is




     over it").


                                       60
 1   not a sufficient basis for affording appellate review over

 2   interlocutory decisions.   Richardson-Merrell, 472 U.S. at 436.

 3              IV.    The Injunctions

 4              We review the district court's issuance of a permanent

 5   injunction for abuse of discretion.    See Third Church of Christ,

 6   Scientist v. City of New York, 626 F.3d 667, 669 (2d Cir. 2010).

 7   A.   The Terms of the Injunctions

 8              Simultaneously with entry of a default judgment, the

 9   district court imposed separate, but substantively identical,

10   permanent injunctions to "abate the public nuisance" caused by

11   Adventure Outdoors and Mickalis Pawn.    Mickalis Pawn Inj., 2009

12   WL 792042, ¶ 1; Adventure Outdoors Inj., 2009 WL 792023, ¶ 1

13   (same).   The injunctions provide for the appointment of a special

14   master (the "Special Master") to implement, and monitor the

15   defendants' compliance with, certain remedial measures

16   contemplated by the injunctions.     Mickalis Pawn Inj., 2009 WL

17   792042, ¶ 2.

18              Paragraph 3 of each injunction provides, with respect

19   to the duties of the Special Master:

20              It will be the responsibility of the Special
21              Master to ensure, to the fullest extent
22              practicable, that from the effective date of
23              this [injunction] forward, firearms sales by
24              [the defendant] are made in full conformity
25              with applicable laws pertaining to firearms
26              and that [the defendant] adopts appropriate
27              prophylactic measures to prevent violation of
28              the firearms laws.



                                     61
 1   Id. ¶ 3.27    Paragraph 7 of each injunction mandates that

 2                [the defendant] shall adopt those practices
 3                that in the opinion of the Special Master
 4                serve to prevent in whole or in part[28] the
 5                illegal sale of firearms. [The defendant]
 6                shall also adopt those prophylactic practices
 7                that in the opinion of the Special Master will
 8                serve to prevent the movement of guns into the
 9                illegal market.

10   Id. ¶ 7 (footnote added).

11                The injunctions contemplate several ways by which the

12   defendants may become subject to penalties.     First, any

13   participation by the defendants in a "straw purchase" -- or any

14   sale "otherwise in violation of Federal, State, or local law or

15   regulation," as determined by the Special Master -- constitutes a

16   violation punishable by a fine that increases with each
17   successive violation.29    Id. ¶ 12.   The term "straw purchase" is

18   defined as including "[a] sale . . . made to an investigator

19   conducting a 'Simulated Straw Purchase,' which shall mean a

20   purchase in a form substantially as described in the Amended

21   Complaint filed in this action, for example, in paragraph 188."

          27
            The injunctions specify certain methods to be used in
     monitoring the defendants' compliance, including in-store
     observation, videotape surveillance, records monitoring, "random
     and repeated integrity testing," inventory inspections, and
     instructional training for the defendants' employees. Mickalis
     Pawn Inj., 2009 WL 792042, ¶ 4.
          28
            The phrase "in whole or in part" appears only in the
     Mickalis Pawn injunction. Compare Mickalis Pawn Inj., 2009 WL
     792042, ¶ 7, with Adventure Outdoors Inj., 2009 WL 792023, ¶ 7.
          29
            The injunctions require each defendant to post a $ 25,000
     bond with the district court; any monetary penalties imposed for
     violations of the injunctions would be drawn from this sum.
     Mickalis Pawn Inj., 2009 WL 792042, ¶¶ 11-12.


                                       62
 1   Id. ¶ 13(iii).     The injunctions also provide, more generally,

 2   that any other "[a]ction[] . . . by which [the defendant] seeks

 3   to evade any of the requirement[s]" of the injunction constitutes

 4   a violation.    Id. ¶ 8.   Finally, any failure by the defendants

 5   "to cooperate with the Special Master," as determined by the

 6   Special Master himself, constitutes a violation.    Id.

 7                If the defendants fully comply with the foregoing

 8   terms, each injunction terminates automatically after three

 9   years.   Id. ¶ 17.    Any violation of the injunction, however -- or

10   any "violation of an applicable firearms law or regulation"

11   certified to have occurred by the Special Master -- "will re-

12   commence the running of the three-year Compliance Period from the

13   date of the violation."    Id. ¶ 18.

14   B.   Governing Law
15                The defendants did not, by defaulting, forfeit the

16   right to challenge the lawfulness of the injunctions.     See

17   Finkel, 577 F.3d at 83 n.6; Brock, 786 F.2d at 65; see also

18   Spamhaus Project, 500 F.3d at 603-04 (vacating permanent

19   injunction imposed after default judgment as violative of Rule

20   65(d)); SEC v. Mgmt. Dynamics, Inc., 515 F.2d 801, 814 (2d Cir.

21   1975) (vacating permanent injunction imposed after default

22   judgment).

23                In appealing the injunctions entered against them, the

24   defendants principally argue that the injunctions are

25   unconstitutionally vague and that they violate the requirements


                                       63
 1   of Federal Rule of Civil Procedure 65(d).     We review de novo

 2   whether the injunctions comply with Rule 65(d).    See Garcia v.

 3   Yonkers Sch. Dist., 561 F.3d 97, 103 (2d Cir. 2009).

 4               Rule 65(d) provides that "[e]very order granting an

 5   injunction . . . must: (A) state the reasons why it issued; (B)

 6   state its terms specifically; and (C) describe in reasonable

 7   detail -- and not by referring to the complaint or other document

 8   -- the act or acts restrained or required."     Fed. R. Civ. P.

 9   65(d)(1).    We have interpreted Rule 65(d) as requiring that "an

10   injunction . . . be specific and definite enough to apprise those
11   within its scope of the conduct that is being proscribed."    S.C.
12   Johnson & Son, Inc. v. Clorox Co., 241 F.3d 232, 240-41 (2d Cir.

13   2001) (internal quotation marks omitted).    The Supreme Court has

14   explained:

15               [T]he specificity provisions of Rule 65(d) are
16               no mere technical requirements. The Rule was
17               designed to prevent uncertainty and confusion
18               on the part of those faced with injunctive
19               orders, and to avoid the possible founding of
20               a contempt citation on a decree too vague to
21               be understood. Since an injunctive order
22               prohibits conduct under threat of judicial
23               punishment, basic fairness requires that those
24               enjoined receive explicit notice of precisely
25               what conduct is outlawed.

26   Schmidt v. Lessard, 414 U.S. 473, 476 (1974) (footnotes and

27   citations omitted).    Rule 65(d) is satisfied "only if the

28   enjoined party can ascertain from the four corners of the order

29   precisely what acts are forbidden or required."    Petrello v.

30   White, 533 F.3d 110, 114 (2d Cir. 2008) (internal quotation marks

31   omitted).



                                      64
 1                Rule 65(d) is said to serve two general purposes: "to

 2   prevent uncertainty and confusion on the part of those to whom

 3   the injunction is directed," and to ensure "that the appellate

 4   court knows precisely what it is reviewing."    S.C. Johnson & Son,

 5   241 F.3d at 241 (internal quotation marks omitted); see also

 6   Schmidt, 414 U.S. at 476-77; Lau v. Meddaugh, 229 F.3d 121, 123

 7   (2d Cir. 2000) (per curiam), cert. denied, 534 U.S. 833 (2001).

 8   We have cautioned that injunctions that do not satisfy the

 9   requirements of Rule 65(d) "will not withstand appellate
10   scrutiny."    Corning Inc. v. PicVue Elecs., Ltd., 365 F.3d 156,
11   158 (2d Cir. 2004) (per curiam) (internal quotation marks

12   omitted).

13               In addition to complying with Rule 65(d)'s specificity

14   requirements, district courts must take care to ensure that

15   injunctive relief is not overbroad.    Although a district court

16   has "a wide range of discretion in framing an injunction in terms

17   it deems reasonable to prevent wrongful conduct," it is

18   nonetheless "the essence of equity jurisdiction" that a court is

19   only empowered "to grant relief no broader than necessary to cure
20   the effects of the harm caused by the violation."    Forschner
21   Grp., Inc. v. Arrow Trading Co., 124 F.3d 402, 406 (2d Cir. 1997)

22   (internal quotation marks omitted).    We have instructed that

23   injunctive relief should be "narrowly tailored to fit specific

24   legal violations," Peregrine Myanmar Ltd. v. Segal, 89 F.3d 41,

25   50 (2d Cir. 1996) (internal quotation marks omitted), and that

26   the court must "mould each decree to the necessities of the



                                       65
 1   particular case," Forschner Grp., 124 F.3d at 406 (internal

 2   quotation marks omitted); see also Patsy's Brand, Inc. v. I.O.B.

 3   Realty, Inc., 317 F.3d 209, 220 (2d Cir. 2003); Brooks v.

 4   Giuliani, 84 F.3d 1454, 1467 (2d Cir.), cert. denied, 519 U.S.

 5   992 (1996); Waldman Publ'g Corp. v. Landoll, Inc., 43 F.3d 775,

 6   785 (2d Cir. 1994).   An injunction may not "enjoin 'all possible

 7   breaches of the law.'"   John B. Hull, Inc. v. Waterbury Petroleum

 8   Prods., Inc., 588 F.2d 24, 30 (2d Cir. 1978) (quoting Hartford-

 9   Empire Co. v. United States, 323 U.S. 386, 410 (1945)).
10   C.   Analysis

11             We agree with the defendants that several portions of

12   the injunctions are insufficiently specific or overbroad, or

13   otherwise violate Rule 65(d).

14             First, the injunctions impose on defendants an

15   obligation to act "in full conformity with applicable laws

16   pertaining to firearms," and to "adopt[] appropriate prophylactic

17   measures to prevent violation" of those laws, without specifying

18   which laws are "applicable" or identifying the ways in which the

19   defendants must alter their behavior to comply with those laws.

20   Mickalis Pawn Inj., 2009 WL 792042, ¶ 3; see also id. ¶ 17

21   (requiring "full compliance" with "applicable firearms laws and

22   regulations").   A directive to undertake "appropriate" measures

23   does not "describe in reasonable detail . . . the act or acts

24   restrained or required," Fed. R. Civ. P. 65(d)(1), nor does it

25   provide "explicit notice of precisely what conduct is outlawed,"

26   Schmidt, 414 U.S. at 476.   Indeed, we have said that to comply



                                     66
 1   with Rule 65(d), "an injunction must be more specific than a

 2   simple command that the defendant obey the law."    Peregrine

 3   Myanmar Ltd., 89 F.3d at 51.

 4             Second, it appears that the injunctions, fairly read,

 5   prohibit not only "straw purchases" -- the sole kind of illegal

 6   practice identified in the City's amended complaint -- but other,

 7   unidentified types of sales practices as well.     An injunction is

 8   overbroad when it seeks to restrain the defendants from engaging

 9   in legal conduct, or from engaging in illegal conduct that was
10   not fairly the subject of litigation.   See Lineback v. Spurlino
11   Materials, LLC, 546 F.3d 491, 504 (7th Cir. 2008) (noting that an

12   injunction is overbroad if it results in a "likelihood of

13   unwarranted contempt proceedings for acts unlike or unrelated to

14   those originally judged unlawful" (internal quotation marks

15   omitted)); Spamhaus Project, 500 F.3d at 604 (vacating injunction

16   that "fail[ed] to comply with the rule requiring courts to tailor

17   injunctive relief to the scope of the violation found" (internal

18   quotation marks omitted)).

19             The injunctions are also problematic because of the

20   extent to which they vest the Special Master with discretion to

21   determine the terms of the injunctions themselves.    Paragraph 7

22   of each injunction requires the defendants to "adopt those
23   practices that in the opinion of the Special Master serve to
24   prevent in whole or in part the illegal sale of firearms" and

25   "adopt those prophylactic practices that in the opinion of the

26   Special Master will serve to prevent the movement of guns into



                                    67
 1   the illegal market."   Mickalis Pawn Inj., 2009 WL 792042, ¶ 7

 2   (emphases added).   A defendant's "failure to cooperate with the

 3   Special Master" constitutes a violation.    Id. ¶ 8.   Moreover, the

 4   injunctions provide that any dispute as to whether a violation

 5   has occurred, or any disagreements concerning decisions made by

 6   the Special Master, are to be resolved by the Special Master

 7   himself in the first instance.   Id. ¶ 9.    Although a party may

 8   appeal "any decision or practice of the Special Master" to the

 9   district court, the Special Master's decisions are made subject

10   only to "arbitrary and capricious" review.    Id.   The injunctions

11   further specify that if a defendant is unsuccessful in

12   challenging the Special Master's decision, the defendant "shall

13   pay the Special Master's costs and attorneys' fees."    Id. ¶ 10.

14             "The power of the federal courts to appoint special

15   masters to monitor compliance with their remedial orders is well

16   established," United States v. Yonkers Bd. of Educ., 29 F.3d 40,

17   44 (2d Cir. 1994), cert. denied, 515 U.S. 1157 (1995), and a

18   special master possesses some power to "determine the scope of

19   his own authority," Bridgeport Guardians, Inc. v. Delmonte, 537

20   F.3d 214, 219 (2d Cir. 2008).    But the Supreme Court has also

21   warned that "[t]he use of masters is to aid judges in the

22   performance of specific judicial duties, as they may arise in the

23   progress of a cause, and not to displace the court."    La Buy v.

24   Howes Leather Co., 352 U.S. 249, 256 (1957) (citation and

25   internal quotation marks omitted).    Serious constitutional


                                      68
 1   questions arise when a master is delegated broad power to

 2   determine the content of an injunction as well as effectively

 3   wield the court's powers of contempt.    "If the master makes

 4   significant decisions without careful review by the trial judge,

 5   judicial authority is effectively delegated to an official who

 6   has not been appointed pursuant to article III of the

 7   Constitution."   Meeropol v. Meese, 790 F.2d 942, 961 (D.C. Cir.

 8   1986).

 9             Constitutional questions aside, we conclude that, at

10   the very least, the injunctions' sweeping delegations of power to

11   the Special Master violate Rule 65(d).   "A court is required to

12   frame its orders so that those who must obey them will know what

13   the court intends to forbid."   Diapulse Corp. of Am. v. Carba,

14   Ltd., 626 F.2d 1108, 1111 (2d Cir. 1980) (emphasis added); see

15   also United States v. Microsoft Corp., 147 F.3d 935, 954 (D.C.

16   Cir. 1998) (concluding that injunction was improper insofar as

17   "the parties' rights must be determined, not merely enforced," by

18   special master).

19             Finally, Paragraph 13(iii) of each injunction prohibits

20   certain conduct by reference to the amended complaint.   This

21   drafting technique, however efficient, is expressly prohibited by

22   Rule 65(d), which provides that "[e]very order granting an

23   injunction" must "describe in reasonable detail -- and not by
24   referring to the complaint or other document -- the act or acts



                                     69
 1   restrained or required."   Fed. R. Civ. P. 65(d)(1)(C) (emphasis

 2   added).

 3               The City defends the injunctions principally on the

 4   basis that "[t]wenty other firearms dealers have entered into

 5   negotiated settlement agreements with the City under virtually

 6   the same terms."   Opening Br. of City (Adventure Outdoors'

 7   Appeal) at 58; see also Opening Br. of City (Mickalis Pawn's

 8   Appeal) at 57.   But there is an obvious difference between

 9   settlement agreements, which are voluntary contracts freely

10   negotiated between parties, and injunctions, which are unilateral

11   directives backed by a court's powers of contempt.   Parties may

12   consent to settlement terms that would otherwise, if imposed

13   unilaterally, violate Rule 65(d) or a defendant's due process

14   rights.   See, e.g., SEC v. First Jersey Sec., Inc., 101 F.3d

15   1450, 1479 (2d Cir. 1996), cert. denied, 522 U.S. 812 (1997);

16   Stauble v. Warrob, Inc., 977 F.2d 690, 698 (1st Cir. 1992).     The

17   fact that other defendants were willing to settle voluntarily

18   with the City on essentially the same terms as those included in

19   the injunctions does not tend to prove, let alone itself

20   establish, that the injunctions comply with the Federal Rules and

21   comport with due process.30


          30
            We reject, however, the defendants' argument that the
     injunctions violate principles of state sovereignty, comity, and
     federalism. To be sure, "[t]he court's discretion to frame
     equitable relief is limited by considerations of federalism,"
     Knox v. Salinas, 193 F.3d 123, 129-30 (2d Cir. 1999) (internal


                                     70
1             We have carefully considered the other arguments made

2   by the parties concerning the injunctions and find them to be

3   without merit.

4                              CONCLUSION

5             For the foregoing reasons, we affirm the entry of

6   default judgment against Mickalis Pawn and Adventure Outdoors,

7   but vacate the injunctions issued against them and remand the

8   matter to the district court for further proceedings.




    quotation marks omitted), and "[a] State cannot punish a
    defendant for conduct that may have been lawful where it
    occurred," State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S.
    408, 421 (2003). However, it is also true that "[t]he federal
    court sitting as a court of equity having personal jurisdiction
    over a party has power to enjoin him from committing acts
    elsewhere." Bano v. Union Carbide Corp., 361 F.3d 696, 716 (2d
    Cir. 2004) (internal quotation marks omitted); see also Steele v.
    Bulova Watch Co., 344 U.S. 280, 289 (1952) ("[T]he District Court
    in exercising its equity powers may command persons properly
    before it to cease or perform acts outside its territorial
    jurisdiction."); New Jersey v. City of New York, 283 U.S. 473,
    482 (1931). Here, the defendants have identified no authority
    for the proposition that a court in New York may not restrain a
    defendant in Georgia or South Carolina from violating U.S.
    federal firearms laws, which are of course binding in both
    jurisdictions. Nor have the defendants demonstrated that Georgia
    and South Carolina law is materially different than New York law
    in relevant respects.


                                   71
 1   WESLEY, Circuit Judge, concurring:

 2       I join the majority’s opinion in full.     I write

 3   separately to express concerns with the jurisdictional

 4   analysis conducted by the court below.    While I fully agree

 5   with the majority’s conclusion that this affirmative defense

 6   was waived, I am concerned that others might embrace the

 7   district court’s jurisdictional analysis.     In my view, that

 8   would be a mistake because the district court’s

 9   jurisdictional analysis has no basis in New York law.

10       The claims brought by the City of New York against

11   defendants Mickalis Pawn Shop, LLC and Adventure Outdoors,

12   Inc. were pled as torts under New York law.     See N.Y. Penal

13   Law §§ 240.45, 400.05(1).    The district court’s subject

14   matter jurisdiction was grounded in 28 U.S.C. § 1332(a)(1).

15   Therefore, the court was permitted to “exercise personal

16   jurisdiction to the same extent as the courts of general

17   jurisdiction” in the State of New York.     Bank Brussels

18   Lambert v. Fiddler Gonzalez & Rodriguez, 305 F.3d 120, 124

19   (2d Cir. 2002).    And yet, the district court devised a test

20   that has no basis in the New York statute governing long-arm

21   jurisdiction.1    See N.Y. C.P.L.R. § 302(a)(3)(ii).   In my


         1
           This appeal concerns only two defendants among many
     implicated by a “series of civil cases brought by the City
 1   view, the court had no authority to apply a novel

 2   jurisdictional test that created an unwarranted expansion of

 3   the meaning of personal jurisdiction under New York law.

 4       The district court termed this case one of “first

 5   impression” and created, out of whole cloth, a seven-factor

 6   test for determining whether personal jurisdiction exists

 7   over “retail gun establishments.”    City of New York v. A-1

 8   Jewelry & Pawn, Inc., 501 F. Supp. 2d 369, 374, 424

 9   (E.D.N.Y. 2007) (Weinstein, J.).    This case, however, is not

10   one of first impression.   In fact, this particular federal

11   judge has decided a number of other cases involving the

12   firearms industry in which he has declined to apply the

13   long-arm statute as interpreted by the New York Court of

14   Appeals.   See, e.g., Johnson v. Bryco Arms, 304 F. Supp. 2d

15   383, 397 (E.D.N.Y. 2004) (Weinstein, J.); N.A.A.C.P. v. A.A.

16   Arms, Inc., Nos. 99 Civ. 3999, 99 Civ. 7037, 2003 WL

17   21242939, at *4 (E.D.N.Y. Apr. 1, 2003) (Weinstein, J.).

18   And, in any event, federally licensed out-of-state firearms

19   distributors, such as defendants in this case, are governed



     of New York” before this district court. City of N.Y. v.
     Bob Moates’ Sport Shop, Inc., 253 F.R.D. 237, 238 (E.D.N.Y.
     2008) (Weinstein, J.).
                                  -2-
 1   by the same long-arm statute as are all other out-of-state

 2   defendants alleged to have committed a tortious act outside

 3   of New York that causes injury in the State of New York.

 4       On August 8, 2006, following limited discovery,

 5   defendants moved to dismiss the complaint against them for

 6   lack of personal jurisdiction.     By an order dated August 15,

 7   2007, the district court denied defendants’ motion to

 8   dismiss.   A-1 Jewelry & Pawn, 501 F. Supp. 2d at 374.    In

 9   declining to grant defendants’ motion to dismiss, the

10   district court applied a test to assess whether defendants

11   were properly subject to personal jurisdiction not

12   previously employed by a New York court.     The district judge

13   appears to be of the view that there should be no limits on

14   the exercise of personal jurisdiction over a defendant

15   “except those of reasonable forum (venue) and a rational

16   state interest in the litigation.”2    Jack B. Weinstein, Mass


          2
           Judge Weinstein has acknowledged in his academic
     writing that “New York’s long-arm statute, unlike that of
     most states, has not been interpreted as going to the
     constitutional limit[].” Jack B. Weinstein, Mass Tort
     Jurisdiction and Choice of Law in a Multinational World
     Communicating by Extraterrestrial Satellites, 37 Willamette
     L. Rev. 145, 148 (2001). Judge Weinstein is, however,
     critical of New York’s long-arm statute because, in his
     view, it “inhibit[s] the expansion of personal jurisdiction
     to its full potential” and its limitations “should be
                                  -3-
 1   Tort Jurisdiction and Choice of Law in a Multinational World

 2   Communicating by Extraterrestrial Satellites, 37 Willamette

 3   L. Rev. 145, 146 (2001).       Specifically, the district court

 4   concluded that defendants’ “knowing cumulative illegal

 5   parallel conduct outside New York causing widespread injury

 6   in New York made them amenable to suit in” New York.       501 F.

 7   Supp. 2d at 374.     The court asserted that “the extent of the

 8   combined harm” could provide a basis for the exercise of

 9   personal jurisdiction over each individual defendant, even

10   if the allegedly illegal out-of-state conduct of a single

11   defendant would not suffice to establish jurisdiction.       Id.

12   at 422.     The district court took the view that “[w]here a

13   defendant deals in [] inherently dangerous products, a

14   lesser showing than is ordinarily required will support

15   jurisdiction.”     Id. at 420 (internal quotation marks

16   omitted).

17       Prior to defendants’ default, the City filed an amended

18   complaint, which sought injunctive relief against defendants

19   for the creation of a public nuisance.       See N.Y. Penal Law

20   §§ 400.05(1), 240.45.     Defendants then made a renewed motion



     eliminated.”     Id. at 149.
                                      -4-
 1   to dismiss in which they reasserted their objection to the

 2   exercise of personal jurisdiction to no avail.3   City of

 3   N.Y. v. A-1 Jewelry & Pawn, Inc., 247 F.R.D. 296, 338

 4   (E.D.N.Y. 2007).    In denying defendants’ renewed motion to

 5   dismiss, the district court again relied, in part, on the

 6   allegedly “knowing parallel conduct” of the defendants.     Id.

 7   at 336.    The district court implied that, perhaps, a

 8   different standard for assessing personal jurisdiction was

 9   warranted because jurisdiction was “sought . . . not simply

10   to vindicate an individual right or to resolve an individual

11   commercial dispute” but rather was “sought to protect the

12   safety of an entire community.”     Id. at 339.

13       While the district judge below may take issue with the

14   limitations placed on New York’s long-arm statute as an

15   academic matter, these limitations “were deliberately

16   inserted to keep the provision well within constitutional

17   bounds,” Ingraham v. Carroll, 90 N.Y.2d 592, 597 (1997), and

18   a federal district court is not free to read them out of the

19   statute.    In addition, the exercise of personal jurisdiction


          3
           Defendant Adventure Outdoors also filed an
     unsuccessful motion for summary judgment based in part on
     its contention that it was not properly subject to the
     district court’s exercise of personal jurisdiction.
                                   -5-
 1   over these defendants does not, in my view, “comport[] with

 2   the requirements of due process.”   Met. Life Ins. Co. v.

 3   Robertson-Ceco Corp., 84 F.3d 560, 567 (2d Cir. 1996)

 4   (citing Savin v. Ranier, 898 F.2d 304, 306 (2d Cir. 1990)).

 5       In evaluating whether personal jurisdiction exists as

 6   to a particular defendant the court must examine the

 7   “quality and nature” of the defendant’s contacts with the

 8   forum.   Best Van Lines, Inc. v. Walker, 490 F.3d 239, 242-43

 9   (2d Cir. 2007).   Here, the defendants’ connection to the

10   forum was tenuous at best.4   Defendants did not “transact[]

11   any business within the state or contract[] . . . to supply

12   goods . . . in the state,” N.Y. C.P.L.R. § 302(a)(1), and

13   defendants did not commit any tortious act in New York

14   State, id. § 302(a)(2).   More to the point, nothing in the

15   record supports the conclusion that they conducted or

16   solicited business in New York or that they “engage[d] in

17   any other persistent course of conduct, or derive[d]

18   substantial revenue from goods used . . . in the state.”

19   Id. § 302(a)(3)(i).


          4
           As characterized by the City, defendant Adventure
     Outdoors is a “storefront establishment in Smyrna, Georgia”
     and defendant Mickalis Pawn Shop is “a store in Summerville,
     South Carolina.”
                                   -6-
 1       There is nothing in the record that supports the

 2   conclusion that defendants knew or should have known that

 3   sales of guns in their home states were having consequences

 4   in New York.   Id. § 302(a)(3)(ii).    Moreover, section

 5   302(a)(3)(ii) provides that in order to form the basis for

 6   the exercise of personal jurisdiction over a non-

 7   domiciliary, the defendant must know (or be deemed to know)

 8   of the consequences of its conduct and “derive[] substantial

 9   revenue from interstate or international commerce.”        Id.

10   Here, even if we were to impute knowledge to the defendants,

11   the record does not reveal anything approaching “substantial

12   revenue” that could be said to have resulted from guns that

13   made their way to New York.     The conjunctive requirement

14   present in section 302(a)(3)(ii) could be understood to be

15   constitutionally mandated.     As the Supreme Court has

16   explained, “foreseeability alone has never been a sufficient

17   benchmark for personal jurisdiction.”     World-Wide Volkswagen

18   Corp. v. Woodson, 444 U.S. 286, 295 (1980) (internal

19   quotation marks omitted).     To the contrary, a “defendant’s

20   awareness that the stream of commerce may or will sweep the

21   product into the forum State does not convert the mere act

22   of placing the product into the stream into an act

                                    -7-
 1   purposefully directed toward the forum State.”    Asahi Metal

 2   Indus. v. California, 480 U.S. 102, 112 (1987).

 3       The district court concluded that when a defendant

 4   deals in inherently dangerous products a lesser showing is

 5   required in order to establish personal jurisdiction.

 6   However, neither the New York Court of Appeals nor this

 7   Court have ever so held.5   If the City “could satisfy the

 8   requirements of [section 302(a)(3)(ii)] on so attenuated a

 9   consequence of defendant[s’] act[s] as has been accepted by

10   the court[] below, it would burden unfairly non-residents

11   whose connection with the state is remote.”   Fantis Foods,

12   Inc. v. Standard Importing Co., 49 N.Y.2d 317, 327 (1980).

13       A particularly troubling aspect of the jurisdictional

14   analysis conducted below is the reliance on what the

15   district judge termed the defendants’ “cumulative parallel

16   conduct” as a basis for establishing personal jurisdiction.


          5
           As a substantive matter, the New York Court of
     Appeals has rejected the argument that a “general duty of
     care arises out of [a] gun manufacturer[’s] ability to
     reduce the risk of illegal gun trafficking through control
     of the marketing and distribution of [its] products.”
     Hamilton v. Beretta U.S.A. Corp., 96 N.Y.2d 222, 235 (2001).
     The hazardous materials doctrine, which is based on a
     products liability theory, id., does not support the
     loosening of the requirements for establishing personal
     jurisdiction.
                                   -8-
 1   According to the district court’s theory, although the “out-

 2   of-state activities of a single defendant alone may not

 3   suffice to establish jurisdiction,” because of “knowing

 4   parallel conduct, the extent of the combined harm may

 5   provide a basis for jurisdiction over each one.”     501 F.

 6   Supp. 2d at 422.     The New York Court of Appeals has never

 7   adopted a theory pursuant to which combined or parallel

 8   conduct may be relied upon to establish a basis for the

 9   exercise of personal jurisdiction over a defendant when

10   jurisdiction does not otherwise exist.

11       The New York Court of Appeals has instructed that “[t]o

12   determine whether a non-domiciliary may be sued in New York,

13   [the court must] first determine whether [New York’s] long-

14   arm statute . . . confers jurisdiction over [the non-

15   domiciliary] in light of its contacts with [New York] State.

16   If the defendant’s relationship with New York falls within

17   the terms of [section 302(a)(3)(ii)], [the court must then]

18   determine whether the exercise of jurisdiction comports with

19   due process.”     LaMarca v. Pak-Mor Mfg. Co., 95 N.Y.2d 210,

20   214 (2000).     Rather than follow the instructions of the New

21   York Court of Appeals, the district court created a seven-

22   factor test for analyzing whether long-arm jurisdiction

                                    -9-
1   exists over “retail gun establishments.”6   501 F. Supp. 2d

2   at 424.

3       The district court determined that an “inflexible

4   application of a traditional jurisdictional analysis that

5   fails to take account of unique practical commercial factors

6   does not effectively insure the fair and orderly

7   administration of the law.”   Id. at 419.   The court

8   preferred to adopt what it termed a “reality-based pragmatic


         6
          As announced by the district court, these factors are
    as follows:

              1) Number of “trace” handguns linked to
              criminal investigations in New York and
              elsewhere that are attributable to the
              defendant;
              2)   Distribution   practices  and   their
              possible effects on crimes in New York;
              3) Time-to-crime of the retailer’s guns
              recovered in New York . . .;
              4) Sales price, type of gun and the
              intended use of the retailer’s handguns .
              . .;
              5) Crimes committed in New York with the
              retailer’s handguns;
              6) Total number of handguns the retailer .
              . . sold in the United States and
              retailer’s total revenue from the United
              States and New York markets; and
              7) Actions of regulatory authorities
              related to the retailer’s distribution
              practices . . . .

    501 F. Supp. 2d at 424-25.


                                  -10-
 1   jurisdictional analysis.”   Id.     However, the district court

 2   was not free to depart from “traditional jurisdictional

 3   analysis” in order to hold defendants subject to suit in New

 4   York.   The “fair and orderly administration of the law” is

 5   best achieved by applying the same standards to all

 6   litigants and by adherence to well-defined legal principles.

 7       The district court’s jurisdictional analysis undermines

 8   the protection afforded to out-of-state defendants by

 9   section 302(a)(3)(ii).   As both this Court and the New York

10   Court of Appeals have previously explained, this provision

11   “is intended to ensure some link between a defendant and New

12   York State to make it reasonable to require a defendant to

13   come to New York to answer for tortious conduct committed

14   elsewhere.”   LaMarca, 95 N.Y.2d at 215 (quoting Ingraham, 90

15   N.Y.2d at 598).   The relevant long-arm provision is

16   specifically “designed to . . . preclude the exercise of

17   jurisdiction over nondomiciliaries who might cause direct,

18   foreseeable injury within the State but ‘whose business

19   operations are of a local character.’”      Id. (quoting

20   Ingraham, 90 N.Y.2d at 599).      Here, it is indisputable that

21   defendants’ businesses are of a local character.

22       The district court also asserted that “[t]here is no

                                    -11-
 1   specific dollar threshold at which revenue becomes

 2   substantial for purposes of [section] 302(a)(3)(ii).”7    501

 3   F. Supp. 2d at 417.   Even if this is so, it was error to

 4   excuse the City from making any showing that defendants

 5   derived substantial revenue from interstate commerce.     See

 6   Bensusan Rest. Corp. v. King, 126 F.3d 25, 29 (2d Cir.

 7   1997).   Indeed, it “offend[s] ‘traditional notions of fair

 8   play and substantial justice’” to subject a non-domiciliary

 9   defendant to jurisdiction when that defendant does not have

10   the requisite “minimum contacts” with the forum state.

11   LaMarca, 95 N.Y.2d at 216 (quoting Int’l Shoe Co. v.

12   Washington, 326 U.S. 310, 316 (1945)).   The record in this

13   case is devoid of information that would allow anyone to


          7
           Other courts have sensibly held that “[w]hether
     revenue is ‘substantial’ under New York law is determined on
     both relative and absolute scales.” Ronar, Inc. v. Wallace,
     649 F. Supp. 310, 316 (S.D.N.Y. 1986); see also Vecchio v.
     S & T Mfg. Co., 601 F. Supp. 55, 57 (E.D.N.Y. 1984); Allen
     v. Canadian Gen. Elec. Co., 410 N.Y.S.2d 707, 708-09 (3d
     Dep’t 1978). Adventure Outdoors asserts that
     “uncontroverted evidence demonstrates that over the six year
     period preceding the institution of this action, [it]
     derived an average of $3,619.89 from interstate or
     international commerce, constituting a paltry 0.36% of its
     overall revenue.” Mickalis Pawn Shop denies receiving any
     revenue from interstate sales and asserts that the City
     never alleged, or showed — and the trial court never found —
     “a sum certain amount of revenue” it allegedly derived from
     interstate commerce.
                                  -12-
 1   conclude that defendants had “meaningful ‘contacts, ties, or

 2   relations’” with New York.    Burger King Corp. v. Rudzewicz,

 3   471 U.S. 462, 472 (1985) (quoting Int’l Shoe, 326 U.S. at

 4   319)).

 5       The seven-factor test for personal jurisdiction relies

 6   heavily on alleged conduct by third parties – specifically,

 7   straw purchasers of handguns — in establishing a basis for

 8   the assertion of jurisdiction.    However, the “unilateral

 9   activity of those who claim some relationship with a

10   nonresident defendant cannot satisfy the requirement of

11   contact with the forum State.”    Id. at 474 (internal

12   quotation marks omitted); see also World-Wide Volkswagen,

13   444 U.S. at 298.    Rather, it is “essential . . . that there

14   be some act by which the defendant purposefully avails

15   itself of the privilege of conducting activities within the

16   forum State, thus invoking the benefits and protections of

17   its laws.”   Burger King, 471 U.S. at 475 (internal quotation

18   marks omitted).    Here, the City did not come forward with

19   any evidence that defendants purposefully established any

20   meaningful contacts with New York state.

21       The district court maintained that New York City has a

22   strong interest in adjudicating this case, and that “[b]y

                                   -13-
 1   enacting strong gun control laws to protect its citizens

 2   from gun-related crimes New York has expressed a special

 3   public policy interest in the subject matter of this

 4   litigation.”    501 F. Supp. 2d at 428, 429.   It is

 5   indisputable that “New York has a strong interest in the

 6   safety of its residents and territory from handgun

 7   violence.”     Id. at 429; see generally Bach v. Pataki, 408

 8   F.3d 75 (2d Cir. 2005).    However, the City’s efforts to

 9   “regulat[e] the illegal flow of handguns into its

10   territory,” 501 F. Supp. 2d at 429, cannot violate the due

11   process rights of defendants it alleges played some

12   attenuated role in the presence of illegal guns in New York

13   City.   As the Supreme Court has explained:

14             [The limits on the exercise of personal
15             jurisdiction over a defendant] are more
16             than   a   guarantee   of   immunity   from
17             inconvenient or distant litigation. They
18             are    a   consequence    of    territorial
19             limitations on the power of the respective
20             States. . . . Even if the defendant would
21             suffer minimal or no inconvenience from
22             being forced to litigate before the
23             tribunals of another State; even if the
24             forum State has a strong interest in
25             applying its law to the controversy; even
26             if the forum State is the most convenient
27             location for litigation, the Due Process
28             Clause,   acting   as  an   instrument   of
29             interstate federalism, may sometimes act to
30             divest the State of its power to render a

                                    -14-
 1              valid judgment.
 2
 3   World-Wide Volkswagen, 444 U.S. at 294.     Here, although

 4   defendants are federally licensed to sell firearms, they are

 5   “small-town [stores that have] no on-going contacts with New

 6   York and [their] interstate activities [if any] are not the

 7   sort which make [them] generally equipped to handle

 8   litigation away from [their business] location[s].”     Markham

 9   v. Anderson, 531 F.2d 634, 637 (2d Cir. 1976) (internal

10   quotation marks omitted).

11          In sum, the district court’s analysis with respect to

12   defendants’ affirmative defense based on lack of personal

13   jurisdiction was a substantial and unjustified deviation

14   from well-known and easily understood principles of New York

15   law.    The jurisdictional analysis performed by the court

16   below appears to be based on one federal judge’s view of how

17   the law of New York ought to be constructed, rather than on

18   how it is clearly delineated by statute and in the decisions

19   of the state and federal courts.

20          By virtue of their default prior to trial, defendants

21   waived their defense based on lack of personal jurisdiction.

22   See Transaero, Inc. v. La Fuerza Aera Boliviana, 162 F.3d

23   724, 729 (2d Cir. 1998).     Therefore, I join the majority’s

                                    -15-
1   well-written opinion.   But an affirmance here is not an

2   endorsement of the jurisdictional analysis conducted below.

3   One’s agreement or disagreement with the policies that

4   animate liability rules for firearms retailers cannot bear

5   on jurisdictional analysis.   The district court was bound to

6   apply New York’s long-arm statute, as clearly interpreted by

7   the New York Court of Appeals.   The court below did not do

8   so in this case.




                                  -16-
