United States District Court, District of Columbia. PRACTICAL CONCEPTS, INC., v. The REPUBLIC OF BOLIVIA, Defendant 613 F.Supp. 863 Civ. A. No. 82-3706.
HEADNOTE: Bolivia filed a motion to vacate default judgment contending it was void because the District Court lacked jurisdiction to render it. The District Court, Parker, J., held that: (1) motion was not time barred; (2) lack of jurisdiction was sufficient ground to set aside judgment; and (3) District Court lacked jurisdiction under Foreign Sovereign Immunities Act. Case dismissed. [*864] COUNSEL: Neil I. Levy, Melrod, Redman &
Gartlan, Washington, D.C., for plaintiff. MEMORANDUM OPINION JUDGE: BARRINGTON D. PARKER, District Judge: On July 28, 1983, this Court entered a default judgment in favor of the plaintiff, Practical Concepts, Inc. (PCI), against the Republic of Bolivia (Bolivia) in the amount of $1,695,601.00. After a statutorily prescribed waiting period, PCI began proceedings to execute the judgment and obtained attachments directed to two local banks against accounts titled in the name of the Bolivian Embassy. Shortly thereafter, Bolivia made its first appearance and filed a motion to vacate the default judgment, arguing it is void because the Court lacked jurisdiction to render it. In addition to Bolivias motion, there are presently before the Court PCIs motions for judgment of condemnation against the garnishee National Bank of Washington, and for discovery sanctions against Corporacion Minera de Bolivia, an intervenor claiming ownership of one of the garnished accounts. For the reasons set forth below, the Court vacates the
default judgment and dismisses the suit for lack of personal and subject matter
jurisdiction. Consequently, the writs of attachment are quashed, and the motion
for discovery sanctions denied. FACTUAL BACKGROUND This litigation arises from Bolivias
alleged breach of a contract for the provision of consulting services by PCI.
The contract was executed in August 1979 by the Bolivian Ministry of Planning
and Coordination (MPC), but was mainly funded by a $2.5
million grant from the United States Agency for International Development
(AID). The purpose of both the AID grant and the PCI
contract was to develop a comprehensive plan for Bolivian rural development. PCIs services under the contract were to be rendered by two
distinct teams of advisors. PCIs U.S.-based staff retained overall control and
were responsible for broadscale research, planning and supervision of the
project. Other aspects of the project, such as direct technical assistance and
data gathering, were to be performed by personnel on location in Bolivia for
periods of assignment ranging from one to three years (referred to in the
contract and hereinafter as the field team or
expatriate staff). In addition to their consulting fee and fixed costs, the
contract entitled PCI to reimbursement of costs directly incurred in the course
of performance. Reimbursement was to be made through the submission of monthly
vouchers to MPC. Once verified and approved, the vouchers were transmitted to
AID, which authorized payment from the U.S. Treasury directly to PCI in
Washington, D.C. The contract provided that [f]inancing of these
services and other costs will be subject to the availability of funds to USAID
for this purpose and that USAID may, from time to time,
exercise [certain] approval rights including [*865] the right to approve the terms of this
Contract, the Contractor, and any or all
specifications
related to this
Contract and the Project of which it is part. Articles III, IV C.,
Exhibit B to Bolivias Memorandum in Support of Motion for Relief From Judgment
by Default and for Dismissal. Performance of the contract proceeded smoothly until May
1981, when AID informed MPC that it would discontinue funding of the contract,
apparently because PCI had come under investigation by AIDs Inspector General
and by the Justice Department. On May 21, 1981, MPC advised PCI of the
termination of the contract. PCIs complaint, filed December 30, 1982, alleged that
Bolivia had breached the contract by failing to comply with its termination
provisions. Specifically, PCI claimed that Bolivia gave inadequate notice of
termination, failed to honor a properly submitted termination
claim voucher, and wrongfully revoked its earlier approval of two PCI
vouchers which had not yet been
paid by the U.S. Treasury. Although Bolivia acknowledged service of the complaint, it
took no action in defense of the suit. On July 28, 1983, in strict compliance
with the provisions of the Foreign Sovereign Immunities Act
(FSIA or the Act) governing the award
of default judgments against foreign states, 28 U.S.C. § 1608(c)
(1982), the Court entered its judgment. Bolivia did not appeal. On October 12,
1984, after determining that a reasonable period of time had elapsed following
the entry of judgment, 28 U.S.C. § 1610(c) (1982), the Court issued
attachments to the National Bank of Washington and Riggs National Bank against
Bolivian embassy accounts. The embassy filed letters of protest four days
later, and finally, on November 14, 1984, counsel appeared on behalf of
Bolivia. ANALYSIS The Court turns its attention to Bolivias motion
under Federal Rule of Civil Procedure 60(b) to vacate the default judgment. As
grounds for that relief, Bolivia asserts that the judgment is void because, by
virtue of Bolivias sovereign immunity, the Court lacked both subject matter
and in personam jurisdiction. [FN1] PCI makes three colorable arguments in
response. First, it maintains that the motion is untimely. Second, PCI argues
that lack of jurisdiction is not sufficient grounds to set aside the judgment
under Rule 60. Finally, PCI argues that the Court did in fact have jurisdiction to render the
judgment. The Court proceeds with an analysis of these three arguments. FN1. Bolivia offers a barrage of additional arguments in support of its motion: that the suit is barred by the act of state doctrine; that the Court should abstain from exercising jurisdiction in deference to the contracts arbitration clause; that Bolivias failure to defend the action was the excusable result of a broad divergence in [American and Bolivian] cultural, governmental, and political approaches to the present case and, that the judgment has been satisfied by virtue of a $249,700.00 consent judgment entered by the United States Claims Court against AID in favor of PCI. Because it considers the jurisdictional issue sufficient to decide the motion, the Court does not reach these other arguments. A. Rule 60(b) provides in relevant part: On motion and upon such terms as are just, the court may relieve a party of his legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation [*866] of the judgment. The motion shall be made within a reasonable time, and for reasons (1), (2) and (3) not more than one year after the judgment, order, or proceeding was entered or taken. A threshold issue raised by the briefs is whether Bolivias
motion is time-barred by the last quoted sentence of the rule. The motion was
filed on December 4, 1984, more than one year after entry of the default
judgment, and so any reliance on clauses (1), (2), and (3) of the rule would
plainly be foreclosed. Bolivias jurisdictional attack, however, falls within
clause (4) of the rule. The issue is thus reduced to whether the reasonable
time limitation in the first clause of the sentence operates to bar
the motion. PCI urges the Court to view the issue in light of the
special requirements of the FSIA which assure that a foreign government is
apprised of a default against it and given a reasonable opportunity to seek
relief prior to any attachment being issued. [FN2] Bolivias lengthy delay in
making any sort of post-judgment submission to the Court, says PCI, cannot,
especially in light of the failure
to take advantage of these protections, be regarded as reasonable.
These procedural safeguards were afforded to Bolivia in this
case. Service of the order directing entry of judgment was made both through
registered international mail and, in Spanish translation, through diplomatic
channels. See 28 U.S.C.
§§ 1608(a)(3), (4). Over a year passed between Bolivias first
notice of the judgment and the Courts orders of attachment against the embassy
accounts. Upon issuance of the orders, the Court made a formal finding that
this was a reasonable time under section 1610(c). It is well established, however, that, despite what a
literal reading of the rule would suggest, the reasonable
time limitation does not apply to a motion under clause (4) attacking
a judgment as void. Pacurar v.
Hernly, 611 F.2d 179, 181 (7th Cir.1979);
C. Wright & A. Miller, Federal Practice and Procedure §
2862 (1973) (hereinafter Wright & Miller). [FN3] Our
Circuit Court of Appeals has held that a void judgment,
[cannot]
acquire validity because of laches on the part of him who applies for relief
from it, Austin v. Smith, 312 F.2d 337, 343 (D.C.Cir.1962). It would
be anomolous if the FSIA, with its special solicitude for foreign states, were
cited as justification for applying a more stringent rule here. The Court also notes that, when a party attacks a judgment
for voidness, there is no requirement that he show the existence of a
meritorious defense, as he must under other clauses of the rule. Wright & Miller, § 2862 at
197. Parenthetically, the Court notes that it finds nothing at
all unreasonable in Bolivias strategy of waiting until after execution of the
judgment was under way to raise its jurisdictional point. As explained in the
next section, a defendant who questions a courts jurisdiction over him is free
to ignore the suit and attack the default judgment in a subsequent proceeding,
provided, of course, that he is willing to undertake the risks associated with
that tactic. [FN4] Bolivia made
such a choice here, and even were it not for the rule just cited, the Court
would be unable to find that choice unreasonable. B. A judgment
is not void merely because it is erroneous. Wright & Miller, § 2862. PCI devotes a
considerable portion of its brief to arguing that, even assuming the Court
lacked jurisdiction to enter [*867] judgment against Bolivia, that does not amount to the sort of defect
that would render the judgment void. Rather, the judgment is, at most, merely
erroneous. The traditional rule is that a judgment rendered in excess
of the courts jurisdiction is void and a legal nullity. Restatement of Judgments
§§ 5-7 (1942). PCI cites younger authorities that seem to question
that rule. One of their cases holds that Lubben v. Selective Service System Local Board No. 27, 453
F.2d 645, 649 (1st Cir.1972) (footnote omitted). PCI relies on these
authorities to argue that, if the Court erred in accepting the complaints
allegation that it had jurisdiction, Bolivias only remedy was by timely
appeal. All of PCIs authorities, however, address situations where
the defendant raised (or should have raised) the jurisdictional issue prior to
the attack in question. They seem to offer an escape from the general rule
because they do not distinguish voidness and issue preclusion. Where a defendant appears in the original suit and raises
the jurisdictional issue but has it determined against him, he is barred from
relitigating the issue in a subsequent voidness attack. Durfee v. Duke, 375 U.S. 106, 84 S.Ct.
242, 11 L.Ed.2d 186 (1963). [FN5] Similarly, if the party charged with the
judgment appeared in the action but did not actually assert lack of
jurisdiction, he is foreclosed from raising it for the first time in a Rule 60(b)(4) motion or
collateral attack. Honneus v. Donovan,
93 F.R.D. 433, 437-38 (D.Mass.), affirmed, 691 F.2d 1 (1st Cir.1982).
By hypothesis the party had opportunity to raise the jurisdictional
defense. There is little reason for saying it should survive the judgment when
defenses on the merits would not. F. James & G. Hazard, Civil
Procedure, § 13.16 at 696 (2nd ed. 1977). [FN6] On the other hand, where, as here, the defendant never
appeared in the original suit and thus has not yet litigated the point, he is
not excepted from the rule that a jurisdictional defect renders a judgment
void. A defendant is always free to ignore the judicial proceedings, risk a default judgment
and then challenge that judgment on jurisdictional grounds in a collateral
proceeding. Insurance
Corporation of Ireland v. Compagnie des Bauxites de Guinee, 456 U.S. 694, 706,
102 S.Ct. 2099, 2106, 72 L.Ed.2d 492 (1982). See also Baldwin v. Traveling Mens Association, 283 U.S.
522, 525, 51 S.Ct. 517, 518, 75 L.Ed. 1244 (1931); Maritime International Nominees Establishment v. Republic of
Guinea, 693 F.2d 1094, 1099 n. 9 (D.C.Cir.1982), cert. denied, 464 U.S. 815,
104 S.Ct. 71, 78 L.Ed.2d 84 (1983) (hereinafter MINE );
James & Hazard, § 13.16 at 697; 59 A.L.R.Fed. 831 (1982). Accordingly, if this judgment suffers from a jurisdictional
defect, it is void. In an action against a foreign state, the existence of both
subject matter and personal jurisdiction turns on whether the defendant state
is entitled to sovereign immunity under the FSIA. [*868] Verlinden B.V. v. Central Bank of Nigeria, 461 U.S.
480, 485 n. 5, 103 S.Ct. 1962, n. 5, 76 L.Ed.2d 81 (1982); MINE, 693 F.2d at 1099; 28 U.S.C. §§ 1330(a),
(b) (1982). The next section of this opinion discusses that issue. C. The provisions of the Act relevant to sovereign immunity
are set forth below. Since neither party has directed the Courts attention to
any international agreements affecting Bolivias sovereign immunity in this
case, the issue depends upon the application of section 1605 of the Act. PCI
argues for exceptions to immunity under both subsections (a)(1) and (a)(2). The
Court will address the commercial activity exception first. 1. The FSIA codified the restrictive
common law theory of sovereign immunity. Under this theory, immunity is limited
to cases arising from public or
governmental acts. If the activity sued upon is not governmental
but commercial, then the foreign state is not entitled to
immunity. See Hearings on H.R.
3493 Before Subcommittee on Claims and Governmental Relations of the House
Committee on the Judiciary, 93d Cong., 1st Sess. 15 (1973) (testimony of
Charles N. Brower, Legal Advisor, Department of State). Not surprisingly, then Texas Trading v. Federal Republic of Nigeria, 647 F.2d 300,
308-09 (2nd Cir.1981) (Kaufman, J.) (citations omitted), cert. denied, 454 U.S.
1148, 102 S.Ct. 1012, 71 L.Ed.2d 301 (1982) (hereinafter Texas
Trading). The Court has no quarrel with PCIs proposition that an
otherwise commercial activity does not lose its commercial character because it
was entered into in connection with an AID program. H.Rep. No. 94-1487, 94th Cong., 2d Sess. 16 (1976), U.S.Code
Cong. & Admin.News 1976, pp. 6604, 6614 (hereinafter House
Report). [*869] But this does not assist the Court in
determining whether, apart from AID funding, the activity involved in this
contract dispute is commercial or governmental. PCI argues that a contract between a foreign state and a
private party for the purchase of goods or services is per se a commercial
activity. Texas Trading, 647 F.2d
at 309, is cited for this proposition. But that opinion merely observes that
[t]he House Report seems to conclude that a contract or series of
contracts for the purchase of goods would be per se a commercial activity,
id. (emphasis added). The House Report in fact goes on to state that
[t]he courts would have a great deal of latitude in determining what
is a 'commercial activity' for purposes of this bill. It has seemed unwise to
attempt an excessively precise definition of this term, even if that were
practicable. House Report at 16, U.S.Code Cong. & Admin.News
1976, at 6615. And in practice courts have not automatically treated every
contract for goods or services as
commercial activity. E.g., Tuck v.
Pan American Health Organization, 668 F.2d 547, 550 (D.C.Cir.1981) (employment
contract held not commercial activity); Broadbent v. Organization of American
States, 628 F.2d 27, 33-36 (D.C.Cir.1980) (same); International Association of Machinists v. Organization of
Petroleum Exporting Countries, 477 F.Supp. 553, 567 (C.D.Cal.1979), affd on
other grounds, 649 F.2d 1354 (9th Cir.1981), cert. denied, 454 U.S. 1163, 102
S.Ct. 1036, 71 L.Ed.2d 319 (1982) (contracts for sale of petroleum not
commercial activity since that term should be narrowly
construed); Carey v. National Oil
Corp., 453 F.Supp. 1097, 1102 (S.D.N.Y.1978), aff'd, 592 F.2d 673 (2nd
Cir.1979) (same). A more useful approach is to consider the rationale for the
distinction between commercial and governmental activity. In his thorough
analysis in the leading Texas Trading case, Judge Kaufman quoted two
expressions of the reasoning behind the rule:
Hearings on H.R. 11315 Before the Subcommittee on
Administrative Law and Governmental Relations of the House Committee on the
Judiciary, 94th Cong., 2d Sess. 51
(1976) (testimony of Bruno Ristau, Chief of Foreign Litigation Section of Civil
Division, U.S. Department of Justice), quoted in Texas Trading, 647 F.2d at
309. Trendtex Trading Corp. v. Central Bank of Nigeria, [[1977]] 2 W.L.R.
356, 369, [[1977]] 1 All E.R. 881 (1977) (Lord Denning), quoted in Texas Trading, 647
F.2d at 310. Judge Kaufman crystallized his analysis down to the following rule
of thumb, which has been frequently applied by federal courts: [I]f
the activity is one in which a private person could engage, it is not entitled
to immunity. Texas
Trading, 647 F.2d at 309. Is the activity contemplated by this contract activity
in which a private person could engage? The Court thinks
not. The text of the contract includes numerous terms which only a sovereign
state could perform, and which no private firm or individual going into the
market place could ever offer. For instance, the Bolivian government agreed to
[r]elieve [PCIs] expatriate staff from corporation and income tax,
import duty and sales tax on imports, sales tax on services and stamp duty for
the Contract otherwise imposed under the laws and regulations in effect in
Bolivia in respect to their activities
under the contract. Appendix B, § VII B. [FN7]
Bolivia also agreed to provide for the prompt duty free clearance
through customs of the supplies and [*870] personal effects of the PCI staff entering Bolivia. Id. Further, the government bound
itself to promptly provide all required entry and exit
visas, exchange permits, and travel documents. Id. MPC agreed to exercise the extent of its legal authority
in expediting any necessary documentation for the expatriate staff, such as
automobile registration, drivers licenses, and tax and duty exemption
documents. Appendix A, § B. Finally, the contract entitled the
expatriate staff to certain diplomatic privileges such as access to the U.S.
Embassy Commissary and health facilities, and use of the embassy pouch for
official and personal mail. Appendix B, § G. The issue presented by these facts is the same issue that
was anticipated in Gibbons v.
Udaras na Gaeltachta, 549 F.Supp. 1094 (S.D.N.Y.1982). In that case, two
American citizens sued an agency of the Republic of Ireland, with whom they had
entered into a joint venture agreement for the establishment of an industrial
enterprise in Ireland. The agency, Gaeltarra Eireann (GE),
had informed the plaintiffs that the joint enterprise would qualify for
certain tax incentives made
available by Irish law. The court held that the defendant was not entitled to
sovereign immunity since [e]very obligation undertaken by GE in the
Joint Venture Agreement contemplated activity in which, by nature, a private
party could engage. Id. at 1110. In a footnote to that holding,
however, the court remarked Id. at 1110 n. 6. The facts in the present case are even more compelling than
those hypothesized in Gibbons. In addition to the tax exemption mentioned
there, Bolivia promised PCI preferential bureaucratic treatment and diplomatic
privileges. To paraphrase the holding of Gibbons, many of the obligations
undertaken by Bolivia in the contract contemplated activity in which, by
nature, a private party could not engage. As we have
seen, the commercial activity exception resembles an estoppel— foreign states who
do business in the manner of private parties ought to be held to the same legal
rules as private parties. See text
at 869, supra. See also International Association of Machinists v. Organization
of Petroleum Exporting Countries, 649 F.2d 1354, 1357 n. 6 (9th Cir.1981),
cert. denied, 454 U.S. 1163, 102 S.Ct. 1036, 71 L.Ed.2d 319 (1982). Under this
rationale, there is nothing unfair about recognizing Bolivias sovereign
immunity in this case. By granting special legal advantages to PCI Bolivia was
acting in a manner very much unlike a private business participant. The nature
of PCIs performance would have been quite different if it had performed the
same services for a private Bolivian concern. The commercial activity exception
is therefore inapplicable. [*871] 2. PCI
insists that Bolivia has implicitly waived its sovereign immunity under section
1605(a)(1) of the Act by entering into the following arbitration agreement: Appendix B, § XIX. [FN8] A passage from the FSIAs legislative history reads: House Report at 18, U.S.Code Cong. & Admin.News 1976, at
6617 (footnote added). This Court has relied on that statement to assume
jurisdiction over foreign states that entered into arbitration agreements with
private plaintiffs. Birch Shipping
Co. v. Embassy of Tanzania, 507 F.Supp. 311, 312 (D.D.C.1980); Ipitrade International, S.A. v. Federal
Republic of Nigeria, 465 F.Supp. 824, 826 (D.D.C.1978). But both of those cases
involved proceedings that were directly related to the arbitration. Ipitrade concerned a petition for
judgment on an arbitration award. Birch Shipping was a suit for execution on an arbitration award. PCI has
not cited, nor has the Courts own research revealed, any case where a court
has invoked an arbitration agreement as the basis for depriving a foreign state
of immunity from a suit on the merits of a dispute. This distinction is controlling. The reasoning behind the
pre-FSIA cases imprecisely referred to in the quoted passage of the House
Report was that [arbitration] agreements could only be effective if
deemed to contemplate a role for [the] courts in compelling arbitration that
stalled along the way, MINE 693 F.2d at 1103, and that [t]o
hold otherwise would be to render the arbitration clause a nullity,
Victory Transport, Inc. v. Comisaria General de Abastecimientos y Transportes,
336 F.2d 354, 363 (2nd Cir.1964), cert. denied, 381 U.S. 934, 85 S.Ct. 1763, 14
L.Ed.2d 698 (1965) (suit to compel arbitration). See also Petrol Shipping Corp. v. Kingdom of Greece,
360 F.2d 103, 107 (2nd Cir.1966)
(suit to compel arbitration). That logic does not extend to this case. The
effectiveness of this arbitration clause does not depend upon this Courts
assumption of [*872] jurisdiction
over a suit on the merits. On the contrary, an initial determination of the
parties rights by this Court would be destructive of their intention to have disputes
resolved by neutral arbitrators. Bolivia cannot therefore be said to have
implicitly waived its immunity from this suit. The Courts conclusion is consonant with the strong judicial
policy of encouraging international commercial arbitration in order to
facilitate international trade and cooperation. E.g., Scherk v. Alberto-Culver Co., 417 U.S. 506, 519, 94
S.Ct. 2449, 2457, 41 L.Ed.2d 270 (1974) (An agreement to arbitrate
before a specified tribunal is, in effect, a specialized kind of forum
selection clause that posits not only the situs
but also the procedure to
be used.); MINE, 693
F.2d at 1102-04. As Chief Justice Burger has written in a closely related
context: The expansion of American business and industry will hardly
be encouraged if, notwithstanding solemn contracts, we insist on a parochial
concept that all disputes must be resolved under our laws and in our courts
.
We cannot have trade and commerce in world markets and international waters
exclusively on our terms, governed by our laws, and resolved in our courts. Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 9, 92 S.Ct.
1907, 1912, 32 L.Ed.2d 513 (1972) (applying choice of forum clause in
international contract). Accordingly, section 1605(a)(1) of the FSIA should not
be construed to encourage federal courts to compete with or undermine freely
agreed arbitration, but to ensure compliance with the agreement. Comment,
Implicit Waivers of Sovereign Immunity by Consent to Arbitration, 18 Tex.Int'l
L.J. 329 (1983). CONCLUSION [12]
For all of the preceding reasons, the Court determines that its default
judgment against Bolivia is void, and that the case must be dismissed for lack
of jurisdiction. [FN10] The dismissal shall be without prejudice to resolution
of the dispute in a proper forum. It follows of course that the writs of attachment issued in
furtherance of the judgment must be quashed. PCIs motion for discovery
sanctions, which requests an order precluding Corporacion Minera de Bolivia
from establishing its claim to the garnished accounts, is mooted. An order conforming to this memorandum shall be filed
herewith. ORDER This matter comes before the Court on Defendants
Motion for Relief From Judgment by Default and for Dismissal of Suit and to
Vacate Order of Execution, Plaintiffs Motion for Judgment of Condemnation
Against Garnishee, and Defendants motion to quash same, and Plaintiffs Motion
for Sanctions Against Claimant Corporacion Minera de Bolivia. The Court has
studied the entire record in this matter and has filed its Memorandum Opinion
of even date. Wherefore, it is this 11th day of July, 1985 ORDERED that Defendants Motion for Relief From Judgment by
Default and for Dismissal of Suit and to Vacate Order of Execution be and
hereby is granted, and it is FURTHER ORDERED that Defendants Motion to Quash Plaintiffs
Motion for Judgment of Condemnation Against Garnishee be and hereby is granted,
and it is
[*873] FURTHER
ORDERED that Plaintiffs Motion for Sanctions Against Claimant Corporacion
Minera de Bolivia be and hereby is denied, and it is
FURTHER ORDERED that the default judgment entered in this
matter against Defendant on July 28, 1983 be and hereby is vacated, and it is FURTHER ORDERED that the orders of attachment issued in this
matter on October 12, 1984 to National Bank of Washington and to Riggs National
Bank be and hereby are vacated, and it is FURTHER ORDERED that this case be and hereby is dismissed
for lack of subject matter and personal jurisdiction with prejudice. |