author: LEWIS, Circuit Judge.

text:
    STATE OF PENNSYLVANIA, Petitioner, v. Richard W. RILEY, Secretary of the United States Department of Education, Respondent.
    No. 95-3308.
    United States Court of Appeals, Third Circuit.
    Argued Jan. 23, 1996.
    Decided May 15, 1996.

      Michael Brustein, Kristin E. Hazlitt (argued), Brustein & Manasevit, Washington, DC, for Petitioner.
    Lynette E. Charboneau (argued), United States Department of Education, Washington, DC, for Respondent.
    Before: MANSMANN and LEWIS, Circuit Judges and RESTANI, Judge, Court of International Trade.

       Honorable Jane A. Restani, Judge, United States Court of International Trade, sitting by designation.

   OPINION OF THE COURT

LEWIS, Circuit Judge.

The Commonwealth of Pennsylvania’s Department of Education (“PDE”) appeals from a final decision of the United States Secretary of Education requiring Pennsylvania to refund $3,082,088.95 to the United States. PDE argues that the Secretary erred in denying PDE an evidentiary hearing, and that the Secretary’s decision violates Pennsylvania’s sovereign right to interpret its own statutes. For the following reasons, we will affirm the decision of the Secretary.

I.

The underlying facts of this case involve the interplay between federal and state programs which fund vocational education, and the requirements states must meet in order to receive federal funding. Under the Perkins Vocational Education Act, 20 U.S.C. § 2301-2471 (1988) (“Perkins Act”), federal grants are issued to the states to “assist the States to expand, improve, modernize, and develop quality vocational education programs in order to meet the needs of the Nation’s existing and future work force for marketable skills and to improve productivity and promote economic growth.” 20 U.S.C. § 2301(1). The Perkins Act defines vocational education as:

organized educational programs which are directly related to the preparation of individuals in paid or unpaid employment in such fields as agriculture, business occupations, home economics, health occupations, marketing and distributive occupations, technical and emerging occupations, modem industrial and agriculture arts, and trades and industrial occupations, or for additional preparation for a career in such fields, and in other occupations, requiring other than a baccalaureate or advanced degree and vocational student organization activities as an integral part of the program; and for purposes of this paragraph, the term “organized education program” means only (A) instruction (including career guidance and counseling) related to the occupation or occupations for which the students are in training or instruction necessary for students to benefit from such training, and (B) the acquisition (including leasing), maintenance, and repair of instructional equipment, supplies, and teaching aids; but the terms do not mean the construction, acquisition, or initial equipment of buildings, or the acquisition or rental of land.

20 U.S.C. § 2471(31) (emphasis added).

Funding under the Perkins Act, however, is contingent upon the state maintaining or exceeding its own level of financial support for these programs. According to the Act:

No payments shall be made under this chapter for any fiscal year to a State unless the Secretary determines that the fiscal effort per student or the aggregate expenditures of such State for vocational education for the fiscal year preceding the fiscal year for which the determination is made, equaled or exceeded such effort or expenditures for vocational education for the second preceding year.

20 U.S.C. § 2463(a). This requirement is reflected in the Act’s implementing regulations which provide that:

[t]he Secretary may not make a payment under the Act to a State for any fiscal year unless the Secretary determines that the fiscal effort per student, or the aggregate expenditures of that State, from State sources, for vocational education for the fiscal year (or program year) preceding the fiscal year (or program year) for which the determination is made, at least equaled its effort or expenditures for vocational education for the second preceding fiscal year (or program year).

34 C.F.R. § 401.22(a) (1990). Thus, in order to receive federal funding under the Perkins Act, a state must maintain or increase its level of financial support for vocational education within the state to qualify for funding for the next year. As the federal funding is provided to the states before the Secretary determines whether the state qualifies under this section, actions brought by the Secretary take the form of actions for refunds.

The dispute in this case involved whether a particular Pennsylvania program, the Customized Job Training Program (“CJT”), is a vocational education program for the purpose of Perkins Act funding. According to the legislative intent, the CJT was created:

to meet the training needs of the State’s new and expanding business by enhancing the skills of workers of this Commonwealth. In so doing, funding shall be dedicated towards training projects which result in net new full-time employment opportunities, significant wage improvements, the retention of otherwise lost jobs or other conditions which would offer substantial economic benefit to this Commonwealth. Recognizing that many regions of the State remain economically distressed, customized job training programs should attempt to meet the special job training needs of these areas.

App. at 54 (emphasis added). During the period at issue, the PDE had the primary responsibility for approving applications and drafting regulations under the CJT. The program, however, was administered by an inter-agency advisory task force comprised of representatives from the Pennsylvania Departments of Labor and Industry, Commerce, Education, and the Economic Development Committee of the Cabinet.

The United States Department of Education concluded that during fiscal years (“FY”) 1989 and 1991, Pennsylvania failed to maintain its level of effort on either a per-student or aggregate basis. According to the United States, Pennsylvania’s aggregate expenditures declined from $67,322,560 in FY 1987 to $60,436,193 in FY 1988, and its per-student expenditures declined from $283.95 in FY 1987 to $283.04 in FY 1988. App. at 161, 163, 165-66. Pennsylvania’s aggregate expenditures also declined from $64,026,598 in FY 1989 to $59,917,439 in FY 1990, and its per-student expenditures declined from $348.41 in FY 1989 to $332.39 in FY 1990. These decreases were discovered during audits conducted ending in FY 1989 and FY 1991, and resulted from Pennsylvania’s decision not to include the CJT program in its maintenance of effort after having done so for five years.

Pursuant to the Perkins Act, the auditors questioned the total amount of federal vocational education funds expended during FY 1989 ($41,827,000) and FY 1991 ($39,603,000). App. at 154, 159. After reviewing further information provided by Pennsylvania, the Assistant Secretary sustained the finding that Pennsylvania failed to maintain its level of fiscal effort in FYs 1989 and 1991, but only demanded a refund of the amounts Pennsylvania failed to maintain on a per-student basis, totaling $3,082,088.95. Pennsylvania appealed to the Office of Administrative Law Judges.

Before the ALJ, Pennsylvania presented evidence, consisting of nineteen exhibits including affidavits, and legal arguments in seeking to establish that it had complied with the maintenance of effort requirement for FFs 1989 and 1991. Pennsylvania’s theory was that the CJT costs should not have been included in the calculations as state funds spent on vocational education because: (1) it was within the sole discretion of the state to determine whether the CJT program was a vocational education program for the purposes of determining its maintenance of effort; and (2) the CJT program did not fall under the definition of “vocational education” as set forth in the Perkins Act. 20 U.S.C. § 2471(31).

Pennsylvania requested an evidentiary hearing before the ALJ, alleging that factual issues remained in dispute. PDE claimed that an evidentiary hearing was necessary in order to understand the nature of the CJT program, and with its brief and reply brief attached a list of ten witnesses, three affidavits, and other documentary evidence to support its claim. The ALJ held a prehearing conference in which he requested stipulations to certain proposed evidence. After the conference, the ALJ allowed PDE to submit an amended witness list which included a brief statement as to why each proposed witness’ testimony was important to the determination. According to PDE, the witnesses’ testimony would support its claim that the purpose of CJT was to provide incentives to businesses and promote economic development in Pennsylvania, rather than to provide vocational education to adults.

The ALJ then issued his initial decision. He found that PDE had failed to maintain its fiscal efforts for the year in question and that an evidentiary hearing was unnecessary. The decision concluded that federal rather than state law controls which state activities fall within the federal definition of vocational education for calculating maintenance of effort, and that the CJT funds fell within the federal definition. The ALJ further found that Pennsylvania’s characterization of the CJT program as a business incentive program was consistent with vocational education under the Perkins Act, and that the funds, therefore, had to be included in determining Pennsylvania’s maintenance of effort. As to the evidentiary hearing, the ALJ concluded, based upon the completeness of the record, the briefs and his review of the appropriate submissions,

that an evidentiary hearing would serve no useful purpose, and ... is not needed to resolve any material factual issue in dispute. In view of the conceded facts, what we have remaining is more in the nature of a dispute as to a matter of law, i.e., the application of specific Federal statutory and regulatory definitions in the face of mainly agreed facts.

App. at 11 (ALJ’s Decision) (emphasis in original). The Secretary certified the ALJ’s decision as a final decision of the Department, and this appeal followed.

On appeal, Pennsylvania “is not requesting that this Court reconsider the Department’s application of the federal definition of vocational education, or that the Court consider the questions of fact surrounding the State CJT program. Pennsylvania only asks the Court to consider the propriety of the issuance of the Department’s Decision without an evidentiary hearing and without fully considering the evidence in the record regarding the State’s interpretation of the CJT program.” Appellant’s Br. at 3-4.

II.

We have jurisdiction to review the Secretary’s decision under 20 U.S.C. § 1234g. In general, when reviewing the Secretary’s decision, we must determine whether the Secretary’s findings of fact are supported by substantial evidence and reflect the application of the proper legal standards. Bell v. New Jersey, 461 U.S. 773, 792, 103 S.Ct. 2187, 2198, 76 L.Ed.2d 312 (1983); Jones v. Sullivan, 954 F.2d 125, 127-28 (3d Cir.1991). The Secretary’s decision to grant an evidentiary hearing is discretionary, however, and will only be reversed if it is arbitrary and capricious. California v. Bennett, 843 F.2d 333, 340 (9th Cir.1988); Bell Telephone Co. of Pa. v. FCC, 503 F.2d 1250, 1267 (3d Cir.1974).

III.

A.

Pennsylvania argues that the AL J’s failure to hold an evidentiary hearing denied it the opportunity to present complete factual evidence as to the nature of the CJT program. Whether an evidentiary hearing is necessary, however, is left to the Secretary’s sound discretion. An administrative agency need not provide an evidentiary hearing when there are no disputed material issues of fact, Moreau v. F.E.R.C., 982 F.2d 556, 568 (D.C.Cir.1993); Altenheim German Home v. Turnock, 902 F.2d 582, 584 (7th Cir.1990); California v. Bennett, 843 F.2d at 340; Bell Telephone Co. of Pennsylvania v. FCC, 503 F.2d at 1267-68; or when the dispute can be adequately resolved from the paper record. Puerto Rico Aqueduct & Sewer Auth. v. E.P.A., 35 F.3d 600, 606 (1st Cir.1994); Louisiana Ass’n oflndep. Producers and Royalty Owners v. FERC, 958 F.2d 1101, 1113-15 (D.C.Cir.1992); City of St. Louis v. Department of Transp., 936 F.2d 1528, 1534 n. 1 (8th Cir.1991). The Secretary will abuse its discretion only when the complaining party demonstrates that the failure to provide an evidentiary hearing denied the party “the opportunity to speak meaningfully to the issues before the [Secretary].” Bell Telephone, 503 F.2d at 1268.

The relevant portions of the Department of Education’s regulations provide that: an ALJ conducts the hearing entirely on the basis of briefs and other written submissions unless—

(1) The ALJ determines, after reviewing all appropriate submissions, that an evi-dentiary hearing is needed to resolve a material factual issue in dispute.

34 C.F.R. § 81.6(b)(1). Proceedings before the Office of Administrative Law Judges, therefore, are generally conducted on the basis of a written record alone. Evidentiary hearings are authorized, but only when the ALJ determines that one is “needed” to resolve a material factual issue. Consequently, the narrow predicates for an evidentiary hearing may be summarized simply and succinctly as: (1) a disputed material issue of fact; and (2) a need to resolve it.

The Secretary’s decision that no evi-dentiary hearing was necessary was not arbitrary and capricious.

First, there is simply no dispute as to any material issues of fact in this case. Neither the Secretary nor the ALJ challenged Pennsylvania’s “factual” claim that the CJT is “viewed ... as a labor and economic development program,” Appellant’s Br. at 17. For example, the ALJ noted that:

Certainly, it should not be surprising that a vocational education program would (also) serve “the needs of industry,” and not benefit “only” individuals entering fields not requiring baccalaureates or advanced degrees. This would appear to be true of virtually any vocational education program.

App. at 9 (ALJ Decision) (emphasis in original). In fact, the Perkins Act, itself, was enacted, inter alia, “to improve productivity and promote economic growth.” 20 U.S.C. § 2301(1). Similarly, despite Pennsylvania’s remonstrances over the goals and objectives of the program, there was no dispute over any of the specific job training activities carried out under CJT funding, and PDE offered no evidence to demonstrate that the job training activities funded by the CJT program did not fit the Perkins Act’s definition of vocational education. Accordingly, we find that the ALJ was correct in concluding that “[i]n view of the conceded facts, what we have remaining is more in the nature of a dispute as to a matter of law, i.e., the application of specific Federal statutory and regulatory definitions in the face of mainly agreed facts.” App. at 11 (ALJ Decision).

Second, even if there were disputed material issues of fact, the written record was adequate to resolve any remaining issues. Pennsylvania was permitted to submit substantial evidence on several occasions to the effect that the CJT was a business incentive rather than vocational education program. Even assuming that “oral testimony provides a far more complete and persuasive analysis of disputed facts than written documentation,” as PDE contends, there is absolutely nothing before us to demonstrate that the written record was inadequate. Three of the proposed witnesses filed affidavits, and PDE’s argument was expounded upon at great length in its submissions. Indeed, the testimony of the potential witnesses appears to be cumulative at best. Given the breadth and depth of the written record, we cannot say that the ALJ’s conclusion that “[t]he opinions and credibility of lay witnesses (e.g., Pennsylvania state employees) explored on direct or cross-examination as to the State’s intentions and objectives in administering the CJT program would add nothing material to the limited issues involved in this proceeding,” App. at 11 (ALJ Decision), was arbitrary and capricious.

But in the end, Pennsylvania’s characterization of the program as non-vocational is irrelevant in any event. The Perkins Act, not the Commonwealth of Pennsylvania, defines what constitutes vocational education under the Act. 20 U.S.C. § 2471(31). Thus, Pennsylvania’s complaint boils down to nothing more than a simple dissatisfaction with the conclusion reached by the ALJ after applying the uncontested law to undisputed material facts. Surprisingly, however, Pennsylvania does not challenge the Secretary’s substantive conclusion or its factual underpinnings. Under these circumstances, the opportunities provided by the Secretary permitted Pennsylvania to speak meaningfully to any factual issues presented in this matter. As such, the Secretary’s determination that an evidentiary hearing was unnecessary was not arbitrary and capricious.

B.

Pennsylvania’s final argument is that the Secretary’s decision impinges upon its right to interpret its own laws. According to Department of Education precedent, “it is a well-settled maxim of federalism that Federal tribunals should defer to a state’s interpretation of its own laws.” In re Oregon State System of Higher Education, No. 92-25-SP, Final Decision, at 22,1993 WL 452646, at *11 (Educ. Appeals Bd., Apr. 5, 1993). PDE argues that the ALJ’s conclusion that the CJT program is a vocational education program as provided by the Perkins Act conflicts with Pennsylvania’s right to characterize the CJT program as a business incentive program. We disagree. We conclude that the ALJ’s determination does not in any way infringe upon Pennsylvania’s sovereign authority.

Unlike the eases cited by the PDE in its brief, this case does not involve a federal agency telling a state how to interpret and implement a state statute as would occur, for example, if the state interpreted the word “shah” in a state statute to be discretionary, and despite this interpretation, the Secretary interpreted it as mandatory. See In re Gulf Coast Trades Center, No. 89-16-S, Decision of the Secretary, at 2-3 (Oct. 19, 1990) (concluding that the Secretary had to accept the state’s interpretation of the statute despite the plain reading of the text). PDE quotes Arkansas Power & Light Co. v. Federal Power Comm’n, 156 F.2d 821, 833 (D.C.Cir.1946), rev’d 330 U.S. 802, 67 S.Ct. 963, 91 L.Ed. 1261 (1947), for the proposition that:

Even if it be said that the [agency] has the right to exercise the judicial function of interpreting its own organic act, it could hardly be added that that agency also possesses the exclusive right to interpret a statute of one of the States of the Union, and to decide the relation between that state legislation and its own Act.

While this language appears to lend some support for PDE’s argument, the quote is taken out of context. The quoted portion of the opinion does not stand for the principle that an agency must defer to the state when interpreting a state statute in conjunction with federal law. Instead, it stands for the proposition that a sovereign state need not “appear before a federal administrative body in order to have determined the legal effect of one of its statutes considered in connection with a related federal statute.” Id. In other words, administrative agencies do not have exclusive jurisdiction when it comes to interpreting state law in conjunction with federal law. But neither of these circumstances is presented in this case. The Secretary merely applied the federal definition of vocational education for the purposes of the Perkins Act to determine whether or not the activities carried out under the C JT program fit within that definition. Pennsylvania can characterize its program anyway it pleases. If, however, the Commonwealth wishes to receive federal funding under the Perkins Act, it will be subject to the requirements established by federal law.

The Perkins Act explicitly defines the activities that constitute vocational education under the Act, and vests in the Secretary the responsibility for determining whether or not a state program funds vocational education for the purposes of determining the eligibility to receive federal funding under the Act. 20 U.S.C. § 2463(a). In this context, the Secretary’s application of federal law to the undisputed facts does not impinge upon the State’s authority to interpret its own laws. See In re Webster Career College, Inc., No. 91-39-SP, Decision of the Secretary (July 23,1993) (concluding that the State’s authority is not being impinged because federal law made the Secretary responsible for defining the term “academic year”). The Secretary, not the state, is responsible for interpreting federal law, and in cases which involve an agency’s interpretation of federal law and its own regulations, we must defer to the Secretary. Chevron, USA Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843-45, 104 S.Ct. 2778, 2781-83, 81 L.Ed.2d 694 (1984); Passaic Valley Sewerage Comm’rs v. U.S. Department of Labor, 992 F.2d 474, 478 (3d Cir.1993).

IV.

For the foregoing reasons, we will affirm the decision of the Secretary of the United States Department of Education.

      . We note that Pennsylvania’s argument is logically problematic. The thrust of PDE’s argument is that the CJT program is not a vocational education program for the purposes of the Perkins Act. Assuming that Pennsylvania is correct, this argument leads to the conclusion that Pennsylvania owes the federal government potentially more money than simply the refunds sought for FY’s 1989 and 1991. Pennsylvania included CJT funds as part of its plan for vocational education for five years, and the amount of federal funding provided to Pennsylvania was based in part upon the inclusion of CJT funding. If the CJT program is by definition not a vocational education program, Pennsylvania's original inclusion of those funds was erroneous. Under Pennsylvania’s own interpretation, it was not entitled to federal grants corresponding to the CJT program in the first place.

      . In its briefs, PDE couches its arguments in terms of due process in a constitutional sense. A State, however, is not entitled to due process protection. South Carolina v. Katzenbach, 383 U.S. 301, 323, 86 S.Ct. 803, 815-16, 15 L.Ed.2d 769 (1966) ("The word 'person' in the context of the Due Process Clause of the Fifth Amendment cannot, by any reasonable mode of interpretation, he expanded to encompass the States of the Union....").


source: Caselaw Access Project

author: NIEMEYER, Circuit Judge:

license: Public Domain

text:
    Richard D. STOVER, Plaintiff-Appellant, v. O’CONNELL ASSOCIATES, INCORPORATED, Defendant-Appellee.
    No. 94-1309.
    United States Court of Appeals, Fourth Circuit.
    Argued Jan. 29, 1996.
    Decided May 14, 1996.

      ARGUED: William Thomas Fitzhugh, Beddow, Marley, Burgess & Associates, Chesterfield, Virginia, for Appellant. Andrew Jay Graham, Kramon & Graham, P.A., Baltimore, Maryland, for Appellee. ON BRIEF: Kevin F. Arthur, Kramon & Graham, P.A., Baltimore, Maryland, for Appel-lee.
    Before HALL, NIEMEYER, and LUTTIG, Circuit Judges.
   Affirmed by published opinion. Judge NIEMEYER wrote the opinion, in which Judge HALL and Judge LUTTIG joined.

OPINION

NIEMEYER, Circuit Judge:

In this case, we revisit the statutory and constitutional limits of Maryland’s long-arm statute, Md.Code Ann., Cts. & Jud.Proc. § 6-103. Assuming that the statute extends jurisdiction to the limits of due process, we hold that Maryland courts may, nonetheless, not exercise personal jurisdiction over a New York private investigation firm whose only connection with Maryland was its occasional retention by telephone of Maryland investigation companies to provide it with information about Maryland subjects, including the plaintiff in this case. Accordingly, we affirm the judgment of the district court dismissing the case for lack of personal jurisdiction over the defendant.

I

When Richard D. Stover, a Maryland resident, obtained a copy of his consumer credit file in September 1992, he discovered that O’Connell Associates, Inc., a New York private investigation company, had requested and obtained information about him from Equifax Corporation. While Stover suspects that O’Connell Associates requested the information because of his work with Ross Perot’s presidential campaign, he acknowledges that he has never been informed of O’Connell’s reason for requesting the information and makes no allegations concerning O’Connell’s purpose for requesting the information or the persons to whom the information was submitted. He claims, however, that because consumer reports may be furnished only for limited purposes, O’Connell violated the federal Fair Credit Reporting Act, 15 U.S.C. § 1681 et seq., its Maryland analog, Md.Code Ann., Com.Law II § 14-1201 et seq., and his common law right to privacy. He alleges that O’Connell’s conduct caused him injury in Maryland, for which he demands $50,000 in compensatory damages and $100,000 in punitive damages.

O’Connell filed a motion under Federal Rule of Civil Procedure 12(b)(2) to dismiss the complaint, contending that it was not subject to personal jurisdiction in Maryland. While representing that it had never had property or agents in Maryland, O’Connell acknowledged that it had occasionally used Maryland investigation firms to obtain information about Maryland subjects.

In connection with its investigation of Stover, O’Connell states that, through use of a computer terminal in its New York office, it obtained Stover’s name, address, birthdate, social security number, and place of employment from Equifax. O’Connell also acknowledges that it telephoned Montgomery Investigative Services, Ltd., a licensed private investigation firm in Rock-ville, Maryland, and retained that firm to conduct a “criminal check” on Stover and determine whether Stover had “any ties to KKK or any known white supremist [sic] group.” O’Connell maintains that from Montgomery Investigative Services it received information only from public court records. It asserts that it provided the information procured from Equifax and Montgomery Investigative Services to its client in California.

On O’Connell’s motion to dismiss, the district court concluded that O’Connell’s “intermittent historical contacts” with Maryland were not sufficiently “extensive, continuous and systematic” to sustain general jurisdiction over O’Connell. The court also concluded that it did not have specific jurisdiction over O’Connell because Stover’s claims did not arise out of any conduct by O’Con-nell in Maryland; all of O’Connell’s conduct had occurred in New York. Accordingly, the district court granted O’Connell’s motion to dismiss the complaint for lack of personal jurisdiction.

From the district court’s dismissal order, this appeal was taken.

II

In analyzing a challenge to a court’s exercise of personal jurisdiction, we first consider whether the state’s long-arm statute authorizes the exercise of jurisdiction over the defendant, and if we conclude that it does, we then determine whether the exercise of jurisdiction comports with the Fourteenth Amendment due process requirements. See Ellicott Mach. Corp. v. John Holland Party, Ltd., 995 F.2d 474, 477 (4th Cir.1993); First American First, Inc. v. National Ass’n of Bank Women, 802 F.2d 1511, 1513-14 (4th Cir.1986).

Stover contends that O’Connell’s conduct in obtaining “a copy of Stover’s consumer credit report” from Equifax and in retaining Montgomery Investigative Services to determine whether Stover had “any ties to [the] KKK” or similar groups violated federal and state consumer protection laws and his common law right to privacy. Stover maintains that because O’Connell invaded his privacy in Maryland, causing tortious injury in the state by acts in the state, the requirements of Md.Code Ann., Cts. & Jud.Proc. § 6-103(b)(3) are satisfied. Focusing on “O’Con-nell’s other investigations of Maryland residents,” however, Stover rests his principal jurisdictional claim on § 6-103(b)(4), which subjects a defendant to jurisdiction for conduct outside the state if the defendant has engaged in a “persistent course of conduct” in Maryland. On the federal due process issue, Stover argues that O’Connell “purposefully directed its tortious activity” at him, thereby causing him injury within Maryland. He maintains that tortious activity conducted outside a state that causes injury within the state “is a sufficient contact to comport with federal due process” under Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984).

Section 6-103(b)(3) of Maryland’s long-arm statute provides that a Maryland court may exercise jurisdiction over a person outside the state who “[c]auses tortious injury in the State by an act or omission in the State.” (Emphasis added). While Stover may be able to establish that O’Connell caused injury in Maryland, he cannot sustain his claim that O’Connell’s injury-causing acts occurred in the state. The evidence demonstrates that O’Connell’s conduct occurred entirely in New York State where O’Connell used a computer terminal to obtain information from Equifax and telephoned a licensed Maryland private investigation company to retain the firm to conduct a “criminal check.” Although Montgomery Investigative Services did operate in Maryland, Stover cannot impute any of that firm’s activities to O’Connell on an agency theory because there is no evidence that O’Connell controlled those activities. See Mylan Labs., Inc. v. Akzo, N.V., 2 F.3d 56, 61 (4th Cir.1993). O’Connell simply asked Montgomery Investigative Services to provide certain information. The Maryland firm selected the means and method of the investigation and used its own employees to fulfill O’Connell’s request.

The statutory provision upon which Stover must rely, therefore, is § 6—103(b)(4), which authorizes a Maryland court to exercise personal jurisdiction over any person who “[c]auses tortious injury in the State or outside of the State by an act or omission outside the State if he regularly ... engages in any other persistent course of conduct in the State.” Stover argues that even though O’Connell is not present in Maryland, its admitted prior investigatory efforts in Maryland constitute a “persistent course of conduct in the State.”

In defining the reach of Maryland’s long-arm statute, Maryland courts have concluded that the state legislature intended to expand Maryland’s exercise of personal jurisdiction to the limits allowed by the Due Process Clause of the Fourteenth Amendment. See Camelback Ski Corp. v. Behning, 307 Md. 270, 513 A.2d 874, 876 (1986), vacated and remanded on other grounds, 480 U.S. 901, 107 S.Ct. 1341, 94 L.Ed.2d 512 (1987). Because the limits of Maryland’s statutory authorization for the exercise of personal jurisdiction are coterminous with the limits of the Due Process Clause, the statutory inquiry necessarily merges with the constitutional inquiry, and the two inquiries essentially become one. See Ellicott Mach. Corp., 995 F.2d at 477; see also Mohamed v. Michael 279 Md. 653, 370 A2d 551, 553 (1977). Accordingly, we direct our inquiry to whether O’ConneU’s activities in Maryland constituted sufficient minimum contacts with Maryland such that maintenance of suit against O’Con-nell in Maryland comports with the demands of due process.

Ill

A state’s sovereign authority over persons, property, and activities extends only to its territorial limits, and its laws have no operation in other states except as allowed by those states or by comity. See Pennoyer v. Neff, 95 U.S. 714, 720-22, 24 L.Ed. 565 (1877); Lesnick v. Hollingsworth & Vose Co., 35 F.3d 939, 941 (4th Cir.1994), cert. denied, — U.S. -, 115 S.Ct. 1103, 130 L.Ed.2d 1070 (1995). And a state’s assertion of power beyond its borders violates the Due Process Clause of the Fourteenth Amendment. Pennoyer, 95 U.S. at 733.

Because the requirement that a person be physically present in a state before he may be subjected to that state’s exercise of judicial power was too restrictive to serve the increasing demands of interstate commerce and the multi-state activities of corporations, the Supreme Court has established that a person is thought to be “present” in a state, not only when he is physically there, but also when he conducts meaningful activity there. In International Shoe Co. v. Washington, 326 U.S. 310, 66 S.Ct. 154, 90 L.Ed. 95 (1945), the Supreme Court explained that a person’s activity in a state, conducted directly or through agents, may serve as an analog for his physical presence there, as long as the in-state activity creates “certain minimum contacts [with the forum state] such that maintenance of the suit [there] does not offend ‘traditional notions of fair play and substantial justice.’ ” Id. at 316, 66 S.Ct. at 158 (citation omitted). That analog for physical presence was further defined in Hanson v. Denckla, 357 U.S. 235, 253, 78 S.Ct. 1228, 1239-40, 2 L.Ed.2d 1283 (1958), as activity by which “the defendant purposefully avails itself of the privilege of conducting activities within the forum State.” To create a basis for the exercise of in personam jurisdiction, however, the defendant’s activities must in any event create a “substantial connection” between himself and the forum state. See Burger King Corp. v. Rudzewicz, 471 U.S. 462, 475, 105 S.Ct. 2174, 2183-84, 85 L.Ed.2d 528 (1985) (quoting McGee v. International Life Ins. Co., 355 U.S. 220, 223, 78 S.Ct. 199, 201, 2 L.Ed.2d 223 (1957)).

The jurisprudence of surrogate presence in a state, articulated for pragmatic reasons, was never intended to reorder the concepts of state sovereignty which form the basis of the Constitution’s due process guarantee. A state’s sovereignty remains territorial, and its judicial power extends over only those persons, property, and activities within its borders. The linchpin for long-arm jurisdiction, therefore, is the quantity and quality of the defendant’s activity in the forum state. As we explained in Lesnick:

While the jurisprudence of personal jurisdiction has focused on fixing the minimum measurement of a person’s contact with a state necessary to substitute for the person’s presence in the state and thus to justify that state’s imposing an in person-am judgment over the person, the immediate concept of “presence” is no longer part of the language. Nevertheless, the establishment of a surrogate for presence has been the core task in defining the due process boundaries of a state’s legitimate exercise of sovereignty over a person beyond its borders.

35 F.3d at 941.

In this case, O’Connell, using only its computer terminal in New York, obtained information about Stover from Equifax. The record does not disclose where Equifax stored that information or where Equifax is located. O’Connell also made a telephone call to a private investigation firm in Maryland to retain it to conduct a “criminal check.” When the Maryland firm completed its search of the public court records, it supplied the information to O’Connell in New York. O’Connell passed the information that it obtained from both Equifax and the Maryland investigation firm to its client in California. Finally, O’Connell acknowledges that “on occasion over the last several years” it has engaged Maryland investigation agencies to review public documents concerning other individuals.

Ordering a product or service by telephone from a company in a different state does not subject the customer to that state’s jurisdiction. See Helicopteros Nacionales de Colombia v. Hall, 466 U.S. 408, 417-18, 104 S.Ct. 1868, 1873-74, 80 L.Ed.2d 404 (1984); Rosenberg Bros. & Co. v. Curtis Brown Co., 260 U.S. 516, 518, 43 S.Ct. 170, 171, 67 L.Ed. 372 (1923). While it is true that the electronic connection transports the customer’s order. for the product or service into the forum state, thereby prompting a response, such conduct does not establish the customer’s “presence” in that jurisdiction. On the contrary, the use of a telephone to facilitate transactions between remote locations serves as an alternative to presence. To conclude that such activity establishes presence in a state would upset generally held expectations, see Craig v. General Finance Corp., 504 F.Supp. 1033, 1038-39 (D.Md.1981) (in personam jurisdiction does not exist over person who placed various telephone calls and mailed letters to forum state), and redefine the nature of state sovereignty.

Stover’s reliance on Colder v. Jones does not persuade us to reach a different conclusion because in that case the magnitude of the defendants’ activities amounted to an analog for the defendants’ presence in the forum state. In Colder, Shirley Jones filed a libel suit in California against the National Enquirer, one of its reporters, and one of its editors. The reporter and the editor challenged the California court’s personal jurisdiction over them because they were Florida residents and had prepared the article primarily in Florida. The Supreme Court rejected the challenge, noting that the article about Jones was researched from California sources, the National Enquirer has its largest circulation in California, and both the reporter and the editor knew that the article would appear in 600,000 copies circulated in California. The Court concluded that California was both the focal point of the Jones story and of the alleged defamation. The defendants’ “intentional, and allegedly tor-tious, actions were expressly aimed at California,” and Jones suffered the “brunt of the harm” there. The defendants therefore must have “‘reasonably anticipate^] being haled into court there.’ ” Id. at 789-90, 104 S.Ct. at 1486-87 (citations omitted).

In this case, we cannot conclude that from O’Connell’s occasional telephonic requests for information from Maryland-based investigation services over a period of years and its furnishing of that information to clients in other states, it could reasonably have anticipated being “haled into court” in Maryland. The magnitude of the Colder defendants’ activities in California distinguishes that case from the one before us.

Because O’Connell’s only contacts with Maryland were its occasional placement of telephonic orders for, and the consequent receipt of, investigation services from Maryland, we hold that it would contravene the Due Process Clause to apply Maryland’s long-arm statute to grant Maryland courts in personam jurisdiction over O’Connell in New York. Accordingly the district court’s order dismissing this case for lack of personal jurisdiction over O’Connell is

AFFIRMED.

       Were we to read Maryland's long-arm statute naturally, we might question the Maryland courts' interpretation, at least with respect to the constitutional limits of specific jurisdiction. Cf. Beaty v. M.S. Steel Co., 401 F.2d 157 (4th Cir.1968), cert. denied, 393 U.S. 1049, 89 S.Ct. 686, 21 L.Ed.2d 691 (1969). Section 6-103(b)(3) reaches persons whose actions take place in the state and cause tortious injury in the state; it does not reach persons whose actions outside the state cause tortious injury in the state. Cf. Calder v. Jones, 465 U.S. 783, 104 S.Ct. 1482, 79 L.Ed.2d 804 (1984) (upholding exercise of personal jurisdiction over defendants whose out-of-state activities caused injury in forum state). While § 6-103(b)(4) covers out-of-state conduct that causes injury in the forum state, its plain language would appear to require greater contacts than the specific jurisdiction jurisprudence requires. In any event, we shall assume that Maryland's long-arm statute reaches the limits of due process.


author: DeMOSS, Circuit Judge:

text:
    NEW YORK LIFE INSURANCE COMPANY, Plaintiff-Appellee, v. Alvin J. BROWN, Defendant-Appellant, v. Leslie A. BROWN, Defendant-Appellee. NEW YORK LIFE INSURANCE COMPANY, Plaintiff-Appellee, v. Alvin J. BROWN, Defendant, and Leslie A. Brown, Defendant-Appellant.
    Nos. 95-30455, 95-30786.
    United States Court of Appeals, Fifth Circuit.
    May 15, 1996.

      Virginia N. Roddy, Eugene R. Preaus, Preaus, Roddy & Krebs, New Orleans, LA for New York Life Ins. Co. in both cases.
    Thomas D. Travis, Howard W. Bushey, Baton Rouge, LA, for Alvin J. Brown.
    Ronnie Lynn Leaf, San Mateo, CA, for Leslie A. Brown in both cases.
    Before SMITH, DUHÉ and DeMOSS, Circuit Judges.
   DeMOSS, Circuit Judge:

This case involves two separate appeals from the same district court case. Both appeals arise out of an interpleader action brought by New York Life Insurance Company (“New York Life”) against Alvin Brown and his ex-wife Leslie Brown seeking to determine who owned several life insurance policies. The district court (1) found that Leslie owned the policies, (2) released New York Life from liability and (3) enjoined both Alvin and Leslie from re-litigating the ownership of the policies in any court. In 95-30455, Alvin appeals the district court’s denial of his motion to vacate the judgment. He claims that the judgment against him is void because it was entered without notice. He argues that even though he had defaulted, he was still entitled to notice before summary judgment was granted against him. In 95-30786, Leslie appeals the district court order enjoining her from pursuing the California small claims court actions and a California superior court action against New York Life. We hold that the failure to provide Alvin notice before the summary judgment denied him due process of law. Thus, the district court erred in refusing to vacate the judgment against him. We vacate 95-30455 and remand for further proceedings. Because the summary judgment was inappropriate, we also vacate and remand 95-30786, Leslie’s appeal.

I. BACKGROUND

In March 1971, Plaintiff-Appellee New York Life issued the first of several whole life insurance policies to Defendant-Appellant Alvin Brown. The policy provided for a waiver of premiums if Alvin became disabled. In January 1972, Alvin was found to be totally and permanently disabled because of his war injuries (he lost his left arm in Vietnam), so the premium waiver clause went into effect. Alvin married Defendant-Appellee Leslie Brown in February 1971. In 1980, Alvin and Leslie divorced. On July 4, 1981, ownership of the policies was transferred to Leslie. (Alvin argues that his signature on the change of ownership form was forged).

Leslie claimed ownership of the policies and sought to have New York Life issue two option policies to her. New York Life refused, because it was not sure whether Alvin or Leslie owned the policies. On April 7, 1992, New York Life filed an interpleader action under 28 U.S.C. § 1335 in federal district court in Louisiana, seeking to establish the ownership of the policy. The defendants in the interpleader action were Alvin Brown and his ex-wife Leslie Brown. The federal district court enjoined the defendants from instituting any suits against New York Life concerning the ownership of the policies. The next day, April 8, Leslie filed suit against New York Life in California state small claims court, seeking the issuance of the option policies. In May, New York Life filed a notice of the federal injunction in the small claims court and sought to stay the proceedings. The small claims court apparently ignored that order. In July, two judgments were entered against New York Life in the small claims cases; New York Life has appealed those judgments. Leslie stipulated to a stay of the appeals.

When Alvin was sued, two unsuccessful attempts to serve him were made before he was properly served. On April 15, 1992, the first try was made at “5101 Nicholson A-16” in Baton Rouge, Louisiana. The remarks on the marshal’s return said “Invalid Address According To Current Resident ... No Phone Directoiy Listing ... Return Unexe-cuted.” The second attempt was on May 12, 1992, at “3539 Clayton Street” in Baton Rouge. The remarks on the marshal’s return said “Current Resident Advises That Subject Moved — No Forward ... No Directory Asst. Listing.” The third attempt was successfully made on June 29, 1992 at “4944 Castlebrook Apts #326” in Baton Rouge.

On July 9, 1992, before either defendant answered, Alvin, Leslie and New York Life attended a telephone settlement conference before a magistrate judge. On August 12, Alvin phoned New York Life’s attorney and told her that he had not responded because he had been out of town. He told her that he was unwilling to stipulate to Leslie’s ownership and that he would attempt to retain counsel. New York Life’s attorney notified the court of this conversation by letter. A status conference was set for September 10, but Alvin declined to participate in it.

On October 13, Alvin still had not answered, so New York Life had a default entered against him. In October 1992, Leslie filed a motion for summary judgment. In November, the magistrate ordered the clerk to mail a copy of the motion to Alvin. The motion was mailed to the Clayton address, which the second marshal’s return showed to be invalid. The letter was returned undelivered. Summary judgment was granted in January 1993. The judgment held that Leslie owned the policies and both Leslie and Alvin were permanently enjoined from suing New York Life in any court for a determination of the ownership of the policies.

In February 1994, Leslie, this time represented by counsel, sued New York Life in California state court, alleging that the inter-pleader was a sham and seeking damages. In April 1995, the federal district court denied New York Life’s motion to enforce the injunction and stop the suits. In July 1995, however, the court reconsidered that ruling and granted the motion. Leslie was specifically enjoined from pursuing the California small claims court actions and the California superior court action against New York Life.

In April 1994, Alvin phoned New York Life’s attorney to cheek the status of his case. He then learned that judgment had been entered over a year earlier recognizing Leslie as the owner of the policies and absolving New York Life of further liability. In October 1994, Alvin obtained counsel and filed a motion to vacate the judgment. That motion was denied in April 1995. Alvin filed a timely notice of appeal.

II. DISCUSSION

A. 95-30455 NEW YORK LIFE v. ALVIN BROWN

Because it is important to keep straight default language, a review of the terms regarding defaults is appropriate. A default occurs when a defendant has faded to plead or otherwise respond to the complaint within the time required by the Federal Rules. An entry of default is what the clerk enters when the default is established by affidavit or otherwise. Fed.R.Civ.P. 55(a). After defendant’s default has been entered, plaintiff may apply for a judgment based on such default. This is a default judgment.

In the instant ease, Alvin defaulted because he did not file an answer within the allowed time. On New York Life’s motion, an entry of default was entered against Alvin; a default judgment was never entered. Instead, Leslie moved for summary judgment, which was granted.

1. Whether Alvin “Appeared”

Alvin complains that he never received notice of the summary judgment. Leslie contends that because Alvin defaulted, he was not entitled to notice. We conclude that Alvin appeared in the lawsuit and was thus entitled to notice before the granting of the summary judgment.

Rule 5 requires that “every written motion ... be served upon each of the parties. No service need be made on parties in default for failure to appear.” (Emphasis added). “[B]y appearing at any time in the action, a party becomes entitled to have his attorney notified of all subsequent proceedings and receive copies of all papers, even if he later chooses to default.” 4A CHARLES AlaN WRIGHT AND ARTHUR R. MILLER, FEDERAL PRACTICE AND PROCEDURE § 1144 (2d ed. 1987) (emphasis added).

In order to determine whether Alvin was entitled to service of the motion for summary judgment, we must first determine whether Alvin’s actions rose to the level of an appearance. An appearance “involves some presentation or submission to the court.” 10 Wright and Miller, Federal Practice and Procedure § 2686 (2d ed. 1987) (internal quotation omitted). What constitutes an appearance is not “confined to physical appearances in court or the actual filing of a document in the record.” Sun Bank of Ocala v. Pelican Homestead and Savings Assoc., 874 F.2d 274, 276 (5th Cir.1989). Appearances “include a variety of informal acts on defendant’s part which are responsive to plaintiffs formal action in court, and winch may be regarded as sufficient to give plaintiff a clear indication of defendant’s intention to contest the claim.” Sun Bank, 874 F.2d at 276 (internal quotation omitted). In summary, an appearance is an indication “in some way [of] an intent to pursue a defense.” United States v. McCoy, 954 F.2d 1000, 1003 (5th Cir.1992). This is “a relatively low threshold.” Id.

Alvin took two actions which could be considered appearances: (1) he participated in a telephone conference with the other parties before the magistrate judge and (2) he spoke with eounsél for New York Life, informing her that he would not sign a stipulation and that he was attempting to retain counsel to contest the suit. We conclude that Alvin’s attendance at the phone conference before the magistrate judge is an appearance, because he actually appeared in court (albeit by phone). Likewise, his phone call to New York Life’s counsel, informing him that he would contest the suit, is also an appearance. Charlton L. Davis & Co. v. Fedder Data Center, Inc., 556 F.2d 308, 309 (5th Cir.1977) (phone call from defendant to plaintiffs attorney, informing him that he intended to contest the suit, considered an appearance). Therefore, because Alvin had appeared in the suit, he was entitled under Rule 5(a) to service of all papers in the suit, including the motion for summary judgment.

2. Whether Alvin Received Notice

Because Alvin was entitled to notice, we must determine whether he actually received it. After reviewing the facts, we determine that the district clerk’s mailing of the notice to an address it knew from its own documents to be invalid, does not satisfy the notice requirement of Rule 5.

The magistrate judge ordered the clerk to mail a copy of the summary judgment motion to Alvin. The clerk mailed the papers to the Clayton address (where the second unsuccessful attempt at service had been made). In its order denying Alvin’s motion to vacate judgment, the district court found that this was not a problem, because Alvin was under a continuing obligation to apprise the court of any address changes.

Rule 5(b) requires service to be made by mailing a copy of the papers “to the attorney or party at the attorney’s or party’s last known address.... ” Alvin correctly points out that the Clayton address was not his last known address; his last known address was at the Castlebrook Apartments, where he had been served. The district court’s statement that Alvin was under a continuing obligation to notify the court of any change in address is inapposite: he had not moved. The court tried to serve him at an address it knew, or should have known, was not his last known address. Therefore, the attempt at service did not conform with Rule 5, and Alvin did not receive the notice to which he was entitled.

3. Alvin’s Motion to Vacate the Judgment

Rule 60(b)(4) allows district courts to “relieve a party ... from a final judgment” because the judgment is void. We typically review district court orders denying Rule 60(b) relief for abuse of discretion. CJC Holdings, Inc. v. Wright & Lato, Inc., 979 F.2d 60, 63 (5th Cir.1992). “When, however, the motion is based on a void judgment under rule 60(b)(4), the district coufy has no discretion — the judgment is either void or it is not.” Recreational Prop. Inc. v. Southwest Mortgage Serv. Corp., 804 F.2d 311, 313 (5th Cir.1986); 11 CHARLES AlaN Wright, Arthur R. Miller and Mary Kay Kane, Federal Practice and Procedure § 2862 (2d ed. 1995). “[T]here is no time limit on an attack on a judgment as void. The one-year limit applicable to some Rule 60(b) motions is expressly inapplicable, and even the requirement that the motion be made within a ‘reasonable time,’ which seems literally to apply to motions under Rule 60(b)(4), cannot be enforced with regard to this class of motion.” Briley v. Hidalgo, 981 F.2d 246, 249 (5th Cir.1993) (quoting 11 CHARLES Alan Wright, Arthur R. Miller and Mary Kay Kane, Federal Practice and Procedure § 2862 (1973)) (brackets in original).

In order to determine whether the judgment should be set aside, we must determine whether the judgment is void. “A judgment is not void merely because it is erroneous.” 11 Charles Alan Wright, Arthur R. Miller and Mary Kay Kane, Federal Practice and Procedure § 2862 (2d ed. 1995) “A judgment ‘is void only if the court that rendered it lacked jurisdiction of the subject matter, or of the parties, or if it acted in a manner inconsistent with due process of law.’” Williams v. New Orleans Public Serv., Inc., 728 F.2d 730, 735 (5th Cir.1984) (quoting 11 Charles Alan Wright, Arthur R. Miller and Mary Kay Kane, Federal Practice and Procedure § 2862 (1973)).

The district court had both subject matter and personal jurisdiction. Thus, our only inquiry is whether the district court acted in a manner so inconsistent with due process as to render the judgment void. “[0]rdinarily all that due process requires in a civil case is proper notice and service of process and a court of competent jurisdiction; procedural irregularities during the course of a civil case, even serious ones, will not subject the judgment to collateral attack.” Fehlhaber v. Fehlhaber, 681 F.2d 1015, 1027 (5th Cir.1982), cert. denied, 464 U.S. 818, 104 S.Ct. 79, 78 L.Ed.2d 90 (1983).

Under our system of justice, the opportunity to be heard is the most fundamental requirement. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 657, 94 L.Ed. 865 (1950) (“The fundamental requisite of due process of law is the opportunity to be heard.”). Without notice of an impending grant of summary judgment, a defendant has no opportunity to be heard. Therefore, Alvin was denied due process of law and the judgment against him is void. Bass v. Hoagland, 172 F.2d 205 (5th Cir.), cert. denied, 338 U.S. 816, 70 S.Ct. 57, 94 L.Ed. 494 (1949). Because the judgment against him is void, the district court erred in refusing the vacate the judgment under Rule 60(b)(4).

B. 95-30786 NEW YORK LIFE v. LESLIE BROWN

Leslie complains about the district court’s permanent injunction prohibiting her from suing New York Life in California for bad faith actions regarding the insurance policy. Because the judgment against Alvin is vacated, it is yet to be determined whether Leslie or Alvin owns the life insurance policies. Therefore, there is no final judgment in the case. As there is no final judgment, a permanent injunction is inappropriate, so it is vacated. Thus, we need not consider Leslie’s claims.

CONCLUSION

Because the summary judgment against Alvin has been vacated, the case is returned to the same procedural position that existed before the summary judgment was taken. That is, (1) Alvin has defaulted and an entry of default has been entered against him; (2) Leslie has filed for summary judgment, but that motion has yet to be served on Alvin; and (3) a preliminary injunction exists restraining Leslie and Alvin from instituting any actions against New York Life relative to the life insurance policies.

Because Alvin'has defaulted, he must succeed in setting aside the default before he will be permitted to respond to the motion for summary judgment. Only if a Rule 55(c) motion is made, and granted, will Alvin be allowed to file an answer or a response to the summary judgment motion. We express no opinion as to how the district court should rule on any Rule 55(a) motion.

Leslie has not brought the bad faith action against New York Life as a counterclaim. Should Leslie seek to amend her answer to raise this counterclaim, she may file for leave of the district court to amend her answer. We express no opinion as to whether the district court should grant leave; instead we entrust that decision to the district court’s sound discretion. Chitimacha Tribe of Louisiana v. Harry L. Laws Co., 690 F.2d 1157, 1163 (5th Cir.1982), cert. denied, 464 U.S. 814, 104 S.Ct. 69, 78 L.Ed.2d 83 (1983).

The judgments of the district court in both 95-30455 and 95-30786 are VACATED and REMANDED for further proceedings consistent with this opinion.

      . Leslie claims that she did not learn of the interpleader suit and injunction until May 18.

      . The notice of default was mailed to the Clayton address, which the second marshal's return had shown to be invalid. It was returned undelivered.

      . All rule references are to the Federal Rules of Civil Procedure.

      . Leslie contends that Alvin is raising for the first time on appeal the issue of whether he appeared in the action. While her argument is not without merit, we disagree. No "bright-line rule” exists for determining whether a matter was raised below. First United Financial Corp. v. Specialty Oil Co. 5 F.3d 944, 948 n. 9 (5th Cir.1993). "[I]f a litigant desires to preserve an argument for appeal, the litigant must press and not merely intimate the argument during the proceedings before the district court. If an argument is not raised to such a degree that the district court has an opportunity to rule on it, we will not address it on appeal.” F.D.I.C. v. Mijalis, 15 F.3d 1314, 1327 (5th Cir.1994). Issues may be raised for the first time in post-judgment motions. First National Bank of Commerce v. Lamaze, 7 F.3d 1227, 1229 n. 9 (5th Cir.1993). While Alvin might have raised the issue more specifically, we are persuaded that his motion to vacate the judgment met the threshold level to avoid forfeiture. Alvin’s motion informs the court the he is complaining of a lack of notice before the granting of summary judgment. We are convinced that this was adequate to allow the court to rule on the issue.

      . This discussion of appearances is drawn from caselaw on Rule 55(b)(2) appearances, which require three days notice and entry of judgment by the court for default judgments when the defendant has appeared. However, Rule 5(a) appearances will be treated the same, as both 55(b)(2) and 5(a) involve defendants who at one time appeared, but later defaulted.

      . Rule 56 requires that the summary judgment motion be served at least 10 days before the hearing.

      . Because Leslie was concerned that Alvin would harm her, special arrangements were made with the court so Alvin would not learn her address. Pursuant to the arrangement, service of all papers from Leslie to Alvin was made through the court.

      . Because we need not reach the issue of the preclusive effect of failing to file a counterclaim on the issue, we express no opinion as to whether the claim is a compulsory counterclaim under Rule 13(a).

      . One issue Leslie raised, however, does deserve comment. Leslie argued that she did not raise her claims against New York Life at the inter-pleader level because the district court has enjoined her from doing so. We believe that Leslie misreads the injunction. As we read it, Leslie is prohibited from filing an action related to the policies in any other court. She is not prohibited from filing a counterclaim in the interpleader action. We sire aware that Leslie was pro se throughout much of the proceeding. Nonetheless, we believe that Leslie should have asked the district court for clarification of its order before she chose to avoid filing a possibly-compulsory counterclaim.


text:
    Franklin ATKINSON, Plaintiff-Appellant, v. DENTON PUBLISHING COMPANY, Defendant-Appellee.
    No. 94-40302.
    United States Court of Appeals, Fifth Circuit.
    May 15, 1996.
    Rehearing Denied June 6, 1996.

      David Stanley Jones, Steven H. Phelps, Dallas, TX, for Appellant.
    J. Shelby Sharpe, Sharpe & Spurlock, Ft. Worth, TX, for Appellee.

      Before REYNALDO G. GARZA, DeMOSS and BENAVIDES, Circuit Judges.
   DeMOSS, Circuit Judge:

For 21 years Franklin Atkinson was the circulation manager for the Denton Record-Chronicle, a paper owned by Denton Publishing Company. On December 30, 1991, at age 58, Atkinson was terminated. Atkinson filed this lawsuit, claiming that he was unlawfully discharged in that (1) he was discharged because of his age, in violation of the Age Discrimination in Employment Act, 29 U.S.C. § 623, (2) his discharge breached a written employment contract, (3) the Paper’s actions rose to the level of intentional infliction of emotional distress, and (4) he was terminated because he refused to commit an illegal act. The district court issued an order granting Denton Publishing’s motion for summary judgment as to each of Atkinson’s claims, and denying Atkinson’s cross-motion for summary judgment. Atkinson appeals the district court’s disposition of his age discrimination, breach of contract and intentional infliction of emotional distress claims, arguing that summary judgment was inappropriate because genuine issues of material fact exist as to each of those claims. Atkinson also appeals several rulings made by the district court prior to summary judgment, which he claims imper-missibly prejudiced his ability to present probative summary judgment evidence. We first address the propriety of the district court’s procedural rulings.

PROCEDURAL RULINGS

Atkinson argues that the district court abused its discretion by (1) refusing to allow Atkinson to propound interrogatories in excess of those allowed by the court’s local rules; (2) refusing to compel production of personnel files for many of Denton Publishing’s past and present employees; and (3) refusing to allow Atkinson additional time to obtain his expert’s report. Atkinson further maintains that the district court abused its discretion by (1) relying upon incompetent summary judgment evidence, and (2) by quashing Atkinson’s amended motion for summary judgement. The district court’s disposition of these contested discovery and procedural matters is reviewed only for an abuse of discretion. McKethan v. Texas Farm Bureau, 996 F.2d 734, 738 (5th Cir.1993), cert. denied, — U.S.-, 114 S.Ct. 694, 126 L.Ed.2d 661 (1994); Mayo v. TriBell Indus., Inc., 787 F.2d 1007, 1012 (5th Cir.1986) (discovery rulings are reversed only if they are “arbitrary or clearly unreasonable”). After careful consideration of the complete record, we find no abuse of the considerable discretion afforded the district court as to these matters. Only two of the issues raised merit further discussion.'

1. Interrogatories

Atkinson initially filed this suit in the Northern District of Texas because he believed both parties were residents of Tarrant County. Because both parties were in fact residents of Denton County, the district court sua sponte transferred the case to the Eastern District of Texas. Once assigned to the Eastern District, the case was placed on Track 3 pursuant to the Eastern District’s Civil Justice Expense and Delay Reduction Plan. Track 3 allows 15 interrogatories, in addition to the mandatory disclosures required by the Federal Rules of Civil Procedure. Atkinson moved to expand the allowed number of interrogatories from 15 to 31 in order to accommodate two sets of interrogatories served on the defendant with his complaint while the case was still pending in the Northern District of Texas. The district court denied his motion.

On appeal, Atkinson claims that Denton Publishing’s responses to the required interrogatories was with reference to the mandatory disclosure requirements, such that he received ho additional benefit from the defendant’s limited responses. In addition, Atkinson claims that the district court abused its discretion by not requiring Denton Publishing to answer the remaining interrogatories, which addressed issues central to Denton Publishing’s defenses and would have helped Atkinson develop competent summary judgment evidence.

Denton Publishing answered Atkinson’s first set of interrogatories with 18 responses. The 18 responses included a total of 36 sub-parts. Only seven of those responses are framed with any reference to the information disclosed as part of the mandatory discovery requirements. Atkinson did not complain that the district court lacked authority to limit discovery, or that Denton Publishing had failed to comply with the requirement for 15 responses. Instead, Atkinson argued solely that Denton Publishing should be compelled to respond to the remaining interrogatories. Atkinson did not explain why additional interrogatories were necessary, beyond stating that the information related to Den-ton Publishing’s defenses in some unspecified way. Moreover, the text of the propounded but refused interrogatories does not appear in the record.

Given the scope of Denton Publishing’s multiple-part responses, and the absence of a compelling reason to expand discovery, it was not an abuse of the district court’s discretion to deny Atkinson’s motion to expand the number of allowed interrogatories.

2. Personnel Files

Atkinson also moved to compel.production of the Denton Publishing personnel files for 12 designated past or present employees of Denton Publishing, plus personnel files for an additional 47 former employees who were voluntarily or involuntarily separated from the company at the age of 40 or older. The district court ordered production of the requested personnel files for in camera inspection. After examining many of the requested files, the court ordered production of one file in its entirety and excerpts from a second file.

Atkinson argues generally that the files had the potential for establishing a pattern and practice of age discrimination, which would be admissible circumstantial evidence of discrimination. But Atkinson’s complaint alleges that he was terminated because his general manager, who valued his performance, was replaced by Bill Patterson, a younger man who discriminated against Atkinson and other employees on the basis of age. Many of the personnel files requested related to employees who left Denton Publishing long before Bill Patterson became general manager. In light of the district court’s in camera review, and the lack of any nexus between Atkinson’s complaint and the employees terminated prior to Bill Patterson’s promotion, the district court did not abuse its discretion by denying Atkinson’s motion to compel production of the remaining files.

SUMMARY JUDGMENT

This Court reviews the grant of summary judgment de novo, applying the same standard as the district court. Bodenheimer v. PPG Indus., Inc., 5 F.3d 955, 956 (5th Cir.1993). Summary judgment is appropriate 'when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). There is no genuine issue of material fact if the evidence is such that, drawing all reasonable inferences in favor of the non-movant, Atkinson, a reasonable jury could not return a verdict in his favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-51, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986).

1. Age Discrimination Claim

In reviewing summary judgment, this Court must decide whether Atkinson produced facts which, if believed, would lead a reasonable jury to conclude that it was more likely than not'that Denton Publishing terminated Atkinson because of his age. Rhodes v. Guiberson Oil Tools, 75 F.3d 989, 994 (5th Cir.1996) (en bane); Bodenheimer v. PPG Indus., Inc., 5 F.3d 955, 958 n. 8 (5th Cir.1993). To conduct that review, we have historically employed the familiar McDonnell Douglas framework. McDonnell Douglas v. Green, 411 U.S. 792, 801-03, 93 S.Ct. 1817, 1824, 36 L.Ed.2d 668 (1973); but see O’Connor v. Consolidated Coin Caterers Corp.,-U.S. -, -, 116 S.Ct. 1307, 1309, 134 L.Ed.2d 433 (1996) (leaving open the question of whether McDonnell Douglas applies in ADEA cases).

Under McDonnell Douglas, the plaintiff bears the initial burden to demonstrate a prima facie case by a preponderance of the evidence. Rhodes, 75 F.3d at 992. Once established, the prima facie case serves to create a rebuttable presumption of unlawful discrimination. Id. at 993. The employer can rebut that presumption with evidence that, if believed by the trier of fact, would support a finding that unlawful discrimination did not motivate the employer’s action. Id. At that point, a plaintiff can avoid summary judgment if:

the evidence taken as a whole (1) creates a fact issue as to whether each of the employer’s stated reasons was what actually motivated the employer and (2) creates a reasonable inference that age was a determinative factor in the actions of which plaintiff complains. The employer, of course, will be entitled to summary judgment if the evidence taken as a whole would not allow a jury to infer that the actual reason for the discharge was discriminatory.

Id. at 994.

The district court concluded and it is not seriously disputed that Atkinson demonstrated a prima facie case of unlawful discrimination: (1) he was discharged; (2) he was qualified for the position; (3) at age 58, he was within the protected class; and (4) he was replaced by someone outside of the protected class—a 38-year-old worker. Denton Publishing effectively rebutted the presumption of discrimination with evidence that Atkinson was terminated for insubordination after he refused to accept a transfer to the Lewisville News and the Grapevine Sun, two smaller newspapers also owned by Denton Publishing. Denton Publishing further responded with evidence that the decision to transfer Atkinson was made because Atkinson failed to complete specific assignments delegated to him within the time period proscribed, and because the paper was experiencing increasing competition for subscribers after the demise of a large daily paper in its market.

Atkinson produced controverting evidence which created genuine issues of fact as to whether each of Denton Publishing’s asserted reasons for his discharge were in fact pretextual. Denton’s primary reason for the discharge, Atkinson’s refusal to accept a transfer, was disputed by Atkinson’s evidence that he was terminated before he was offered any transfer, and evidence that Den-ton Publishing immediately withdrew the transfer offer when Atkinson attempted to accept it. Denton Publishing claimed that the transfer was motivated by Atkinson’s failure to complete assignments and increasing competition for subscribers. Atkinson responded with summary judgment evidence that all assignments had been completed on a timely basis, or would have been, if he had not been terminated. Moreover, Atkinson was never given any negative performance evaluations or warnings abut his performance, although it was the company’s policy to do so before termination. In fact, in the month prior to his termination, Atkinson was told that he was “doing a good job.” Atkinson also offered evidence that the demise of the large daily Dallas paper did not significantly impact Denton Publishing’s market in a negative way, and that he had offered numerous ideas to counter any competitive effect, which had all been refused by his employer.

Atkinson also offered additional evidence of age discrimination, based upon which a reasonable jury could conclude that he was more likely than not discharged because of his age. See Rhodes, 75 F.3d at 994-95; Moore v. Eli Lilly & Co., 990 F.2d 812, 816 (5th Cir.1993), cert. denied, — U.S. — , 114 S.Ct. 467, 126 L.Ed.2d 419 (1993). Atkinson offered evidence that general manager Bill Patterson preferred to deal directly with Atkinson’s younger, less experienced subordinates. Atkinson also offered evidence that Patterson told another Denton Publishing employee that he preferred to solve problems directly with the younger employees because Atkinson had “old ideas and old ways.” Atkinson also offered evidence that Patterson gave younger employees pay raises, when equally entitled older employees were denied raises. Finally, Atkinson’s deposition identifies other employees in the protected age class who were terminated and replaced by younger workers after Bill Patterson was promoted to general manager.

Taken as a whole, Atkinson’s summary judgment evidence creates a fact issue on the issue of whether age was a determinative factor in Denton Publishing’s decision to terminate Atkinson. Although we express no opinion on the ultimate merits of Atkinson’s claim, summary judgment at this stage was therefore improper.

2. Breach of Contract

In August 1991, Atkinson and Den-ton Publishing entered into a “Profit Sharing Bonus Agreement.” Under the terms of that agreement, Atkinson agreed to function as a circulation manager for Denton Publishing from August 1, 1991, until June 80, 1992. Denton Publishing agreed that Atkinson would be compensated $720 per week, and in addition, would receive a profit sharing bonus calculated according to the terms of the agreement.

The district court found that the profit sharing agreement was an employment contract for the stated period. We agree that there is at least a fact question about whether the agreement formed a binding employment contract. The district court nonetheless concluded that summary judgment was appropriate because Atkinson committed the first material breach of the agreement by refusing the offer of transfer on the day of termination. The court reasoned that because the agreement did not limit Atkinson’s service to a particular newspaper owned by Denton Publishing, Atkinson could not refuse the transfer without breaching the agreement. However, the position offered to Atkinson paid significantly less and did not include a profit sharing bonus. Perhaps more important is the fact that Atkinson contends he was terminated before any offer of transfer was made. Viewing the facts in a light most favorable to Atkinson, Denton Publishing’s unilateral decision to terminate the agreement six months early, or alternatively, its unilateral attempt to modify the financial terms of the agreement without new consideration was a material breach that preceded Atkinson’s alleged refusal of the transfer. Atkinson’s summary judgment evidence demonstrated that there remain genuine issues of material fact relating to his claim for breach of contract, and summary judgment was improper.

Nor do we agree, as the district court found in the alternative, that collateral estoppel bars Atkinson’s claim for breach of contract. Shortly after he was terminated, Atkinson filed a claim before the Texas Employment Commission (TEC) under the Texas Payday Law claiming his entitlement to a bonus according to the terms of the agreement. See Tex.Rev.StatAnn. art. 5155 § 5(f) (rules and procedures used by TEC in benefit determinations are used to make preliminary wage determinations under the Texas Payday Law). While this action was pending, the TEC issued a final determination that Atkinson was not entitled to a bonus under the agreement. Den-ton Publishing argues that the final TEC wage determination collaterally estops Atkinson from litigating his breach of contract claim, which is based upon the agreement.

Atkinson argues that TEC decisions do not have preclusive effect, citing Tex.Rev.Stat. Ann. art. 5221b-9(r), which states that findings made in a claim for benefits under the Texas Unemployment Compensation Act cannot be used as evidence in another proceeding not brought under the Act. Denton Publishing responds that although article 5221b-9(r) prohibits the use of benefit determinations as collateral estoppel, it does not apply to preclude the use of wage determinations made by the TEC in subsequent litigation.

The Texas legislature denied TEC benefit determinations preclusive effect because “[t]he adjudication process under the Texas Employment Compensation Act is geared to the disposal of a large number of cases in an expeditious manner.” Report by the Texas House Comm. ON Labor and Employment Relations, H.B. 813 (Mar. 26, 1991). Further, “[t]he mere possibility that collateral estoppel will be applied has the potential for bogging down the appeals process under the Texas Unemployment Compensation Act by protracted litigation where further litigation is contemplated in other forums involving the same facts and parties.” Id. Both of those justifications for denying TEC findings pre-clusive effect apply equally when the TEC is making wage, rather than benefit, determinations. There are, however, no Texas cases addressing the issue of whether the statute prohibits the assertion of TEC wage determinations as collateral estoppel, and it is not necessary that we decide that issue in this case. If the statute is applicable, the TEC determination as to Atkinson’s claim would not bar relitigation in this action. If the statute is not applicable, then the preclusive effect of the TEC determination is governed by Texas collateral estoppel principles. Migra v. Warren City School District Bd. of Educ., 465 U.S. 75, 80-82, 104 S.Ct. 892, 896, 79 L.Ed.2d 56 (1984).

Under Texas law, collateral estoppel precludes relitigation of identical issues actually litigated in a prior action if: (1) the issue was fully and fairly litigated in the prior action; (2) the issue was essential to the decision in the prior case; and (3) the parties were cast as adversaries in the prior action. J.M. Muniz, Inc. v. Mercantile Texas Credit Corp., 833 F.2d 541, 544 (5th Cir.1987) (citing Bonniwell v. Beech Aircraft Corp., 663 S.W.2d 816, 818 (Tex.1984)). Even if article 5221b-9(r) does not preclude relitigation of Atkinson’s breach of contract claim, Atkinson’s claim for breach of contract is not identical to the Texas Payday Law claim he filed with the TEC. Moreover, the adjudicative process afforded by the Texas Unemployment Compensation Act did not provide Atkinson with the opportunity to fully and fairly litigate all aspects of his claim. We therefore decline to give preclusive effect to the TEC determination.

3. Intentional Infliction of Emotional Distress

Under Texas law, the tort of intentional infliction of emotional distress has four elements: (1) intentional or reckless conduct; (2) that was extreme or outrageous; (3) that caused emotional distress; (4) that was severe. Wornick Co. v. Casas, 856 S.W.2d 732, 734 (Tex.1993). Only conduct that is “so outrageous in character and so extreme in degree as to go beyond all possible bounds of human decency, and to be regarded as atrocious and utterly intolerable in a civilized community” will satisfy the second element of the tort of intentional infliction of emotional distress. Dean v. Ford Motor Credit, 885 F.2d 300, 306 (5th Cir.1989); see also Wornick, 856 S.W.2d at 735. Further, it is the province of the court to determine whether a defendant’s conduct may reasonably be regarded as extreme and outrageous enough to permit recovery. Wornick, 856 S.W.2d at 734.

Atkinson alleges that he was terminated without warning after long-service, that the company published false and defamatory reasons for his termination to people inside, the company, that his superiors were disrespectful or rude to him during his employment and in the termination meeting, and that as a result he experienced “grief, shame, humiliation, anger, depression and nausea.” Virtually all of Atkinson’s allegations fall within the realm of an ordinary employment dispute, which is not actionable as an intentional infliction of emotional distress. As a matter of law, the alleged conduct is not extreme and outrageous. See Ugalde v. W.A. McKenzie Asphalt Co., 990 F.2d 239 (5th Cir.1993); Johnson v. Merrell Dow Pharmaceuticals, Inc., 965 F.2d 31, 33-34 (5th Cir.1992); Wornick, 856 S.W.2d at 735. The district court’s grant of summary judgment as to Atkinson’s intentional infliction of emotional distress claim was appropriate.

CONCLUSION

For the foregoing reasons, the district court’s orders (1) denying Atkinson’s motion to expand the number of interrogatories; (2) denying, in part, Atkinson’s motion to compel production of certain Denton Publishing personnel files; (3) denying, in part, Atkinson’s motion to strike portions of Denton Publishing’s summary judgment evidence; (4) quashing Atkinson’s amended motion for summary judgement; and (5) denying Atkinson’s motion to expand the time required to obtain a report from his expert on damages, are AFFIRMED. The district court’s grant of summary judgment in favor of the defendant, Denton Publishing, is AFFIRMED as to Atkinson’s intentional infliction of emotional distress claim. As to Atkinson’s age discrimination and breach of contract claims, the district court’s grant of summary judgment is VACATED, and the cause is REMANDED to the district court for further proceedings consistent with this opinion.

The district court’s summary judgment is AFFIRMED in part, and VACATED AND REMANDED in part.

      . Atkinson makes no argument on appeal related to his claim that Denton Publishing terminated him because he refused to commit an illegal act.

      . The Civil Justice Expense and Delay Reduction Plan was adopted pursuant to the Civil Justice Reform Act of 1990, 28 U.S.C. § 471 et seq.

      . Tex.Rev.Civ.Stat Ann. art. 5155. The Texas Payday Law has been repealed and codified at TexLabor Code § 61.011 et seq. This opinion refers to that version of the Texas Payday Law applicable to Atkinson’s claims.

      . TexRev.Stat.Ann. art. 5221b-9(r) was repealed and is now codified at TexLabor Code § 213.007. This opinion refers to the version of that statute applicable to Atkinson’s claims.