On January 20, 2026, the U.S. Supreme Court issued its opinion in Coney Island Auto Parts Unlimited, Inc. v. Burton, clarifying how and when parties may challenge federal judgments as void. At issue was whether a debtor can challenge a federal judgment as “void” at any time, even years after it was entered. The Court answered “No,” holding that final judgments are not open to indefinite attack. Instead, parties seeking to set aside a federal judgment must act within a reasonable time after learning of the judgment.
Judgments can be challenged as void for several reasons, including that the federal court lacked jurisdiction and that service was improperly made on the defendant. In Coney Island, a company in bankruptcy initiated a lawsuit against Coney Island to recover $50,000 in unpaid invoices. Coney Island did not respond to the lawsuit, and default judgment was entered against the company in 2015. The bankruptcy trustee spent six years attempting to enforce the judgment, including by sending a demand letter to Coney Island’s CEO directly. In 2021, the trustee successfully froze funds from Coney Island’s bank account. Only then – six years after judgment was entered against it – did Coney Island file a motion to vacate the judgment, alleging the judgment was void because of improper service. The bankruptcy court denied Coney Island’s motion, and the district court and federal appeals court affirmed that decision.
Federal Rule of Civil Procedure 60(c)(1) has long stated that parties seeking relief must file a motion seeking to void the judgment “within a reasonable time.” Before this decision, courts across the country were divided on whether and how to apply the rule to allegedly void judgments. The Supreme Court did not define what constitutes a “reasonable time”, but the facts of the Coney Island suggest its far less than six years.
For businesses enforcing judgments, this ruling adds some predictability and reduces the risk that a long-dormant judgment will suddenly be challenged after enforcement efforts are underway. Businesses should continue making every effort to properly serve debtors and should document early communications with debtors, who can no longer ignore judgments that they become aware of through unofficial channels.
If you have questions about how this ruling may affect your business or need guidance on enforcing or challenging judgments, please contact Hannah Schroer or any member of Barley Snyder’s Finance & Creditors’ Rights Practice Group.
