UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
________________
No. 99-11308
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Robert C. Ballew,
Plaintiff-Appellant,
versus
United States Department of Justice and
United States Coast Guard,
Defendants-Appellees.
_________________________________________________________________
Appeal from the United States District Court
for the Northern District of Texas
Civil Docket #4:99-CV-406-Y
_________________________________________________________________
December 15, 2000
Before JOLLY, JONES, and SMITH, Circuit Judges.
EDITH H. JONES, Circuit Judge:*
Robert C. Ballew (“Ballew”) appeals from the district
court’s grant of a motion to dismiss for failure to state a claim
*
Pursuant to 5TH CIR. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under the limited
circumstances set forth in 5TH CIR. R. 47.5.4.
on his Federal Rule of Civil Procedure 60(b) independent equitable
action for relief from a final judgment. Because Ballew did not
plead the sort of “grave miscarriage of justice” required to
sustain a Rule 60(b) independent equitable action for relief from
a final judgment, we now affirm the district court’s dismissal of
his claim.
In 1988 Ballew filed a qui tam lawsuit under the Federal
False Claims Act against his then-employer, Aerospatiale Helicopter
Corporation (“AHC”) and the Textron Lycoming Division of AVCO
Corporation (“AVCO”). These two defense contractors were engaged
in the production and maintenance of the HH65-A “Dolphin”
helicopter for the Coast Guard. Ballew’s qui tam action revealed
that the engines made by AVCO for use in the AHC-manufactured
helicopter were defective. As relator of an action brought on
behalf of the government, Ballew was entitled to receive a share of
any recovery obtained by the government. The Department of Justice
ultimately intervened in Ballew’s qui tam action and settled the
case on July 10, 1990.
As part of the settlement, the Government agreed to give
Ballew, in his capacity as relator, a 15% share of the cash
recovery, or a total payment of $2,685,861.90. In return for this
large cash payment, Ballew consented to the dismissal of his qui
tam lawsuit against AVCO and AHC. The district court approved the
proposed settlement, stating that “the Settlement Agreement between
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the Parties provides fair, adequate and reasonable resolution of
this case under all the circumstances.”
Ballew received his nearly $2.7 million payment shortly
after the July 10, 1990 settlement was reached, and the matter was
considered closed. However in June 1999, nearly nine years later,
Ballew returned to federal court, asserting that he received a sum
far below that to which he was entitled.
In the instant case, Ballew asserts that the Government
fraudulently concealed critical elements of the settlement
agreement with AVCO and AHC, disguising the fact that the
Government actually received some $327,940,130 in valuable
consideration. Ballew therefore contends that he is entitled to
15% of $327,940,130, rather than the 15% of $17.9 million that he
actually received.
Ballew arrived at this much larger settlement figure
based on several documents he obtained via the Freedom of
Information Act between 1996 and 1998. Ballew claims that the qui
tam settlement to which he agreed in 1990 failed to give him his
15% cut of (1) the new engine maintenance (“Power by the Hour”)
contract entered into between AVCO and the Government as part of
the settlement and (2) the settlement of certain administrative
claims between the Coast Guard and AHC, which settled several weeks
after his own underlying qui tam action.
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The district court granted the Government’s motion to
dismiss Ballew’s Rule 60(b) independent action for failure to state
a claim. The district court ruled that Ballew had failed to plead
the sort of “grave miscarriage of justice” required to sustain an
independent equitable action under the “Savings Clause” of Rule
60(b) and that any motion allowed under Rule 60(b) was untimely.
Ballew now appeals the dismissal of his Rule 60(b) claim.
This Court’s review of the district court’s grant of the
Government’s motion to dismiss for failure to state a claim is de
novo. Holt Civic Club v. City of Tuscaloosa, 439 U.S. 60, 66
(1978); Fontana v. Barham, 707 F.2d 221, 227 (5th Cir. 1983). The
Government has argued that we should review the district court’s
decision in this case for abuse of discretion. The Government’s
argument is premised on the rule that dismissal of Rule 60(b)
motions seeking relief from final judgment is subject only to abuse
of discretion review. The Government’s argument is correct as far
as it goes: Rule 60(b)(1)-(6) motions are directed to the sound
discretion of the district court. See e.g. Behringer v. Johnson,
75 F.3d 189, 190 (5th Cir. 1996), cert. denied 516 U.S. 1182
(1996); Bertrand v. Sullivan, 976 F.2d 977, 980 (5th Cir. 1992).
However, the instant action does not concern a Rule 60(b) motion
but rather an independent action pursuant to the “Saving Clause” of
Rule 60(b). See 11 Charles Alan Wright & Arthur R. Miller, Federal
Practice and Proceedure § 2868 (2d ed. 1986). An action pursuant
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to the “Saving Clause” is a free-standing claim in equity, not a
mere motion, and is thus subject to de novo review on appeal when
dismissed pursuant to Federal Rule of Civil Procedure 12(b)(6).
The “Saving Clause” reads in relevant part that “[t]his
rule does not limit the power of a court to entertain an
independent action to relieve a party from a judgment [or] order.”
Fed. R. Civ. Pro. 60(b). This independent action sounds in equity
and is subject to the standard equitable defenses, including
laches.
The Supreme Court has recently underscored the special
nature of the Rule 60(b) independent equitable action as a means of
relief from a judgment, concluding that the remedy is available
only where there has been “grave miscarriage of justice.” United
States v. Beggerly, 524 U.S. 38, 46, 118 S.Ct. 1862, 1868 (1998).
The Supreme Court emphasized that the level of fraud or misconduct
necessary to sustain an independent action under the “Saving
Clause” of Rule 60(b) must be several notches of severity above
that required for a 60(b)(3) motion:
If relief may be obtained through an independent action
in a case such as this, where the most that may be
charged against the government is a failure to furnish
relevant information that would at best form the basis
for a Rule 60(b)(3) motion, the strict 1-year time limit
on such motions would be set at naught. Independent
actions must, if Rule 60(b) is to be interpreted as a
coherent whole, be reserved for those cases of
“injustices which, in certain instances, are deemed
sufficiently gross to demand a departure” from rigid
adherence to the doctrine of res judicata.
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Beggerly, 524 U.S. at 46, 118 S.Ct. at 1867 (quoting
Hazel-Atlas Glass Co. v. Hartford- Empire Co., 322 U.S. 238, 244,
64 S.Ct 997, 1000 (1944)).1 Thus, the bar has been set high for
Ballew’s Rule 60(b) independent action: it must work a “grave
miscarriage of justice” to allow the settlement in the original qui
tam action to stand.
In his attempt show the requisite “grave miscarriage of
justice” Ballew focuses on the failure of the government to give
him a share, in his capacity as relator, of the estimated value of
the later-settled “Power by the Hour” maintenance contract or of
the resolution of the administrative claims between AHC and the
Coast Guard. Ballew’s brief implies that this exclusion was
motivated by malice, misrepresentations and fraudulent concealment
on the part of the Department of Justice and/or the Coast Guard;
but the qui tam award that he did receive was, at the time, the
largest-ever. It is also undisputed that he was aware of the
government’s negotiations over the Power by the Hour contract at
the time of the settlement, and he was vigorously represented by
counsel during settlement negotiations. Put together, these
1
As Beggerly suggests, Rule 60(b)(3) would be directly applicable to
Ballew’s alleged situation, permitting relief “from a final judgment . . .
[because of] fraud . . . misrepresentation, or other misconduct of an adverse
party,” but by waiting over nine years to assert that the Government committed
fraud in entering into the underlying qui tam settlement, Ballew lost the option
of bringing a 60(b)(3) motion. Similarly, to the extent Ballew’s allegations
might have supported relief based on Rule 60(b)(1) (“mistake, inadvertence,
surprise, or excusable neglect”), or Rule 60(b)(2) (newly discovered evidence),
they are also time-barred.
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circumstances do not rise to the level of a grave miscarriage of
justice even if the government was not fully forthcoming to Ballew.
Ballew also attempts to satisfy the grave miscarriage of
justice standard by claiming that he is the victim of fraud by the
Government, which allegedly made misrepresentations and withheld
information during the settlement negotiations in 1990. Accepting
these allegations as true, Ballew has still not made out a claim
there has been the sort grave miscarriage of justice contemplated
by the Supreme Court. Even prior to Beggerly it was established
that “fraud cognizable to maintain an untimely independent attack
upon a valid and final judgment has long been regarded as requiring
more than common law fraud.” Geo. P. Reintjes Co. v. Riley Stoker
Corp., 71 F.3d 44, 48 (1st Cir. 1995). Beggerly itself held that
the failure of the Government to “thoroughly search its records and
make full disclosure to the Court” was insufficient to sustain a
Rule 60(b) independent action. Beggerly, 524 U.S. at 47, 118 S.Ct.
1868.
Ballew’s only other argument that there has been a grave
injustice is bound up with his assertion that “fraud on the court”
was committed by the Government. Fraud on the court, if
established, constitutes a grave miscarriage of justice and may
serve as the foundation of a Rule 60(b) independent action. Rozier
v. Ford Motor Company, 573 F.2d 1332, 1338 (5th Cir. 1978). But
the standard for fraud on the court is demanding: “Generally
speaking, only the most egregious misconduct, such as bribery of a
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judge or members of a jury, or the fabrication of evidence by a
party in which an attorney is implicated, will constitute a fraud
on the court.” Id. at 1338 (citing to Hazel-Atlas Glass Co. v.
Hartford-Empire Co., 322 U.S. 238, 64 S.Ct. 997 (1944)). Less
egregious misconduct, such as nondisclosure to the court of facts
allegedly pertinent to the matter before it, will not ordinarily
rise to the level of fraud on the court. Id. at 1338 (citing to
Kupferman v. Consolidated Research & Mfg. Co., 459 F.2d 1072 (2nd
Cir. 1972)). Where the wrong is only between the parties and there
has been no direct assault on the integrity of the judicial process
itself, the federal courts have refused to invoke the doctrine of
fraud on the court. See 11 Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure § 2870 at 416 (2d. ed. 1987).
Stated another way, fraud on the court requires a “scheme by which
the integrity of the judicial process has been fraudulently
subverted by a deliberately planned scheme in a manner involving
‘far more than an injury to a single litigant.’” Addington v.
Farmer’s Elevator Mutual Insurance, 650 F.2d 663, 668 (5th Cir.
1981) (quoting Hazel-Atlas Glass, 322 U.S. 238, 245-46, 64 S.Ct.
997, 1002 (1944)).
Ballew asserts that the fraud on the court in the instant
case occurred when “the DOJ attorneys conspired with the USCG (and
the defendants in the underlying Qui Tam) to mislead the court as
to the true nature, extent and value of the underlying Qui Tam
settlement proceeds.” Taking all of these assertions as true,
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DRAFT
April 29, 2004 (4:39am)
Ballew has only established that the Government committed fraud
against him as an individual. Ballew has shown injury to himself
in his capacity as a “single litigant” but this alone is not
sufficient to constitute fraud on the court. Ballew has failed to
allege an attack on the integrity of the judicial process itself.
By failing to plead fraud on the court, Ballew has thereby failed
to assert that a grave miscarriage of justice exists.
Ballew has failed to plead any grave miscarriage of
justice. In the absence of a grave miscarriage of justice, a Rule
60(b) independent action can not be sustained. The district
court’s dismissal of Ballew’s action for failure to state a claim
is therefore AFFIRMED.
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