USCA1 Opinion
December 13, 1995 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 95-1552
GEO. P. REINTJES, CO., INC.,
Plaintiff, Appellant,
v.
RILEY STOKER CORPORATION,
Defendant, Appellee.
____________________
ERRATA SHEET ERRATA SHEET
The opinion of this Court issued on December 7, 1995, is
amended as follows:
On page 2, first paragraph, line 12, change "Reintjes'" to
"Riley Stoker's."
UNITED STATES COURT OF APPEALS UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT FOR THE FIRST CIRCUIT
____________________
No. 95-1552
GEO. P. REINTJES CO., INC.,
Plaintiff, Appellant,
v.
RILEY STOKER CORPORATION,
Defendant, Appellee.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Nathaniel M. Gorton, U.S. District Judge] ___________________
____________________
Before
Torruella, Chief Judge, ___________
Aldrich and Coffin, Senior Circuit Judges. _____________________
____________________
Duane J. Fox with whom Gregory S. Gertstner, Seigfreid, Bingham, ____________ ____________________ ___________________
Levy, Selzer & Gee, Edmund C. Case, Roger Lane and Testa, Hurwitz & ___________________ _______________ __________ ________________
Thibeault were on brief for appellant. _________
David P. Grossi with whom Barry A. Bachrach and Bowditch & Dewey _______________ _________________ ________________
were on brief for appellee.
____________________
December 7, 1995
____________________
ALDRICH, Senior Circuit Judge. This is another _____________________
case seeking, inter alia, to attribute to M.G.L. c. 93A, ___________
2(a) and 11 (1988 ed.), the universal capacity of a Swiss
army jack-knife. Briefly, plaintiff Geo. P. Reintjes Co.,
Inc. of Kansas City, Missouri, and defendant Riley Stoker
Corp. of Worcester, Massachusetts, found themselves faced
with the question of who must bear a loss due to the
inappropriateness of A.P. Green furnace lining material,
obtained and installed by Reintjes in boilers supplied by
Riley Stoker to a third party. The answer depended on
whether Reintjes' warranty to Riley Stoker included the
material's design. The parties resorted to arbitration and
the arbitrator credited Riley Stoker's employees, who
testified, in its favor, that it was so understood. The
arbitrator's findings were confirmed by the United States
District Court for the District of Massachusetts and Riley
Stoker obtained a judgment in the amount of $989,119. The
parties agreed to settle the judgment for $950,000 which, in
due course, was done.
Some two years later Reintjes learned, through the
accident of its counsel in the arbitration case being engaged
in entirely independent litigation with Riley Stoker, that
Riley Stoker employees may have committed perjury in the
Reintjes arbitration proceeding. Reintjes then filed this
action claiming Riley Stoker's failure to disclose the
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alleged fraud during settlement negotiations, that led to
Reintjes paying a substantial sum, amounted to a common law
misrepresentation and, more, was an "unfair or deceptive act
. . . in the conduct of . . . trade or commerce" under M.G.L.
c. 93A, 2(a), entitling Reintjes to damages. According to
Reintjes, its present suit rests not on the original cause of
action, but on the independent allegation of fraud in
procurement of the settlement agreement.
The district court initially took the view that
Reintjes' claims arising from procurement of the settlement
agreement were cognizable independently of the judgment, but
later, on Riley Stoker's motion, undertook to reconsider.
Reintjes thereupon moved for leave to file an amended
complaint to set aside the judgment. This was denied on the
grounds that Reintjes did not state a claim for relief from
the judgment in the absence of a showing that fraud upon the
court had occurred. The court then granted Riley Stoker's
motion to dismiss Reintjes' common law and state claims
because they could not lie unless relief from the prior
judgment was obtained. We affirm.
I. __
Reintjes first asserts that the court erred in
ruling its fraud and chapter 93A claims barred by the prior
judgment. Reintjes states that "failure to disclose any fact
which would influence a person not to enter into a
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transaction is a violation of chapter 93A;" that this statute
therefore "imposed upon Riley Stoker an affirmative duty _________________
(sic) to disclose, during procurement of the settlement
agreement, that the award was obtained through perjured
testimony," and that Reintjes relied on the non-disclosure in
entering into the settlement agreement.
Our assent to such a contention would amount to a
rule, in Massachusetts at least, that attached to every
federal judgment affecting commercial matters is an inherent
condition that it must be proved correct, or it cannot be
relied upon, for there is an "affirmative duty" to disclose
if it is faulty. Reintjes concludes that Rule 60, which
prescribes the exclusive methods by which federal judgments
may be attacked, "cannot curtail" its state and common law
claims, citing 28 U.S.C.A. 2072(b) to the effect that
Federal Rules of Civil Procedure "shall not abridge, enlarge
or modify any substantive right." With due respect, it is
inconceivable that the finality of otherwise valid federal
judgments is dependent upon their validity under state law.
Reintjes cites no authority. We summarily affirm the
district court's ruling that Reintjes' only route to relief
from the settlement and underlying judgment is through
application of Federal Rule of Civil Procedure Rule 60(b).
To this we turn.
II. ___
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Reintjes claims the court erred in ruling that it
was unable to state a claim for relief from judgment because
its allegations did not amount to a fraud upon the court, or,
alternatively, that Rule 60(b) does not require it to show
fraud upon the court and that its allegations state a
cognizable basis for relief under the Rule. It contends
Riley's witnesses engaged in a concerted effort to present
perjured testimony during the arbitration hearing regarding
the central issue in the case, namely, whether Reintjes had
assumed design warranty for the boiler linings. These
charges stem from Reintjes' discovery, some two years after
entry of judgment against it, of materials1 indicating
Riley's witnesses may have perjured themselves.
Rule 60(b) permits relief from final judgment for,
inter alia, __________
(2) newly discovered evidence which by
due diligence could not have been
discovered in time to move for a new
trial under Rule 59(b);
(3) fraud (whether heretofore denominated
intrinsic or extrinsic),
misrepresentation, or other misconduct of
an adverse party . . .
Fed.R.Civ.P. 60(b). The Rule requires that motions pursuant
to the above grounds "shall be made within a reasonable time,
and . . . not more than one year after the judgment, order,
____________________
1. Letters and notes of a third-party participant in a
pivotal meeting between the parties, about which both had
testified.
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or proceeding was entered or taken." Id. At the same time, ___
the Rule
does not limit the power of a court to
entertain an independent action to
relieve a party from a judgment, order,
or proceeding, . . . or to set aside a
judgment for fraud upon the court.
Id. ___
Our initial reaction is that, despite the apparent
openness of this final provision, where the body of the Rule
contains an explicit time limitation for motions invoking
specified grounds for relief, it would make no sense to apply
the final general provision, containing no limit of time, so
broadly as to cover all the grounds for which the time limit
is expressly stated. Since Reintjes' claims would appear to
fall exactly under sections (2) and (3) of the Rule, but
materialized too late to file in a motion to the judgment
court,2 it should not now be able to elect to proceed under
the unlimited clause without some additional ground or
reason. Historically, however, this may be too easy an
answer. In view of the curtness of the Rule's final clause,
and a modicum of disagreement in the circuits, we will
examine its origins.
____________________
2. Reintjes did file such a motion to the judgment court
(Young, J.), however, it was summarily denied, presumably
because it was filed more than one year after entry of the
judgment. Fed.R.Civ.P. 60(b)(3). No appeal was filed.
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Prior to the adoption of the Federal Rules of Civil
Procedure the general rule was that application for relief
from judgment on account of fraud could be made to the
presiding court before expiration of the term in which final
judgment was entered. Bronson v. Schulten, 104 U.S. 410, 415 _______ ________
(1882). See also Glass, et al. v. Excelsior Foundry Co., 56 ___ ____ _____________ _____________________
F.3d 844, 848 (7th Cir. 1995). However, efforts to balance
the value of finality against aversion to condoning abuse of
the judicial apparatus led courts sitting in equity to
recognize an exception for a narrow category of fraud
"extrinsic," or collateral, to the original action. On the
other hand, intrinsic fraud, such as perjury relating to an
issue actually decided, could not form the basis for untimely
relief. United States v. Throckmorton, 98 U.S. 61, 66, 68 _____________ ____________
(1878) (judgment confirming certain land claims based on
falsified land grant could not be set aside 18 years later on
claim of fraud because validity of grant was the issue
tried).
The Throckmorton rule that fraud claimed in the ____________
matter tried cannot form the basis for an untimely request
for relief from final judgment was refined in Hazel-Atlas ___________
Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944).3 An _________ ____________________
____________________
3. This case avoided the extrinsic/intrinsic labels. Some
have long found the distinction dubious, dubbing it "clouded
and confused," 11 Wright, Miller & Kane, Federal Practice and ____________________
Procedure, 2868, p. 401 (1995 ed.), and "at times . . . a _________
journey into futility." Moore & Rogers, Federal Relief from
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attorney for Hartford had contrived to have an encomium for
its patent claim published in a trade journal under the by-
line of a disinterested expert, which was then presented in
evidence. Hartford lost at trial, but its attorneys paraded
the article before a panel of the court of appeals, which
then reversed and entered judgment in Hartford's favor,
supporting its opinion with quotation from the spurious
publication. Id. at 240-42. Nine years later Hazel-Atlas ___
instigated an action to undo the judgment based on newly
obtained evidence of Hartford's caper. The Supreme Court
directed that judgment for Hartford be set aside and the
district court's original order denying relief to Hartford be
reinstated. Id. at 251. The Court emphasized the old ___
English rule that, "under certain circumstances, one of which
is after-discovered fraud, relief will be granted against
judgments regardless of the term of their entry," id. at 244, ___
was to be applied cautiously, i.e., only "in certain
instances . . . deemed sufficiently gross to demand a
departure from rigid adherence" to finality. Id. The Court ___
justified its application in Hazel-Atlas Glass by ___________________
distinguishing this situation from a case where after-
discovered evidence indicates merely that a witness may have
perjured himself, id. at 245, from cases concerning only ___
private parties, id. at 246, and from cases resulting in ___
____________________
Civil Judgments, 55 Yale L.J. 623, 658 (1946).
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injury merely to a single litigant (deeming fraud perpetrated
to obtain a favorable patent ruling "a wrong against the
institutions set up to protect and safeguard the public").
Id. And, Hartford's was "a deliberately planned and ___
carefully executed scheme" by an attorney "to defraud not
only the Patent Office but the Circuit Court of Appeals."
Id. at 245-46. In fact, it reached all persons affected by ___
the patent.
Hazel-Atlas Glass thus expanded the range of the __________________
fraud exception for untimely requests for relief delineated
in Throckmorton to include fraud committed by "officers of ____________
the court." See Moore, 7 Federal Practice, 60.33, p. 60- ___ ________________
359 (1995). It carries forward the well-established
understanding that this exception never included garden-
variety fraud:
This is not simply a case of a judgment
obtained with the aid of a witness who,
on the basis of after-discovered
evidence, is believed possibly to have
been guilty of perjury.
Hazel-Atlas Glass, 322 U.S. at 245. _________________
In 1946 Congress adopted the current version of
Rule 60(b) which specifies fraud, "whether heretofore
denominated extrinsic or intrinsic," Fed.R.Civ.P. 60(b)(3),
as an explicit ground for a motion for relief and subjects
it, like several other grounds specified, to a one year
limitation. The Rule preserves judicial power to grant
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relief in an independent action "insofar as established
doctrine permits,"4 and "expressly does not limit the power
of the court, when fraud has been perpetrated upon it, to
give relief under the saving clause." Fed.R.Civ.P. 60, Notes
of Advisory Committee on Rules, 1946 Amendment, Note to
Subdivision (b) (hereinafter "Advisory Committee Notes").
Other than specifying "fraud upon the court,"5
however, the Rule "makes no attempt to state the bases for
the independent action." Moore, 7 Federal Practice, _________________
60.37[2]. Rather, it leaves this substantive determination
to established principles, id., "which have heretofore been ___
applied in such an action." Advisory Committee Notes. See ___
Indian Head Nat. Bank of Nashua v. Brunelle, 689 F.2d 245, _________________________________ ________
248-49 (1st Cir. 1982) (as Advisory Committee Notes indicate,
"the Rule expressly preserves independent equitable actions"
available "prior to the Rule's enactment"). We find that
Congress incorporated into Rule 60(b) pre-existing judicial
principles governing untimely requests for equitable relief
____________________
4. The Rule as originally adopted did not specify fraud as a
ground for relief, but did contain a saving clause that left
courts free to continue to exercise their inherent power to
grant relief from judgments where established doctrine
warranted. Fed.R.Civ.P. 60(b) (1937), 28 U.S.C.A. 723(c)
(West 1941). See, e.g., Central Hanover Bank & Trust Co. v. ___ ____ ________________________________
Wardman Real Est. Prop., 31 F. Supp. 685 (D.D.C. 1940). _______________________
5. In this Circuit we have held such fraud to consist of an
"unconscionable scheme calculated to interfere with the
judicial system's ability impartially to adjudicate a matter"
involving an officer of the court. Aoude v. Mobil Oil Corp., _____ _______________
892 F.2d 1115, 1118 (1st Cir. 1989).
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from fraudulent judgments. See Hazel-Atlas Glass, 322 U.S. ___ __________________
238.
While "fraud upon the court" is therefore not the
only permissible basis for an independent action, as the ____
district court held, and therefore Reintjes need not make
such a showing, there is also little doubt 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. Throckmorton, 98 U.S. at 66; ____________
Hazel-Atlas Glass, 322 U.S. at 244-45 (untimely bid for __________________
relief justified only where enforcement of judgment would be
"manifestly unconscionable") (quoting Pickford v. Talbott, ________ _______
225 U.S. 651, 657 (1912)). See also, Chicago, R.I. & P. Ry. ___ ____ _______________________
v. Callicotte, 267 F. 799, 810 (8th Cir. 1920), cert. denied, __________ ____________
255 U.S. 570 (1921) ("indispensable" element of independent
attack on judgment for fraud is that it prevented party from
presenting his case); Aetna Casualty & Surety Co. v. Abbott, ____________________________ ______
130 F.2d 40, 43-44 (4th Cir. 1942) ("it is well settled that
[a conspiracy between plaintiff and his witnesses to present
perjured testimony] constitutes no ground" upon which court
could deny enforcement of judgment in an independent
proceeding). The great majority of cases addressing the
scope of fraud necessary to sustain an independent action
under the modern Rule 60(b) has adhered to this principle.
See, e.g., Gleason v. Jandrucko, 860 F.2d 556, 558 (2nd Cir. ___ ____ _______ _________
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1988) (fraud necessary to sustain independent action is
narrower than that which is sufficient to obtain relief by
timely motion); Travelers Indemnity Co. v. Gore, 761 F.2d ________________________ ____
1549 (11th Cir. 1985) (allegations of perjury insufficient to
entitle plaintiff to relief from judgment in an independent
action under Rule 60(b)); Great Coastal Express v. Int'l ______________________ _____
Brotherhood of Teamsters, 675 F.2d 1349, 1358 (4th Cir. __________________________
1982), cert. denied, 459 U.S. 1128 (1983); Robinson, 56 F.3d ____________ ________
at 1274 n.6 (10th Cir. 1995). But see, Averbach v. Rival _______ ________ _____
Manufacturing Co., 809 F.2d 1016, 1022-23 (3rd Cir.), cert. _________________ _____
denied, 482 U.S. 915, and cert. denied, 484 U.S. 822 (1987) ______ ____________
("[T]he elements of a cause of action for [relief from a
judgment on the ground of fraud] in an independent action are
not different from those elements in a Rule 60(b)(3) motion,
and . . . the time limit on such a motion does not apply to
an independent action.").
In sum, perjury alone, absent allegation of
involvement by an officer of the court (Reintjes makes none),
has never been sufficient. Throckmorton, 98 U.S. at 66; ____________
Hazel-Atlas Glass, 322 U.S. at 245. See also, Gleason, 860 _________________ ________ _______
F.2d at 559 (2nd Cir.); Travelers Indemnity, 761 F.2d at ___________________
1551-52 (11th Cir.); Wood v. McEwen, 644 F.2d 797 (9th Cir. ____ ______
1981), cert. denied, 455 U.S. 942 (1982). The possibility of ____________
perjury, even concerted, is a common hazard of the adversary
process with which litigants are equipped to deal through
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discovery and cross-examination, and, where warranted, motion
for relief from judgment to the presiding court.
Fed.R.Civ.P. 60(b)(3). Were mere perjury sufficient to
override the considerable value of finality after the
statutory time period for motions on account of fraud has
expired, it would upend the Rule's careful balance. See ___
Great Coastal Express, 675 F.2d at 1354-55 (Rule 60(b) is an ______________________
effort to balance competing judicial values of finality and
equity, with equitable considerations favored for up to one
year from entry of judgment, and finality thereafter).
Reintjes points to no reason why this newly
discovered evidence might justify relief from judgment beyond
the statutory time frame. Discrediting witnesses does not
generally justify an "extraordinary" second opportunity.
Xerox Financial Services Life Ins. Co. v. High Plains Ltd., _______________________________________ ________________
44 F.3d 1033, 1038-39 (1st Cir. 1995). See Moore, 7 Federal ___ _______
Practice, 60.37 (Rule 60(b) does not license a party to ________
relitigate, whether via motion or independent action, any
"issues that were made or open to litigation in the former
action where he had a fair opportunity to make his claim or
defense"). See, also, Travellers Indemnity, 761 F.2d at 1552 ___ ____ ____________________
(11th Cir.); Comptex, S.A. v. LaBow, 783 F.2d 333, 335 (2nd _____________ _____
Cir. 1986); Carter v. Dolce, 741 F.2d 758, 760 (5th Cir. ______ _____
1984). Reintjes' claims amount, at best, to ordinary fraud
which, as we have said, cannot form the basis of an
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independent action under the Rule's saving provision when
they would certainly be barred if presented as a motion under
section (3).6 See Wallace v. United States, 142 F.2d 240, ___ _______ _____________
244 (2nd Cir.), cert. denied, 323 U.S. 712 (1944) _____________
("[o]bviously it cannot have been intended that what may be
done within six months, pursuant to the body of Rule 60(b)
may also be done thereafter, under the exception contained in
its last sentence") (referring to predecessor to current
Rule). See also, Moore, 7 Federal Practice, 60.33 (if _________ _________________
fraud that may form basis of independent action "is not kept
within proper limits but is ballooned to include all or
substantially all species of fraud within 60(b)(3) then the
time limitation upon 60(b)(3) motions will be meaningless").
Finally, while the notion that it would be "against
conscience" to let a particular judgment stand may in some
instances serve to tip what would otherwise be ordinary fraud
into the special category that can invoke a court's inherent
powers to breach finality, see Marshall v. Holmes, 141 U.S. ___ ________ ______
589, 595 (1891), Hazel-Atlas Glass, 322 U.S. at 244-45, __________________
Reintjes has failed to so move us here. There is nothing
particularly offensive about the circumstances surrounding,
or the result of, Reintjes' warranty dispute with Riley
Stoker. See id. at 244. If Reintjes should have won, then ___ ___
____________________
6. See note 2, supra. ___ _____
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the most that can be said is that it lost in large measure
due to its own lack of diligence.
The judgment of the district court is affirmed. ________
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