concurring in part and dissenting in part:
I agree with the persuasive majority opinion in all respects except its affirmance of the district court’s denial of the plaintiffs’ Rule 60(b)(2) motion in No. 87-3131. This is a close question and I am very much aware that the discretion of the trial judge is (and ought to be) particularly broad with respect to motions for a new trial based on newly discovered evidence. But here the new evidence of boasting by building management personnel of kicking out the “spies” and “wetbacks” was dynamite. As Judge Plunkett appears to concede, had it been available in time, it would easily have defeated summary judgment.
The district judge based his denial of the motion for a new trial on the plaintiffs’ alleged lack of due diligence in discovering evidence of discriminatory intent in time for trial. Judge Plunkett, in his remarks from the bench, made quite clear the considerations that he took into account in reaching this difficult decision:
THE COURT: [T]he place I stick on reversing what I did earlier is not the material you have in the affidavits; / think if I had that material when I looked at the case initially you would have a prima facie case of intentional discrimination.
[WJhere I stick is, and the reason I am denying the motion, is because under what you pled I couldn’t find any evidence that plaintiffs had engaged in any kind of discovery, although it was available to them, to deal with this information.
That is why I had to agree with the defendant Chody’s argument, although —I didn’t say it in the opinion but I say it here, I’m not happy I am doing that because I don’t like what was said out there, and I’m sure the plaintiffs don’t either, and it is not a happy decision I render, and sometimes I render decisions which are I think proper under the law but not necessarily under equity.
... [I]t is really on a, I’ll call it that, a technicality for lack of diligence on that claim that I block it, and I frankly, based on those affidavits, just shake my head about what apparently, or at least the plaintiffs allege, went on in that development. My God!
Gomez v. Chody, No. 86 C 6776, trans. at 2-3 (N.D.Ill. Dec. 8, 1987) [1987 WL 27298] (emphasis added).
The district court also stated that, “[w]hile we agree with Plaintiffs’ argument that Chody himself was unlikely to have admitted a discriminatory motive in deposition, questioning of the employees may well have uncovered evidence supporting an allegation of intentional discrimination.” Gomez v. Chody, No. 86 C 6776, mem. op. at 4 (N.D.Ill. Dec. 8, 1987). It seems to me the purest speculation whether the employees would have sung any louder on the subject of bias than Chody. After all they had jobs to protect. And, if the whole Chody team had denied animus, who was to give them the lie? Only after the district court granted summary judgment and in the convivial atmosphere of a building party, did some employees let *407their guard down and boast of bouncing the “spies” and “wetbacks.” This is the only way this solid evidence of discriminatory intent could have been generated; I am profoundly skeptical that it could have been extracted earlier. I would therefore hold that the denial of the plaintiffs’ new trial request was an abuse of discretion.
Rule 60(b)(2) does provide that newly discovered evidence may justify a new trial only if the evidence could not have been discovered earlier through the exercise of due diligence. But there is an important exception to this requirement where the evidence is virtually determinative of the merits of the litigation. Thus, even if the district court’s finding that plaintiffs had not exercised reasonable diligence is accepted, there are still grounds for vacating the denial of the new trial motion.
This significant exception to the due diligence requirement of Rule 60(b)(2) was first recognized in Ferrell v. Trailmobile, Inc., 223 F.2d 697 (5th Cir.1955). In that case, judgment was entered in favor of Trailmobile on the ground that Ferrell had failed to make the installment payments on a trailer he had purchased from Trailmo-bile. After entry of the judgment, Ferrell discovered photocopies of various money orders which conclusively demonstrated that he had, in fact, made the installment payments at issue. Although the Fifth Circuit agreed that Ferrell had not engaged in sufficient efforts to discover the evidence, it nevertheless reversed the district court’s denial of his Rule 60(b)(2) motion.
If, in fact, practically conclusive evidence shows that the appellant had actually paid all eighteen installments for the purchase of the trailer, it is obvious that the judgment should be set aside to prevent a manifest miscarriage of justice. In such a case, the ends of justice may require granting a new trial even though proper diligence was not used to secure such evidence for use at trial.
Id. at 698.
The Ferrell doctrine has since been applied in other cases where the movant belatedly discovered evidence that established, virtually conclusively, that a judgment had been entered erroneously. See W.S. Dickey Clay Mfg. Co. v. Corder, 310 F.2d 764, 774-75 (5th Cir.1962) (new evidence demonstrates erroneousness of judgment “with almost mathematical certainty”); Serio v. Badger Mutual Ins. Co., 266 F.2d 418, 421 (5th Cir.1959). Other courts have recognized the existence of the Ferrell rule, while holding that it was inapplicable in a particular instance because the evidence was not sufficiently dispositive, or the movant had previously known of the evidence and had made a conscious decision not to rely on it at trial. This court referred to the doctrine in a case in which a naturalized citizen was ordered deported based on allegations that he had engaged in war crimes and atrocities as a member of the German Gestapo during World War II. United States v. Walus, 616 F.2d 283 (7th Cir.1980). After entry of the deportation order, Walus located several witnesses in Poland and France who testified that he had been a forced laborer in Poland during the war, and could not have committed the acts alleged by the United States. Although finding that Walus had exercised due diligence to discover the foreign witnesses, the court noted that “[e]ven if this failure [to timely discover the witnesses] could be characterized as neglect, and we in no way imply that it was, we nevertheless cannot hold that the results of this trial are forever insulated from reexamination. In light of the strength of the new evidence, affirmance of the district court’s decision ‘would be to accept an evil far greater than waste of the court’s or litigants’ time.’ ” Id. at 304 (citation omitted).1
*408OPE Shipping, Ltd. v. Underwriters at Lloyd’s, 100 F.R.D. 428 (S.D.N.Y.1983), is also illustrative. In OPE, four ships owned, through various corporate entities, by General Anastasio Somoza were seized by Sandinista forces during the Nicaraguan revolution. The holding corporations brought suit, claiming that they were entitled to recover for seizure of the vessels under various “marine risk” and “war risk” insurance policies. Each policy contained a clause terminating the policy “if and when the vessel is requisitioned.” After trial and appeal, the defendant insurers discovered evidence that the vessels had been commandeered by forces loyal to Somoza prior to their seizure by the Sandinis-tas; if this were true, the policies would not apply to the loss of the vessels. Judge Milton Pollack held that this evidence entitled the defendants to a new trial, whether or not the evidence could have been discovered through the exercise of due diligence. The district judge recognized that, as a general matter, new evidence could not support a motion for a new trial if it could have been discovered by a reasonable search. However, he also recognized that
[a] narrow exception to this rule has been recognized: a new trial may be ordered to prevent a grave miscarriage of justice even though the “newly discovered evidence” supporting that order would have been available to the moving party at trial had that party exercised proper diligence. Ferrell v. Trailmobile, Inc., 223 F.2d 697, 698 (5th Cir.1955). This exception, however, has been restricted to cases in which the evidence is practically conclusive. Niedland v. United States, 338 F.2d 254, 260 (3d Cir.1964).
Id. at 432 (other citation omitted). The court noted that, even if defendants had not exercised due diligence, a new trial would be required in order to avoid an inequitable result, since it appeared likely that the plaintiffs were aware of the requisitioning and had concealed it from the court.
Given the great likelihood that plaintiffs knew of the prior use of the Managua by the Nicaraguan military and concealed it from this Court, a new trial would be warranted on the basis of defendant’s newly discovered evidence even in the absence of a showing of “due diligence.” Such a proceeding would be justified in order to prevent a miscarriage of justice, namely the commission of fraud on this Court. The evidence on which defendants base their motion, moreover, is practically conclusive in establishing the May, 1979 use of the Managua as a gunboat: this motion thus falls within the Niedland (“conclusive evidence”) restriction on the application of the Ferrell (prevention of miscarriage of justice justifies new trial even in the absence of the diligence showing) rule.
Id. at 434.
The same analysis applies here and should lead to the same result as in OPE. The new evidence plaintiffs seek to introduce is “practically conclusive,” since in this case, all plaintiffs had to show to withstand defendant’s motion for summary judgment was that a genuine factual issue existed as to defendant’s motive. Clearly, drawing all inferences in plaintiffs’ favor, the proffered affidavits strongly suggest that defendant Chody acted with discriminatory intent in effecting the forced removals. This evidence would be sufficient to prevent the grant of summary judgment. And there is at least a reasonable inference that the evidence was previously known to the defendants. Applying the OPE Shipping logic, a reopening may be necessary to prevent what might amount to fraud on the court. The district court’s failure to appreciate the extent of its discretion under the Ferrell rule means that the denial of the plaintiffs’ Rule 60(b) motion was an abuse of discretion.2 As indicated in the quota*409tion from its bench ruling, supra, the district court clearly acknowledged that the equities of the situation favored the plaintiff, but that it felt its hands were tied by the due diligence requirement of Rule 60(b).
Under these circumstances, where the district court has recognized that the new evidence would have prevented the grant of summary judgment, no defensible purposes are served by denying the plaintiffs’ motion for a new trial. After all, the Federal Rules of Civil Procedure were promulgated “to secure the just, speedy, and inexpensive determination of every action.” Rule 1 (emphasis added). Since the majority’s resolution of the appeal in Number 87-3131 cannot be reconciled with this overriding purpose, I respectfully dissent from affirmance of the new trial ruling.
. See also, e.g., United States v. Philatelic Leasing Ltd., 794 F.2d 781, 788 (2d Cir.1986) (citing Ferrell; noting that “even though proper diligence is not employed to secure evidence for use at trial the ends of justice may require the granting of a new trial to present new evidence in certain limited instances”); Shook & Fletcher Insulation Co. v. Central Rigging & Contracting Corp., 684 F.2d 1383, 1385-86 n. 2 (11th Cir.1982); Niedland v. United States, 338 F.2d 254, 260 (3d Cir.1964) (refusing to grant new trial, because new evidence " ‘raises only a doubt, although perhaps a disturbing doubt,’ that there may have been a miscarriage of justice.... In *408the Ferrell case, [t]he newly-discovered evidence ... was conclusive.”); In re Bahre, 28 B.R. 609, 611 (Bkrtcy.D.Conn.1983) (Ferrell doctrine limited to new evidence which is "practically conclusive.”).
. Of course, a district court’s failure to recognize the scope of its discretion in rendering a decision itself constitutes an abuse of discretion, since the court's decision is based on an erroneous interpretation of the law governing its rul*409ing. See, e.g., United States v. $103,387.27 in U.S. Currency, 863 F.2d 555, 561 (7th Cir.1988); Heat & Control, Inc. v. Hester Indus., Inc., 785 F.2d 1017, 1022 (Fed.Cir.1986); Deitchman v. E.R. Squibb & Sons, Inc., 740 F.2d 556, 563-64 (7th Cir.1984). Cf. Prill v. National Labor Relations Bd., 755 F.2d 941, 948 (D.C.Cir.) (agency decision must be invalidated where agency considered itself bound by statute to reach certain result, and failed to recognize its own discretion to reach contrary conclusion), cert. denied sub nom. Meyers Indus., Inc. v. Prill, 474 U.S. 948, 971, 106 S.Ct. 313, 352, 88 L.Ed.2d 294, 320 (1985).