Opinion ID: 783242
Heading Depth: 2
Heading Rank: 2

Heading: The Independent Action

Text: 73 The gravamen of the plaintiff's complaint in the independent action under Rule 60(b) is that State Farm's counsel, Orrick, Herrington & Sutcliffe, committed fraud upon the court by responding to the plaintiffs' request to depose Henry Keller, a former State Farm executive, by fraudulently claiming to represent Keller and opposing the deposition on grounds that he was very elderly, had long been retired, and possessed no documents or knowledge concerning the subject matter of the lawsuit. In reliance on Orrick's representations, the plaintiffs did not pursue the deposition. In reality, the plaintiffs claim, Orrick did not represent Keller and knew Keller possessed material evidence that strongly supported their claims and was willing and ready to testify. 74 The majority holds that Orrick's acts are not actionable because they do not rise to the level of fraud on the court or work a grave miscarriage of justice. I cannot agree. The majority's interpretation as to when a federal court may set aside a judgment is too narrow. Rule 60(b) permits a court, within a reasonable time, not more than one year after a judgment is entered, to grant a motion for relief from a judgment because of, inter alia, fraud on the court. See Fed.R.Civ.P. 60(b). After a year elapses, the rule also allows a party to bring an independent action to set aside a judgment for fraud on the court. The power to grant relief in an independent action is based in the court's inherent power to vacate judgments on proof that a fraud on the court has been committed. In re Levander, 180 F.3d 1114, 1118 (9th Cir.1999) (citing Chambers v. NASCO, Inc., 501 U.S. 32, 43-44, 111 S.Ct. 21-23, 115 L.Ed.2d 27 (1991)). Rule 60(b) largely codified preexisting substantive law regarding the circumstances in which courts are empowered to set aside judgments, but removed many procedural complexities that were associated with preexisting law. See Averbach v. Rival Mfg. Co., 809 F.2d 1016, 1020-21 (3d Cir.1987) (discussing the relationship of Rule 60(b) to prior law and practice). The period of a year specified by Rule 60(b) supplanted the earlier requirement that a request to set aside a judgment that was brought as part of the original action must have been made before end of the term of court in which the judgment was entered. However, nothing in the text of Rule 60(b) requires that a plaintiff make a higher showing for relief in an independent action than in a motion under the rule. 75 The question presented here is whether the fraud that the plaintiffs have alleged may, if proved, warrant relief. Fraud in the discovery process plainly may sustain an independent action under Rule 60(b). The Supreme Court has held that federal courts may set aside judgments, notwithstanding the defense of laches or the plaintiff's lack of diligence in pursuing relief if a judgment has been obtained based on evidence that counsel has manufactured. See Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 64 S.Ct. 997, 88 L.Ed. 1250 (1944). The Third Circuit has held that a plaintiff stated a claim for relief in an independent action based on opposing counsel's false and misleading answers to interrogatories. See Averbach, 809 F.2d at 1017, 1022-23. None of our precedents warrants a different result. In Levander, we stated that non-disclosure by itself does not constitute fraud on the court that warrants relief in an independent action under Rule 60(b), Levander, 180 F.3d at 1119, and that ordinary perjury similarly is not actionable, but we explicitly embraced a definition of fraud on the court that encompasses fraud perpetrated by officers of the court so that the judicial machinery cannot perform in the usual manner its impartial task of adjudging cases. Id. at 1119 (quoting 7 James W. Moore, et al., Moore's Federal Practice ¶ 60.33, at 515 (2d ed.1978)). 76 Here, Orrick is alleged not merely to have failed to disclose material evidence 3 that under long-established federal law it was obligated to disclose, but also to have claimed to represent a potential witness that it did not represent and intentionally to have misrepresented that person's position in a calculated attempt to obtain a judgment in its client's favor. An attorney in a legal proceeding who fraudulently claims to represent a client whom she or he does not, not only commits a fraud against the parties to the proceeding, but also a fraud on the court. Both the court and the parties are entitled to rely on an attorney's representation that she or he actually represents a client whom he or she claims to represent. A fraudulent misrepresentation about the fact, nature, and scope of an attorney's mandate is not only an ethical breach but a fraud of the highest order that interferes with the machinery of our judicial system. Our adversary system cannot function if attorneys claim to represent individuals that they do not. The majority fails to appreciate the gravity of Orrick's alleged fraud, and errs as a matter of law in holding that an allegation of such fraud may be dismissed for failure to state a claim. 77 The majority also errs by holding that the plaintiffs could have, with diligence, discovered Orrick's alleged duplicity by insisting on deposing Keller despite Orrick's representations and that the plaintiffs' failure to do so bars their claim. I strongly disagree. First, under Hazel-Atlas, the diligence of a party in discovering the alleged basis for setting aside a judgment is not decisive. See Hazel-Atlas, 322 U.S. at 246, 64 S.Ct. 997. Moreover, unlike the perjury in Levander, Orrick's alleged fraud will not be subject to the rigors of cross-examination in the factfinding process itself: The representation by counsel that he represents a witness and that the witness has no material information is not testimony that may be cross-examined. A party is entitled to rely on the representations of adverse counsel regarding such matters. 78 As a matter of construing the discovery rules, moreover, the principle that the majority embraces, namely that a party may not rely on the plain representations of adverse counsel in the discovery process, is not only cynical but unworkable. It requires a party doggedly to pursue discovery notwithstanding opposing counsel's signed certification that such discovery is not warranted, see Fed.R.Civ.P. 26(g), on the possible chance that opposing counsel is committing fraud. The failure of the party seeking discovery to take such action, which itself might violate the discovery rules, by the majority's lights, precludes it from seeking redress if it later discovers that it has been the victim of fraud. I cannot embrace such a view of the law. 79 Such an interpretation of the discovery rules is not only unconscionable, but flies in the face of the purpose of the rules themselves. As the Rules Advisory Committee has explained, Rule 26 explicitly imposes an affirmative duty to engage in pretrial discovery in a responsible manner that is consistent with the spirit and purposes of Rules 26 through 37, Fed.R.Civ.P. 26, Advisory Committee Notes, 1983 Amendment, Subdivision (g), and Rule 37(c) permits a district court to sanction a party for making false or misleading discovery disclosures. See Fed.R.Civ.P. 37(c). As the Washington Supreme Court has held, the Federal Rules of Civil Procedure explicitly encourage the imposition of sanctions for discovery abuse in part because a spirit of cooperation and forthrightness during the discovery process is necessary for the proper functioning of modern trials. Wash. State Physicians Ins. Exch. & Ass'n v. Fisons Corp., 122 Wash.2d 299, 858 P.2d 1054, 1077 (1993). The court noted that although [f]air and reasoned resistance to discovery is not sanctionable[,] ... misleading ... responses [are] ... contrary to the purposes of discovery and ... most damaging to the fairness of the litigation process. Id. at 1079-80. 80 The plaintiffs' allegations, if proved, would be most damaging to the ethical standing and professional reputation of any attorney — and indeed might have severe collateral consequences such as disbarment. 4 The majority minimizes the gravity of the plaintiffs' charge and invites similar behavior in the future by holding that such a claim may be dismissed for failure to state a claim in an independent action under Rule 60(b). As Judge Schwarzer has persuasively explained: Misconduct, once tolerated will breed more misconduct and those who might seek relief against abuse will instead resort to it in self-defense. William W Schwarzer, Sanctions Under the New Federal Rule 11 — A Closer Look, 104 F.R.D. 181, 205. I would reverse the district court and reinstate the action. Notes: 1 The district court considered only authority prior to Sandberg in concluding: The Court... takes note of the stark landscape of inconsistent prior interpretations of the termination clause, and finds that this factor weighs heavily in favor of granting Sandberg no preclusive effect. The district court's decision amounts to nothing more than an expression of disagreement with the correctness of the Sandberg decision. 2 The district court dismissed much of the evidence that the plaintiffs proffered because it was written after the contract provisions at issue were drafted. The court reasoned that because the evidence postdated the drafting process it lacked any nexus to the drafting and could not illuminate the meaning of the contract provisions. Although such an inference, if justified, could be drawn after trial, it is not permissible at the summary judgment stage. It is entirely possible that the materials that were written after the contract provisions are evidence of what the parties to the contract intended by its provisions 3 Keller himself advised Orrick that he had material evidence to furnish to the plaintiffs 4 The majority does not hold that Orrick and State Farm have not committed the actions as alleged, but merely that the plaintiffs may not seek relief under Rule 60(b). Orrick itself could be well-served by trial of the charges. They must be very disturbing to a reputable firm. If untrue, Orrick should welcome the opportunity to disprove them