Court Opinion

ID: 9494827
Source: CourtListenerOpinion
Date Created: 2023-08-05 15:47:58.156152+00
Date Added: 2024-06-11T17:56:39.007363
License: Public Domain

TALLMAN, Circuit Judge,
dissenting.
Today, the Court expands the scope of Federal Rule of Civil Procedure 60(b)(6) by allowing a default judgment against a client to be set aside where his attorney’s conduct constitutes gross negligence. Since I am of the opinion that this expansion is unwarranted and that the district *1173court did not abuse its discretion in finding that Tani had not shown that circumstances beyond his control prevented his participation in the litigation, I respectfully dissent.
Rule 60(b)(6) provides that a default judgment may be set aside where “any other reason justifying relief’ exists. “In order to bring himself within the limited area of Rule 60(b)(6) a petitioner is required to establish extraordinary circumstances which prevented or rendered him unable to prosecute [his case].” Marietta v. Marine Cooks & Stewards Union, 448 F.2d 729, 730 (9th Cir.1971) (per curiam). Rule 60(b)(6) is to be used “sparingly as an equitable remedy to prevent manifest injustice ... [and] only where extraordinary circumstances prevented a party from taking timely action to prevent or correct an erroneous judgment.” United States v. Alpine Land & Reservoir Co., 984 F.2d 1047, 1049 (9th Cir.1993). Thus, relief under Rule 60(b)(6) should only be granted where the moving party is able to demonstrate “that circumstances beyond its control prevented timely action to protect its interests.” Id.
Attorney misconduct, regardless of how it is characterized, does not constitute an “extraordinary circumstance” beyond a litigant’s control that would prevent that litigant from timely pursuing his cause of action. Litigants are “considered to have notice of all facts known to their lawyer-agent” and have a duty to “keep track of the progress of their lawsuit.” Ringgold Corp. v. Worrall, 880 F.2d 1138, 1141-42 (9th Cir.1989). As the Supreme Court stated in Link v. Wabash R.R., 370 U.S. 626, 633-34, 82 S.Ct. 1386, 8 L.Ed.2d 734 (1962) (internal quotations omitted),
Petitioner voluntarily chose this attorney as his representative in the action, and he cannot now avoid the consequences of the acts or omissions of this freely selected agent. Any other notion would be wholly inconsistent with our system of representative litigation, in which each party is deemed bound by the acts of his lawyer-agent and considered to have notice of all facts, notice of which can be charged upon the attorney.
While acknowledging the validity of the principles summarized above, the Court attempts to carve out an exception for cases where an attorney’s misconduct amounts to gross negligence. Although the Court is validly concerned that “an innocent party is forced to suffer drastic consequences” of his attorney’s misconduct, see Slip Op. at 3760, the Supreme Court has repeatedly made clear that “[t]here is certainly no merit to the contention that dismissal of petitioner’s claim because of his counsel’s unexcused conduct imposes an unjust penalty on the client.” Link, 370 U.S. at 633, 82 S.Ct. 1386. This language clearly encompasses the conduct at issue here. Regardless of whether attorney misconduct is characterized as gross negligence or mere negligence, the client is bound by such unexcused conduct. See Dickerson v. Board of Educ., 32 F.3d 1114, 1118 (7th Cir.1994) (stating that “counsel’s negligence, whether gross or otherwise, is never a ground for Rule 60(b) relief’); Heim v. Commissioner, 872 F.2d 246, 248 (8th Cir.1989) (concluding that “any errors committed by [counsel], even accepting the designation of gross negligence, do not constitute an adequate showing of ‘exceptional circumstances’ ”).
The Court looks to agency principles to support its holding that an attorney’s gross negligence constitutes extraordinary circumstances under Rule 60(b)(6). See Slip Op. at 3761-62. It reasons that, when an attorney’s conduct rises to the level of gross negligence, he is no longer serving the interests of his client. Therefore, any consequences suffered as a result of an attorney’s gross negligence should not be imputed to the client since the attorney-*1174client relationship has effectively been severed. This argument is unavailing.
Clients, as principals, are bound by the actions of their chosen agents, whether those actions are characterized as wilful misconduct, see National Hockey League v. Metropolitan Hockey Club, 427 U.S. 639, 640-42, 96 S.Ct. 2778, 49 L.Ed.2d 747 (1976) (per curiam), or mere negligence, see Pioneer Inv. Servs. Co. v. Brunswick Assoc., 507 U.S. 380, 396-97, 113 S.Ct. 1489, 123 L.Ed.2d 74 (1993); Link, 370 U.S. at 633-34, 82 S.Ct. 1386. While these cases did not involve the gross negligence at issue in the Court’s opinion, “why should the label ‘gross’ make a difference to the underlying principle: that errors and misconduct of an agent redound to the detriment of the principal (and ultimately, through malpractice litigation, of the agent himself) rather than of the adversary in litigation?” United States v. 7108 W. Grand Ave., 15 F.3d 632, 634 (7th Cir.1994).
By expanding the scope of Rule 60(b)(6) to allow a default judgment to be set aside where an attorney has demonstrated gross negligence, the Court is essentially stating that mere negligence and wilful misconduct, but not gross negligence, may serve as the basis of a default judgment. This simply does not make sense. ■ Negligence and wilful misconduct constitute two ends of the spectrum of attorney error. As noted above, both an attorney’s negligence and his wilful misconduct are attributed to his client. Why then, should gross negligence, which falls somewhere in the middle of the two extremes on this spectrum, be treated any differently?
A more rational approach would lead to the conclusion that “[w]hen the polar cases are treated identically, intermediate cases do not call for differentiation.” Id. As the Seventh Circuit explained, “[n]o lawyer would dream of arguing on behalf of a hospital that, although the hospital is liable in tort for staff physicians’ negligence and intentional misconduct, it is not liable for their ‘gross negligence.’ ” Id. This argument makes no more sense when the actors involved are an attorney and his client.
Furthermore, by holding that an attorney’s gross negligence should not be imputed to the client, while both mere negligence and wilful misconduct are so imputed, the Court is effectively encouraging gross negligence on the part of attorneys. “If the lawyer’s neglect protected the client from consequences, neglect would become all too common. It would be a free good — the neglect would protect the client, and because the client would not suffer the lawyer would not suffer either.” Tolliver v. Northrop Corp., 786 F.2d 316, 319 (7th Cir.1986); see also 7108 W. Grand, 15 F.3d at 634 (“A distinction between ordinary and gross negligence would put an end to ‘mere’ negligence in federal litigation but would create a land office business in gross negligence.”); L.P. Steuart, Inc. v. Matthews, 329 F.2d 234, 238 (D.C.Cir.1964) (citation omitted) (Miller, J., dissenting) (“If courts say that counsel for defendant can neglect without excuse their clients’ business but no ill effects to the clients will be permitted to result from this negligence, complete chaos in judicial proceedings will surely result.”).
Simply basing the determination of whether a default judgment may be set aside on the label attached to an attorney’s misconduct is unworkable. A more rational and uniform result requires holding the client responsible for all of his attorney’s conduct, regardless of whether that conduct constitutes mere negligence, gross negligence, or wilful misconduct. The client may then seek his remedies against the lawyer in malpractice litigation and bar disciplinary proceedings.
*1175While application of this rule may result in some inequity in the case at hand, “[cjlients have been held to be bound by their counsels’ inaction in cases in which the inferences of conscious acquiescence have been less supportable than they are here, and when the consequences have been more serious ... Surely if a criminal defendant may be convicted because he did not have the presence of mind to repudiate his attorney’s conduct in the course of a trial, a civil plaintiff may be deprived of his claim if he failed to see to it that his lawyer acted with dispatch in the prosecution of his lawsuit.” Link, 370 U.S. at 634 n. 10, 82 S.Ct. 1386 (citations omitted).
Tani is not left without a remedy. As the Supreme Court has noted, where an attorney’s conduct “falls substantially below what is reasonable under the circumstances, the client’s remedy is against the attorney in a suit for malpractice.” Id. Although the Court believes that such a remedy would be inadequate for a litigant whose case has been dismissed, keeping Tani’s suit alive merely because he should not be forced to suffer the consequences of his attorney’s negligence, whether gross or not, would simply be visiting the sins of Tani’s lawyer upon the opposing party. See Link, 370 U.S. at 634 n. 10, 82 S.Ct. 1386.
Tani cannot credibly argue that the actions of his attorney, whether negligent, grossly negligent, or intentional, were extraordinary circumstances, beyond his control, that prevented him from taking timely action in the case below. Regardless of where on the spectrum of conduct an attorney’s action falls, the action is attributable to the client, and therefore cannot provide a valid basis for setting aside a default judgment under Rule 60(b)(6).
I believe that the denial of Tani’s motion to set aside the default judgment was within the discretion of the district court and that this Court’s new extension of Rule 60(b)(6) is unwarranted. I respectfully dissent.