Court Opinion

ID: 8915012
Source: CourtListenerOpinion
Date Created: 2022-11-27 04:38:31.684852+00
Date Added: 2024-06-11T17:08:53.799702
License: Public Domain

BUTZNER, Circuit Judge,
dissenting:
I agree with the district court and part II A of the majority opinion that the union would be entitled to prevail had it filed its motion to set aside the judgment, which the company fraudulently obtained, within the one-year period of limitations prescribed by Rule 60(b). But I do not agree that the one-year limitation bars relief to the union. Because the union did not institute proceedings to set aside Great Coastal’s judgment within one year after its entry, it must show that Great Coastal practiced fraud upon the court. The rule provides that this type of fraud is not subject to the one-year limitation.
I dissent from the majority’s conclusion that Great Coastal’s fraud does not rise to *1359the level of fraud on the court. The facts satisfy the requirements of fraud on the court that are set forth in Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 64 S.Ct. 997, 88 L.Ed. 1250 (1944). Rule 60(b) was amended in 1946 to reflect the principles expounded in Hazel-Atlas, and the Notes of the Advisory Committee clarify the concept of fraud on the court by citing Hazel-Atlas as “an illustration of this situation” which the amended rule addresses.
I
Pursuant to the directions of this court, the district court made supplementary findings of fact derived from the 1979 evidentiary hearing on the union’s motion for relief from the judgment granted Great Coastal. The district court’s findings on remand clearly establish that the officers and employees of Great Coastal engaged in an extensive, deliberate scheme to subvert justice by perpetrating a fraud on administrative and judicial tribunals. Because the district court’s findings are essential for the resolution of this appeal, they are quoted as follows:
At the evidentiary hearing upon the union’s motion to set aside judgment for alleged fraud upon the Court, the union presented nine witnesses: (1) Robert G. Seward, a driver for Great Coastal during the strike; (2) Betty Seward, Robert Seward’s wife; (3) William P. Funai, Great Coastal’s Terminal Manager during the strike; (4) William Stagg, Jr., Great Coastal’s Assistant Terminal Manager during the strike; (5) John Martini, a Great Coastal driver during the strike; (6) Samuel Rogers, a Great Coastal driver during the strike, presently employed by Great Coastal; (7) Mack Fifer, a Great Coastal driver during the strike, presently employed by Great Coastal; (8) Edmond Christian Nuckols, Jr., a Great Coastal employee during the strike; and (9) Carmello Thomas Tuminello, Supervisor and Dispatcher for Adley Express during the strike.
No witnesses were called on behalf of [Great Coastal].
Charles E. Estes is presently President and owner of Great Coastal, and held those same positions during the strike. During the strike, William P. Funai, the Terminal Manager of Great Coastal, routinely reported any damage of Great Coastal equipment to Estes. Estes personally negotiated the profit-sharing arrangements between key managerial employees and Great Coastal. Funai was a key managerial employee who had direct supervision over the drivers, with the right to hire and fire drivers. Funai described himself as “the boss” of the terminal; a fact which corroborated the testimony of Seward. The drivers took their instructions directly from Funai, and Funai took his instructions directly from Mr. Estes. Funai was on profit-sharing during the strike, a status reserved by the company for managerial personnel. Funai, according to Great Coastal, was entitled to 2% of all Great Coastal profits in excess of $100,-000.00 by virtue of his status as a manager; in fact, he received $12,024.22 as his prorated share of the IBT judgment.
Edward L. Flinn was manager of Great Coastal during the strike, and is presently a manager with the company. As a manager, Flinn, according to Great Coastal, was on profit-sharing during the strike, and was entitled to 2% of all of Great Coastal’s profits in excess of $100,000.00. Flinn received $12,731.12 as his prorated share of the IBT judgment.
Robert Williams was Great Coastal’s maintenance supervisor and shop foreman during the strike, a position which he presently holds. Williams was part of Great Coastal’s management during the strike and was entitled to 2% of all Great Coastal profits in excess of $100,000.00. Williams received $12,822.69 as his share of the IBT judgment.
One morning during the strike William Stagg, Assistant Terminal Manager of Great Coastal, was told by C. E. Estes that he wanted to see Great Coastal’s Terminal Manager, William Funai. Stagg, in turn, told Funai, who was at his desk adjacent to Stagg’s, that Estes wanted to see him. In response to the message, Funai went directly to the second floor where Estes’ office *1360was located. In approximately ten to fifteen minutes, Funai came down the stairs and immediately told Stagg to get the pickup truck and go to Belk Floor Covering to relieve Robert Seward. Stagg had never before been asked to relieve any drivers during the strike and it was “very unusual” that the request was made in this instance inasmuch as other drivers were idle and available. Nevertheless, in accordance with Funai’s instructions, Stagg got in the company pickup truck, and drove to Belk Floor Covering.
On that day, October 23, 1970, Robert Seward was unloading a truck at Belk Floor Covering in the City of Richmond when he was instructed by Stagg to go back to the terminal. Seward got in the pickup truck left by Stagg and went back to the terminal while Stagg finished unloading the trailer at Belk Floor Covering.
Seward went directly to the terminal office and reported to his boss, William Funai, who ordered Seward to get a brick or a rock, to take a truck to West Point, to break out the windshield of the truck and to “tear it up some”. Funai and Seward discussed the fact that Seward was “going to break up the truck”, was going to “shoot the truck” with a gun, and that Seward should wear gloves because “there might be fingerprints”.
As instructed, Seward got a half brick off of the Great Coastal yard and drove a Great Coastal truck to Route 33 off Interstate 64, past New Kent, and pulled off the road. Seward, wearing gloves in an effort to avoid fingerprints, threw the brick at the windshield on the passenger side three times; the brick bounced off the windshield the first two times, but on the third blow crashed through its center. He then fired three shots into the front of the Great Coastal trailer using a small handgun — -a cheap .22 caliber “Saturday Night Special”.
Seward then proceeded on Route 33 to Green’s Restaurant, called the terminal and spoke with Ed Flinn, but rather than tell Flinn the truth, Seward told a contrived story to the effect that unidentified persons had sabotaged the truck. Thereafter, the police arrived and Seward took the officer down the road to a point where a high bank rises from the highway and then levels off into the woods. Although that was not where Seward in fact had inflicted the damage, Seward, in telling his lie to the police, designated that as the place where a brick had been thrown at the windshield of his truck, where he heard gunshots, and where he saw men running from the bank away from the road through the woods. Later that same day Stagg and the employees at the terminal learned that Seward’s tractor windshield had been knocked out and his trailer had been “shot up”.
Seward executed a false affidavit concerning the New Kent incident, identified as IBT Exhibit 3. That affidavit was witnessed by Edward L. Flinn, and was specifically incorporated in Great Coastal’s answer to IBT Interrogatory No. 14 as “direct evidence of specific instances of violence, intimidation and secondary boycotting activities which are recorded in written statements attached hereto”. Great Coastal’s answers to IBT’s interrogatories were executed under oath by E. C. Estes, Great Coastal’s President, and filed with this Court on March 25, 1971.
Seward gave a false affidavit concerning the New Kent incident, identified as IBT Exhibit 4, to a representative of the National Labor Relations Board. Seward also testified falsely about the New Kent incident in a proceeding before the National Labor Relations Board.
Seward was called as a witness for Great Coastal at the trial before this Court on June 15, 1972. He falsely testified that he was driving toward New Kent in October 1970 when a brick came through the windshield on the passenger side, and that he saw men running away through the woods. Seward admitted at the hearing in July, 1979 that he gave perjured testimony before this Court in 1972.
William P. Funai was called as a witness for Great Coastal at the trial before this Court on June 15, 1972 and testified that during the strike he went to West Point, Virginia to look at a Great Coastal truck *1361and saw “[t]he front windshield was broken on it” and there was “a small hole” in the trailer which looked like it was caused by “a shot, a small caliber gun”. When asked in 1972 whether he “saw anybody do anything to that truck”, Funai answered, “I seen the damage ... and nothing else”. Funai now concedes that he failed to “tell the truth, the whole truth, and nothing but the truth” in his 1972 testimony; he admits that he failed to tell everything he knew about the New Kent incident to the Court and he therefore violated his sworn oath before this Court. When Funai asked whether he told Seward to sabotage his equipment, Funai refused to answer “on the grounds that the answer may tend to incriminate me”.
The Court’s conclusion as to Seward’s having testified falsely at the first trial is made independent of Funai’s exercise of his right against self-incrimination.
Edward Flinn is presently manager at Great Coastal and was also manager at the company during the strike. Some time in 1978 Robert Seward spoke with Ed Flinn at the Great Coastal terminal and told Flinn the truth about the New Kent incident. Flinn stated to Seward that at one time he, Flinn, was trying to trace down the New Kent incident, but someone told Flinn to “lay off” because he was “getting close to something in his investigation”. The Court’s finding in this regard is admittedly prompted by the absence of any testimonial denial on the part of [Great Coastal].
When Local 592 struck Great Coastal in 1970, Adley Express, a trucking company in the Richmond area, enjoyed a greater demand for its services and began hiring extra roadmen who were out on strike against Great Coastal. After the strike began, Ed Flinn, manager of Great Coastal, placed a telephone call to Camello Thomas Tuminello, dispatcher at Adley. Flinn wanted to know who was in charge at the time, and Tuminello responded that he was. Flinn said, “I’d like to see if you could do us a favor” and asked if Adley was “running any extra road drivers that are out on strike that work at Great Coastal”. When Tuminello responded that Adley was running six or seven of them every night, Flinn asked if Adley “could stop running the roadmen on the road, so we could starve the sons of bitches out and make them come back to work at Great Coastal”. Flinn went on to say that this would help Great-Coastal “get rid of the union”. Tuminello told Flinn that his boss, the terminal manager, who was not there at that moment, said the men were qualified drivers, Adley needed extra men, and he would continue to run them until he had further notice from his own boss.
During the strike Seward was ordered by Funai to go to Adley and East Coast to “punch tires and tear up trucks” [Tr. 40, 95 (Seward)]. Funai handed three “punches” to Seward that were prepared in Great Coastal’s maintenance shop and sent him to a motel in Richmond to wait for the other members of the “raiding” party.
That night Seward was met at the motel by three other Great Coastal employees, Sam Rogers, Mack Fifer and Chris Nuckols, and together, upon orders from Funai, they went on a “raid” to Adley, driving to Adley in Nuckols’ car. Seward, Rogers and Nuckols punctured tires while Fifer slashed the air hoses off the Adley trucks. Tuminello spotted the four marauders under the Adley trucks while making a yard check, but by the time he returned with assistance, all he found were punctured tires and slashed air lines on the Adley equipment. Tuminello noted that one was wearing a Great Coastal jacket and later recalled the identity of one of them as “Seward”.
Thereafter, similar acts of vandalism were conducted by Seward and Nuckols at the East Coast Freight yard. Seward was corroborated in regard to these acts by several witnesses.
During the strike Funai asked Seward to shoot the windows out of the Great Coastal office with an old double barrel shotgun. Seward declined because there were pickets nearby and the police were also in the vicinity.
Also during the strike, Funai instructed Seward and Chris Nuckols to purchase a slingshot for the purpose of breaking truck *1362windshields. The testimony of Seward in this regard is corroborated by Nuckols. Seward and Nuckols purchased a slingshot from a sporting goods store, and Seward was with Funai, the Terminal Manager, when Funai submitted a ticket to Great Coastal petty cash for reimbursement of the slingshot. Seward and Nuckols tried to use the slingshot in the Great Coastal yard to break the windshield of Great Coastal trucks, but their efforts were to no avail because the shot could not be propelled with sufficient force to damage the windshield glass.
During the strike Martini heard Estes and Flinn express their appreciation to the drivers for their “irritation and agitation” of the pickets. Martini also heard Estes and other officers of Great Coastal express appreciation when Great Coastal trucks would come in damaged. In response to an inquiry from the Court on the attitude of Great Coastal managers about damage to the trucks, Martini testified that when damaged equipment came into the terminal, these officials would say words to the effect that, “this is what we need”.
On November 24, 1971, as a result of an election, the National Labor Relations Board decertified Local 592 as representative of Great Coastal employees. Seward had, at the request of a Great Coastal manager, been active in seeking the decertification of the union.
Within three weeks of Great Coastal’s elimination of the union, Estes called Seward into his office and handed Seward $500.00 in cash. At that time, Estes said to Seward, “keep it to [yourjself”, and told Seward he could “call it a Christmas bonus or pay for a job well done”. This $500.00 payment is no where reflected on the company’s books and records. Certain of the company’s records for the relevant time period have been destroyed, but Great Coastal’s custodian of records has no recollection of the circumstances underlying the destruction of those documents.
Emmett Williamson, Great Coastal’s Treasurer and General Manager, testified that during the strike each “managerial” employee who was on profit-sharing with Great Coastal was “reassured by the company that he would receive his agreed percentage of profits if the company were later to recover damages from the union”.
Notwithstanding the company policy that a manager on profit-sharing must have been with Great Coastal at the time of recovery against the IBT, William P. Funai, in July 1976 — more than five years after Funai had left the employ of Great Coastal — received $12,024.22 ($8,927.99 net after-tax dollars) as his share of Great Coastal’s recovery against the IBT.
The Court is satisfied and finds as a fact that much of the testimony offered by the plaintiff in the first trial dealing with the alleged acts of violence by the defendant was perjured.
Just as the perjurors are, regrettably, free from prosecution for perjury by virtue of the statute of limitations, the one year limitation precludes the instant defendant from relief under Rule 60(b)(3) for the reasons stated in the Court’s memorandum of February 29, 1980.1
To the district court’s findings I need add only that Great Coastal persisted in its fraud when this court heard the union’s appeal from the judgment awarding the company damages for the secondary boycott. Contrary to its present position, Great Coastal asserted in its brief that the secondary boycott activity “was inextricably tied in with violence ... . ” Great Coastal, however, did not reveal that this violence was self-inflicted. Instead, its brief relied on the perjured testimony of Seward and its other witnesses, and it embellished the appellate record with photographs of the truck that Seward, acting on orders of company officials, had damaged with a brick and bullets.
II
It may be well to dispel at the outset the notion that proof of bribery of a judge or *1363juror or of fraud perpetrated by other officers of the court is an essential element of fraud on a court. To be sure, this wrongdoing would be a badge of such fraud, but the opinion in Hazel-Atlas did not rely on this type of misconduct. Commentators have suggested that involvement of an attorney is an essential component of fraud on the court when misconduct of other officers of the court is not established.2 The Supreme Court, however, neither predicated its decision in Hazel-Atlas on the narrow ground of an attorney’s involvement in the litigant’s fraud, nor did it identify this as an element of fraud on the court. Consequently, a civil judgment may be set aside because of a litigant’s fraud on the court though no wrongdoing is ascribed to an attorney or other officer of the court. Toscano v. Commissioner, 441 F.2d 930 (9th Cir. 1971); Lim Kwock Soon v. Brownell, 369 F.2d 808 (5th Cir. 1966); Dausuel v. Dausuel, 195 F.2d 774 (D.C.Cir.1952).
Parenthetically, 1 note that if proof of fraud by an attorney is required, Great Coastal can retain its fraudulently obtained judgment. Great Coastal’s attorneys did not participate in this fraud, and the union does not charge that they did. The sole perpetrators of the fraud were the company’s officers and employees who, along with the company, have profited handsomely from the judgment.
Also, it may be well to put aside the notion that all fraud that injures an opponent must be brought to the attention of the court within one year of the entry of judgment when bribery of the court or other such egregious misconduct is not alleged. In Hazel-Atlas, the defrauded litigant was mulcted of one million dollars, and the judgment had been entered eight years before it was challenged. The Court acknowledged that “in most instances society is best served by putting an end to litigation after a case has been tried and judgment entered.” 322 U.S. at 244, 64 S.Ct. at 1000. But there are exceptions to this general rule. Notwithstanding the eight-year delay, the opinion affirmed the power of federal courts to set aside a fraudulent judgment, saying: “But where the occasion has demanded, where enforcement of the judgment is ‘manifestly unconscionable,’ they have wielded the power without hesitation.” 322 U.S. at 244-45, 64 S.Ct. at 1000-01 (citations omitted).
In Hazel-Atlas, the occasion demanding relief was, as here, a judgment obtained by fabricated evidence. There it was a spurious publication to sustain a litigant’s claim to a patent both at proceedings in the patent office and in court. The enormity of this long concealed fraud elicited from the Court both condemnation and the proper response of the judiciary. The Court said: 322 U.S. at 246, 64 S.Ct. at 1001,
Furthermore, tampering with the administration of justice in the manner indisputably shown here involves far more than an injury to a single litigant. It is a wrong against the institutions set up to protect and safeguard the public, institutions in which fraud cannot complacently be tolerated consistently with the good order of society. Surely it cannot be that preservation of the integrity of the judicial process must always wait upon the diligence of litigants. The public welfare demands that the agencies of public justice be not so impotent that they must always be mute and helpless victims of deception and fraud. 322 U.S. at 246, 64 S.Ct. at 1001.
Ill
Hazel-Atlas explains that a court’s power to grant equitable relief against a fraudulent judgment is not a creature of statute; nor, I might add, is it a creature of Rule 60(b). The Court stated:
It is a judicially devised remedy fashioned to relieve hardships which, from time to time, arise from a hard and fast adherence to another court-made rule, the general rule that judgments should not be *1364disturbed after the term of their entry has expired. Created to avert the evils of archaic rigidity, this equitable procedure has always been characterized by flexibility which enables it to meet new situations which demand equitable intervention, and to accord all the relief necessary to correct the particular injustices involved in these situations. 322 U.S. at 248, 64 S.Ct. at 1002.
Hazel-Atlas requires proof of two elements to establish fraud on the court for the purpose of setting aside a civil judgment when the court itself has not been compromised by bribery or corruption. These two elements distinguish fraud on the court from the type of fraud that Rule 60(b) requires to be asserted within one year. The first is that the judgment involves an issue “of great moment to the public .. . . ” 322 U.S. at 246, 64 S.Ct. at 1001. A dispute that concerns only private litigants is not enough. See S & E Contractors, Inc. v. United States, 406 U.S. 1, 15, 92 S.Ct. 1411, 1419, 31 L.Ed.2d 658 (1972) (dictum).
Hazel-Atlas dealt with an affront to the public’s interest in the integrity of the nation’s patent laws. This case involves an assault on the public’s interest in the integrity of the laws governing our national labor policy. There can be no doubt that the dispute between the company and the union implicated interests beyond those of the litigants. Section 1 of the Labor Management Relations Act, 1947, 29 U.S.C. § 141, states in part:
It is the purpose and policy of this chapter, in order to promote the full flow of commerce ... to define and proscribe practices on the part of labor and management which affect commerce and are inimical to the general welfare, and to protect the rights of the public in connection with labor disputes affecting commerce.
Just as a litigant in Hazel-Atlas deceived the patent office by fabricated evidence, Great Coastal deceived the National Labor Relations Board in administrative proceedings pertaining to the same strike that is the subject of this case by fabricating evidence of union violence. Just as a litigant in Hazel-Atlas invoked in judicial proceedings the patent laws that are designed both to grant a monopoly and advance the public interest, Great Coastal invoked the Labor Management Relations Act, particularly 29 U.S.C. §§ 158(b)(4), 185, and 187. As the congressional declaration of purpose and policy states, 29 U.S.C. § 141, these laws, too, are designed to protect the public as well as litigants.
I therefore conclude that the litigation culminating in the judgment for Great Coastal satisfied the first requirement of Hazel-Atlas. This litigation involved more than a controversy between private parties, and the fraud by which it was prosecuted debased the laws enacted to assure the free flow of commerce for the benefit of the public.
IV
The second requirement of Hazel-Atlas is best described in the words of the Court, 322 U.S. at 245-46, 64 S.Ct. at 1000-01:
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. Here ... we find a deliberately planned and carefully executed scheme to defraud not only the Patent Office but the Circuit Court of Appeals.
The unrefuted evidence of the 1979 hearing conducted by the district court and the court’s supplementary findings establish beyond doubt that Great Coastal, its officers, and employees engaged in “a deliberately planned and carefully executed scheme to defraud” the National Labor Relations Board, the district court, and the court of appeals. Their fraud was no isolated instance of perjury. To achieve their purposes, the officers and employees created spurious evidence, deceived the Virginia State Police, answered interrogatories under oath untruthfully, filed false affidavits and gave perjured testimony in administrative and judicial proceedings, introduced fabricated exhibits, and filed a corrupt brief and appendix on appeal.
*1365By payments and promises of payments, Great Coastal frustrated discovery of its fraud through the judicial processes afforded by the Rules of Civil Procedure. Moreover, its scheme did not end with the entry of judgment. Like the litigant in Hazel-Atlas, it later attempted to forever seal its deception by the payment of large sums of money to the participants in its fraudulent scheme. And, as in Hazel-Atlas, it succeeded in cloaking its wrong for several years.
I therefore conclude that this case satisfies the second requirement of Hazel-Atlas.
V
Finally, I find no merit in Great Coastal’s argument that the fraud did not taint its recovery of damages. While the evidence concerning the secondary boycott was sufficient to sustain a verdict, this issue presented questions for the jury both on liability and damages. As part II of the majority opinion points out, it cannot be said “with complete confidence ... that the fraud was harmlessly excised from the case.” Indeed, the majority opinion states: “We are in complete accord with the conclusions of the district court that 60(b)(3) would have provided relief in this case had the union’s motion been timely ... . ”
Great Coastal’s argument is similar to the argument rejected in Hazel-Atlas that the fabricated evidence was not “basic” to the judgment under attack. 322 U.S. at 246. There the Court did not attempt to appraise the effect of the fraud on the decision making process. Instead, it pointed out that the 'fraudulent litigant deemed the spurious document to be material. The litigant contrived the fraud to deceive the patent office and the court. The litigant, therefore, was “in no position now to dispute its effectiveness.” 322 U.S. at 247, 64 S.Ct. at 1002.
Great Coastal is in the same posture as the fraudulent litigant in Hazel-Atlas. Great Coastal’s fraud was conceived and used to deceive the National Labor Relations Board and both trial and appellate courts. The jury that found liability was exposed to the fraud. On appeal Great Coastal argued that violence — which the district court later found was self-inflicted — was inextricably tied in with the secondary boycott. Like the litigant in Hazel-Atlas, Great Coastal is in no position to dispute the effectiveness of its fraud.
I would reverse the order of the district court, afford the union equitable relief on its petition filed in this court, and set aside the judgment because, tested by Hazel-Atlas, Great Coastal committed a fraud upon the court.

. The district court’s memorandum of February 29, 1980, is reported as Great Coastal Express v. International Brotherhood of Teamsters, 86 F.R.D. 131 (E.D.Va.1980).

. See 7 Moore’s Federal Practice 60.33 at 513-15; 11 Wright & Miller, Federal Practice & Procedure § 2870 at 256.