Bennie Kennedy v. Schneider Electric
893 F.3d 414
| 7th Cir. | 2018Background
- Bennie Kennedy, a Schneider Electric employee, taught electrical safety at Prairie State College and published two articles without Schneider’s prior approval; Schneider’s HR contacted Prairie State about potential proprietary concerns.
- Prairie State later determined Kennedy lacked required credentials and did not rehire him; Kennedy sued Schneider for defamation and tortious interference; Schneider removed to federal court on diversity grounds.
- The district court granted summary judgment for Schneider in 2014, finding Prairie State revoked Kennedy’s teaching approval for credentialing reasons, not Schneider’s call; Kennedy did not appeal.
- More than one year after judgment, Kennedy moved under Rule 60(d)(3) to set aside the judgment for fraud on the court, alleging perjured testimony and that Schneider’s lawyers knowingly submitted false evidence; no new evidence was presented—arguments relied on discrepancies in the original record.
- The district court denied the Rule 60 motion and imposed Rule 11 sanctions on Kennedy’s attorney, John H. Davis, awarding Schneider approximately $10,627 for defending the motion.
- On appeal, the Seventh Circuit affirmed the denial of Rule 60 relief (no newly discovered, court-corrupting fraud) and affirmed Rule 11 sanctions (attorney failed reasonable inquiry); it denied appellee’s request for Rule 38 appellate sanctions as procedurally improper.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a post-judgment Rule 60(d)(3) motion alleging fraud on the court can succeed based on discrepancies in the record already before the court | Kennedy argued Schneider’s HR and Prairie State affidavits/declarations were perjured and Schneider’s counsel knowingly submitted them, warranting relief under Rule 60(d)(3) | Schneider argued no new evidence of fraud was presented; discrepancies were available at summary judgment and should have been raised then or on appeal | Denied: Rule 60(d)(3) relief requires narrow, extraordinary fraud that corrupts the judicial process and ordinarily could not have been discovered earlier; recycling record discrepancies is insufficient |
| Whether Kennedy’s counsel’s Rule 60 motion warranted Rule 11 sanctions | Kennedy’s counsel urged the court to set aside judgment for fraud on the court based on inferences from the existing record | Schneider argued the motion was frivolous and counsel failed to conduct a reasonable inquiry before filing | Affirmed: District court did not abuse discretion; counsel failed the objective reasonable-inquiry standard and sanctions were appropriate |
| Standard for fraud on the court under Rule 60(d)(3) and timeliness | Kennedy contended Rule 60(d)(3) has no time limit and allows any fraud allegations at any time | Schneider emphasized the rule’s narrow scope to prevent collateral attacks on final judgments | Held: Rule 60(d)(3) has no strict deadline but is narrowly applied; fraud must be of a nature that corrupts judicial machinery and is not merely rehashing known discrepancies |
| Whether appellee’s request for appellate sanctions under Rule 38 was procedurally proper | Schneider requested Rule 38 fees in its merits brief | Kennedy and Davis argued request was not separately moved | Denied: Rule 38 requires a separately filed motion; a brief request is procedurally defective |
Key Cases Cited
- In re Golf 255, Inc., 652 F.3d 806 (7th Cir. 2011) (defines narrow scope for fraud-on-the-court relief under Rule 60(d)(3))
- Oxxford Clothes XX, Inc. v. Expeditors Int’l of Wash., Inc., 127 F.3d 574 (7th Cir. 1997) (examples of fraud on the court include bribing a judge or inserting bogus documents into the record)
- Wickens v. Shell Oil Co., 620 F.3d 747 (7th Cir. 2010) (discusses limits of fraud claims and Rule 60(b)(3) one-year requirement)
- Cash v. Ill. Div. of Mental Health, 209 F.3d 695 (7th Cir. 2000) (motions rearguing trial-court errors are not a substitute for timely appeal or Rule 59 relief)
- Russell v. Delco Remy Div. of Gen. Motors Corp., 51 F.3d 746 (7th Cir. 1995) (Rule 60 relief is for extraordinary situations, not ordinary legal error)
- Northern Ill. Telecom, Inc. v. PNC Bank, N.A., 850 F.3d 880 (7th Cir. 2017) (standard of review and requirements for Rule 11 sanctions)