LabMD, Inc. v. Tiversa, Inc.
17-11274
| 11th Cir. | Dec 7, 2017Background
- Tiversa, a Pennsylvania company, downloaded a 1,718-page file from a LabMD computer containing patient SSNs and medical info and notified LabMD in 2008; Tiversa later solicited LabMD's business.
- LabMD (Georgia) sued Tiversa in Georgia state court in 2011 asserting CFAA and state-law claims; case removed and dismissed for lack of personal jurisdiction; Eleventh Circuit affirmed.
- In 2016 LabMD moved under Fed. R. Civ. P. 60(d)(3) alleging Tiversa and its counsel committed fraud on the court by knowingly misstating Tiversa’s contacts with Georgia and facts about the file download.
- The district court denied Rule 60(d)(3) relief (with leave to refile), finding LabMD failed to prove by clear and convincing evidence that an officer of the court (Tiversa’s lawyer) knowingly made false statements.
- The district court granted limited post-judgment discovery targeted to whether Tiversa’s counsel-of-record (John Hansberry) had actual knowledge or intent to deceive; it required Hansberry to answer three interrogatories without objection.
- LabMD sought broader discovery and reconsideration; the district court denied; on appeal the Eleventh Circuit affirmed, holding the district court did not abuse its discretion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether LabMD proved fraud on the court under Rule 60(d)(3) | Tiversa and its counsel knowingly made false statements about contacts with Georgia and download facts | LabMD cannot show by clear and convincing evidence that an officer of the court knowingly lied | Denied; LabMD failed to meet clear-and-convincing standard for fraud on the court |
| Whether district court erred by limiting post-judgment discovery | Additional, broader discovery was needed to develop evidence of counsel’s knowledge and intent | Discovery should be limited to whether counsel-of-record had actual knowledge or willful blindness; broader discovery unnecessary | No abuse of discretion; limited discovery appropriately targeted to dispositive issue |
| Whether denial of Rule 60(d)(3) was premature due to restricted discovery | Denial was premature without further discovery | District court reasonably concluded further discovery would not help resolve dispositive issue | Affirmed: denial was not premature because limits on discovery were proper |
Key Cases Cited
- Rozier v. Ford Motor Co., 573 F.2d 1332 (5th Cir. 1978) (fraud on the court reserved for most egregious misconduct)
- Booker v. Dugger, 825 F.2d 281 (11th Cir. 1987) (Rule 60(d)(3) requires clear and convincing proof of fraud on the court)
- Iraola & CIA., S.A. v. Kimberly-Clark Corp., 325 F.3d 1274 (11th Cir. 2003) (district court has broad discretion over discovery)
- Harrison v. Culliver, 746 F.3d 1288 (11th Cir. 2014) (appellate review of discovery rulings is for abuse of discretion; reversal requires showing substantial harm)
- Avirgan v. Hull, 932 F.2d 1572 (11th Cir. 1991) (denial of further discovery proper when it would not aid resolution)
- Aviation Specialties, Inc. v. United Technologies Corp., 568 F.2d 1186 (5th Cir. 1978) (end discovery when record is sufficiently developed)