United States v. Chapman, 642 F.3d 1236

Second appeal from Chapman, Flanagan, and Jacobi for securities/investment fraud; district court dismissed indictment with prejudice for Brady/Giglio violations; Hyde Amendment fees denied on prior appeal; Eddy Memo from IRS post-dismissal raised questions about prosecution practices; district court held memo did not establish fraud on the court and denied Rule 60(b)(3) relief; Ninth Circuit reviews denial for abuse of discretion; petitioners contend Eddy Memo reveals intentional withholding and entitles them to reopen Hyde Amendment relief.
EIS: Eddy Memo described intentional delay in turning over impeachment materials and suggested trial-preparation failures; district court treated misconduct as significant but not fraud on the court; the Hyde Amendment relief requires prevailing party status tied to merits, which the district court denied.
The Eddy Memo reinforced the district court’s prior finding of mixed intentional/negligent misconduct and did not alter the conclusion that the dismissal was a sanction for misconduct, not a merits-based victory for the defendants.
The court reiterates that Rule 60(b)(3) relief is rare and requires fraud on the court or comparable misconduct by officers of the court; abuse of discretion standard governs review.
The panel affirms the district court’s denial of Rule 60(b)(3) relief and the Hyde Amendment prevailing-party analysis.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Eddy Memo proves fraud on the court	Chapman argues Eddy Memo shows intentional withholding	U.S. contends memo reflects overall misconduct but not fraud on court	No; no fraud on the court established
Whether Eddy Memo establishes prevailing-party status under Hyde Amendment	Defendants contend memo makes dismissal merits-based	Government argues no merits adjudication occurred	No; not a merits-based victory to qualify as prevailing party
Whether Rule 60(b)(3) relief was properly denied as to reopening	Relief warranted by fraud or grave miscarriage	Discretionary denial appropriate given record	Affirmed; district court did not abuse discretion

Brady v. Maryland, 373 U.S. 83 (U.S. 1963) (established Brady disclosure rule)
Giglio v. United States, 405 U.S. 150 (U.S. 1972) (impeachment material disclosure requirements)
United States v. Beggerly, 524 U.S. 38 (U.S. 1998) (fraud-on-the-court exception to Rule 60(b))
Dixon v. Commissioner, 316 F.3d 1041 (9th Cir. 2003) (fraud-on-the-court standard; narrow inherent power exception)
Latshaw v. Trainer Wortham & Co., 452 F.3d 1097 (9th Cir. 2006) (definition of fraud on the court; officers of the court)