862 F.3d 1157
9th Cir.2017Background
- Moonlight Fire (2007) burned ~46,000 acres; United States sued private forestry operators (including Sierra Pacific) in federal court seeking nearly $800 million; extensive joint Forest Service/Cal Fire investigation produced an Origin and Cause Report blaming a Howell bulldozer.
- Extensive discovery produced materials (photographs, sketches, aerial video, investigator notes) that defendants argued showed investigative misconduct and misrepresentations; the district court limited some evidence in limine but allowed evidence of attempts to conceal.
- Three days before trial the parties settled: defendants agreed to pay $55 million and convey land; settlement contained broad release language covering "Unknown Claims" discovered before or after the agreement; court entered judgment dismissing the federal case with prejudice.
- After settlement and during related state proceedings, additional allegations surfaced: (1) government attorneys allegedly told investigators the "white flag" issue was a "non-issue" (raising subornation claims); (2) a false bribery accusation involving Edwin Bauer that defendants say the government knew and failed to disclose; and (3) revelations about Cal Fire’s WiFITER fund raising potential conflicts of interest.
- Defendants moved under Fed. R. Civ. P. 60(d)(3) for relief from judgment, alleging fraud on the court; the district court denied relief, holding (a) pre-settlement matters could not support fraud-on-the-court relief because they were not after-discovered, (b) the settlement’s release may bar relief, and (c) the post-settlement allegations did not meet the high fraud-on-the-court standard. Defendants also sought recusal of the judge based on alleged tweets from an account the judge allegedly controlled; the district court did not recuse.
- Ninth Circuit affirmed: applied high standard for fraud on the court (intentional, material misrepresentation affecting integrity of the judicial process and not discoverable with due diligence), found no basis to set aside the judgment, and rejected retroactive recusal under plain-error review.
Issues
| Issue | Plaintiff's Argument (United States) | Defendant's Argument (Sierra Pacific / co-defs) | Held |
|---|---|---|---|
| Whether pre-settlement allegations (photographs/sketches, video, investigator conduct) constitute fraud on the court under Rule 60(d)(3) | Pre-settlement evidence was false/misleading and infected the litigation | These misrepresentations/failures to disclose amounted to fraud on the court warranting vacatur despite settlement | Denied — pre-settlement matters are not "after-discovered"; defendants had opportunity to litigate them and cannot use Rule 60(d)(3) to attack a voluntary settlement |
| Whether post-settlement allegations (subornation re: white flag) constitute fraud on the court | Attorneys instructed investigators to downplay/ conceal the white flag, amounting to subornation of perjury that undermined the process | Such instruction ("nonissue") was at most counsel opinion; even if true it did not show intentional, material deception affecting the court’s integrity | Denied — statements characterized as "nonissue" not an instruction to lie; allegations do not meet fraud-on-the-court standard |
| Whether post-settlement allegations (withheld Edwin Bauer bribery accusation; WiFITER conflicts) constitute fraud on the court | Government failed to disclose exculpatory/financial-motive evidence and misrepresented WiFITER’s nature, which biased investigators | The government had no Brady-like duty in civil case to disclose the Bauer claim; it lacked knowledge/documents about WiFITER impropriety; nondisclosure does not equal fraud on the court | Denied — nondisclosure/discovery issues insufficient; no evidence government knew of WiFITER improprieties; these revelations do not significantly alter the pre-settlement picture |
| Whether judge’s Twitter activity required recusal / vacatur | Tweets from an account allegedly controlled by the judge (following/retweeting U.S. Attorney account and linking a news story) created appearance of bias and impermissible ex parte/public comment | Following a public U.S. Attorney Twitter account and posting a link to a news article does not show an identifiable relationship, directed ex parte communication, or public comment on merits | Denied (plain-error review) — no appearance of bias or prohibited ex parte communication; single link tweet without commentary did not warrant retroactive recusal or vacatur |
Key Cases Cited
- Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944) (establishes equitable power to set aside judgments for after-discovered fraud but stresses restraint to protect repose of judgments)
- United States v. Beggerly, 524 U.S. 38 (1998) (fraud-on-the-court relief is limited to prevention of a grave miscarriage of justice)
- In re Levander, 180 F.3d 1114 (9th Cir. 1999) (not all fraud is fraud on the court; after-discovered fraud required and must have been undiscoverable with due diligence)
- Estate of Stonehill, 660 F.3d 415 (9th Cir. 2011) (fraud on the court inquiry focuses on harm to judicial integrity and requires intentional, material misrepresentation that affects outcome)
- Appling v. State Farm Mut. Auto. Ins. Co., 340 F.3d 769 (9th Cir. 2003) (due diligence requirement; fraud discoverable with diligence will not support fraud-on-the-court relief)
- In re Napster, Inc. Copyright Litig., 479 F.3d 1078 (9th Cir. 2007) (fraud on the court must be intentional and material)
- United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001) (conduct by judge amounting to public comments/interviews can require recusal; discussed for contrast with this case)