"Final Judgement" and "Order Granting Defendants' Motion To Dismiss".Civil Action 4-99-CV-406-Y, Robert C. Ballew vs. United States Department of Justice, et.al., In The United States District Court For The Northern District of Texas, Fort Worth Division, Filed September 30, 1999.
Order Granting Defendants' Motion To Dismiss Pending before the Court is Defendants' United States Department of Justice and United States Coast Guard's Motion To Dismiss, filed August 11, 1999. After careful consideration of the briefs, affidavits, and other materials submitted in this case, the Court finds that Defendants' motion should be GRANTED. I. FACTS Plaintiff, Robert C. Ballew, filed this action pursuant to Federal Rule of Civil Procedure 60(b), which, inter alia, permits a court to entertain an independent action to relieve a party from a judgment, order, or proceeding, or to set aside a judgment for fraud upon the court. The judgment from which Plaintiff seeks relief stems from a settlement agreement that took place almost a decade ago. In 1988, Plaintiff filed a lawsuit under the False Claims Act against two defense contractors who had sold defective helicopter engines to the United States Coast Guard. His claim was filed under a provision of the False Claims Act that authorizes private persons to file qui tam lawsuits on behalf of the Government and receive a share of the Government's recovery. See 31 U.S.C. S 3730(d). During the course of the proceedings, the Government negotiated a settlement with the qui tam defendants, who agreed to pay the Government $17 (Page 2) million. Plaintiff received a statutory share of $2.7 million, 15 percent of the cash payment resulting from the settlement agreement. Plaintiff's recovery of this sum in 1990 was widely publicized because it was the largest payment awarded to a relator in the 127-year history of the False Claims Act.Plaintiff now alleges that he received a sum well below that to which he was entitled. He claims that the Government fraudulently concealed critical aspects of the settlement agreement and thereby failed to disclose that it actually received consideration in the amount of $327,940,130 by its agreement to settle the qui tam lawsuit. Plaintiff bases these allegations on a number of government documents he requested and received under the Freedom of Information Act between 1996 and 1998. He asserts that this Court has jurisdiction to hear his claim as an independent action, in equity under Rule 60 (b). Defendants filed this motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) and failure to state a claim upon which relief can be granted under Rule 12(b)(6). II. RULE 60(b) Rule 60(b) of the Federal Rules of Civil Procedure is the only means of obtaining relief from a judgment. See United States v. Beggarly, 118 s. Ct. 1862 (1998). Under Rule 6o(b)(1)-(3), a party may file a motion for relief from a final judgment based on mistake, fraud, or newly discovered evidence "not more than one year after the judgment, order, or proceeding was entered or taken." Fed. R. Civ. P. 60(b). Plaintiff does not dispute that n motion under this (Page 3) provision is tine-barred. Rather, Plaintiff relies on the "saving clause" of Rule 60(b), which provides that "this rule does not limit the power of a court to entertain an independent action to relieve a party from a judgment . . . or to set aside a judgment for fraud upon the court." Fed. R. Civ. P. 60(b).In Beggerly, the Supreme Court held that Rule 60(b) preserves the equitable remedy of an "independent action" to set aside a judgment when all other possible claims under Rule 60(b) are time-barred. However, the court emphasized that the grounds for bringing an independent action based on fraud under Rule 60(b) must exceed the same grounds available under Rule 60(b)(3), otherwise, "the strict 1-year time limit on such motions would be set at naught." 118 S. Ct. at 1867. Consequently, the court held that an independent action for relief from a prior judgment is available "only to prevent a grave miscarriage of justice." Id. at 1868. "Independent actions must . . . be reserved for those cases of injustices which, in certain instances, are deemed sufficiently gross to demand a departure from rigid adherence to the doctrine of res judicata." Id. at 1857 (internal citations omitted). III. PLAINTIFF'S CLAIM The Court is not persuaded that Plaintiff's alleged "injury" rises to the level of a "grave miscarriage of justice" as contemplated by the Supreme Court in Beggerly. In that case, the Court held that the claimants were not entitled to bring an independent action to set aside a settlement agreement based on their contentions that the (Page 4) government had failed to thoroughly search its records and make full disclosures to the court regarding a previous grant of disputed property to a private landowner. The Court, however, provided an example of a situation that did warrant an independent action because judgment had been entered against the petitioner as a result of a forged document. Id. at 186'7 (citing Marshall v. Holmes, 12 S. Ct. 62 (1891)).At least two district court cases have applied Beggarly to claims similar to that of Plaintiff, and both held that "something more than common law fraud" must be shown in order to meet the heightened standard for an independent action under Rule 60(b). See Porter v. Chicago School Reform Board of Trustees, 1999 WL 627384 (N.D. 111.) (dismissing complaint of teacher who asserted that school board engaged in fraud when it misrepresented her position in settlement negotiations, resulting in proceeds less than that to which she was entitled); Lehman Bros. v. Masselli, 1998 WL 53181 *6 (S.D.N.Y.) ("Far more than an injury to an individual litigant, (fraud on the court] embraces that species of fraud which does or attempts to, defile the court itself, or is a fraud perpetrated by officers of the court so that the judicial machinery cannot perform in the usual manner its impartial task of adjudging cases presented for adjudication"). In the present case, Plaintiff hardly can assert that his recovery of $2.7 million dollars as a relator in a claims under the False Claims Act constituted a "grave miscarriage of justice." No judgment was entered against Plaintiff, nor was he penalized in any way as a result of the court's acceptance of the settlement agreement. Even if he (Page 5) would have recovered a substantially larger sum but for the government's alleged fraud, Rule 60 (b) provided him with an opportunity to file a motion within one year of the dismissal of the qui tam action. Plaintiff himself admits that he strongly suspected that the government was misrepresenting facts about the settlement during the negotiation process, and that he received a copy of the actual settlement agreement within one year of the final Judgment.Therefore, it is ORDERED that Defendants' Motion to Dismiss is GRANTED. All costs of court shall be borne by Plaintiff. Further, it is ORDERED that the above-styled and numbered cause be UNSEALED in accordance with the requests of all parties. SIGNED September 29, 1999. _____(Signature)____
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