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United States v. Sierra Pacific Indus.

United States District Court, E.D. California

April 17, 2015

UNITED STATES OF AMERICA, Plaintiff,
v.
SIERRA PACIFIC INDUSTRIES, et al., Defendants, AND ALL RELATED CROSS-ACTIONS

For United States of America, Plaintiff: Kelli L. Taylor, GOVT, Matthew Dean Segal, LEAD ATTORNEYS, Colleen M Kennedy, David Taylor Shelledy, U.S. Attorney's Office, Sacramento, CA; Todd A. Pickles, LEAD ATTORNEY, United States Attorney's Office, Sacramento, CA; Glen Frederick Dorgan, GOVT, United States Attorney's Office, Fresno, CA.

For W.M. Beaty and Associates, Inc., Defendant, ThirdParty Plaintiff, Cross Claimant: Richard Stone Linkert, LEAD ATTORNEY, Matheny Sears Linkert and Jaime LLP, Sacramento, CA.

For Brooks Walker, III, individually and as trustee of the Clayton Brooks Danielsen, the Myles Walker Danielsen, and the Benjamin Walker Burlock trust, the Margaret Charlotte Burlock Trust, Leslie Walker, individually and as trustee of the Brooks Thomas Walker Trust, the Susie Kate Walker Trust and the Della Grace Walker trusts, Ann McKeever Hatch, as trustee of the Hatch 1987 revocable trust, Wellington Smith Henderson, Jr., as Trustee of the Henderson Revocable Trust, John C. Walker, individually and as trustee of the Della Walker Van Loben Sels trust for the issue of John C. Walker, Jennifer Walker, individually and as trustee of the Emma Walker Silverman Trust and the Max Walker Silverman Trust, Lindsey Walker, individually and as trustee of the Reilly Hudson Keenan and Madison Flanders Keenan Trust, also known as Lindsey Walker-Silverman, James A Henderson, Charles C Henderson, as Trustee of the Charles C. and Kirsten Henderson Revocable Trust, Joan H Henderson, Kirby Walker, Brooks Walker, Jr., as Trustee of the Brooks Walker, Jr. Revocable Trust and the Della Walker Van Loben Sels Trust for the issue of Brooks Walker, Jr., Richard L. Greene, As Trustee of the Hatch Irrevocable Trust, Mark W. Henderson, as Trustee of the Mark W. Henderson Revocable Trust, Elena D. Henderson, Defendants, ThirdParty Plaintiffs: Richard Stone Linkert, LEAD ATTORNEY, Matheny Sears Linkert and Jaime LLP, Sacramento, CA; Steven P. Ragland, LEAD ATTORNEY, John W. Keker, Sharif E. Jacob, Keker & Van Nest LLP, San Francisco, CA.

For Sierra Pacific Industries, Defendant, Cross Defendant: Annie Smith Amaral, LEAD ATTORNEY, Meghan M. Baker, Downey Brand LLP (Sacramento), Sacramento, CA; Avalon Claire Johnson, William Ross Warne, LEAD ATTORNEYS, Michael John Thomas Downey Brand, LLP, Sacramento, CA; Jennifer T Lias PHV, Richard W Beckler, PHV, LEAD ATTORNEYS, PRO HAC VICE, Bracewell & Giuliani LLP, Washington, DC; David H. Dun, Dun & Martinek LLP, Eureka, CA.

For Eunice E Howell, Individually, Doing business as Howell's Forest Havesting Company, Defendant: Derek John Vandeviver, Rushford & Bonotto, LLP, Sacramento, CA; Lori J. Gualco, Gualco Law, Sacramento, CA; Phillip R. Bonotto, Law Offices of Rushford & Bonotto, LLP, Sacramento, CA.

For Ann McKeever Hatch, Cross Claimant: Richard Stone Linkert, LEAD ATTORNEY, Matheny Sears Linkert and Jaime LLP, Sacramento, CA; John W. Keker, Sharif E. Jacob, Steven P. Ragland, Keker & Van Nest, LLP, San Francisco, CA.

For California Attorney General's Office, Movant: Tracy Lynn Winsor, LEAD ATTORNEY, Office of the Attorney General, Sacramento, CA; Daniel M. Fuchs, California Attorney General's Office, Sacramento, CA.

For Eunice E Howell, Individually, ThirdParty Plaintiff: Phillip R. Bonotto, Law Offices of Rushford & Bonotto, LLP, Sacramento, CA; Derek John Vandeviver, LEAD ATTORNEY, Rushford & Bonotto, LLP, Sacramento, CA.

For Sierra Pacific Industries, Cross Defendant, Counter Claimant: Annie Smith Amaral, LEAD ATTORNEY, Meghan M. Baker, Downey Brand LLP (Sacramento), Sacramento, CA; Michael John Thomas William Ross Warne, LEAD ATTORNEYS, Downey Brand, LLP, Sacramento, CA; David H. Dun, Dun & Martinek LLP, Eureka, CA.

For Brooks Walker, III, individually and as trustee of the Clayton Brooks Danielsen, the Myles Walker Danielsen, and the Benjamin Walker Burlock trust, the Margaret Charlotte Burlock Trust, Leslie Walker, individually and as trustee of the Brooks Thomas Walker Trust, the Susie Kate Walker Trust and the Della Grace Walker trusts, John C. Walker, individually and as trustee of the Della Walker Van Loben Sels trust for the issue of John C. Walker, Jennifer Walker, individually and as trustee of the Emma Walker Silverman Trust and the Max Walker Silverman Trust, Kirby Walker, Brooks Walker, Jr., as Trustee of the Brooks Walker, Jr. Revocable Trust and the Della Walker Van Loben Sels Trust for the issue of Brooks Walker, Jr., Brooks Walker, III, individually and as trustee of the Clayton Brooks Danielsen, the Myles Walker Danielsen, and the Benjamin Walker Burlock trust, the Margaret Charlotte Burlock Trust, Leslie Walker, individually and as trustee of the Brooks Thomas Walker Trust, the Susie Kate Walker Trust and the Della Grace Walker trusts, John C. Walker, individually and as trustee of the Della Walker Van Loben Sels trust for the issue of John C. Walker, Jennifer Walker, individually and as trustee of the Emma Walker Silverman Trust and the Max Walker Silverman Trust, Kirby Walker, Brooks Walker, Jr., as Trustee of the Brooks Walker, Jr. Revocable Trust and the Della Walker Van Loben Sels Trust for the issue of Brooks Walker, Jr., Cross Claimants: Richard Stone Linkert, LEAD ATTORNEY, Matheny Sears Linkert and Jaime LLP, Sacramento, CA; John W. Keker, Sharif E. Jacob, Keker & Van Nest LLP, San Francisco, CA.

For Lindsey Walker, individually and as trustee of the Reilly Hudson Keenan and Madison Flanders Keenan Trust, Lindsey Walker, individually and as trustee of the Reilly Hudson Keenan and Madison Flanders Keenan Trust, Cross Claimants: John W. Keker, LEAD ATTORNEY, Sharif E. Jacob, Keker & Van Nest LLP, San Francisco, CA; Richard Stone Linkert, LEAD ATTORNEY, Matheny Sears Linkert and Jaime LLP, Sacramento, CA.

For Eunice E Howell, Individually, Cross Defendant: Derek John Vandeviver, Rushford & Bonotto, LLP, Sacramento, CA; Phillip R. Bonotto, Law Offices of Rushford & Bonotto, LLP, Sacramento, CA.

For United States of America, Counter Defendant: Kelli L. Taylor, GOVT, LEAD ATTORNEY, Colleen M Kennedy, U.S. Attorney's Office, Sacramento, CA.

MEMORANDUM AND ORDER

WILLIAM B. SHUBB, UNITED STATES DISTRICT JUDGE.

After reaching a settlement with the government and requesting the court to enter judgment pursuant to that settlement almost two years ago, defendants Sierra Pacific Industries, Howell's Forest Harvesting Company, and fifteen individuals and/or trusts who own land in the Sierra Nevada mountains (referred to collectively as " defendants" ) now move to set aside that judgment based upon " fraud on the court."

I. Brief Factual and Procedural Background

On September 3, 2007, a fire ignited on private property near the Plumas National Forest. The fire, which became known as the Moonlight Fire, burned for over two weeks and ultimately spread to 46,000 acres of the Plumas and Lassen National Forests. The day after the fire started, California Department of Forestry and Fire Protection (" Cal Fire" ) investigator Joshua White and United States Forest Service (" USFS" ) investigator David Reynolds sought to determine the cause of the fire. As a result of the joint investigation, Cal Fire and the USFS ultimately issued the " Origin and Cause Investigation Report, Moonlight Fire" (" Joint Report" ). The Joint Report concluded that the Moonlight Fire was caused by a rock striking the grouser or front blade of a bulldozer operated by an employee of defendant Howell's Forest Harvesting Company. After winning a bid to harvest timber on the private property, Sierra Pacific Industries had hired that company to conduct logging operations in the area.

On August 9, 2009, the Office of the California Attorney General filed an action in state court on behalf of Cal Fire to recover its damages caused by the Moonlight Fire (the " state action" ). That same month, on August 31, 2009, the United States Attorney filed this action on behalf of the United States to recover its damages caused by the Moonlight Fire (the " federal action" ). The two cases proceeded independently, but the government[1] and Cal Fire operated pursuant to a joint prosecution agreement.

To say that this case was litigated aggressively and exhaustively by all parties would be an understatement. When the court entered judgment almost two years ago, the docket had almost six hundred entries, which included contentious discovery motions and voluminous dispositive motions. Almost three years after the federal action commenced, it was set to proceed to jury trial on July 9, 2012 before Judge Mueller and was expected to last no more than thirty court days. Three days before trial, the parties voluntarily participated in a settlement conference and reached a settlement agreement.

Under the terms of the settlement agreement, Sierra Pacific Industries agreed to pay the government $47 million, Howell's Forest Harvesting Company agreed to pay the government $1 million, and other defendants agreed to pay the government $7 million. (Settlement Agreement & Stipulation ¶ 25 (Docket No. 592).) Sierra Pacific Industries also agreed to convey 22,500 acres of land to the government. (Id.) At the request of the parties and pursuant to the settlement agreement, the court dismissed the case with prejudice on July 18, 2012 and directed the clerk to enter final judgment in the case. (Id.)

More than two years later, on October 9, 2014, defendants filed the pending motion to set aside that judgment. After Judge Mueller recused herself, the case was reassigned to the undersigned judge. After conferring with the parties, the court required limited briefing addressing the threshold issue of whether the alleged conduct giving rise to defendants' motion constitutes " fraud on the court." The court now addresses that limited issue.

II. Legal Standards

A. Federal Rule of Civil Procedure 60

To preserve the finality of judgments, the Federal Rules of Civil Procedure limit a party's ability to seek relief from a final judgment. Rule 60(b) enumerates six grounds under which a court may relieve a party from a final judgment:

(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b);
(3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;
(4) the judgment is void;
(5) the judgment has been satisfied, released or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or
(6) any other reason that justifies relief.

Fed. R. Civ. P. 60(b). A motion seeking relief from a final judgment under Rule 60(b) must be made " within a reasonable time" and any motion under one of the first three grounds for relief must be made " no more than a year after the entry of the judgment." Id. R. 60(c)(1). Defendants concede that any motion under Rule 60(b) in this case would be barred as untimely because it would rely on one or more of the first three grounds for relief but was not filed within a year of the entry of final judgment.

Despite the limitations in Rule 60(b), " [c]ourts have inherent equity power to vacate judgments obtained by fraud." United States v. Estate of Stonehill, 660 F.3d 415, 443 (9th Cir. 2011) (citing Chambers v. NASCO, Inc., 501 U.S. 32, 44, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991)). Rule 60(d)(3) preserves this inherent power and recognizes that Rule 60 does not " limit a court's power to . . . set aside a judgment for fraud on the court." Fed.R.Civ.P. 60(d)(3); accord Appling v. State Farm Mut. Auto. Ins. Co., 340 F.3d 769, 780 (9th Cir. 2003) ( " Federal Rule of Civil Procedure 60(b) preserves the district court's right to hear an independent action to set aside a judgment for fraud on the court." ); Estate of Stonehill, 660 F.3d at 443 ( " Rule 60(b), which governs relief from a judgment or order, provides no time limit on courts' power to set aside judgments based on a finding of fraud on the court." ).[2] Because defendants failed to file a timely Rule 60(b) motion, they are forced to argue that the judgment in this case should be set aside for fraud on the court, and the court must assess defendants' allegations under this narrowly defined term.

B. Definition of " Fraud on the Court"

The Supreme Court has " justified the 'historic power of equity to set aside fraudulently begotten judgments' on the basis that 'tampering with the administration of justice . . . involves far more than an injury to a single litigant. It is a wrong against the institutions set up to protect and safeguard the public.'" In re Levander, 180 F.3d 1114, 1118 (9th Cir. 1999) (quoting Chambers, 501 U.S. at 44). Still, " [a] court must exercise its inherent powers with restraint and discretion in light of their potency." Id. at 1119.

Relief for fraud on the court 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." United States v. Beggerly, 524 U.S. 38, 46, 118 S.Ct. 1862, 141 L.Ed.2d 32 (1998) (quoting Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 244, 64 S.Ct. 997, 88 L.Ed. 1250, 1944 Dec. Comm'r Pat. 675 (1944), overruled on other grounds by Standard Oil Co. v. United States, 429 U.S. 17, 97 S.Ct. 31, 50 L.Ed.2d 21 (1976)). The Ninth Circuit has repeatedly emphasized that " [e]xceptions which would allow final decisions to be reconsidered must be construed narrowly in order to preserve the finality of judgments." Abatti v. Comm'r of the I.R.S., 859 F.2d 115, 119 (9th Cir. 1988); see also Appling, 340 F.3d at 780; Dixon v. C.I.R., 316 F.3d 1041, 1046 (9th Cir. 2003).

Fraud on the court " 'embrace[s] only 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 can not perform in the usual manner its impartial task of adjudging cases that are presented for adjudication.'" Appling, 340 F.3d at 780 (quoting In re Levander, 180 F.3d at 1119) (alteration in original). A finding of fraud on the court " must involve an unconscionable plan or scheme which is designed to improperly influence the court in its decision." Pumphrey v. K.W. Thompson Tool Co., 62 F.3d 1128, 1131 (9th Cir. 1995) (internal quotations marks omitted); see also Appling, 340 F.3d at 780 (" Fraud on the court requires a 'grave miscarriage of justice,' and a fraud that is aimed at the court." (quoting Beggerly, 524 U.S. at 47)).

" In determining whether fraud constitutes fraud on the court, the relevant inquiry is not whether fraudulent conduct 'prejudiced the opposing party,' but whether it '" harm[ed]" the integrity of the judicial process.'" Estate of Stonehill, 660 F.3d at 444 (quoting Alexander v. Robertson, 882 F.2d 421, 424 (9th Cir. 1989)); see also Estate of Stonehill, 660 F.3d at 444 (" Fraud on the court involves 'far more than an injury to a single litigant . . . .'" (quoting Hazel-Atlas Glass Co., 322 U.S. at 246)). Although " one of the concerns underlying the 'fraud on the court' exception is that such fraud prevents the opposing party from fully and fairly presenting his case," this showing alone is not sufficient. Abatti, 859 F.2d at 119; see also Abatti, 859 F.2d at 118 (" [W]e have said that it may occur when the acts of a party prevent his adversary from fully and fairly presenting his case or defense. . . . Fraud on the court must involve 'an unconscionable plan or scheme which is designed to improperly influence the court in its decision.'" (quoting Toscano v. Comm'r of the I.R.S., 441 F.2d 930, 934 (9th Cir. 1971) (internal citation omitted) (emphasis added)). At the same time, a showing of prejudice to the party seeking relief is not required. Dixon, 316 F.3d at 1046.

" Non-disclosure, or perjury by a party or witness, does not, by itself, amount to fraud on the court." Appling, 340 F.3d at 780; accord In re Levander, 180 F.3d at 1119 (" Generally, non-disclosure by itself does not constitute fraud on the court. . . . Similarly, perjury by a party or witness, by itself, is not normally fraud on the court." ); see also Hazel-Atlas Glass Co., 322 U.S. at 245 (" This is not simply a case of a judgment obtained with the aid of a witness who, on the basis of after-discovered evidence, is believed possibly to have been guilty of perjury." ).

The Supreme Court has held that a party's failure to " thoroughly search its records and make full disclosure to the Court" does not amount to fraud on the court. Beggerly, 524 U.S. at 47 (internal quotation marks omitted); see also Valerio v. Boise Cascade Corp., 80 F.R.D. 626, 641 (C.D. Cal. 1978), adopted as the opinion of the Ninth Circuit in 645 F.2d 699, 700 (9th Cir. 1981) (" [N]ondisclosure to the court of facts allegedly pertinent to the matter before it, will not ordinarily rise to the level of fraud on the court." ).

Non-disclosure by an officer of the court or perjury by or suborned by an officer of the court may amount to fraud on the court only if it was " so fundamental that it undermined the workings of the adversary process itself." Estate of Stonehill, 660 F.3d at 445; see also 11 Charles Alan Wright, Arthur R. Miller, Mary Kay Kane, Richard L. Marcus & Adam N. Steinman, Federal Practice and Procedure § 2870 (3d ed. 2014) (" [T]here is a powerful distinction between perjury to which an attorney is a party and that with which no attorney is involved. . . . [W]hether perjury constitutes a fraud on the court should depend on whether an attorney or other officer of the court was a party to it." ). Non-disclosure by an officer of the court, however, does not rise to this level if it had a " limited effect on the district court's decision" and the withheld information would not have " significantly changed the information available to the district court." Estate of Stonehill, 660 F.3d at 446.

As the Ninth Circuit has recognized, " the term 'fraud on the court' remains a 'nebulous concept.'" In re Levander, 180 F.3d at 1119 (quoting Broyhill Furniture Indus., Inc. v. Craftmaster Furniture Corp., 12 F.3d 1080, 1085 (Fed. Cir. 1993)). Nonetheless, it " places a high burden on [the party] seeking relief from a judgment," Latshaw v. Trainer Wortham & Co., Inc., 452 F.3d 1097, 1104 (9th Cir. 2006), and the party seeking relief must prove fraud on the court by clear and convincing evidence, Estate of Stonehill, 660 F.3d at 443-44.

C. Inapplicability of Brady v. Maryland

Relying on Brady v. Maryland, 373 U.S. 83, 83 S.Ct. 1194, 10 L.Ed.2d 215 (1963), defendants argue that the government is held to a higher standard than non-government parties not just in criminal cases but in civil cases as well.[3] In Brady, the Supreme Court held that " the suppression by the prosecution of evidence favorable to an accused upon request violates due process where the evidence is material either to guilt or to punishment, irrespective of the good faith or bad faith of the prosecution." 373 U.S. at 87. Its holding relied on the rights of a criminal defendant under the Due Process Clause of the Fourteenth Amendment and the " avoidance of an unfair trial to the accused." Id.; see also Lisenba v. California, 314 U.S. 219, 236, 62 S.Ct. 280, 86 L.Ed. 166 (1941) (" As applied to a criminal trial, denial of due process is the failure to observe that fundamental fairness essential to the very concept of justice." ).

" 'Due process is a flexible concept, and its procedural protections will vary depending on the particular deprivation involved.'" Goichman v. Rheuban Motors, Inc., 682 F.2d 1320, 1324 (9th Cir. 1982) (quoting Morrissey v. Brewer, 408 U.S. 471, 481, 92 S.Ct. 2593, 33 L.Ed.2d 484 (1972)); see also Mathews v. Eldridge, 424 U.S. 319, 335, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976) (identifying the first consideration in the procedural due process inquiry as " the private interest that will be affected by the official action" ).[4] In a criminal case, the government is seeking to deprive a defendant, who is presumed to be innocent, of his liberty. The " 'requirement of due process . . . in safeguarding the liberty of the citizen against deprivation through the action of the State, embodies the fundamental conceptions of justice which lie at the base of our civil and political institutions.'" Mooney v. Holohan, 294 U.S. 103, 112, 55 S.Ct. 340, 79 L.Ed. 791 (1935). In contrast to a criminal case where there is a potential loss of liberty, a civil action such as this is strictly about money. Except that the government happens to be the plaintiff, this case is no different from any other civil case in which one party pursues recovery of damages allegedly caused by the other party. The government did not seek to deprive any defendant in this case of liberty or impose any other consequences akin to a criminal conviction.[5] It therefore stands to reason that Brady has no application in civil cases such as this.

The differences between discovery in criminal and civil cases also underscore the need for Brady only in criminal cases. In a criminal case, a defendant is " entitled to rather limited discovery, with no general right to obtain the statements of the Government's witnesses before they have testified." Degen v. United States, 517 U.S. 820, 825, 116 S.Ct. 1777, 135 L.Ed.2d 102 (1996). A defendant in a civil case, on the other hand, is " entitled as a general matter to discovery of any information sought if it appears 'reasonably calculated to lead to the discovery of admissible evidence.'" Id. at 825-26. The Supreme Court has explained that " [t]he Federal Rules of Civil Procedure are designed to further the due process of law that the Constitution guarantees." Nelson v. Adams USA, Inc., 529 U.S. 460, 465, 120 S.Ct. 1579, 146 L.Ed.2d 530 (2000). The expansive right to discovery in civil cases and the Federal Rules of Civil Procedure thus provided defendants with constitutionally adequate process to mount an effective and meaningful defense to this civil action.

Defendants have not cited and this court is not aware of a single case from the Supreme Court or Ninth Circuit applying Brady to a civil case.[6] In fact, all of the Supreme Court and Ninth Circuit cases defendants rely on for this proposition are cases assessing the conduct of prosecutors[7] in criminal cases. (See Defs.' Revised Supplemental Briefing at 3, 19-20 (Docket No. 625-1) (" Defs.' Br." ) (relying on Youngblood v. West Virginia, 547 U.S. 867, 869-70, 126 S.Ct. 2188, 165 L.Ed.2d 269 (2006) (criminal case addressing Brady); Kyles v. Whitley, 514 U.S. 419, 438, 115 S.Ct. 1555, 131 L.Ed.2d 490 (1995) (habeas petition based on Brady violation); United States v. Young, 470 U.S. 1, 25-26, 105 S.Ct. 1038, 84 L.Ed.2d 1 (1985) (Brennan, J., concurring) (criminal case addressing prosecutorial misconduct); Imbler v. Pachtman, 424 U.S. 409, 424, 96 S.Ct. 984, 47 L.Ed.2d 128 (1976) (discussing prosecutorial immunity in suits under 42 U.S.C. § 1983); Berger v. United States, 295 U.S. 78, 88, 55 S.Ct. 629, 79 L.Ed. 1314 (1935) (" The United States Attorney is the representative not of an ordinary party to a controversy, but of a sovereignty whose obligation to govern impartially is as compelling as its obligation to govern at all; and whose interest, therefore, in a criminal prosecution is not that it shall win a case, but that justice shall be done." (emphasis added)); Tennison v. City & County of San Francisco, 570 F.3d 1078, 1087 (9th Cir. 2009) (42 U.S.C. § 1983 claim based on Brady violations in underlying criminal case); Morris v. Ylst, 447 F.3d 735, 744 (9th Cir. 2006) (criminal case addressing Brady and prosecutor's duty to investigate suspected perjury); United States v. Chu, 5 F.3d 1244, 1249 (9th Cir. 1993) (criminal case addressing prosecutorial misconduct in questioning of witness); Benn v. Lambert, 283 F.3d 1040, 1062 (9th Cir. 2002) (habeas petition based on Brady violation)).)

Outside of the Ninth Circuit, " courts have only in rare instances found Brady applicable in civil proceedings, mainly in those unusual cases where the potential consequences 'equal or exceed those of most criminal convictions.'" Fox ex rel. Fox v. Elk Run Coal Co., Inc., 739 F.3d 131, 138-39 (4th Cir. 2014) (quoting Demjanjuk v. Petrovsky, 10 F.3d 338, 354 (6th Cir. 1993)); see also Brodie v. Dep't of Health & Human Servs., 951 F.Supp.2d 108, 118 (D.D.C. 2013) ( " Brady does not apply in civil cases except in rare situations, such as when a person's liberty is at stake. . . . With only three exceptions, . . . courts uniformly have declined to apply Brady in civil cases." ).

In arguing that Brady should be extended to this civil case, defendants rely heavily on the Sixth Circuit's decision in Demjanjuk. In that case, the government sought denaturalization and extradition to Israel on capital murder charges based on its belief that Demjanjuk was " the notorious Ukrainian guard at the Nazi extermination camp near Treblinka, Poland called by Jewish inmates 'Ivan the Terrible.'" Demjanjuk, 10 F.3d at 339. During the proceedings, the government did not disclose documents and statements in its possession that " should have raised doubts about Demjanjuk's identity as Ivan the Terrible." Id. at 342.

The Sixth Circuit recognized that even though Brady did not apply in civil cases, " it should be extended to cover denaturalization and extradition cases where the government seeks denaturalization or extradition based on proof of alleged criminal activities of the party proceeded against." Id. at 353 (emphasis added); see also id. (indicating that Brady would not apply if " the government had sought to denaturalize Demjanjuk only on the basis of his misrepresentations at the time he sought admission to the United States and subsequently when he applied for citizenship" ).

In extending Brady to the proceedings in Demjanjuk, the Sixth Circuit explained that the " consequences of denaturalization and extradition equal or exceed those of most criminal convictions," " that Demjanjuk was extradited for trial on a charge that carried the death penalty," that the government attorneys were from the Office of Special Investigations (" OSI" ), which is a unit within the Criminal Division of the Department of Justice, that the government attorneys were frequently referred to as prosecutors during the proceedings, and that the Director of OSI believed Brady applied to the proceedings. Id. at 353-54. Unlike in Demjanjuk, this case was brought by the Civil Division of the United States Attorney's Office, the government did not seek to prove that defendants engaged in serious criminal conduct potentially subject to capital punishment, and a judgment in favor of the government would not have subjected defendants to consequences akin to those following a criminal conviction.

Because Brady is understandably inapplicable to this civil case, defendants' reliance on criminal cases discussing a prosecutor's heightened duties in light of Brady and other distinctly criminal rights is misguided. Lawyers representing the United States, like lawyers representing any party, must of course comport with the applicable rules governing attorney conduct. As defendants appear to concede, those ethical standards, or any self-imposed standard by the executive branch, do not affect the showing necessary to prove fraud on the court, and the court should not, as defendants argue, assess the conduct of the government through the lens of any heightened obligation.

The Supreme Court and Ninth Circuit have repeatedly analyzed claims of fraud on the court by government attorneys without suggesting that their conduct is to be evaluated in light of any heightened obligations. In Beggerly, the government had brought a quiet title action. 524 U.S. at 40. Defendants sought proof of their title to the land during discovery and, after searching public land records, the government informed defendants that it had not found any evidence showing that the land in dispute had been granted to a private landowner. Id. at 40-41. After judgment was entered pursuant to a settlement the parties reached on the eve of trial, defendants discovered a land grant in the National Archives that supported their claim. Id. at 41. Defendants sought to vacate the judgment for fraud on the court because " the United States failed to 'thoroughly search its records and make full disclosure to the Court'" regarding the land grant. Id. at 47. Without suggesting that a heightened standard governed the government's conduct during discovery or litigation, the Supreme Court held that defendants were not entitled to relief from the judgment. The Court concluded that " it surely would work no 'grave miscarriage of justice,' and perhaps no miscarriage of justice at all, to allow the judgment to stand." Id.

In Appling, the Ninth Circuit discussed Beggerly without mentioning that the alleged misconduct was committed by the government and referred to the government only as the prevailing party. See Appling, 340 F.3d at 780 (describing Beggerly as " holding that allegations that the prevailing parting [sic] failed during discovery in the underlying case to 'thoroughly search its records and make full disclosure to the Court' were not fraud on the court" ).

Similarly, in Estate of Stonehill, the Ninth Circuit engaged in a detailed examination of alleged instances of misconduct by the government without suggesting that a heightened standard applied because it was the government that engaged in the conduct at issue. 660 F.3d at 445-52. Instead, the standards the Ninth Circuit articulated and applied were the same as those which govern the ability to seek relief for fraud on the court by non-government parties.[8] See, e.g., id. at 444-45 (discussing Levander and Pumphrey, which assessed allegations of fraud on the court by non-government attorneys); see also id. at 445 (" In order to show fraud on the court, Taxpayers must demonstrate, by clear and convincing evidence, an effort by the government to prevent the judicial process from functioning 'in the usual manner.'" ); accord Dixon, 316 F.3d at 1046-47 (finding fraud on the court perpetrated by government tax attorneys under the same standards governing fraud on the court by non-government attorneys).

The court therefore finds that Brady is inapplicable to this civil case and that the conduct of the government is to be assessed under the same standards as a non-government party when analyzing whether that conduct amounts to fraud on the court.

III. Analysis

Initially, it does not appear that any of the alleged acts of fraud tainted the court's decision to enter the stipulated judgment. The government argues quite persuasively that none of those acts therefore may form the basis for setting aside the settlement agreement and stipulated judgment. The argument certainly has logical appeal and finds support in a plethora of lower court decisions.[9] The Supreme Court, nevertheless, appears to have rejected that argument. See Beggerly, 524 U.S. at 39, 40-41, 47 (addressing the sufficiency of allegations of fraud on the court despite the fact that the judgment in that case was entered pursuant to a settlement agreement and the alleged fraud was not relevant to the court's decision to enter the judgment pursuant to the settlement agreement). The court accordingly proceeds to consider defendants' claims, individually and collectively, in light of the government's alternative arguments.

A. Allegations of fraud on the court that defendants knew about prior to settlement and entry of judgment

With the exception of any allegations subsequently addressed in this Order, defendants concede they knew of the following alleged instances of fraud on the court prior to settling the federal action: (1) that the government advanced an allegedly fraudulent origin and cause investigation and allegedly allowed investigators to testify falsely about their work, (Defs.' Br. at 58:2-9); (2) that the government allegedly misrepresented J.W. Bush's admission that a bulldozer rock strike caused the Moonlight Fire, (id. at 63:26-28); (3) that the government proffered allegedly false testimony in opposition to defendants' motion for summary judgment, (id. at 69:3-4); (4) that the government failed to take remedial action after learning that the air attack video allegedly undermined its origin and cause theory, (id. at 74:3-4); (5) that the government created an allegedly false diagram, (id. at 77:8-9); (6) that the government failed to correct an allegedly false expert report, (id. at 79:20-80:11); (7) that the government allegedly misrepresented evidence regarding other wildland fires, (id. at 88:5-6); and (8) that the government allegedly covered up misconduct at the Red Rock Lookout Tower, (id. at 104:9-11).

Despite knowing of and having the opportunity to persuade the jury that the government engaged in the aforementioned alleged misconduct, defendants chose to settle the case and forgo the jury trial. Relying exclusively on Hazel-Atlas Glass Co., defendants now argue that the calculated decision to settle the case with full knowledge ...


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