Apotex v. Merck (CAFC 2006-1405)

Apotex had licked its wounds too long. Appealing assertion of fraud has a one-year window, after which the accuser faces the double-tough burden of "fraud upon the court," which requires "rigorous proof."

Federal Rule of Civil Procedure 60(b) states the conditions on which a court can set aside a judgment based on assertion of fraud:

Rule 60(b) Mistakes; Inadvertence; Excusable Neglect; Newly Discovered Evidence; Fraud, Etc.
On motion and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(b); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; . . . or (6) any other reason justifying relief from the operation of judgment.
The motion shall be made within a reasonable time, and for reasons (1), (2), and (3) not more than one year after the judgment, order, or proceeding was entered or taken. A motion under this subdivision (b) does not affect the finality of a judgment or suspend its operation. This rule does not limit the power of a court . . . to set aside a judgment for fraud upon the court.

Rule 60(b)(3) provides that a judgment can be set aside for fraud or misrepresentation only when the motion is made within a year after the judgment, unless there was "fraud upon the court" or other egregious act not previously uncovered.

Fraud upon the court requires that there was a material subversion of the legal process such as could not have been exposed within the one-year window; it requires rigorous proof, as do other challenges to final judgment, lest the finality established by Rule 60(b) be overwhelmed by continuing attacks on the judgment. See Broyhill Furniture Indus. v. Craftmaster Furniture Corp., 12 F.3d 1080, 1085 (Fed. Cir. 1993) ("fraud upon the court should [ ] embrace only that species of fraud which does or attempts to subvert the integrity of the court itself, or is a fraud perpetuated by officers of the court so that the judicial machinery cannot perform in the usual manner its impartial task of adjudging cases that are presented for adjudication") (bracket in original, citations omitted). Fraud upon the court is typically limited to egregious events such as bribery of a judge or juror or improper influence exerted on the court, affecting the integrity of the court and its ability to function impartially. Id. at 1085-86. Such issues are not subject to a one-year limitation, but must be raised within a reasonable time of discovery of the fraud. Similarly, the Seventh Circuit has ruled that a district court's decision as to whether relief should be granted under rule 60(b) is committed to the sound discretion of the court. See, e.g., Nelson v. City Colleges of Chicago, 962 F.2d 754, 755 (7th Cir. 1992) ("we have noted many times that '[t]he district courts are given wide latitude in declining motions under Rule 60(b)'"); Matter of Whitney-Forbes, Inc., 770 F.2d 692, 698 (7th Cir. 1985) ("Fraud on the court involves a particular type of fraud which is directed to the judicial machinery itself, Bulloch v. United States, 721 F.2d 713, 718 (10th Cir. 1983), and which involves circumstances where the impartial functions of the court have been directly corrupted.")

Apotex's arguments were considered desperate ravings. Case closed.