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Fraud Of A Greater Magnitude: Sixth Circuit Reinforces High Bar For Relief Under Rule 60(d)(1)

In Giasson Aero. Sci., Inc. v. RCO Eng'g Inc., 2017 U.S. App. LEXIS 18165 (6th Cir. Sep. 20, 2017), the Sixth Circuit Court of Appeals held that a party seeking an independent action for relief from a final judgment under Rule 60(d)(1) must demonstrate a "grave miscarriage of justice" that is "several notches above" common law fraud. The case involves a settling party's request to undo a settlement agreement executed nearly seven years ago on the basis that the opposing party misrepresented pricing information during settlement negotiations that led to a royalty-based settlement. In affirming the district court's dismissal of the settling party's complaint, the Sixth Circuit did not specifically define what a grave miscarriage of justice means, but it did state that it is something far greater than "recovery of less-than-ideal royalty payments" negotiated by sophisticated parties that were represented by legal counsel. This case reinforces the judicial policy in favor of settlement agreements, noting that independent actions under Rule 60(d)(1) should be granted only under unusual and exceptional circumstances.

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