Have a question about how to use the law in your story? Need a character, plot twist or setting? Ask me in the comments section and I'll be glad to answer. I welcome all comments and questions.

Thursday, July 19, 2012

Suits Gets Fraud on the Court Right

I had one of those WTH moments while watching Suits recently. A lawyer with a grudge against Harvey shows up claiming he has evidence that a judgment Harvey obtained 5 years ago was done fraudulently. The evidence? He comes up with a memo he claims was hidden. In it, a company representative talks about the design defect the company denied existed in a products liability case. He claims Harvey hid it deliberately. He is suing the law firm for fraud and is going to move the court to set aside the judgment.

So I’m thinking, five years? How is he going to reopen a case that old? Does fraud on a court let you go back indefinitely in New York?

The answer is, maybe. If the judgment was entered in Federal court, the parties have only one year to seek relief based on fraud. Fed. R. Civ. P. 60 says:

(b) Grounds for Relief from a Final Judgment, Order, or Proceeding. On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons:
(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.
(c) Timing and Effect of the Motion.
(1) Timing. A motion under Rule 60(b) must be made within a reasonable time—and for reasons (1), (2), and (3) no more than a year after the entry of the judgment or order or the date of the proceeding.
However, I don’t see a similar time limit under New York’s CVP. LAW § 5015 : Relief from judgment or order:

(a) On motion. The court which rendered a judgment or order may relieve a party from it upon such terms as may be just, on motion of any interested person with such notice as the court may direct, upon the ground of:

1. excusable default, if such motion is made within one year after
service of a copy of the judgment or order with written notice of its
entry upon the moving party, or, if the moving party has entered the
judgment or order, within one year after such entry; or

2. newly-discovered evidence which, if introduced at the trial, would
probably have produced a different result and which could not have been
discovered in time to move for a new trial under section 4404; or

3. fraud, misrepresentation, or other misconduct of an adverse party;

4. lack of jurisdiction to render the judgment or order; or

5. reversal, modification or vacatur of a prior judgment or order upon
which it is based.

The one year time limit only applies to excusable default, and not to the other grounds. So I’ll rate that plotline as plausible (NY civil procedure gurus, let me know if I missed something).

The next thing that happened is the lawyer tricked Harvey into doing his own investigation after the client fired the firm. Harvey found out that there was indeed fraud. The lawyer then announced that Harvey had to disclose the fraud to the court now.

If they were in Florida, that’s probably true. New York law isn’t so clear. NY DR 7-102(B)(1) provides that “[a] lawyer who receives information clearly establishing that . . .[t]he client has, in the course of the representation, perpetrated a fraud upon a person or tribunal shall promptly call upon the client to rectify the same, and if the client refuses or is unable to do so, the lawyer shall reveal the fraud . . . except when the information is protected as a confidence or secret.”

So while Harvey probably had to withdraw once he found out the client committed fraud, he probably can’t reveal it to the court. That’s because the fraud occurred while he represented the client, so most of his factual knowledge comes from attorney-client communications. If a person other than a client has committed the fraud, the lawyer must tell the tribunal. So the other lawyer probably has a duty to inform the court if he thinks Harvey’s client perpetrated a fraud.

On the other hand, NY law says a lawyer may reveal: “Confidences or secrets to the extent implicit in withdrawing a written or oral opinion or representation previously given by the lawyer and believed by the lawyer still to be relied upon by a third person where the lawyer has discovered that the opinion or representation was based on materially inaccurate information or is being used to further a crime or fraud.” So maybe he’s okay if he reveals the fraud, but he can only do it to the extent he announces to the court that he’s withdrawing his representation that the company produced all the relevant documents. He probably can’t say, “Oh, by the way, the client told me that he had produced everything but I found this document that wasn’t produced.”

Overall, although I initially thought the plotline wasn’t very plausible, I have to conclude that it is indeed plausible under New York law. While the writers took some liberties, I’ll concede that they did a good job overall. I wonder how Harvey will get out of this one?


Laser said...

In re Hazel Atlas Glass v Hartford Empire U.S. Supreme Court (1944). Fraud on the Court by "Officers of the Court" equitably tolls the time to address matters of fraud.

A patent case closed for 9 years was re-opened and reversed.

It is a universally adopted Precedent - based upon the correct premise - that insiders of the system cannot benefit from fraud directed at the judicial machinery itself.

Key term "Officers of the Court"

Donna said...

Thanks Lazer! Interesting case.

Michael said...

My question is what do you do when your miscreant U.S. Attorney perpetutes the Fraud Upon the Court by the government by REFUSING to deconflict evidence SHE used in her Motion to Dismiss (See USAM 9.5001 Policy on Exculpatory & Inpeachable info). "I can't deconflict three conflicting statements---because it will harm the government's case!!"

Two Army Officers of the Court (JAG) destroyed 4 continuances and claimed my JAG officer never responded to my ART138 claims, hence I FORFEITED all my rights to redress. US. Atty Haag, AT THE LAST MINUTE produced a Declaration by my JAG demonstrating a paper trail that the Army DID RECEIVE our continuance in time!!! The Army even destroyed a CONGRESSIONAL Copy that the Army said it signed for!!! I lost my FTCA claim because the judge declared my JAG attorney committed MALPRACTICE (Professional Negligence=Negligence=Feres Bar).

The Appeals court barred me from filing any more motions before it ruled on my Appeal, including my Rule 60 motion.

Question: Can one go back to the original Fed Judge and file the Rule 60 motion before the Appeal is rendered? Right Now, I'm trying to backdoor the Rule 60 challenge through official law enforcement channels. What's the regs say?